Tuesday, March 31, 2009
I hate potlucks. I hate everything about it. There's nothing morale boosting about having to feed other people in your office, including those peeps you can barely stand. But what's especially aggravating are those peeps who think it's appropriate to run to the sign-up sheet immediately after it is posted to write down "chips" or "veggie sticks". And the SAME people do it over and over and over. And these cheapskates aren't the "low earners" in the office either.
I had to put my foot down the other day. I said, "I'm not participating in a potluck. If you (i.e., management) feel that morale booster is "necessary", let's all pitch in $10 to buy pizza, salad, etc. I am NOT going to subsidize other people's meals, especially to those who regularly only contribute a $1 bag of chips."
Of course, the office cheapskates got huffy. "Well, I shouldn't HAVE to contribute to meat items since I'm a vegetarian!"... "Well, I don't eat as much as others..."... "Ten dollars?? My normal lunch doesn't cost that much!!" Blah, blah, blah.
But this is what P!SSED me off - "Wow. You're so petty, Shtinky."
I'M PETTY? I'm not the one who thinks it's appropriate to bring $1 bag of chips and be the first one at the trough, piling my dish high with salad, pasta salad, mashed potatoes, rolls and dessert that OTHER people brought. I'm usually the one that brings the main dish that I've carefully planned so that (most) everyone can enjoy. I usually spend well OVER $20 to bring enough food for everyone.
The other non-cheapskates in the office secretly cheered me on, but did not publicly back me up. They were "too polite". Or more accurately, they were too "politic".
Since when did it become "petty" to call out people who are cheap? (And again, I'm not talking about the admin staff or other lower wage earners in the office. The cheapskates in my office earn as much or more than I do, are unmarried and are childless.)
It ticks me off that these cheapskates only think about themselves without consideration for what a "potluck" really is meant to be - - the sharing of food. I'm sorry, but vegetarianism is no excuse for such cheapness. You can't make an inexpensive spinach lasagna? You can't throw together a pasta salad? And the fact that you normally don't spend that kind of money for lunch is just plain assinine. You're feeding other people, duh!
I've kept my mouth shut for way too long. I'm SICK of subsidizing other people's meals when they see no need to reciprocate.
Here's a clue to management - if you TRULY believe that potlucks build morale, think again. If you insist on having one, here's another tip: MANAGE the damn events. Don't let the same people shirk their responsibilities over and over and over and burden the same people with the tab.
Monday, March 30, 2009
An opinion piece in Kiplinger suggested that those who can, should spend sensibly, to help the economy recover. People who can are those whose:
- income stayed consistent for the past few years - - check;
- job is reasonably secure - - uhhhh, nope;
- financial obligations are about the same from the year prior - - check;
- saving rate is 10%+ of gross income for all future needs (EF, retirement, major purchases, etc.) -- check.
Okay, so I'm not one of the people who can or should be spending extra money. After all, I only have about 3-4 months of an emergency fund saved up and there's a good chance that I'll get laid off at the end of the year.
But with 3 out of the 4 criteria above satisfied, I feel pretty comfortable spending spontaneously. And sometimes, it's worth spending some money sensibly especially if I'm not going to go into debt to do so. Here are some examples:
"Pity Party" Spending - $52.11
This was a rough month on the job front for a friend and a colleague. My friend was passed over for a promotion when her company hired outside the company for the managerial position. To add insult to injury, the "outside" person is someone that we know to be, ummmmm, rather un-professional. To make matters worse, my friend will now report to this un-professional person. Talk about a lousy week. I took her out for a "pity party" at a local Mexican joint. Thank goodness my friend doesn't drink, since the tab only came out to $32.11 (including tax and tips).
Separately, a colleague recently presented one of his cases to new upper management. The new manager nit-picked silly details and refused to give him any authority to resolve the case as he recommended. I could see that the situation was eating him up so I took him out to lunch at a local Shanghainese cafe. The tab was $21 (including T&T).
I guess I didn't need to do any of this, but it felt like the right thing to do. Afterall, it's always better to vent with friends over drinks and a nice meal, right?
Shampoo and Conditioner - $39.51
Holy cr@p!! $40 for shampoo and conditioner? Yep. But I don't regret it one bit.
This past weeekend, I went to the hair salon for a much needed cut since I was starting to resemble Cousin It from the Addams Family.
I hadn't seen my hairstylist since 2006 and I asked how he was doing. He bemoaned how business has been hurting and that holidays like Christmas and Valentine's really haven't helped.
I felt bad for my hairstylist. Although I've been his loyal customer for the past 24 years, I'm not a frequent customer. For the past 8 years or so, I've only gotten my hair cut every 2 years because I grow my hair out for a purpose. Since I don't give him regular business, I felt I should atleast support him by buying something "extra". He initially tried selling me a $200 professional grade-flat iron or a $85 non-professional-grade flat iron. When I didn't bite, he said the salon-grade shampoo and conditioner were on "sale" for $36. Okay, that's do-able. With tax, the total bill came to $39.51.
I felt $40 is a small amount to help support the only man (other than my dad) with whom I've had a long-term relationship. As an added bonus, my stylist guarantees that my hair will be healthier and better smelling than from using my usual Garnier Fructis shampoo/conditioner. (Yeah, right.) :-D
Orchestra Level Opera Ticket - $107
I plan to attend as many opera performances I can afford, to support the local artists and musicians.
I usually don't get the expensive seats, but I bought orchestra seats for the upcoming performance of Rigoletto. The reason? Several years back, I sat in nosebleed seats during the last performance of Rigoletto. The couple who sat next to me somehow felt it was appropriate to hum along to "La Donna è Mobile", which was clearly the only song they recognized. I asked them to pipe down and they got huffy and belligerent with me.
I hate to say this, but people who sit in nosebleed seats are usually never the same class of people in orchestra seats. I'm not being elitist (since I usually only sit in nosebleed seats). I'm just callin' it as I see it.
Hopefully, I can enjoy this upcoming performance sans annoying disturbance.
- help people like my hairstylist stay in business;
- promote art, music and culture;
- promote camraderie and morale between friends, it can't be all that bad, right?
Friday, March 27, 2009
Ohhhh... what should I get with the extra $6.79/paycheck?
But alas, it's not enough to buy:
* An Aqua Globe ($9.99 on sale at CVS);
* A Flirty Girl DVD set ($9.99 for "Teaser Pack") [Note: It costs $10 to learn how to chair dance? I'm afraid to know how much it costs to learn how to pole dance!]
* An Old Navy Towngown ($25.00).
Speaking of towngowns, looks like everything old is new again. Oh Gawd. These dresses are giving me flashbacks of my fashion-challenged, misspent youth!! (See below, circa late 70's.)
Anyhoo, I'm just kidding about spending the extra $6.79. I'll bank it since I'll probably stimulate California by passing it through via my increased state income tax. (For cryin' out loud!)
Have a great weekend folks!
Thursday, March 26, 2009
Uh-oh. I guess I'm hitting the library very soon. UPDATE: Books read by Shtinky denoted below. DISCLAIMER: "Read" does not mean I've retained any of it. The reason why I haven't read many of the "required reading" from highschool is because I cheated by reading the Cliff's Notes. I'm probably going to have to re-read all of them!! UPDATE #2: I probably won't finish this list because I know I'll NEVER finish War and Peace or the Bible. But I'm certainly going to give it the good ol' college try. :-D
How do your reading habits stack up?
Instructions: Look at the list and put an 'x' after those you have read.
1 Pride and Prejudice - Jane Austen ( )
2 The Lord of the Rings - JRR Tolkien ( )
3 Jane Eyre - Charlotte Bronte (1)
4 Harry Potter series - JK Rowling (2)
5 To Kill a Mockingbird - Harper Lee (3)
6 The Bible - ( )
7 Wuthering Heights - Emily Bronte (4)
8 1984 - George Orwell (5)
9 His Dark Materials - Philip Pullman ( )
10 Great Expectations - Charles Dickens ( )
11 Little Women - Louisa M Alcott (6)
12 Tess of the D’Urbervilles - Thomas Hardy ()
13 Catch 22 - Joseph Heller ( )
14 Complete Works of Shakespeare ( )
15 Rebecca - Daphne Du Maurier ( )
16 The Hobbit - JRR Tolkien ( )
17 Birdsong - Sebastian Faulk ( )
18 Catcher in the Rye - JD Salinger (7)
19 The Time Traveller’s Wife - Audrey Niffenegger ( )
20 Middlemarch - George Eliot ( )
21 Gone With The Wind - Margaret Mitchell (8)
22 The Great Gatsby - F Scott Fitzgerald ( )
23 Bleak House - Charles Dickens ( )
24 War and Peace - Leo Tolstoy ( )
25 The Hitchhiker’s Guide to the Galaxy - Douglas Adams ( )
26 Brideshead Revisited - Evelyn Waugh ( )
27 Crime and Punishment - Fyodor Dostoyevsky ( )
28 Grapes of Wrath - John Steinbeck ( )
29 Alice in Wonderland - Lewis Carroll (9)
30 The Wind in the Willows - Kenneth Grahame ( )
31 Anna Karenina - Leo Tolstoy (10)
32 David Copperfield - Charles Dickens ( )
33 Chronicles of Narnia - CS Lewis ( )
34 Emma - Jane Austen ( )
35 Persuasion - Jane Austen ( )
36 The Lion, The Witch and The Wardrobe - CS Lewis (11)
37 The Kite Runner - Khaled Hosseini - ( )
38 Captain Corelli’s Mandolin - Louis De Bernieres ( )
39 Memoirs of a Geisha - Arthur Golden (12)
40 Winnie the Pooh - AA Milne ( )
41 Animal Farm - George Orwell (13)
42 The Da Vinci Code - Dan Brown ( )
43 One Hundred Years of Solitude - Gabriel Garcia Marquez ( )
44 A Prayer for Owen Meany - John Irving ( )
45 The Woman in White - Wilkie Collins ( )
46 Anne of Green Gables - LM Montgomery ( )
47 Far From The Madding Crowd - Thomas Hardy ( )
48 The Handmaid’s Tale - Margaret Atwood ( )
49 Lord of the Flies - William Golding (14)
50 Atonement - Ian McEwan ( )
51 Life of Pi - Yann Martel ( )
52 Dune - Frank Herbert ( )
53 Cold Comfort Farm - Stella Gibbons ( )
54 Sense and Sensibility - Jane Austen ( )
55 A Suitable Boy - Vikram Seth ( )
56 The Shadow of the Wind - Carlos Ruiz Zafon ( )
57 A Tale Of Two Cities - Charles Dickens (15)
58 Brave New World - Aldous Huxley( )
59 The Curious Incident of the Dog in the Night-time - Mark Haddon ( )
60 Love In The Time Of Cholera - Gabriel Garcia Marquez ( )
61 Of Mice and Men - John Steinbeck ( )
62 Lolita - Vladimir Nabokov ( )
63 The Secret History - Donna Tartt ( )
64 The Lovely Bones - Alice Sebold ( )
65 Count of Monte Cristo - Alexandre Dumas ( )
66 On The Road - Jack Kerouac ( )
67 Jude the Obscure - Thomas Hardy ( )
68 Bridget Jones’s Diary - Helen Fielding (17)
69 Midnight’s Children - Salman Rushdie ( )
70 Moby Dick - Herman Melville (18)
71 Oliver Twist - Charles Dickens (19)
72 Dracula - Bram Stoker ( )
73 The Secret Garden - Frances Hodgson Burnett (20)
74 Notes From A Small Island - Bill Bryson ( )
75 Ulysses - James Joyce ( )
76 The Inferno - Dante ( )
77 Swallows and Amazons - Arthur Ransome ( )
78 Germinal - Emile Zola ( )
79 Vanity Fair - William Makepeace Thackeray ( )
80 Possession - AS Byatt ( )
81 A Christmas Carol - Charles Dickens (21)
82 Cloud Atlas - David Mitchell ( )
83 The Color Purple - Alice Walker (22)
84 The Remains of the Day - Kazuo Ishiguro ( )
85 Madame Bovary - Gustave Flaubert ( )
86 A Fine Balance - Rohinton Mistry ( )
87 Charlotte’s Web - EB White (23)
88 The Five People You Meet In Heaven - Mitch Albom ( )
89 Adventures of Sherlock Holmes - Sir Arthur Conan Doyle ( )
90 The Faraway Tree Collection - Enid Blyton ( )
91 Heart of Darkness - Joseph Conrad (24)
92 The Little Prince - Antoine De Saint-Exupery (25)
93 The Wasp Factory - Iain Banks ( )
94 Watership Down - Richard Adams (26)
95 A Confederacy of Dunces - John Kennedy Toole ( )
96 A Town Like Alice - Nevil Shute ( )
97 The Three Musketeers - Alexandre Dumas ( )
98 Hamlet - William Shakespeare ( )
99 Charlie and the Chocolate Factory - Roald Dahl ( )
100 Les Miserables - Victor Hugo (27)
Wednesday, March 25, 2009
On my way to Vegas, I sat in a row with a very bling-ed out woman and a not-so-bling-ed-out man, both probably in their 40s. We started talking about how it was amazing that R-rated (if not X-rated) photos are allowed to be passed out on the Strip to pedestrians. I laughed and said that I witnessed an older man (probably in his 70s and 80s), giddily collecting the flyers as if he was a young boy collecting baseball cards. I thought the dirty old man was strangely "cute".
The male passenger then proceeded to tell us that he has one regret in his life. He said he wished he had hired a stripper/hooker on his dad's deathbed. Whoa! TMI buddy!! He said his dad was a "dirty old man" with tubes coming out of every orifice of his body and he probably would have enjoyed seeing/touching a beautiful young woman before he went. Okaaaay.
The other passenger and I started giggling uncomfortably. To break the awkwardness, I said something to the effect of, "On my deathbed, I'm not sure I want to see a naked man." The other passenger hastily added, "I want someone to bring me a big diamond. That would make me smile." We were able to change the topic from there.
But the man's comment did get me thinking -- what I would want on my deathbed? Having my loved one by my side is a given. But is there something more that could bring me joy in that circumstance? Can something that is bought allow me to go in peace? Hmmm... I'd have to think about that.
On my return flight, I sat next to a man who works for a local upstart company called Pathway Genomics. It's one of those companies that you send samples of your saliva to test your DNA for information regarding your ancestral path and genetic disease and conditions. The ancestral path test costs $199 and the health test costs $250.
My father suffers from dementia, which may or may not be a precursor to Alzheimer's disease. I'm so afraid of developing this condition that I avoid aluminum products. I am strongly tempted to partake in this test just to find out.
This got me wondering - Do I really want to know what disease I may be prone to? Would the results encourage me to be healthier? But if the disease has no cure, would I be unnecessarily devastated?
I've got some questions for my readers:
- On your deathbed, other than having your loved ones at your side, is there something you'd want?
- Would you pay $250 to find out about potentially inherited diseases?
Monday, March 23, 2009
I'm currently $11,000+ in credit card debt. As if that figure isn't embarrassing enough, I was more ashamed that I have nothing to show for it. Sure, I have a pair of diamond earrings and pretty decent wardrobe. But nothing like antiques or an extensive haute-couture shoe collection like Carrie Bradshaw.
And since I kept lousy records, I'm not exactly sure where all the money went. But I'm pretty sure that one of my top spendings was on food. I thought to myself, of all the stupid things I've done (which are many), going into debt for something I consume and literally piss away, takes the cake. (Oh goodness. I never thought I would use "piss" and "cake" in the same sentence. Sorry for the disgusting imagery.)
Last year, in my quest for financial responsibility and personal redemption, I implemented a pretty spartan food budget, which means I rarely eat out and my home-cooked meals generally consist of easy-to-make food. Admittedly, over the course of the year, I fell off the horse a few times, but I've done relatively well sticking to the budget. But somehow, there was always an under-current of feeling deprived.
In a recent MSN SmartSpending post, The Simple Dollar wrote:
In a way, I almost looked down on people who are frugal, particularly people who actively choose frugality over simply buying the best. I felt pride in my possessions and experiences -- and I looked at people who chose different paths as needlessly depriving themselves.
What I've learned is that a sense of being deprived -- provided, of course, that your basic needs are met -- is just a negative state of mind.
Frugality isn't choosing to be deprived. It's just a different way of looking at things.
I'm guessing that the point TSD wants to make is that money spent beyond obtaining basic necessities of life has a diminishing rate of return for happiness. And I agree.
But for every dollar we spend beyond providing for basic sustenance, aren't we all in varying degrees, buying some increased level of contentment, if not happiness? And what's so wrong about buying some fleeting moments of joy?
And what if some experiences can usually only be bought?
I come from a culture that places great importance on food as a spiritual and communal activity. In essence, my culture stresses the importance of appreciating food, not merely as a source of sustenance but also as a medium for appreciating nature and art.
As a result, I deeply appreciate food, and not just food from the old country -- all kinds of food, particularly ethnic foods. Give me a good hot piping bowl of Vietnamese Pho rather than chicken noodle soup. I'd rather clog my arteries with Phillipino deep fried lechon versus chicken-fried steak. And when someone says "barbecue", I immediately think "Korean".
Consuming good food and a variety of food gives me great joy. And this often means that I'd have to eat out since:
- Ingredients to make cuisines from the old country is expensive since much of it is imported;
- It is generally not cost-effective for me to cook for one;
- One of the downsides of a culture that places high-importance on food is that great emphasis is placed on not only the cooking method, preparation and taste, but also the aesthetics of the cuisine itself. I certainly cannot replicate some of the food that ethnic restaurant chefs have been trained to do.
And I'm not talking about restaurants like Joel Robuchon that serves a $385, 16-course meal, or a $150 omakase-meal at Nobu's.
I'm talking about enjoying a $1.50 taco made with cow-head meat from a street vendor. I'm talking about the joys of discovering that something as disgusting looking as a sea-cucumber can actually be very tasty. I'm talking about the joys of sharing a traditional, communal hot-pot meal with someone who has never eaten food from my native country.
Was it really that bad for me to feel deprived when I chose not to eat food that I truly love for the sake of frugalism? If that makes me a slave to consumerism, so be it. I'll just practice a more responsible form of consumerism-slavery. :-D
Anyhow, I'm now hooked on Tough Love on VH1, where a matchmaker attempts to "train" desperate women into marriage-worthy prospects. Please spare me the feminist rant on how this show is demeaning, sexist, etc. Anyone who wants to rant about the misogyny of the show never watched VH1's prior reality show, Tool Academy, which was also very sexist against men.
Either way, ALL of the reality shows on VH1 are sleazy, trashy and probably the sign that the apocalypse is near. I get that. But it takes my mind off trashier (and infuriating) topics like how our government forced the Big 3 automakers to renegotiate their contracts with union workers but didn't require AIG to renegotiate the bonuses prior to handing out bailout money.
That being said, the recent episode highlighted a 38-year old career-minded cast member whose conversations are dominated solely by conversations about her job. She yammered constantly about her career to a physical trainer and her prospective date.
In watching this woman, I came to the horrific realization that my conversations are generally dominated by PF topics. Egads! I'm wondering whether my PF blogging is causing me to think and talk about PF topics constantly, or, whether I'm blogging about PF because I think about it constantly and love to talk about it. It's the classic chicken-or-the-egg debate.
I ask fellow PF bloggers: Outside of your blog, do you talk about PF a lot?
Thursday, March 19, 2009
Before I go on, have you ever prepared for an event only to forget its purpose?
I wrote a semi-smug, self-congragulatory post about setting aside money to cover future cost of living increases. But I boneheadedly forgot that I should probably buy a big-ticket item before California sales tax goes up effective 4/1/09. (Click here to see your city's new sales tax rate.)
Thankfully, I've got the financially savvy Miss M, watching my back. (A shout out to Miss M: Thanks for the reminder!)
So I took the plunge and bought myself a pink laptop. Yep, pink. Sad to say, that was my sole criteria for my new laptop, so I was limited to buying a Dell Inspiron laptop. (I realize I may be too old to be buying pink computers but Dell is going donate $5 to the Susan G. Komen Foundation if I went "pink". That'll be my excuse to the world.)
Anyhow, my final price for my laptop was $907.93, including 7.75% sales tax. This is within my budget and I feel great that I'll be paying for my laptop with cash, but I can't help feel a bit of buyer's remorse.
In hindsight, I made the stupid mistake of upgrading components while I was building my computer online. Did I really need 3GB vs. 2GB of RAM? Did I really need a 320GB vs. 160 GBHard Drive? This is gonna gnaw on me for awhile.
On the bright side, the upgrades bumped the price above the $799 threshold, thereby giving me free shipping and handling ($25 off) and allowing me to take advantage of a 20% off coupon code ($208.80 off).
I guess part of the remorse came about after seeing an ad from Fry's that sold comparable laptops for much less. Oh well. I guess I paid a premium to own a pink laptop. And atleast I didn't pay an additional $9 in taxes.
Update: Now that I think about it, I guess I did have several other criteria: I wanted an Intel (not AMD) processor, I wanted to own a name-brand laptop and no refurbished laptops, based upon my experience from owning 3 prior laptops.
Wednesday, March 18, 2009
According to LLS, leukemia, Hodgkin and non-Hodgkin lymphoma, myeloma and myelodysplastic syndromes are cancers that originate in the bone marrow or lymphatic tissues. They are considered to be related cancers because they involve the uncontrolled growth of cells with similar functions and origins. The diseases result from an acquired genetic injury to the DNA of a single cell, which becomes abnormal (malignant) and multiplies continuously. The accumulation of malignant cells interferes with the body's production of healthy blood cells.
An estimated 138,530 people in the United States will be diagnosed with leukemia, lymphoma or myeloma in 2008. New cases of leukemia, Hodgkin and non-Hodgkin lymphoma and myeloma account for 9.6 percent of the 1,437,180 new cancer cases diagnosed in the United States this year.
LLS is the world's largest voluntary health organization dedicated to funding blood cancer research and providing education and patient services. LLS invested more than $600 million in research since 1949 - over $71 million in 2008 - specifically targeting leukemia, lymphoma and myeloma. Last year alone, LLS made 6.3 million contacts with patients, caregivers and healthcare professionals.
Tuesday, March 17, 2009
The concept of living one pay raise behind is to "bank" the pay increase for a year. In other words, you don't increase your standard of living . When you get another raise the following year, you allow yourself the increased pay raise you got the year prior, but bank the current year's raise, so on and so forth.
Last year I got a nice 5% raise and I immediately increased my 401k contribution from 13% to 15% of my pre-tax income. My pay-raise net me an extra $34 per paycheck, which I planned to put into my savings. This meant that after one year, I should have an additional $884 extra saved. How did I do?
RESULT: I saved an additional $590, or 66.7% success rate.
For starters, I didn't adopt this system until May last year, which meant a reduced savings of $68.
Secondly, I cheated. I gave my self a "raise" but only by $4/paycheck, which reduced my savings by about $104.
Thirdly, I stopped saving my raise in February when my rent increased by $20/month and the costs of my benefits increased (e.g., monthly medical and dental insurance premiums). This reduced my savings by about $120.
Despite only being partially successful, I'm actually pleased with the result and highly recommend it.
My company recently announced a 3% COLA raise and I've increased my 401k contributions from 15% to 16%. However, I've decided that I won't be putting away any of the remaining pay increase into my emergency fund anymore. I'll instead "earmark" the pay raise into my "cost of living inflation" fund.
The reasons for this is because I anticipate serious increases in my cost of living this year:
- My rent will likely increase in August;
- California sales tax will increase by at least 1% in April;
- My car registration will nearly double in December;
- My state income tax will increase;
- And finally, I expect gas prices will increase from the current $2 level to $3/gallon.
It makes sense for me to stash this money away for anticipated increases in my cost of living since, after all, the raise was a cost of living adjustment and not a merit raise, right?
Anyhoo, have a great Happy St. Paddy's Day, everyone! I'm gonna go find me some green beer this evening!
Monday, March 16, 2009
It's not unheard of unemployed workers now taking 30%-70% pay cuts in their new jobs. In this article, one former bank employee went from a $125,000 salary to a $66,000 salary. Another former mortgage lender went from earning $110,000 to $33,000.
I'm relatively confident that based upon the industry that I'm in, I probably won't face such a dramatic salary decrease in my next job. But I AM expecting to take a significant hit in my salary, so I spent the weekend thinking how I'd deal with a hypothetical 20% pay-cut.
I've concluded that I want to continue to maintain my current standard of living, so I'm not going to alter my spending, even in the face of a 20% pay cut. Fact of the matter is, I'm living a pretty frugal life right now. It's not like I'm living the high-life by subscribing to premium cable channels, drinking expensive wine, dining out regularly, buying Starbucks coffee, etc.
The big bulk of my expenses are eaten up by rent and debt repayment. The rest of my budget is quite modest. Although I'm open to the idea of a roommate, I'm not yet at the point where I am willing to share my living quarters with a stranger. With respect to my debt, my credit card should be paid-off by year end. However, I want to continue with my debt snowball plan and roll the credit card payments into my student loans. In other words, paying off my credit card really doesn't give me much relief.
Some people have suggested that I eliminate my cable TV/high-speed internet service/land line service. This is a great idea, but I'm not inclined to eliminate my internet service since I do a lot of online banking and I do not want to do so on a shared computer in a public place. Although I don't need cable TV, it's my primary source of entertainment, and I'm not going to give it up so easily. I also like having my land line, since out-of-state calls to my parents and big sis are included in the monthly flat fee.
It's a bit depressing that a 20% pay cut will set me back to where I was in 2004. Looking at my 2004 paycheck, I've estimated what my take-home pay will be after taxes and other expenses. I then took out some expenditures that will help bring my take-home pay to what it is now.
|% of Current Paycheck||% of Pay-Cut Paycheck|
|Fed'l Income Tax||15.01%||16.25%|
|CA Income Tax||5.04%||5.60%|
|CA SUI/SDI Tax||1.09%||1.18%|
|Long Term Disability Ins.||0.55%||0.00%|
|Personal Accident Ins.||0.09%||0.00%|
Through this exercise, I've concluded that I need to do the following:
- Eliminate my ESOP contributions;
- Eliminate long-term disability insurance coverage;
- Eliminate personal accident insurance coverage;
- Reduce my 401k contribution from 15% pre-tax to 2% (ouch).
I've also discovered that my current company's medical and dental benefits are cheap compared to other employers'. Based upon what my big sister is currently paying for her medical and dental benefits, I'm anticipating that these costs could easily increase 3x.
It pains me to have to dramatically reduce my 401k contribution and savings rate, especially at a time where I can dollar-cost average my retirement investments cheaply. But at least I have the comfort of knowing that I won't be sacrificing the pace of my debt elimination. Once my debts are paid off (hopefully before 2014), I'll boost my 401k contribution at such time.
Oh, what a fun exercise this was...
Friday, March 13, 2009
Well, I'm a bit embarrassed to report that that won't be the case. When I initially mapped out what I intended to do with my recent windfall, I realized that I wanted to spend 70% on "earmarks" and only "save" 30%.
Before I go on, I'd like to explain what I mean by "earmarks" and "savings". When I report my "savings" in my net worth every month, I don't include money I've earmarked for future spending. After all, if I plan to spend it, it's not really savings, right?
Secondly, in my opinion, debt reduction is the flip-side of the same coin as savings, since it is a guaranteed increase in my net worth. My credit card balance currently has a 0% APR and I'm "reverse arbitraging" my credit card payments (that are in excess of the monthly minimum) into a "high-yield" (*snort*) savings account. Perhaps incongruously, I consider the arbitraged money as "savings" rather than an "earmark" because it's going to be used to pay down debt.
That being said, I struggled last night to split my "earmarks" and my "savings" to a 50-50 compromise. Although some of the "earmark" categories may seem frivolous, please note that I don't intend to spend it right away (or perhaps, even at all). In practice, when I am short of funds, I tap the "earmark" funds before I tap my "emergency fund".
|Earmark||% of Bonus|
|Pet Care Fund||7.24%|
|Tax 2008 Fund||4.14%|
|Car Maint. Fund||2.07%|
- VACATION FUND: I currently have $0.00 saved in this category. I'd really like to go on an über-luxurious trip to Hong Kong-Tokyo for my 40th birthday. And that's not in the too-far distant future (*eek*). This was the one category I had to slash to bring my earmark allocation down. As disappointed I am with that, this will give me a good start.
- CHRISTMAS FUND: This fund is now fully funded. If I get laid off before the end of the year, I intend to shift this money into my EF. After all, people shouldn't expect me to give gifts while I'm unemployed, right?
- COMPUTER FUND: I don't have a home computer right now. :-P I've been doing all my computing on my work laptop. I eventually need to get my own home PC, so this falls into more of a "necessity" for me.
- "MISC." FUND: This is my "mad money" fund that I can spend on my "wants" vs. my needs. The comfort of having "mad money" is critical for my sanity and continued motivation to live a frugal life.
- PET CARE FUND: Truth be told, this is less about "pet-care" and more about "pet-euthanasia and cremation fund". I just don't want to call it that. Although my cat MJ is doing relatively well right now, I don't expect him to live much longer.
- TAX 2008 FUND: I owe, I owe. Last year I estimated that I'd probably need about $350 to pay my federal and state taxes. Uhhhh... I was short... by a mile.
- CASH: I should actually call this my Tax 2009 Fund. As previously reported, my company made the right bet on the housing crisis and the shareholders have been rewarded richly. I participate in my company's ESOP plan and I got a separate bonus there too. But with all good financial news, there's always the tax-man to pay. My company took out the tax on the ESOP bonus from my paycheck. I decided to pay it through my cash-bonus instead.
- CAR MAINT. FUND: Since my car seems to have a knack for attracting foreign objects that either break the windshield or puncture the tire, I think bolstering this fund would be a good idea.
|Category||% of Bonus|
|CD Ladder 2008||5.17%|
|CD Ladder 2009||5.17%|
- CC Arbitrage: Even with 0% APR and paying $1,053/month, I won't have all of my cc paid off before the promotional interest rate expires in October. I need to put away money in order to pay off my CC before the end of the year.
- EMERGENCY FUND: Yeah, I know I'm only putting away a pathetic 14% of my windfall into my savings. C'est la vie.
- CD Ladders/Roth IRA: These are critical elements of my long term savings strategy. For now, I'm going to keep them in my liquid savings. If I need to tap this fund while I'm unemployed, so be it. But with respect to my Roth, I'll contribute $50/month from this fund so that I can take advantage of this down-market to dollar cost average.
In the comment section of my prior post, some people asked about a severance package. Other people wondered why, if my company did so well in the housing crash, it's laying off people. I'm not at liberty to specifically discuss these issues right now but there is a logical explanation. With respect to a severance, my company has offered generous severance packages in the past. However, I am not counting on the severance in light of the fact that my company can easily eliminate or grossly reduce it. With respect to why my company is laying off people despite doing so well in the past, well... let's just say my company's philosophy is similar to Warren Buffet's: "The investor of today does not profit from yesterday's growth."
Thursday, March 12, 2009
The WSJ writes:
Twenty thousand Americans are losing their jobs every day. This slump could be much worse, and last much longer, than most of us expect. No wonder families are being advised to keep six months', or even nine months', worth of expenses in an emergency fund they can tap if they end up out of work for a long time.
That's a fine idea in theory. In practice, it's not so easy.
According to federal data, a typical middle-class family spends about $42,000 annually. Six months of expenses is $21,000, and nine months is $31,500. A lot of people don't have that much on hand. And for many others, that would be pretty much all their retirement savings.
Sallie's Niece was curious about my EF since I expect to be laid off some time soon. I guess it's a good time to look at the state of my preparedness (or lack thereof) in the event of a layoff:
MY MINIMUM MONTHLY PAYMENTS
In my current budget, I pay extra towards my debts and set aside money for savings and earmarks. However, in the event of a layoff, I plan only to pay the bare minimum owed on my debts and I won't be saving. So the following are my expected bare minimum expenses:
Rent: $1,275/month. (This will likely go up in July.)
Electricity: Approximately $37/month.
Student Loans: I expect to be able obtain a temporary forbearance on my student loans while I am laid off. But unlike before, I will NOT allow my student loans to negatively amortize. By paying the interest only, I won't be paying down the balance, but atleast I'm not letting it grow again. I estimate my monthly interest on my student loans are $500/month (*eep*).
My cable/internet/land line: $152/month.
My cell phone: $53/month.
Minimum credit card: Approximately $240/month.
Insurance (car and renter's): Approximately $120/month.
GRAND TOTAL: $2,725
MY EMERGENCY FUND
Liquid Savings: Not taking into account the bonus I have yet to receive, I currently have $6,166.37 saved, or 2.26 months.
Taxable Investment Account: If necessary, I can also liquidate my taxable investment account that was valued at $4,500 on Monday (i.e., before the recent 2-day market rally). If I were to anticipate a scenario that my account will go down an additional 20%, I'll have an additional $3,600 (or, 1.32 months) that I can tap. The good news in selling my stocks at a loss is that at least I won't owe any taxes. :-P
So, essentially, I have about 3.58 months worth of my expenses in my emergency fund.
Worse comes to worst, I can also liquidate my meager Roth IRA account (value: $1,000). Since again, I'm liquidating at a loss (i.e., my withdrawal is below my post-tax contributions), I won't owe any penalties or taxes.
The aforementioned bonus will help somewhat, but I was hoping to use some of it towards my long term savings like a CD ladder or Roth IRA.
Basically, I'm like most people - - my EF is not bad, but it is sorely inadequate to weather this current economic crisis.
Wednesday, March 11, 2009
Due to confidentiality issues, I can't go into details. But let's just say that my parent company was one of the few companies that bet on the housing market correctly. As a result, it made tons of money between 2006-2008. My parent company's investment portfolio is now focused heavily on capital preservation versus capital growth. Essentially, future earnings won't be great. Reading between the lines, it means that the company will continue to cut costs, which I assume, will include labor costs. Continued layoffs are on their way. But to be fair, the company has never given me any reason to believe otherwise.
The great news is, most (if not all) of the employees are getting a bonus this year. After the meeting, I learned that I'll be getting a very nice bonus. Hallelujah!
The bad news is, bonuses next year may be non-existent. But that's okay. All the more reason why I greatly appreciate what I'll be getting this year.
All in all, it was a good news day yesterday. Seems like the market also had a decent bounce.
Tuesday, March 10, 2009
I decided I need a break. It's been great not reading/hearing/watching about recent layoffs, the tanking market and increased foreclosure rates.
Instead, I went to see Watchmen (matinee screening, of course) this past weekend. Do you want a finance tip? Go to the library and borrow Watchmen, the graphic novel, before you go see the movie. There were many people who came out of the movie theater scratching their heads asking, "What the h#ll was that all about?"
And, ironically, there's been no better refuge from reality than "reality TV". The best show to make yourself feel better about your scruples, morals and ethics has got to be Rock of Love Tour Bus on VH1. After all, it's a show where a former stripper and Penthouse Pet is the classiest contestant.
And that reminds me of this hilarious fake commentary from The Onion about skanks on reality shows.
But... no matter how much runaway from reality, it seems to keep sucking me right back in. My company will be having a company-wide meeting today. I wonder what bad news I can take today?
Friday, March 6, 2009
But on 3/2/09, FDIC Chairwoman Sheila Bair wrote to bank CEOs that the FDIC needs to increase fees to shore up the fund since it could otherwise become insolvent. I think I peed in my pants when I read that.
Thankfully, it appears that the FDIC was granted triple its prior borrowing capacity from the Feds to keep it solvent. FDIC’s permanent credit line is now at $100 billion and the FDIC projects that bank failures will cost the agency about $65 billion through 2013. FDIC agreed to halve the emergency fees it was planning to charge banks in return.
Not the most confidence-inspiring news to say the least. I wondered whether should I give up the hunt for best yields and start putting money in safer banks with minimal yields, or perhaps my credit union?
But I’m finding it’s really difficult for me to move money from a low rated bank account yielding 2.5% (DollarSavingsDirect) to my credit union that only pays 0.5%.
At this point, I’m going to stay put, mainly because I’m greedy and partly because I want to maintain confidence in my government.
I just pray that this economy will stabilize itself to the point that I don't feel like I'm putting my emergency fund at risk. I love to gamble but not with my savings. Sheesh.
Thursday, March 5, 2009
Here’s a brief recap of my seriously disturbing history with Chase and my Ex (not Mr. Spock. He's one of the good ones.):
- CHASE: Wooed me with an awesome 5.99% APR until loan paid off deal. EX-BF: Wooed me with poems, dinner and chocolate.
- CHASE: Unitlaterally implemented monthly service charges. EX-BF: Unilaterally lowered the thermostat to arctic temps, kept toilet seats up and never replaced toilet paper.
- CHASE: Blackmailed me to make a 7.99% APR balance transfer to remove service charge. EX-BF: Blackmailed me to…. Ummmm… TMI. Never mind.
- CHASE: Gave’em the boot. EX-BF: Gave him the boot.
After the “Big Break-Up” , my ex had the gall to call me up weeks later to ask me, "Hey, do you want some special lovin'?" (Oh God, I think I swallowed my vomit then.)
In the same vein, I got a call from a telemarketer from Chase the other night. And no joke, the telemarketer asked, “As a valued customer of Chase Credit Cards, I am calling to see what we can do to improve our services to you?”
ARE YOU FREAKIN’ SERIOUS? Oh, man! This was my chance to give Chase a piece o’ my mind!
As I was preparing to lay my wrath upon the poor telemarketer, I remembered - - the guy is a working stiff just making a living. It's not like Jamie Dimon (CEO of Chase) called me.
I sucked it up and told the kid, "I cancelled my card and let me tell you why. Chase started charging me $10/month and boosted my minimum monthly payment to 5%. I know tons of people are ticked off by this. Good luck since I think you'll be dealing with tons of pissed off people."
The kid was surprised but said, "Uh... okay. Uhh... Thanks. Uhhh... have a good evening."
I'm still shaking my head. This is one of our better financial institutions, folks.
Wednesday, March 4, 2009
My guess was $450 (armageddon scenario) to $650 (most likely scenario) to $950 (insanely optimistic scenario). I came up with these figures by looking at the S&P500 20+ year chart and drawing lines at various price points and various time frames.
Mr. Spock's guess was $600 to $800 based upon a much simpler thinking. He figured that most (if not all) of the bad news is baked into the current price of about $700 and a swing of $100 either way is plausible.
Since we are guessing around the same price, we decided to do an over-under bet. He bet that the S&P will end higher than $650 and I bet under. (Keep in mind - - I have a HORRIBLE track record when betting over-under. I hope this is one bet I lose horribly.)
So... what is your bet?
Tuesday, March 3, 2009
I was patting myself on the back for not getting swindled by a Ponzi schemer like Bernie Madoff, but as I looked at my most recent Social Security benefit estimate, I'm starting to think perhaps I already am.
Suppose you hand money over to an institution on the promise that it will invest it for you, so that after a certain period of time, you can obtain a certain level of monthly income. But suppose it turns out that the institution that you were handing money to was basically operating on a "rob-Peter-to-pay-Paul" principle? The SEC calls it a Ponzi scheme or a pyramid scheme.
I previously wrote about how I'm not expecting to receive any Social Security benefits when I retire. And from reading other PF blogs, it seems like most of us don't. Doesn't that make us the biggest Ponzi suckers of all?
I was okay (but not happy) about not receiving Social Security benefits in retirement, when I was relatively confident that my 401k and other savings would give me an adequate return so that I won't have to rely upon Social Security. But now, with a possibility that my 401k investments and savings alone may not give me a decent standard of living in retirement, I'll be livid if I don't get back anything what I've paid into the Social Security system.
I'm particularly pissed since I'm discovering that it's more and more difficult to create a stream of income that would sufficiently replace the Social Security benefits I probably won't be receiving.
I previously thought that in addition to my 401k and Roth IRA, holding high-dividend yielding stocks/ETFs/funds and an immediate annuity, would be enough to give me a decent income stream in retirement. But I'm learning that it's prohibitively expensive to do so.
According to this article, an income stream that lasts your lifetime could be purchased via an immediate annuity with a lump sum payment. The immediate annuity allows you to achieve a higher income stream than you could earn from living off the interest income paid by savings, CDs or high-yielding bonds. That's because a straight life immediate annuity doesn't return principal when you die, and the annuity only lasts for your lifetime.
But risks associated with immediate annuities include default risks, fees and non-standardized benefits that make it harder to comparison shop between different insurance companies.
Based upon a quote from ImmediateAnnuities.com, a 67-year old female today would need to pay $361,441 in premiums to get $2,483/month. Assuming that my 401k will only generate, on average, less than 5% yearly return for the next 30 years, the premium alone will eat up 1/3 of my 401k balance!
And even if I create a decent portfolio of high-quality, high-dividend yielding stocks/ETFs/funds, there's always a possibility that dividends could be slashed.
If I can save the extra $500/month that I'm currently paying into the Social Security right now, I think I can probably do well enough to give my self a decent income stream when I retire. But I can never save enough while I pay into a system from which I will never see a return.
Monday, March 2, 2009
Work has been hellishly busy so I haven't been able to update or respond to comments as often as I'd like. Worse yet, I haven't kept up with everyone else's blog. And for that, please accept my heartfelt apologies.
And I figure I might as well 'fess up early - I totally failed with respect to my veggie/exercise swear jar experiment. Although I did well on eating more fruits and vegetables, I got ZERO, zippo, nada exercise this past month. (Another confession: I've been eating broccoli almost every night sauteed with 1/4 strip of bacon. That still counts, right?)
Anyhow, as they say, "On with the show!"
|Starting Debt (6/31/08)||Last Month||This Month||Difference|
The one bright spot of the February 2009 catastrophe was that I paid off my car (yee-hawwww), which has freed up $788/month from my monthly obligations.
Before I go on, an anon commenter suggested that I should be owning a $50,000 car if I was paying $788/month. Actually, if I took out a $50,000 loan with 4.75% APR for a 38 month term, my monthly payment would've been $1,418/month (!!!). (The only way a $50k loan would have had a $788/month payment is if the term was for 72 months. And that would just be insane.) Secondly, I've only recently (i.e., within the past 7-8 months) started paying $788/month. Prior to that, I'd been paying $570/month. So, that's how I ended up with a $788/month payment on a $25,000 car that I paid off in 38 months.
Anyhoo, I digress.
I previously whined about how I wanted to spend some of the $788/month payment for fun, but I've since controlled my tantrum, and am committed to using the car payment to pay down my credit card. Since my credit card interest is currently at 0%, my tentative plan is to reverse arbitrage the additional $788/month payment into my "high-yield" (*snort*) savings account.
I may change my mind about arbitraging though, since my debt-to-limit ratio has gone up (and probably reducing my FICO score) as a result of closing my Chase credit card. I figure that the earlier I pay down my debt, the faster I can repair any damage that I've done by closing my $18,500 limit credit card. (Curse you Chase!)
Additionally, the "high-yield" interest rates on my online saving accounts are dropping like flies. By my calculations, the reverse arbitrage would net me around $43 (pre-tax). Is $43 worth sacrificing the immediate gratification of seeing my credit card balance go down? Hmmmm... not sure. I'll play this one by ear.
OY GEVALT!! I'm hemmorhaging! Just joking.
The reason why my savings went down $2k+ is because I used $2,219 of my savings and $1,908 of my earmarks (which don't count towards my savings) to speed up my car pay off date. So, if you disregard the money I took out to pay off my car, I actually saved an additional $153.80 this month.
But yuck. The above chart looks pretty ugly, doesn't it?
MY NET WORTH
|LAST MONTH||THIS MONTH||DIFFERENCE|
Wow. The graph and the chart get uglier and uglier. Ha ha.
The swan dive looks worse than it actually is because I took an immediate write down of $12,600 in my assets with respect to the value of my car. The only reason why I previously included the value of my car in my asset calculation was because I wanted to reassure myself that my loan amount didn't exceed the value of my car. Now that I own the car outright, I don't have to worry about that. And as Frugal CPA commented, putting the value of my car in my net worth is misleading since I'm never going to see the value it supposedly represents while I keep the car.
But... this doesn't fully explain the carnage. I'm sure you've all suffered from the market breaking the November 08 lows so I'm not going to bother discussing it here.
The breakdown of my net worth can be seen here.