Shtinkykat's PF Blog

January 2012 Progress Report

2012-02-04T10:04:00.000-08:00

Boy, how quickly time flies. I can't believe that January has come and gone. I've been keeping busy with my condo rehab/reno work and I've lost track of time.

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$0.00	$0.00	$(0.00)
Fed'l SL	$55,852.68	$50,334.47	$50,115.88	$(218.59)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
Mortgage (1/6/12)	$274,000.00	$0.00	$274,000.00	$274,000.00
Bank of Mom (1/6/12)	$68,500.00	$0.00	$68,050.00	$68,050.00
CC	$18,753.00	$0.00	$18,753.00	$18,753.00
TOTAL	$476,414.00	$50,334.47	$410,918.88	$360,584.41

Oh boy. I'm swimming in a big sea of red. The mortgage and Bank of Mom debts were incurred to buy my condo. The $18,753 credit card debt was incurred to pay for my couch and renovation work at my condo (50% completed at this time). The credit card debt will continue to increase next month when my condo rehab/renovation work will be completed. The credit card debt is currently financed with 0% interest for the next 21 months.

Incurring so much cc debt to "pretty-up" my condo wasn't a prudent decision on my part, undoubtedly. But quite frankly, I would rather eat rice and beans everyday to pay for a "pretty" condo than to live in the squalor that the prior owner lived. I hope to retire in this condo free and clear before I hit 60, so doing as much renovation work now makes sense to me. Besides, what's done is done. I can't turn back the clock.

SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$14,338.29	$14,437.72	+$99.43

The savings I report here is with respect to my emergency fund only and does not include my future spending earmarks. Currently, the total amount in my liquid savings account is $23,430.54.

MY ROP (LIFE INS) FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$1,709.88	$1,823.93	+$114.05

Long story short, I'm pretending to pay myself an additional $55/month for a "hypothetical" return of premium (ROP) term life insurance policy. I'm basically trying to "earn" back the term life insurance premiums through savings and investments. I had a nominally negative return in 2011 but 2012 is starting to look pretty decent. I've so far "recouped" 55.88% of the premiums I've paid so far and I still have 27 more years to go.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$179,586.72	$187,878.14	$8,291.42

My networth chart now includes a new asset for "home." Problem is, what IS the market value of my home? I know the answer is the amount for which a buyer is currently willing to purchase my condo. But unless I put my home on the market, I really won't know, would I?

Zillow is claiming that my home value is up $40,000 from when I closed. Suuuuuure. I believe that! Just based upon my limited search of my co-workers'/friends' home values, I think Zillow's proprietary algorithm is biased favorably towards recent purchasers. Rather than using the Zillow valuation for my home, I'm just going to use my cost basis (i.e., purchase price plus cost of renovations). This probably isn't an accurate reflection of the market value of my home, but it will at least keep me updated on my cost basis.

The breakdown and the history of my net worth can be seen here.

The Whole Year Inn (Actually, The Hole I'm In)

2012-01-22T08:22:00.000-08:00

I've dug a financial hole for myself and I can't seem to stop digging. The total cost of my renovations is... drumroll please... $30,355. And this doesn't include appliances (fridge, washer and dryer) or living room furniture.

Everyone tells me, "Don't try to do everything at once." I know, I know. I hear the advice and my common sense tells me this is absolutely correct. But I've succumbed to my demons and I've resigned myself to massive consumer debt once again.

This is no excuse, but I'm almost turning 40 and I've lived like a college student for the past 22 years. I'm sick of it. I've lived in a 1 BR/1 Bath apartment forever with a daybed as a sofa. I'm not saying I deserve a richly furnished/decorated home, but I finally want to be able to put my imprint on a place I call "home."

Due to my excellent credit, I'll be able to finance most of this project on a 0% interest loan for 2 years. Only time will tell how well I pay this down.

I've Dug A Hole For Myself Again

2012-01-17T05:57:00.000-08:00

Out of sheer frustration at the amount of work needed to rehabilitate my condo and because I'm not so handy (I don't even own a power drill), I contacted a highly recommended general contractor to do some work for me. My list was initially short and modest. But as I was going through the work that needed to be done, I started adding in extras that I wanted.

Here was my original "need-to-do" list:
1.) Fix garage door opener and hardware ($650);
2.) Patch drywall and paint ceilings/walls and replace baseboards ($5,000);
3.) Replace corroded pipes under sinks ($1,000);
4.) Replace broken fire door ($950);
5.) Get HVAC/furnace serviced ($100 + repairs extra);
6.) Remove heavily soiled carpeting and replace ($4,000);
7.) Replace kitchen sink and broken garbage disposal ($1,325);
8.) Refinish tubs in master and guest bathroom ($1,650).
TOTAL: $14,675

Not too crazy, right? After all, most of those items were recommended by my inspector.

As I was walking through the condo explaining my needs, my mouth detached from my brain and started spouting off stuff I wanted done as well. Suddenly, I no longer wanted carpet; I wanted hardwood floors. I couldn't live with the ugly fluorescent lights -- I wanted recessed pot lights in the living room and kitchen. I also wanted a ceiling fan with lights in the master and guest bedroom, which requires additional electrical work. The drab laundry room needed some pizzaz, so I wanted a glass backsplash added to the walls between the cabinets. And here's the pièce de résistance -- I want the guest bathroom entirely remodeled because the fiberglass tub is old and cracked.

*Sigh*

I'll let you fine folks guess how much my revamped rehab/remodel job is going to cost me. I'm a bit depressed right now to tell you how I intend to finance this as well, but as I'm sure you've already guessed, I'm going back into consumer debt.

*Sigh*

Manual Labor is Hard (Or Maybe I'm Just a Wimp)

2012-01-08T09:09:00.001-08:00

Thank you for your well wishes! I spent most of the week cleaning and dusting the condo. Unfortunately, the prior owner ~~was not much of a housekeeper~~ was a disgusting pig and the place (especially the kitchen), was pretty nauseating. To be fair, though, I really have no basis to criticize. After all, I had difficulty locating a bottle of pledge in my current apartment. :-P

The one thing about short sales is that the seller really doesn't give a sh!t about the home. (Although in my case, I don't think the prior owner ever had any concept of scrubbing/dusting/wiping.) I've heard about owners throwing fire crackers or cement down toilets and virtually gutting the place before they lose their home. I don't have anything egregious like that, but this owner has pretty much neglected this unit for the past 14 years she owned this.

For example:

14 years of dust accumulation in the fireplace screen:

Debris on kitchen floor:

Filthy dishwasher:

Deeesgusting kitchen sink:

As I've said, I've been scrubbing like I've never scrubbed before.

Before and After of the Gross Kitchen Drawer:

Before and After of the Dirty Countertop Tile Grout:

Tile Floor Grout Cleaning in Progress:

I am completely pooped from the scrubbing, sweeping, mopping, that I've been doing this past week. And I still have to do the Master Bathroom and Laundry Room. Manual labor is hard and I'm not even doing the heavy stuff! I'm a total wimp.

I (Finally) Closed!

2012-01-07T03:39:00.000-08:00

I finally closed yesterday evening. I immediately went to my condo and discovered that I had no electricity. I had to inspect the unit using my flashlight app on my phone. Although my vision was limited, the prior owner had completely removed all of her belongings and left no trash behind, which was a relief. Now comes the hard stuff like cleaning, painting, installing new flooring, fixing the garage door, etc.

2011 Final Financial Progress Report

2012-01-02T07:56:00.000-08:00

I hope you all had a wonderful holiday.

I started writing a rant about how my idiot lender failed to step up to the plate to fund my mortgage by 12/30/2011, the deadline of the short sale consent. But I also hated the thought of starting the New Year on a negative tone. I guess I'll just do a 2011 financial progress report wrap up first and then go on my rant.

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$0.00	$0.00	$(0.00)
Fed'l SL	$55,852.68	$50,486.69	$50,334.47	$(152.22)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$50,486.69	$50,334.47	$(152.22)

I'm really proud of the fact that I had reduced my debt by 61% over the past 3.5 years. Although I still have a big student loan balance (>$50k), looking at this chart always makes me happy because it shows how far I've come.

I was planning to snowball my remaining student loan debts and pay it off by 2014. I instead got impatient and antsy about plunging into the real estate market because both the housing market and interest rates are really low right now. I realize that both the housing market and interest rates could go lower in the upcoming year(s), but it probably won't matter. Unless the housing market suffers another catastrophic drop and the other unit owners default en masse, the price of my unit is irrelevant. I intend too live in my condo for a long time, possibly for the rest of my life.

Next month, I will be incurring significant debt. My additional debt will include a $274,000 mortgage (@ 3.825% interest) and a $68,500 "personal loan" from mom (@ 0% interest). If all goes to plan, I will pay off my student loans by 9/2019, Bank of Mom by 2/2022 and my mortgage by 2/2030. I suspect neither Suze Orman nor David Ramsey will approve my recent financial moves but c'est la vie.

Note: A commenter made a good point that the IRS will impose an imputed interest upon the lender in a 0% loan. I call it a "loan" but my mom will actually be on the deed to the home. When my mom quit claim deeds or passes away (and her interest gets transferred to me), there will be tax implications.

SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$14,038.86	$14,338.29	+$299.43

The savings I report here is with respect to my emergency fund only and does not include my future spending earmarks. My unreported earmarked savings (i.e., spending fund) balance is currently $5,343. This money is earmarked for expected expenditures like car repair, insurance premiums, etc. I have another $5,450 set up towards the repair costs of my condo. I suspect that amount is woefully inadequate.

MY ROP (LIFE INS) FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$1,647.08	$1,709.88	+$62.80

Long story short, I'm pretending to pay myself an additional $55/month for a "hypothetical" return of premium (ROP) term life insurance policy. I'm basically trying to "earn" back the term life insurance premiums through savings and investments.

I guess my investments were flat this year because I deposited $660 and my balance increased only by $644 since last December. This is a 30-year experiment so I won't be too discouraged by this.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$196,830.87	$179,586.72	-$17,244.15

Oof. The big reason for this drop is because I recently withdrew $14,314.07 to pay for points ($5,822.50 for 2.125 pts) and closing costs ($8,491.57) on the new condo. As noted above, I also set aside another $5,450 for immediate repairs I'll need to do on the condo.

The breakdown and the history of my net worth can be seen here.

ARRRRrrrggggh!!! Closing Hits a Snag Due to Incompetence

2011-12-29T07:24:00.000-08:00

We're down to the wire and we may not be able to close by 12/30, all because my loan processor is a freaking, lying, incompetent idiot.

On December 16, my loan processor inquired whether she can charge $85 on my credit card for an HOA questionnaire fee. I authorized the charge.

Last Friday, on December 23, I was contacted by my insurance agent that my lender requested Evidence of Insurance. I authorized payment on my credit card and my agent submitted a binder to my lender.

On Tuesday, December 27, my loan processor advised that all documents were received and that my file was with the underwriter for final approval.

On Wednesday morning, December 28, my loan processor advises that she needs me to authorize another credit card charge for an HOA certification for the second association. This time, she doesn't advise me of the charge amount in advance. When I inquired, the charge was $217. I discover that the charge includes an expediting fee. When I inquired why she didn't order the documents back on the 16th, she dances around the issue and blames it on the first association for not providing all documentation and the underwriter for not getting back to her until yesterday.

Now, we're scrambling to meet the 12/30/2011 closing deadline placed by the short sale lender. It irritates me that the idiot loan processor neglected to order the necessary documents from both HOAs back on the 16th. Because of her negligence, I may not be able to close in time by the 30th, which has tax implications and other monetary consequences like having to pay 31 days worth of interest in advance. The worst part is this idiot loan processor's failure to admit fault.

Holy Frick On A Stick - - I May Close By 12/30/2011!

2011-12-23T02:02:00.000-08:00

I just got word that the State of California agreed to release the Seller's tax lien off of the condo I've been trying to purchase in short sale. I've been told that the Seller also negotiated the HOA delinquencies and it looks like we're sprinting to the finish line. We may actually close escrow by 12/30/11!

The only recent hiccup was that I had to waive the termite inspection. What really irritates me is that the purchase offer that my agent drafted specifically stated that the Seller would pay for the termite inspection. The Seller accepted those terms. However, the genius realtors (mine and the Seller's) failed to ensure that the Short Sale Lenders would set aside funds from the sales proceeds to pay for the termite inspection. (But they sure as hell made sure that their commissions were taken care of.) Since the Seller agreed to pay for it, I could look to the Seller to pay for it out of her own pocket.

Oh yeah... I forgot -- The Seller hasn't even paid her state taxes. Why would she even honor the terms of her contract?

My genius agent now tells me that termite inspections aren't required for condos because termite control is the condo association's responsibility and I'm buying the property 'as-is'. Bullcr&p. First of all, I'm responsible for termites within my unit. Secondly, her blanket statement that termite inspections for condos are never required is only partially true. FHA-HUD loans require termite inspections even for condominiums. She's only correct that my lender doesn't require it.

I agreed to waive the termite inspection because: (1) re-negotiating the term with the Short Sale Lender will only delay the closing, and most importantly, (2) even if I got a Seller paid termite inspection report with adverse results, I'd still go through with the sale. It's still irritating, though, that my agent is selling me a snowjob.

Once I close, I'll hire a termite exterminator to inspect the property. According to this report, experts in the industry say "there is an incentive to "undercall" (i.e., an inspector misses or overlooks something in an inspection) during escrow. Professionals recommend that homeowners should have three or four companies look at their property. They also advised homeowners to watch the inspector during the inspection, making sure he inspects the locations claimed, like an attic or crawl space. If inspectors find termites, experts said to ask the inspector to show where the infestation is and what they found. Experts advised not to accept a single inspection from a realtor. If a termite company misses the problem, they do have to come back and treat it at no cost to the homeowner."

Good News - Bad News on the Short Sale Purchase

2011-12-16T05:35:00.000-08:00

My misadventures in purchasing a condo in short sale goes on. Like life, there are ups and downs. And for every good news I get, it seems to have a twin of bad news.

Goods news - I was approved for a conventional loan. I locked in a 3.875% interest with 20% down and 2.125 points. The lock is good 'til 1/20/12 (or so).

Good news - The appraisal for the property came back at $365,000. My accepted offer was $342,500.

Bad news - I noticed a $3600 State tax lien on the condo in the preliminary title report. When I reviewed the 1st mortgagee's consent to short sale letter, it gave an allowance of up to $6,000 to satisfy any liens on the property. The consent letter specifically identified the HOA lien and and the 2nd mortgagee's lien but nothing about the State tax lien. I brought this to my agent's attention. Apparently, the Seller neglected to disclose the fact that she hadn't paid her state taxes on her HUD-1.

The Seller is now scrambling to get a partial lien release from the State. According to the State of California website:

A partial release of lien releases a state tax lien from a specific piece of property. However, the lien remains in effect and will encumber the transfer of title of any other properties owned or subsequently acquired by the taxpayer. Reasons to request a partial release of lien include a need to transfer the rights to the property when there are insufficient funds to fully satisfy the state tax lien or the party with the lien has no rights to title of the property.

As part of the request, the Seller requested that I forward the appraisal (that I paid for) to the Franchise Tax Board. I gave specific instructions to the escrow company that it is only authorized to release the appraisal to the FTB and not to anyone else.

Hopefully, when the FTB sees that the condo was appraised $83,000 less than what she owes, it will release the lien off the property. I am hoping that the State does not demand that I increase my offer to cover the lien.

Bad News - Due to the ~~deadbeat~~ Seller's failure to disclose her State tax delinquencies, I probably won't be able to close on this condo before the end of the year, much less before the 2nd mortgagee's consent expires on 1/15/2012. My locked interest rate will likely also expire and knowing my luck the rate will probably increase. Oh... did I forget to tell you that this Seller will get $3,000 bucks if this deal goes through? Yes, you read that right. This woman who took out a "Liar's Loan" and hasn't paid her taxes will get $3,000 from this sale. I'm really starting to resent this Seller and I will be pissed if I end up paying her State taxes.

Inspection Result of the Short Sale Condo

2011-12-11T19:29:00.000-08:00

I had the short sale condominium inspected last week. As expected, the inspector found additional issues that require repairs. Many of the repairs are due to neglect and lack of maintenance by the Seller.

Before I go on to discuss the repair items, I learned something about the Seller that somewhat irritates me. The Seller purchased the home in 1997 for $180,000. In 1999, she was let go from her job that she had for 17 years. She was unemployed for 2 years until 2001. Her next employment only lasted 1 year. The Seller was then unemployed for another 3 years until 2005, where again, she was only able to maintain a job for 1 year. She's been essentially unemployed (or "self-employed") ever since.

In August 2006 (hopefully during the time she was gainfully employed), she refinanced her home to the tune of $375,000. In March 2007 (during her unemployment period), she took out a 2nd mortgage in the sum of $73,000, probably via a NINJA ("no-income, no-job application") loan.

I know I have no right to judge the Seller because I don't know her entire story. But considering that she's had a spotty employment history since 1999, I can't help but to think she was either greedy or irresponsible for refinancing, rather than selling her condo. Personally, if I wasn't confident about having a steady income to repay my mortgage, I would sell my condo. I certainly wouldn't take out a 2nd mortgage during a period of unemployment.

Had the Seller sold in 2006 or 2007, she could have easily sold for $483,000 - $508,000 and broken even or even made a small profit. The Seller instead chose to live off of borrowed money despite her unstable income. She spent $0 on maintaining the condo and it shows. Every repair item that I know I have to make due to "lack of maintenance," sticks in my craw. I guess it infuriates me because I should've asked for a bigger discount during the negotiation. *Sigh* Live and learn, I guess.

Oh... and did I tell you that the Seller is going to get rewarded with an additional $3,000 from the HAFA program? Oh righty. I'm finished ranting and raving.

Anyhow, here are some of the issues the inspector found:

Broken garage door hardware;
Corroded pipes underneath all of the sinks;
Chipped kitchen sink and broken garbage disposal;
Damaged fire door;
Leaky bathroom faucet;
Dirty and unmaintained air conditioning unit;
Dirty and unmaintained heating unit;
Unsealed platform at heating unit;
Rusted and discolored burners at heating unit;
Vent pipe at water heater stained;
Various locations of drywall damage;
Various locations of ceiling damage.

The inspector surmised that these repair items total about $2,000 or so, assuming I don't need to replace any of the major items like the AC or the furnace. Even assuming that those items need replacement, I can just choose not to turn on my AC and central heat. One of the benefits of living in a temperate climate like San Diego.

I'm a bit nervous now that I've underestimated what it would cost to make my unit "move-in" ready. I'm getting a dose of home ownership reality before I've even closed.

I'm Officially in Escrow - - Budgeting for The Expiration of the Payroll Tax Cuts

2011-12-03T18:59:00.001-08:00

Good news: The second mortgagee, Wells Fargo, consented to the short sale on 11/30/2011. Although the first mortgagee, BofA, has not agreed to extend its consent that expired on 11/25, I'm told that this is common and that it will likely do so later. Once a bank consents to a short sale, it is highly unlikely to refuse an extension, especially when there's a willing buyer. Or so I'm told.

I guess this means we're now officially off to the races. I just paid $315 for an inspection and another $400 for the appraisal. I was hoping to close by the end of the year, but looks like the target closing date is 1/15/2012.

Bad news: Interest rates are inching up right now because the stock market is doing gangbusters for whatever reason. I managed to lock in an interest rate of 3.875% (2.125 discount points) for the next 50 days. Knowing my luck, the rates will subsequently dip. *shrug* I'm okay because I doubt it will go down by much. I'd rather have the peace of mind of knowing what my rates will be for budgeting purposes.

Speaking of budgets, I've estimated that my paycheck will be approximately $95 less per pay period. The reason is two-fold: (1) my out of pocket costs for health/dental/AD&D insurance is going up by about $15/paycheck, and (2) my pay will decrease by $80/paycheck if our moron Congress members fail to come to any consensus regarding the Social Security payroll tax cuts. I will be flabbergasted if Congress makes a decision one way or the other by 12/31/2011.

I personally don't like to see my pay go down approximately $200/month, but I can absorb it. After all, when the payroll tax cut was implemented, I decided to hoard it rather than spend it. I wasn't a very good citizen since I didn't use the tax cuts to stimulate the economy.

Do you think the Social Security payroll tax cut will be extended? If so, are you preparing for this possibility?

I'm Starting to Think Short Sales Aren't Worth The Hassle...

2011-11-11T10:01:00.000-08:00

I finally got the Short Sale Consent letter from the first mortgagee (BoA). But it demands that the property be closed by 11/25. 11/25 is the Friday after Thanksgiving, not to mention only gives us 2 weeks to fund, douche-bags.

When I pointed this out to my ~~genius~~ real estate agent, she said the Seller's Agent will seek an extension of time. The only problem is, the Consent Letter clearly states that if an extension is sought, interest will accrue and either the Buyer or the Seller will be responsible for the interest. Uhhhh.... yeah. The deadbeat Seller is really going to have funds to pay the interest. Uh-huh. I'm not going to agree to pay interest on a loan that I had no involvement in taking out. Mea culpa -- If an extension is sought, the Consent Letter does not say that the Buyer or Seller would be responsible for the interest if an extension is requested. Only the Seller would be responsible. My real estate agent assured me that if the Seller can't come up with the money, the Short Sale Lender will eat it. Not so sure about that...

And here's another thing - - the Consent Letter states that it will give an allowance of $1485 to pay outstanding HOA fees. I previously inquired about outstanding HOA dues with my real estate agent and her response was a flip, "You're not responsible for it so don't worry." Ummmm... unless the HOA agreed to write off outstanding amounts in excess of $1485, I doubt it's going to give up its lien rights and the Seller won't be able to give marketable title. I again, requested my ~~genius~~ real estate agent to look into this.

Finally... the first installment of the real estate tax is due 12/12/11. If not paid by the due date, penalties will attach. Again... I doubt that the deadbeat Seller is going to have the funds to pay the penalty, much less the first installment.

I can't help but to feel that my real estate agent just wants me to sign to everything and get to the point of no return when they spring these "surprise" costs at me at closing. I have no faith that my agent has my best interest in mind.

I'm so over this stupid short sale.

Short Sale Whiplash - Update

2011-10-30T14:41:00.001-07:00

My agent called me last Thursday to tell me that she got verbal confirmation that the Short Sale Lender approved the short sale at our offer price. My agent seemed excited but I was less than thrilled since: a) I was on a business trip and was tired and b) I don't believe it until I actually see the Short Sale Approval letter.

At the risk of sounding like a broken record -- what an idiot this Short Sale Lender is. Had they countered even slightly less than their original counter, I would have (probably) increased my offer slightly. Instead, they countered twice with a comp price that is (probably) no longer applicable in this market. Their arrogance sufficiently pissed me off to make me want to walk away from this property.

If this is how most Short Sale Lenders negotiate, I have little hope for the housing market and the economy rebounding any time soon. These banks won't be getting these defaulted properties off their books quickly enough and they won't be negotiating top dollar either. Ay, ay, ay...

Short Sale Whiplash -- Lender Reconsidering?

2011-10-23T09:05:00.001-07:00

While I was in the old country placing my father's ashes into the family grave, I got word from my real estate agent that the short sale lender wants a "live signature" (as opposed to an electronic signature) on my offer of $342,500. I'm told the short sale lender will then submit the offer to an investor for final decision.

I re-submitted my written offer but I'm not holding my breath. Knowing these greedy idiots, they'll probably counter back at $375,000 for the third time.

You know what's funny? Had these idiots countered at, say, $360,000, rather than holding firm at $375,000, I would have seriously considered increasing my offer. Now, I'm more motivated than ever to stick to my line in the sand. I am not the desperate one at this party. I'm not the idiot that lent $450,000+ on a condo that's never been renovated since 1991.

Short Sale Fail...

2011-10-07T05:43:00.000-07:00

The Short Sale Lender countered again. And they countered with $375,000 -- the same figure they countered with before. Stick a fork in me, I'm done. The Short Sale Lender is clearly telling me that $375,000 is its bottom line.

Seriously, BofA??? You want me to pay the same amount that someone else paid for another pristine unit? This unit has dingy carpet, old paint job and crappy appliances.

No thanks. I'm not going to bid against myself for a fixer upper. I'd rather pay more for a move-in ready unit. I'm walking.

Short Sale Approval Delayed...

2011-09-16T06:24:00.000-07:00

I got word that the Seller of the condo unit on which I made an offer just got approved under the Home Affordable Foreclosure Alternatives (HAFA) program. According to this article, HAFA is "[a]imed at borrowers who are underwater on their mortgages and who've been denied a modification via HAMP [Home Affordable Modification program]... The program pays cash to both the borrower and lender to encourage a short sale, a deal in which the bank accepts the proceeds of the home sale as full repayment of the mortgage debt, forgiving any loss." Supposedly, the Seller will be getting $3,000 if this deal goes through.

Assuming that the Seller's agent is telling the truth, she resubmitted the short sale approval paperwork on Tuesday. The Seller's agent also claims that the short sale lender's own negotiator is recommending my offer. I've been told to expect a response in the next 30 - 45 days.

I guess I shouldn't presume that the short sale approval will be forthcoming, but I have to admit, I have. In order to temper my expectations, I've been reading blogs like this one, which is forecasting another significant price correction in the California housing market.

Stiffing Bank of Mom and Dad

2011-09-11T04:32:00.001-07:00

I previously wrote that my Snowball Plan will come to a screeching halt now that I'm purchasing a condo. In actuality, I've just revised my Snowball Plan, yet again, to include my anticipated new debts: my mortgage and the down payment lent to me by Bank of Mom.

Come 10/31/2011, my debts will look something like this:

10/31/11	Fed'l Sub'd Student Loan	$ 50,558.49	@ 5.125%	Fixed
	Mortgage	$ 274,000.00	@ 3.875%	Fixed
	Down Payment	$ 68,500.00	@ 0.000%	Fixed
	TOTAL	$ 393,058.49

Based upon these estimates, here's my new Snowball Plan ver. 3.0.

I know that the "real" Snowball Plan requires me too pay off my debts in the order of the smallest balance to the largest. I do plan to pay off my smallest debt first, but I'll also be snowflaking $4,000/year to my Bank of Mom debt.

Some would argue that the $4k/year snowflake should be applied to my student loans instead of to Bank of Mom. But I feel that Bank of Mom deserves the not-so-insignificant snowflaking since she was generous enough to lend me the money interest-free. Additionally, my mom's 69. God knows how much longer she'll live. She got a relatively clean bill of health recently so I'm thinking that she'll be good for at least another 10 years. Hence, my goal is to pay off Bank of Mom in 10 years. I guess I should also be prepared to make a balloon payment for the balance in the event my mom's health deteriorates prematurely. The bottom line is, I intend to take my debt to Bank of Mom seriously and will treat it no differently than any other debt to a "real" creditor.

I'm going to switch gears now and I'm going to engage in some catty gossip. My best friend recently confided to me that she and her husband also "borrowed" approximately $20,000 from the husband's parents for their down payment. It's been 8 years and they've paid back $0.00 so far. In the mean time, they've taken vacations, bought a new car and made improvements to their house. My BFF claims she feels guilty for stiffing the in-laws, but not guilty enough to initiate a repayment plan. My BFF further feels that it's her husband's responsibility to make the repayment arrangements since they are his parents.

I'm appalled at my friend's cavalier attitude about how she and her husband are stiffing Bank of Mom and Dad. I guess since her in-laws haven't said a "peep" about being repaid, perhaps the in-laws intended to "gift" the money. Either way, the issue has been swept under the rug and no one is dealing with it.

I'm a bit disappointed with my friend. No matter how you slice it, she and her husband are deadbeats. They're deadbeats because they're stiffing their family members on a significant sum. Even assuming that the in-laws were willing to gift the money, my friend and her husband are deadbeats since they didn't pay taxes on the non-exempt portion of the amount that was gifted to them.

I wonder if the in-laws have forgotten about the "loan"? Or I wonder if it will always stay in the back of their minds that their kid and his wife stiffed them?

August 2011 Progress Report

2011-09-03T06:39:00.001-07:00

My focus on my personal finances took a serious nose-dive after I paid off my private student loans in March. Paying off my private student loans literally free'd-up $900/month in my budget and I started living the "good life." I stopped paying attention to my spending and spent money like it grew on trees. I'm happy to say that with $900/month in discretionary spending, I didn't get myself into any trouble. But I really hadn't saved much and I hadn't significantly paid down my $50k+ federal student loans either.

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$0.00	$0.00	$(0.00)
Fed'l SL	$55,852.68	$50,965.88	$50,834.65	$(131.23)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$50,965.88	$50,834.65	$(131.23)

In light of the fact that I've decided to buy a condo, my debt snowball will come to a screeching halt. Rather than putting the extra money towards paying down my student loans, I've decided to "invest" it in real estate. Only time will tell whether this is a good financial move on my part or not.

SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$10,324.10	$13,834.42	+$3,510.32

The savings I report here is with respect to my emergency fund only and does not include my future spending earmarks. The increase in the chart above does not represent an actual increase in my savings. I merely shifted money from my unreported earmarks to my EF. I figure I'll need more $ in my EF since my housing budget will likely double in the next couple of months.

In case you were wondering, my unreported earmark fund is down from $10.8k in June to $4,765 currently. This makes me a bit nervous.

MY "X"-FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$5,898.14	$19,369.56	+$13,471.42

My "X"-Fund represents a part of a windfall that I had originally set aside either as an emergency fund or a down-payment for my first home. Either way, it's money that I didn't intend to touch unless it's for an emergency or for reinvestment purposes.

In February 2011, my X-Fund had $28,573.36. I used approximately $26,319 in March to pay off my private student loans. It left me with only about $2,254.58, but I slowly built the balance back up to $5,898.14 by July. In July, I sold a bunch of my company stock, liquidated one of my Roth IRA accounts and shifted some of my earmark money to my X-Fund which explains the sudden $13k+ jump.

I anticipate this fund will be exhausted in October on closing costs and home improvements.

MY ROP (LIFE INS) FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$1,478.27	$1,514.53	+$36.26

Long story short, I'm pretending to pay myself an additional $55/month for a "hypothetical" return of premium (ROP) term life insurance policy. I'm basically trying to "earn" back the term life insurance premiums through savings and investments.

Considering I saved $55 last month and my gain was only $36.26, I guess I lost money on my investments. But who didn't in August?

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$187,411.16	$186,209.75	-$1,201.41

August was a brutal month for my 401k, IRAs and other investments. It could've been worse, though. I didn't suffer as big a loss as I could have since I liquidated a bunch of my company stocks and one of my Roth IRA account at the end of July in anticipation of buying my first home.

The breakdown and the history of my net worth can be seen here.

Short Sale Approval Is Supposedly Coming Next Week

2011-09-03T06:09:00.000-07:00

I just got word from my agent that the seller submitted her final approval paper work for the short sale along with a recommendation from the short-sale lender's negotiator. The short sale is expected to be approved some time next week with an anticipated closing date of 10/10/11. I requested that the closing date be pushed back to 10/31/11. I haven't heard back from my agent so I'm not sure whether my request will be honored or whether it will jeopardize the deal.

Anyhow, here's my new monthly housing budget, assuming the short sale is approved:
Mortgage (P&I): $1,289 @ 3.88% interest (3 disc pts)
Assoc Fee: $320
Property Tax: $343 (est.)
Payback Mom: $225
Insurance: $45
Total: $2,222

My current housing budget is:
Rent: $1,175
Renters Insurance: $20
Total: $1,195

Difference: $1,027/month+

Maybe I Shouldn't Have Countered

2011-08-24T04:03:00.001-07:00

Hmmmm... No response from the short sale lender after we put our counter-to-their-counter in writing. Is it possible that the delay is caused by a new boss at BofA's troubled mortgage servicing department?

I initially thought BofA's lack of an immediate response as a sign that it's crunching numbers to decide whether to accept our counter. I would think that if BofA was planning to stand firm, it wouldn't have asked for a written counter and just rejected us verbally. But now I'm wondering if BofA is entertaining other offers right now? Am I being cheated on???? Surely they've read the most recent bad news in the San Diego housing market, right?

I don't deal with uncertainty in my personal life too well. I dwell and obsess. Maybe that's why I've never been married and am still single. Hmph.

I guess I need to think about the bright side - - the longer this is drawn out, the better, because my apartment lease doesn't end until November 3o, 2011. If we had a sales contract now, we'd probably close by the end of September, leaving me with double housing payments (rent + mortgage) for two months.

And perhaps I just need to remind myself that if this doesn't go through I'll still be okay...

Counter Offer

2011-08-20T05:00:00.000-07:00

I'm not exactly thrilled with my agent. When the short sale lender countered at $375,000, I was expecting my agent to discuss with me viable arguments with which we can counter. But instead, my agent's attitude was, "comps are comps." It was almost as if "comps" were gospel and irrefutable. W T F?? The only advice I got was an unscientific/unproven hypothesis that a short sale lender will likely accept an amount that equals 95% of its counter.

Fine. I decided I'll play them at their own game. I carefully examined the comps. As I previously noted, the "comps" weren't exactly comparable to my unit. When I pointed these out, my agent responded, "Those are all cosmetic. At most, it will get you a $10,000 discount."

Okaaaay. I then looked at the numbers.

Comp #1 (a 1185 sq. ft. unit) closed escrow on 7/15/11 for $410,000.
Comp #2 (a 997 sq. ft. unit) closed escrow on 6/10/11 for $375,000.
Comp #3 (a 997 sq. ft. unit) closed escrow on 3/8/11 for $367,500.

I wrote to my agent:

After careful consideration, please counter with $342,500. My unit does not include upgrades and appliances of the other comps such as newer carpet, paint, hardwood floors, kitchen appliances and washer/dryer. I believe that the upgrade/appliance/repair allowance is valued at $10,000+.

The price per sq ft of one of the comps was $345.99 (i.e., $410k div. 1185 sq ft). Using that price, I've calculated: $345.99 x 1019 sq ft = $352,562 - $10,000 = $342,564.

The short sale lender based its counter on June/July comps, but I think it's worthwhile to point out that the stock market took a significant dive in August, which has reduced the net wealth of many potential buyers, including myself. I imagine that other buyers' purchasing abilities have been similarly affected.

I thought the last argument about the recent market dive could be irrelevant. But according to the WSJ article titled, New Round of Upheaval Reduces Home Buyers' Urgency to Do a Deal (Note: click on top search result to get full article), many buyers are actually reducing their offers because of the market dive. Maybe it wasn't superfluous at all.

My agent verbally conveyed our counter on Thursday to the short sale negotiator (whose fee I agreed to pay if this deal went through). Yesterday, the short sale lender requested that we put our offer in writing.

Will the short sale lender accept? Or will they counter? I'm on pins and needles.

The Short Sale Lender Countered - And I'm Not Happy

2011-08-17T06:59:00.001-07:00

I just got word that the short sale lender countered... $46k above my offer. The counter was based upon comps of recent sales in the development.

But comps are a peculiar thing - - they're not necessarily apples-to-apples comparisons. First of all, the "comps" conveyed with a fridge, washer and dryer (approx value $3k) and my unit would not. The other unit had wood floors (kitchen and bath), newer carpet and range/oven/dishwasher upgrades. So even without taking the condition of my unit into consideration, there should be a discount.

I've asked my agent whether I can look at the property again. After all, I suspect that there are issues with the unit that I didn't catch the first time around, like a leaky toilet that the seller tried to hide with towels.

I learned that the seller owes approximately $450,000 on the unit. The short sale lender wants $375,000. My agent says that with her experience, a short sale lender would more likely than not accept a counter that equals approximately 95% of the approved amount. In other words, my agent estimates that the bank would be hard-pressed to reject a counter of $356,250.

I'm having a hard time right now separating out emotions and sound financial judgment. My bank has already pre-approved me for the full $375,000 amount. And if I can seal the deal now, I can get a mortgage at 3.75% APR (with 3 discount points).

I can make the payments, but I'll be seriously house poor. And I'm not sure whether the home is worth $356,000 to $375,000. Based upon the sale prices of comparable units from 1989, it looks like the home values are back to what they were in 2003. But if you look at the graph below, 2003 was in the beginning stages of the housing bubble.

Of all the properties that are on the market right now, I like this unit the best for the intangibles -- a south facing patio/windows, a "walkable" location, beautiful landscaping, etc. But... I'll also be paying a premium for these intangibles.

I have until Thursday to make up my mind. I'm not sure whether I should walk or buy.

My Offer Was Accepted

2011-08-02T05:22:00.001-07:00

I got an email Monday morning from my agent that the Seller accepted my offer. Egads! I meant, yahoo. I meant, OMG. I meant, hurray. I meant, "What have I done????"

One of the "minor" concessions I had to make was that I needed to deposit $3,290 of earnest money into escrow within 3 days of the Seller's acceptance, not when her lenders approve the short sale. Feh. July was a three-paycheck month - - I's got the money!

But when I checked my bank account, I had barely any money. WTF??? It looks like an inter-institutional transfer from my primary checking to an online savings bank that I set a while ago, but canceled over the weekend, was pushed through nevertheless. I called both banks to cancel the transaction, but no dice. Frick! The money is floating in the cyber-transfer ether for the next 3 days and possibly inaccessible until after the due date. F#$K!!

Fortunately, my sister agreed to wire the earnest money. Truth be told, the only reason why I'm able to purchase this property at all is because my mother is lending me a portion of my dad's life insurance proceed for the 20% down payment. My sister is the trustee of the funds so it made sense that she pay the initial deposit. Mini-crisis resolved.

I have a good feeling that the Seller's lenders will approve the short-sale. A comparable unit in December sold for $333,000. Another comparable unit (but with hardwood floor upgrades) sold for $375,000 in June. Looks like I'm in the ballpark.

Even if the short sale is rejected, I'll be okay. After all, my cost of living will skyrocket and I'll be living on rice-and-beans for the foreseeable future if this goes through. Assuming the short-sale is approved, this is my new housing budget: (Oh, God, I'm feeling sick.)

Mortgage (P&I): $1,275
HOA Fee: $320
Property Tax: $340 (est.)
Payback Mom: $225
Condo Insurance: $60
TOTAL: $2,220/month.

Do you see why I won't really be disappointed if the the short-sale is rejected?

Getting Caught Up in the Frenzy - Budget Increase Round Two

2011-07-31T11:09:00.000-07:00

It's starting to look like I need a budget of $300k to $330k for a "move-in ready" 2br/2ba condo in my area. At this price range, I've estimated that my housing cost will be around $1,914 - $2000/month = mortgage (P&I only) $1,274 + associations fees around $300 + property tax $340 + insurance $10. (The reason why my "insurance cost" budget is $10 is because I'm only taking into account the increased premium from a condo-owner's policy vs. my current renter's insurance policy.)

I'm currently paying $1,175/month in rent, so this is a jump of $739-$825/month in my cost of living. Of course, I'm currently only renting a 1 br/1 ba apartment, so it's not really an apples-to-apples comparison. If I were to rent a 2 br/2 ba apartment at my complex, I would be paying approx. $1,600 - $1,700 month. So I concluded that buying makes sense, even with the significantly increased cost of living.

With this conclusion, I made two offers:
1.) $300,000 back-up offer on a townhome for which the seller had already accepted a $300k cash offer from someone else. The buyer, however, has a date certain that they need to move-in. With the townhome being sold as a short-sale, the property may not close in time for the buyer. In the event the buyer drops out, my back-up offer will be considered.

2.) $329,000 on a short-sale townhome. The seller countered yesterday with minor concessions, which I accepted. The seller is entertaining multiple offers so I'm not sure whether I'll "win" the bid yet.

I have mixed feelings about this process. On the one hand, I hope I can buy the $329k property. On the other hand, the thought of the increased cost of living is giving me heartburn.

My Budget Round One: From $231,250 to $275,000

2011-07-30T08:18:00.000-07:00

My initial, "What I Can Afford" budget was a condominium up to $231,250. I based that budget on a cursory review on Zillow for 2 BR/2Ba condominiums in my area. There were a couple of apartment conversion units with upgraded interiors (i.e., granite countertops, stainless steel appliances) in the $229,000 - $230,000 price range. Poifect!

My agent sent me an updated MLS listing with a search criteria of 2+BR/2+Ba up to $235,000. I got 9 hits. The 2 condo conversion units were still on the market. Yipee!

Unfortunately, when I did a "drive-by," I quickly discovered why those units were so cheap... errrr.... I meant affordable. The units' balconies and windows face a major freeway. Semis and trucks drive through this freeway all day and all night. The noise pollution from the freeway is overwhelming. There's no way I can sleep at night. *Sigh*

Okay... Maybe if I increase my search criteria to $275,000? Yikes. That means I need to come up with a $55,000 down payment and my loan amount will be $220,000. My monthly mortgage payment will go from $890 to $1,066. I tell myself, "I can swing it! It's still less than my monthly rent!" (I'm conveniently ignoring property taxes and COA fees.) I instructed my agent to increase the search criteria.

I got a couple of more hits. There was one unit for $257,000. The MLS pictures were kind of dark and depressing. But the location is great, so nothing a little paint, extra lighting and some elbow grease can't cure, right?

The walk-through was scary... errrr... I meant enlightening. Everything from the common area to the living area screamed 70's kitsch. Imagine a generic Motel 8 structure with an age-worn Brady Bunch decor. The unit doorway had a tiki-like, wood panel embellishment. I like tikis well enough, but at Disneyland or Trader Vics. Not my home. And since the ugly tiki is in the common-area, I can't just rip it out.

Once inside, it was bright and spacious, but everything was soooo dated. The prior owner appeared to have started DIY removal of the acoustic (popcorn) ceiling in the kitchen. But they stopped a little ways into the living room area, probably saying, "F*#k it. This $#it is too much work." The fireplace had some weird, orange-ish psychedelic tiles above it. When I got close, the tiles had a picture of a flamenco dancer. Egads.

*Sigh* I'm coming to the realization that even in this economy, a 2BR/2Ba for <$275,000 will only get me a fixer-upper. If it's move-in ready, I have to be prepared to wear earplugs at all times while at home. I'm getting depressed...

I'm In the Market to Buy My First Home

2011-07-29T05:59:00.000-07:00

The US economy is on the brink of crumbling and I've decided now is the good time to buy my first home. I've always had a knack for good timing. Like that line from the movie Airplane!: "I guess I picked the wrong time to quit drinking."

I won't be writing about stuff like "How I found my agent" (friend referral), "How I found my first mortgage" (credit union), "How I determined what I can afford". Other (much knowledgeable/experienced/smarter) people have already covered that territory ad nauseum. I'm just going to write about my personal experience. My posts, for all practical purposes, will be of no use to anyone but myself.

I started the process on Monday. So far, my emotions have ran the gamut of hopeful, excited, optimistic, scared, ambivalent, dejected, sad, frustrated, anxious, impatient, depressed, etc. I don't deal with stress very well, so these extreme fluctuations in emotion have immediately manifested into cold sores (plural) on my bottom lip. Nothing exudes and inspires confidence like outwardly visible herpes sores.

I've already had to adjust my "maximum" budget twice in the span of a week. *Sigh* Not a good sign. For those who like witnessing a train crash, you may be in for treat.

Paid Off My Private Student Loans

2011-03-19T05:15:00.000-07:00

I purged the variable-rate-debt snake from my household and paid off my private student loans on St. Paddy's Day. Yep, made one lump sum payment of $31,584.24 to pay it off. Now I have approximately $51.5k in federally subsidized student loans remaining. I'm less concerned about paying my federally subsidized student loan off because: (a) it has a fixed interest rate of 5.125% and (b) the monthly payment is only $360.08/month.

You may be wondering how I got the money to make a huge lump-sum payment. Back in December 2009, I came across a significant windfall of ~$33k. (Due to a confidentiality clause, I can't divulge the source or the reason for the windfall.) I spent some of the windfall on various things, but managed to hold onto $28.5k for over a year. I didn't know what I wanted to do with the money. Should I keep it as a potential down payment for my first home? Should I just stash it as my secondary emergency fund? Or should I pay off my student loans?

I finally worked up the courage to use the money to pay off my private student loans. Although the interest rates are really low right now (3.583% APR), I'm not sure how much longer it will stay low since it is a variable rate loan. Secondly, I've been accruing anemic interest on my savings accounts ranging between 0.5% - 1.59% APY. Thirdly, if you add my EF balance and my "earmarked" savings, I have approximately $24,000 remaining in the bank. I felt I had enough of a financial cushion to pull the trigger.

I was planning to snowball my entire student loans but I've changed my mind. As I've indicated above, the minimum monthly payment and the fixed interest rates on my remaining federal student loans are both relatively low. Although the balance is still relatively high, I feel less urgent to pay it off.

Instead, I'm going to focus on saving money for a down payment on my first home. Although I'm pretty confident that interest rates aren't going to skyrocket any time soon (in the next five years or so), I want to be able to have money to buy something before it does.

Give More Than You Get

2011-01-23T09:23:00.001-08:00

I've made a personal commitment to live by this motto.

In the past, I lived by the motto, "Do unto others as they have done for me." For example, if some one didn't do "X" for me, I won't do "X" for them either. I guess in many ways this is a pragmatic way to live. But it also made me miserable because I was keeping score. And I've come to the conclusion that keeping score is exhausting, limiting and ultimately, self-defeating.

Don't get me wrong - - I have no intention of trying to make friends with those who have intentionally wronged or back-stabbed me in the past. I'm just talking about those people who haven't necessarily reciprocated my kind gestures in the past.

I bring this up because my BFF told me, "If 'giving more than you get' is your motto, you're going to discover that you got taken advantage of your entire life." My BFF said this with respect to my friend, "Tara," who I take out to lunch every year for her birthday. Tara has never remembered my birthday. This irked me for a while, but I came to the conclusion that I'm just being petty.

Tara is a single mother who is sandwiched between taking care of her college-bound daughter and a sick, invalid father. She has a lot on her plate and I doubt remembering my birthday is high on her priority list. Besides, I haven't really cared about my birthday since I turned 30 either.

My BFF said, "Tara is just using you and she'll see you nothing other than a free meal-ticket. She will do nothing for you. You watch." Of course, my BFF has never met Tara and is casting a broad judgment based upon this one issue. Fact of the matter is, Tara wouldn't care if I never paid for her lunch. I just take Tara out to lunch on her birthday because it's an excuse to get together and catch up. She never expects or have asked to be taken out.

I took Tara out to lunch for her birthday last week. She offered and even insisted on paying for her own meal, but I paid anyways. She finally sheepishly said, "You always do this for me and I don't even know your birthday. When is it?" I told her my birthday was in June but didn't say the specific day . After all, I don't take her out with the expectation that she'll take me out for mine.

On a side note, my BFF complains that she has no "girl-friends" that she can hang out with. What she really means is that she has no friends that she deems worthy to hang out with. I guess when you expect your friends to reciprocate every kind thing you do for them, you're pretty much going to limit your circle of friends.

2010 Year-End Progress Report

2011-01-15T07:40:00.000-08:00

This is my (belated) 2010 year-end financial review.

Due to family obligations last year, I hadn't been updating my blog regularly other than to blow steam about my parents' financial irresponsibility.

With my father now deceased (RIP), I am hoping that my life will return to "normal" and that I will be able to resume a semi-regular update of my financial progress.

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$33,936.80	$33,486.00	$(450.80)
Fed'l SL	$55,852.68	$52,101.45	$51,953.37	$(148.08)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$86,038.25	$85,439.37	$(598.88)

I totally fell off of the snowball plan last year. It's partly because my monthly budget took a whack every time I traveled out-of-state to attend to my parents' bankruptcy and health care issues. I also blew beaucoup cash to deal with my emotional upheavals in dealing with my parents. Hey, retail therapy is a proud American tradition, no? Even if it isn't, our economic recovery depends upon it, sadly.

Anyhow, here's a recap:

Total debt in 12/31/09: $96,750.67
Total debt in 12/31/10: $85,439.37
Reduction in $: $11,311.30
Reduction in %: 11.69%

SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$9,592.59	$9,696.45	+$103.86

The savings I report here is with respect to my emergency fund savings only and does not include my future spending earmarks. My ultimate goal is to save $36,000.

Total EF in 12/31/09: $8,472.64
Total EF in 12/31/10: $9,696.45
Increase in $: $1,223.81
Increase in %: 14.44%

MY "X"-FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$28,443.10	$28,523.41	+$80.31

My "X"-Fund represents a part of a recent windfall that I'd set aside for some unplanned expense. I was thinking it could serve as a supplement to my emergency fund or a down-payment for my first home, but I'm very, very tempted to use this money to pay off my private student loans some time down the road. After all, this money is currently accruing interest at an anemic 1.3% APY. My private student loans are costing me ~3.6% APR. On paper it's a no-brainer, but the emotional security this money gives me is incalculable.

MY ROP (LIFE INS) FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$1,003.23	$1,066.14	+$62.91

Long story short, I bought term life insurance but created a hypothetical whole life insurance policy (or, return of premium (ROP) term life insurance policy). I'm basically trying to see whether I can earn back my life insurance premiums through various investments.

So far, my investments have yielded a 9.06% return. With the stock market surging though, I don't think I'll be buying any stocks or ETFs in the near future. I'll wait for the inevitable (yet somehow unexpected) market correction.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$133,127.73	$143,084.85	+$9,957.12

Looks great doesn't it? But if I omit my 401k and IRAs, my net worth is... -$35,413.41. I'll do the happy dance when my net worth (excl-retirement accounts) is no longer in the red.

Net worth on 12/31/09: $53,922.34
Net worth on 12/31/10: $143,084.85
Increase in $: $89,162.51
Increase in %: 165.35%

The increase in my net worth is mostly attributed to: (a) 401k value increased by ~$45,000, (b) net windfall of ~$28,000, (c) debt reduction of ~$11,000.

The breakdown and the history of my net worth can be seen here.

What Are You Doing with the Social Security Payroll Tax Cut?

2011-01-15T06:34:00.000-08:00

I got my first paycheck of 2011 and it was more than I expected. (This is partly due to the fact that I reduced my 401k contributions by 1% back in August because I would have otherwise maxed out my 401k contributions before my last paycheck and missed out on some of the company match.) But it looks like my Social Security payroll tax cut accounts for an additional $80 per paycheck or so.

I'm not too thrilled about this tax-cut, though, because I've always been worried about the solvency of the Social Security program when I retire. As a sign that we probably can't afford this tax cut, the government is borrowing $112 billion to make Social Security whole.

I guess the thought behind the SS payroll cut is to stimulate the economy. Unfortunately, I'm probably not going to put the money back into the stream of commerce. I intend to use the money to pay down my private student loans and/or to increase my Roth IRA contributions. I guess I'm no better than the companies that are hoarding cash rather than hiring, despite tax cuts and other government cheap money.

If I'm worried that I won't be able to collect on Social Security, I might as well reduce my debt and sock this money into my Roth, right? But does this make me a bad citizen? Maybe to alleviate my guilt, I'll continue to buy I-Bonds despite the less-than-thrilling rates they've been giving lately.

My Father Passed Away This Early Morning

2010-11-11T05:40:00.000-08:00

I guess the title says it all. In all honesty, I'm more relieved than anything. I saw my father last on November 1st. I tried to encourage him to stay positive but he replied, "Every time I try to think positively, it just seems like I run into set backs. It's as though I shouldn't even try to be positive. All I wanted was to die quickly and painlessly. I can't even succeed at that." My father was a broken man in life and he wasted away in pain during his last months. For whatever he suffered in life, I hope he is happy in the afterlife. Rest in peace, Dad.

Right now, I'm struggling with the conflict between juggling family/cultural obligations vs. financial responsibility. For example, I suspect that my father's brother (my uncle) wants my father's ashes to be buried in the family plot in the old country. I'm not certain, but it appears that the Buddhist Temple would require a yearly maintenance fee or rent that could potentially cost anywhere between $200 - $1,000/year. My mother also believes we need to go back to the old country to hold a memorial for my father's family. The travel costs during the holiday + memorial costs (feeding my father's extended family) could easily run $20,000.

I hate to think of my father in terms of dollar-and-cents, but is it really my burden to carry on this potentially never-ending financial obligation, especially when my father didn't plan for it himself? Am I a bad daughter for even thinking in these terms?

I also feel guilty for feeling grateful that my father passed away before his term life insurance lapsed. This means we'll have some money (~$200k) to hold in trust for my mother in the event she needs to go into an assisted living facility. I'm glad my sister and I had the foresight to file my parent's bankruptcy so that this life insurance money can be preserved for the care of my mother.

There's just something tasteless about not wanting to do something for a deceased parent due to money. But at the same time, I need to do what's financially responsible for me. Where do I draw the line? What are my filial duties and obligations? Perhaps this is one of those questions that have no right-or-wrong answers.

Placed My Father In a Nursing Home This Weekend

2010-10-04T05:22:00.001-07:00

My sister, for the past few months, has been trying to get my father approved for Medicaid Long Term Care to help pay for my dad's Adult Daycare costs. At the time she initiated the process, my father was deemed "too healthy" and has "too much income" to qualify for Medicaid.

With respect to his income, I finally filed my parents' Ch. 7 bankruptcy petition on 9/30/10. This will free up my parents' income for their own care, rather than paying back overwhelming credit card debts. My sister and I also set up a "Miller" Trust" to get past the Medicaid income requirement. In a nutshell, my dad's entire monthly income will go into the Trust, with my sister acting as Trustee. My sister is required to disburse my father's income for various approved expenses: my dad's personal needs, spousal support to my mother and reimbursement to Medicaid. At the end of every month, my father's monthly income will need to be spent completely for all approved expenses. Anything left over, gets handed over to Medicaid.

With respect to his health, my father appears to have lost all will to live. He won't eat and spends most of his days and nights just sleeping. He can barely remain standing or sitting upright for a minute before he has to lie down. He was approved for hospice care, which will be paid by Medicare. My father will probably undergo a second-round of health evaluation by a Medicaid nurse to see whether he now qualifies. (He undoubtedly will qualify now.)

My family concluded that my dad is now beyond my sister's or my mother's ability to properly care for him. My dad doesn't make his care-giving any easier with his disrespectful attitude towards my mother and my sister. (On the flip side, when standing in his shoes, I wouldn't want my last days being at the mercy of people I hated either.) No matter how you looked at it, we all felt that placing him in a nursing home was the best option.

My sister and my mother went to look at various Medicaid-approved nursing homes. What they found were shocking. All of the commercial facilities that resemble mini-hospitals were "private pay"-only facilities that charged upwards of $5000/month-$7000/month. When my sister mentioned "Medicaid," these private-pay facilities hung up on her.

All of the Medicaid-approved facilities were run by private individuals out of single-family homes. I had the opportunity to inspect two facilities - one was a depressing home with a wall-eyed "nurse" dressed in sweats and a dirty t-shirt. The room was dark and dingy and the carpeting looked stained and dusty. I didn't even bother to inspect the bathrooms.

The second home was a bright, clean home with the proprietor's licenses prominently displayed in the lobby. The nurses at this home wore medical scrubs and looked very professional. The bathrooms were handicap-accessible and clean. The second home charged $2,500/month for a small, private bedroom. My sister and my mother both agreed that this second facility was the best out of all they've inspected. There was an immediate vacancy on 9/27. My sister and I debated whether we should wait until my father was approved for Medicaid or whether we should place him immediately and pay out-of-pocket in the interim.

We concluded that the bigger risk was to wait for Medicaid approval and the nursing home would no longer have a vacancy. We sucked it up, paid $2,500 for the first month and placed my dad in the facility this past Saturday. My dad didn't argue, fight or resist the transfer. The nurses gave him a cup of Ensure blended with some ice cream (the only thing he will consume) and he went to sleep. We visited him again yesterday morning and the only thing he complained about was that his internet wasn't working. When we fixed his internet, he promptly went back to sleep.

Watching my father wither away makes me wonder - - is there any reason to keep someone alive who is clearly terminally ill and no longer has the will to live?

Filing For Bankruptcy

2010-08-24T06:32:00.000-07:00

No, not me. The only debt I have right now is my oppressive student loans (~$88k) which can't be BK'd away. *Bleh*

My sister and I hired an attorney to file Chapter 7 bankruptcy on behalf of my parents. Since my parents have absolutely no assets to speak of, the bankruptcy filing is relatively straightforward and simple. I could've done the work since I'm admitted to practice in federal court, but quite frankly, I'm pissed with my parents for being so careless and apathetic about their finances. (In April, they had $60k in credit card debt and had no clue about it!) My sister made valiant efforts to get my parents (or at least my mother) to sit down to discuss a budget, but they couldn't care less. After four months, my sister managed to get my parents' debt down to $55k! But it's only a matter of time before my father will pass away, leaving a crushing debt that is unaffordable under my mother's Social Security survivor's benefits alone. C'est la vie - - my parents will pay a flat fee of $1,895 + $300 filing fee to bankrupt away their debts. I'm not going to pay this cost for them.

Of course, my sister and I will be doing all of the leg-work of compiling information about my parents' debt, their income, their cost-of-living, etc. And the next struggle will be to get my mother to actually undergo credit counseling. (My dad will likely be exempt due to his dementia.) Since my mother never bothered to learn English, I will probably have to attend with her and translate. Joy.

I'm sorry to be complaining here. But I just can't forgive or fathom my parents' attitude that their financial mess is their daughters' responsibility to clean up.

I Had A Job Interview Yesterday

2010-08-19T05:45:00.001-07:00

I made a commitment to my big sis that I will look for a job in Phoenix to help her care for our parents. So yesterday I had a job interview with a prospective employer. The interview went relatively well. But... I ~~may not~~ probably won't get the job especially since I learned that my new boss will be my old boss from 10 years ago with whom I previously did not get along.

I was asked how I got along with my former boss. I danced around the issue and said, "He ran a tight ship and I struggled a bit since I was transitioning from an attorney job to a corporate one. It wasn't all smooth sailing but we're both professionals." But... my former boss may bad mouth me and I may be kiboshed. *Shrug*

Anyhow, before my job interview, I came across an article that said good looking people do better at interviews. Which made me wonder: Do I have an advantage?

Beauty is part subjective and part objective. I've heard that if your face matches the Fibonacci Golden Ratio, you're deemed objectively "beautiful." (Although some scientists have refuted this theory.)

Out of morbid curiosity, I used the formula from this page. I heard that Angelina Jolie has the perfect ratio, so I used the picture below and plugged in her numbers.

And whaddaya know? Based upon my imperfect measurement technique, Angelina still came out with 1.54 out of 1.61 (i.e., a 95.14% Golden Ratio match).

I plugged in my numbers and I got.... 1.389. Very average. Ha ha. I guess I didn't have that great of an advantage based upon my looks. *snicker*

Anyhow, masochistic people can get their own number using my spreadsheet.

Last Will and Testament

2010-07-07T07:12:00.001-07:00

My father is dying. He's diabetic, suffers from dementia and currently weighs less than 108 lbs. He recently got his blood test results back and it doesn't look good. With CEA levels of >500 mcg/L, he probably has colorectal cancer as well. My father has opted not to get any invasive testing since he also does not want any treatment.

My father was a passive man with little to no initiative to improve his life. (I say "was," since with his diminished mental capacity, there's no point in criticizing him for what he is now.) He was unemployed for most of my childhood until my mother had to pull some nepotism strings to get him a job. It's no wonder that my parents currently have $60,000 in credit card debt with absolutely no assets.

My father never took much care for personal relationships either. He is estranged from my mother and refuses to speak to or acknowledge her although they live together with my sister. When my sister and I were growing up, he never really took any interest or effort to get involved in our lives.

While driving to Phoenix couple of months ago, I borrowed a chick-lit audiobook called "Best Friends Forever" by Jennifer Weiner from the library. In the book, the main character, Addie, gets bullied by the school jocks who graffiti nasty stuff about her on her driveway. Addie's father helps her scrub off the graffiti and encourages her to keep her wits about her since the harassment will eventually end. This made me sad since I don't EVER recall an occasion that my father consoled me when I was down. For example, when I was in the eighth-grade, my classmates ditched me during a class-outing. I came home crying and told my parents what happened. I distinctly remember my father continued to do whatever he was doing. Typical.

Anyhow, what little effort my father spent in developing a relationship with his family, he spent less with others. He really has no one he can call his best friend, other than his younger brother.

The sad life of my father is reflected in his "Last Will and Testament" that he emailed my sister and me. Below is a translation:

This year in October, I will turn 74 years old. I don't know how much longer I will live, so I am setting forth a simple "last will and testament."

Upon my death, please notify the following 3 people:

1.) My younger brother,
2.) Mr. K.M. I am the person who nominated him for various positions he currently holds, so I doubt he would object to your notifying him about my death,
3.) The Buddhist Temple in the old country where the family grave is located. Since I have not been making any offerings to the Temple and since you girls are now US citizens, please notify the Temple that there will be no future communications on behalf of the Family upon my death.

When you dispose of my body, you may also dispose all of my personal belongings as you see fit.

I am sorry that I couldn't do much for my family. I understand that I have a small life insurance policy. Whatever is left over from the proceeds, please give to your mother.

It's very sad to see in writing that my father accomplished little towards a fulfilling life. If anything, though, I see my father as a cautionary tale. As a result, I am putting more effort into nurturing my personal relationships. (Hence, the lack of posts.) At the end of the day, I want people to remember me fondly for who I am, not because they owe me a debt of gratitude. Whatever petty issues I have with my family and friends, I need to let them go. As long as I am willing to give more than I get, that shouldn't be a problem.

With respect to personal finances, my father recently gave me some advice:

Last month, my sister an I took our parents to Las Vegas to celebrate Father's Day and my birthday. Since my mother and my father absolutely detest each other, I stayed in one room with my father and my sister stayed with my mother in the other. (How much more dysfunctional can my family be?)

Anyhow, while my father and I were getting ready for dinner, my father looked at a bottle of Fiji water at the mini-bar. My father commented that when he was working in Australia, a co-worker suggested a trip to Fiji and New Zealand. My father said, at the time, he thought that was such a big waste of money and didn't go. He said, "I now wonder whether I should've gone. Now at the end of my life, I think I perhaps I should've taken opportunities when they presented themselves and not be so stingy." Pearls of wisdom from my father. Late, but better than never.

Why Are I-Bonds So Confusing?

2010-05-04T05:49:00.000-07:00

The fixed rate of the I-Bonds were announced yesterday and it's 0.2%, down from 0.3% in November. If you add in the inflation adjusted semi-annual rate, the composite rate for the period between 5/1/2010 - 10/31/2010 is 1.74%. Since the prior composite rate was 3.36%, I decided to front-load my planned purchases and bought $300 on April 29.

What's really confusing about I-Bonds, though, is that I really can't compare the current composite rate to APYs offered by banks since the I-Bond rates change every 6 months. Additionally, I noticed something peculiar about my I-Bonds.

I already knew that:
1.) The applicable composite rates are announced every May 1 and November 1;

2.) The composite rates are applied every 6 months from the month of purchase. For example, I-Bonds that I buy in January will have the current composite rate until June 30. (And February purchases will have the current rate until July 31, so on and so forth.) The new composite rate for the January I-Bond will apply between July 1 to December 31. The next composite rate change will take place anew on January 1.

Although that's simple enough, I also discovered that the interest doesn't start accruing until 3 months after purchase.

Using my January 2010 $50 I-bond purchase as an example:

1.) The applicable composite rate at that time was 3.36% and would apply until June 30, 2010. Since it was just announced that the new composite rate is 1.74%, the new rate would apply between July 1 and December 31, 2010.

2.) The 3.36% interest didn't start accruing, however, until April 1, 2010. The I-Bond will continue to accrue at 3.36% until September 30, 2010. The bond will accrue at the new rate of 1.74% between October 1, 2010 and March 31, 2010.

If I sold the I-Bond in January 2011, after the requisite 1-year holding period, I would be penalized 3 months' worth of interest. In this case, I'm wondering if I'll be penalized the 1.74% interest that I will be accruing between 10/1/2010 - 12/31/2010. If so, my January 2010 I-Bond would only have a net effective interest rate of about 1.78% (if I sold after only 1 year). If you take into account that it's exempt from state tax, I guess it still beats the current 12-month CD rates that are available out there.

But still, that's a lot less than the 3.36% interest rate that I thought I was getting. And I may have been better off just sticking my money into my SmartyPig savings account that's yielding 2.01%.

April 2010 Progress Report

2010-05-02T07:40:00.001-07:00

I've reached a pretty important milestone in April - my net worth is in the six-figures for the first time in my life! But... does this really reflect my current net worth?

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$39,111.05	$37,742.72	$(1,368.33)
Fed'l SL	$55,852.68	$53,170.49	$53,034.22	$(136.27)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$92,281.54	$90,776.94	$(1,504.60)

Still chugging along with my snowball.

Ooooooh and I'm almost at the next milestone of going below the $90k mark. I'm also *this* close to paying off one of my private student loans that I took out to pay for my living expenses while I studied for the bar. This basically means that I'll be paying off my living expenses (rent, food, entertainment, etc.) from 1998 in 2010. *Shaking my head in disgust.*

Anyhow, reduced my debt 1.63% from last month. That's pretty good, right?

SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$8,883.55	$8,970.12	+$86.57

The savings I report here is with respect to my emergency fund savings only and does not include my future spending earmarks. I fell short on my monthly target to save $100 into my EF. Oopsie. Don't want to sound too defensive, but I had to pay boatloads of money in taxes this month (Federal $788 and State $2,318). But.... I'll also admit I over spent this month too. :-(

MY "X"-FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$24,272.43	$24,344.25	+$71.82

My "X"-Fund represents a part of my recent windfall that I'd set aside either as an emergency fund or a down-payment for my first home. Either way, it's money that I don't intend to touch unless it's for necessity or reinvestment.

I didn't put any extra money into this fund in April, so the increase represents the interest I accrued in my Everbank account. Sadly, the promotional 2.71% APY came to an end in March. From here on forward, I'll only be accruing ~1.26% of thereabouts, so I'll probably only earn about ~$30/month or so. Sucks.

MY ROP (LIFE INS) FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$0.00	$660.00	+$660.00

Long story short, I'm pretending to pay myself an additional $55/month for a "hypothetical" return of premium (ROP) term life insurance policy. (I'm basically trying to "earn" back the term life insurance premiums through interest and investments.)

I've set aside $660 ($55 x 12) for this year's premium into my SmartyPig account that's earning 2.01% APY. But starting in June, I'll invest my hypothetical $55/month ROP premium into my IRA. Or I may buy savings bonds. Or I may just save or whatever.

Anyhow, my gamble is that over the long haul (i.e., 30 years, or during the period of time that I am paying for my life insurance premium), I can earn enough to cover the premiums paid. At this time, I'm estimating that the benchmark I need to beat is 3.98% APY.

Since I'm curious how this experiment will turn out, I'll be reporting about my returns/losses monthly. I've created a new category for "life insurance" in my net worth chart to map my progress.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$98,184.22	$105,514.01	+$7,329.79

I made it into the six-figure club!!! Hurray!

But my excitement is tempered by the nagging question of whether I should even count my 401k and my IRA as part of my current net worth, especially since I can't touch the money (without penalty and ungodly taxes) for another couple of decades.

If I omit my 401k and IRAs, my net worth is... -$43,285.19. Ugh. If that number ain't demotivating, I don't know what is. I'll continue to include my retirement accounts in my monthly net worth, thank you very much.

The breakdown and the history of my net worth can be seen here.

My DIY ROP Life Insurance Policy

2010-04-26T05:54:00.001-07:00

As you know, I'm currently in the process of purchasing a $500,000 term life policy for the benefit of my sister, who has recently taken in my parents. I had my medical exam last Friday and Accuquote just confirmed that it received my application. I'm told the underwriting process takes about 4 to 6 weeks, so I should be getting my policy by my next birthday. (Gaaaaaah. I share the same birthday as Michael Vick?? Ugh.)

*Ahem* I digress.

Assuming that my health exam results are "excellent", my annual premium for a basic term life policy should be $595, or about $50/month. I was also quoted $1,250/year, or, $104.17/month for a Return of Premium ("ROP") policy.

ROP policies will allow term life insurance policyholders to recover all or part of their premiums paid over the life of the if they do not die during the stated term. Basically, with an ROP policy, I'll be paying an insurance company $104.17/month now, to get back $104.17/month 30 years later. (By my calculation, the yield on the additional ROP premiums would be about ~3.98% APY over 360 months.)

Any claim that the net cost under an ROP policy is zero, ignores opportunity costs or illiquidity. More importantly, the additional premiums are wasted if the policyholder does die during the term.

This site gives an objective explanation of the pros and cons of ROP policies. But ultimately, I think the most compelling argument against the ROP policy is:

"Why Shouldn't I Get ROP Term Life Insurance?

The main reason people don't get ROP term life insurance is that it costs more. It can cost up to three times as much as term life insurance.

Some financial advisors also suggest that if you can afford ROP life insurance, then you should consider getting regular term life insurance and investing the difference."

Although I'm convinced that the ROP policy is not worth it, I'm intrigued about getting a "refund" of my premiums. I wondered whether I can DIY my own ROP policy?

Confession: Although I have enough money to pay this year's premium, I just realized that I don't have enough room in my monthly budget to pay for subsequent years' premiums. In order to pay for my life insurance policy, I'll need to reduce my monthly student loan payments from $1,478/month to $1,373/month (for the "pretend" ROP policy), or, $1,428/month (for the basic term life policy).

My Plan: I immediately set aside $595 for my basic life insurance premium and an additional $660 for my hypothetical ROP premium for this year. I created a sub-account in my Smartypig account (2.01% APY) specifically to park my "pretend" ROP premium. I also adjusted my budget by reducing my SL payments to $1,373/month. I plan to save and/or invest the additional $55/month "pretend" ROP premiums.

I can already hear the trolls - - "The extra $55/month is better spent paying down your ginormous student loans!! You're such an idiot. No wonder you got yourself in such a horrendous financial hole." And quite frankly, I can't argue with the trolls, since they're right. My private SLs have an APR of 3.547% and are likely to go higher in the upcoming months. But I want to point out that I banked this year's "pretend" ROP premiums from my future spending earmarks, not from my emergency fund or future student loan payments. So I don't want to hear how paying down 3.547% APR is better than banking at 2.01% APY. I get it. I really do.

And I've decided to proceed with my DIY ROP plan because I'll still be able to pay off my private SLs in 2 years with or without the additional $55/month. (Even at the reduced $1,373/month payment, I'll be paying over 3 times the minimum monthly payments owed on my private SLs and over twice the minimum monthly payments on all of my SLs combined.) But the biggest reason why I'm doing this now is because I highly doubt I'll remember to start setting aside my "pretend" ROP premiums several years down the road when I payoff my SLs.

Although I parked this year's "pretend" ROP premiums into a savings account, I intend to dollar cost average my future monthly hypothetical premiums into my Fidelity non-deductible IRA account with commission-free ETFs. In essence, my gamble is whether my "pretend" ROP investments can match or beat 3.98% APR, or even 3.547% APR.

Only time will tell...

Happy With My New Fidelity IRA

2010-04-24T09:48:00.000-07:00

On February 3, 2010, Fidelity Investments offered commission-free trades on 25 iShares ETFs. As a small investor and a die-hard, dollar-cost averager, this intrigued me. My biggest obstacle to dollar-cost averaging ETFs was brokerage firms' commission fees. Even at low-commission fee Scottrade, I would need to buy $700+ of any one ETF in order to limit my commissions to 1%.

If I had $700+ to invest monthly, I wouldn't care too much about brokerage commission fees. But alas, since most of my income is going towards paying down student loans and my 401k, I don't have that kind of money to ~~play with~~ invest. (Some day, though, some day.)

Anyhow, I was happy to see that Fidelity was offering TIP commission-free. (I currently have 10 shares of TIP in my Scottrade accounts.) I was even more excited that EEM (MSCI emerging market fund), IVW (S&P500 growth fund), LQD (investment grade corporate bond fund) and EMB (emerging markets bond fund) were also offered commission-free. I was sold.

Traditional v. Roth?
I chose to open a Traditional, non-deductible IRA. Although I expect my 2010 AGI to be below the $105,000 - $120,000 threshold, it may not be if I get laid off at the end of the year and am given my lump-sum severance. In order to avoid the headaches of a potential re-characterization from a Roth to a Traditional IRA and coverting it back to a Roth, I just chose to open a Traditional IRA and convert it a Roth next year.

Open Account With $2,500 or $200/month?
Since I intend to dollar cost average over the year, I chose the SimpleStart IRA process which waives the usual $2,500 minimum investment in lieu of $200 monthly automatic contributions.

I chose to invest $220/month and keep the rest of the money in my numerous "high" interest-bearing savings accounts. Fidelity offers an FDIC-insured, deposit sweep, but it's currently earning 0.10%. That's pretty much close to nothing.

DRIP Feature
I've currently elected to invest solely in income funds in my IRAs to create a source of tax-free, passive income stream in my retirement. I figure that since I'm not presently investing much money in my IRA (in comparison to my 401k), I'm not sacrificing that much potential growth for safety.

For the first two months, I bought couple shares each of LQD and EMB. They both pay out about $.40/share in dividends per month. I was delighted to learn that my Fidelity account also has a DRIP feature which would reinvest my dividends into the ETFs. (I don't think my Scottrade accounts have this feature.)

With the DRIP, I earned an extra 0.005 share of EMB and an extra 0.004 share of LQD and should be getting more at the end of the month. Woo hoo!!

All in all, I'm happy with my new Fidelity account. I'll be the first to admit that the iShares ETFs aren't my first choice, but if I want to dollar-cost average, this is currently my best option. If I can find additional monies to invest, I'd also eventually like to add growth fund ETFs into the mix. My 401k is woefully lacking in growth funds and this may be a great way for me to diversify.

My Parents Are Moving In With My Big Sis... Today

2010-04-19T08:03:00.001-07:00

Lately, the phrase, "the best laid plans of mice and men oft go astray," is running through my head frequently. I previously wrote about how my big sis was planning to buy a house in Arizona and rent it out to my parents in the event that her employer transferred her to another state. I petulantly pouted and threw a tantrum that if my sister went through with the plan, she'll need to take care of my parents, not me.

Well... turns out, my big sis IS taking care of my parents since they're moving in with her. TODAY.

My big sis closed on her brand spankin' new home on New Year's Eve. She bought a 3 BR/2.5 Bath, 1750 sq. ft. home with granite counter tops, all stainless steel appliances (incl. washer/dryer), window treatments AND landscaping inclusive for $250k. (For those of us who live in expensive States, doesn't this make you sick?)

Anyhow, I digress. About a couple of months ago, my sister noticed that my parents got a renewal notice from their landlord. My sister asked what my parents intended to do. My mother confided that they probably can't afford to continue to live in their apartment since they've been using their credit card cash advances to pay their rent. *EGADS*

In response, my sister offered to take them in for $675/month rent. My dad immediately accepted her offer. *DOUBLE EGADS*

My parents live on a fixed income, but not a shabby one. They take in about $3,300/month in pensions and Social Security. So how come they can't afford to pay ~$1,200/month in rent?

Over the past two months, my sister and I have been trying to piece together my parents' finances. Although we're not certain yet, this is what we estimate:

Approx. $40k in credit card debt;
My father never signed up for Medicare Part D (prescription drug coverage). His monthly prescription drugs cost about $300-$400/month.
Supplemental health insurance cost about $500/month.

Doing the math, there’s no reason why my parents can’t make ends meet. But I suspect there are other "financial bombs" that my sister and I haven't yet uncovered. My parents hate each other and refuse to speak to one another. Both are passive-aggressive and obstinate. They refuse to listen to one another. Neither will admit to, or take responsibility for their current situation. Worse yet, neither has any clue regarding what financial obligations they have. *Sigh*

My mom often cries that she wants death to come a day sooner. My dad has been telling anyone that would listen, that his family neglects and abuses him. (My dad is suffering from advanced dementia. For the record, no one is abusing or neglecting him. If anything, he is the one that is emotionally abusive to us all.)

It is appalling to my sister and me that my parents can't seem to appreciate how lucky they are. They are not destitute - - they have over $3,000 in monthly income. ($3k/month NPV is probably more than I can expect in my retirement!) They have children that are willing to step in to care for them. (My parents see this as a cultural birthright, so of course they wouldn't consider this "lucky." *Sigh* Gotta set them straight on this one eventually.) Yet, all they can see is how miserable their lives are.

Being happy or miserable is not only a state of mind but a life choice. I agree that my parents are not in the best financial state. But that's the consequence of their poor (read: no) planning. Rather than accepting the consequences of their failures and attempting to make right, they both claim they are just plain "unlucky." My parents have made their choice to wallow in misery. How sad and depressing.

I tried explaining to my parents that being "lucky" or "unlucky" is not an issue of chance, but is reflective of one's attitude and effort in creating one's luck. The common characteristics of "lucky" people are:

being skilled at creating and noticing chance opportunities;
taking risks on opportunities;
being flexible and don’t define themselves by others' expectations;
being able to make decisions by listening to their intuition;
being able to maintain positive expectations;
being able to “not give up” and manage to transform bad luck into good.

As the 18th Century Irish Author and Physician Oliver Goldsmith once said, "Our greatest glory is not in never falling, but in rising every time we fall."

My parents lack all of the characteristics of a "lucky" person. I guess they are indeed unlucky, but unlucky by choice.

March 2010 Progress Report

2010-04-03T10:31:00.000-07:00

My financial life and my personal life were previously in sync. When my financial life was in the dumps, so was my personal life. When my finances improved, so did my spirits.

But there's been a "decoupling" of the two since my father's car crash in February. My net worth rocketed upwards while my emotions have taken a free-fall.

Now that my finances are under control (or, at the very least not as dire as it used to be), I guess I'm experiencing the diminishing return on happiness for every dollar increase in my net worth. I hate thinking that way since it makes me very unappreciative and whiny.

Therefore, I want to take this opportunity to acknowledge that I am a VERY lucky woman. I earn a damn good salary with damn good benefits. I got a windfall in December, while many people were unemployed or experiencing cut backs. I also got a bonus in March that was completely unearned and undeserved. I need to improve my attitude in my professional as well as my personal life. At the end of the day, I want to say I earned my good fortune and deserve a good life.

To those who are curious, below is my recent embarrassment of riches.

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$40,481.01	$39,111.05	$(1,368.96)
Fed'l SL	$55,852.68	$53,321.08	$53,170.49	$(150.59)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$93,801.09	$92,281.54	$(1,519.55)

I've been up and running on my snowball since January. After interest, I've been paying down my debts by over $1,470+/month, or 1.5%+. Woo hoo.

SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$8,779.98	$8,883.55	+$103.57

The savings I report here is with respect to my emergency fund savings only. I have an additional $18,036.59 in an unreported "earmark" fund for expenses, such as tax, car maintenance, IRA, etc. etc. I don't report my earmark funds here, or in my net worth, since it's money I intend to spend eventually.

MY "X"-FUND

LAST MONTH	THIS MONTH	DIFFERENCE
$20,212.37	$24,272.43	+$4,060.06

In addition to my savings and earmark fund, I've created an "X"-Fund, which is reported in my net worth as "other property." I came across a significant windfall (~ $33K) in December. In January, I allocated $20,175 of my windfall into what I call my "X-Fund," since I don't know yet whether I'll need to use it as an emergency fund or a down-payment for my first home. Either way, it's money that I don't intend to touch unless I absolutely need to or unless I reinvest it.

In March, my company also paid me a bonus (net ~$9,711.61), which admittedly was not deserved. I put $4,000 of my bonus money into my X-fund, hence the big jump this month. I don't expect any future big jumps.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$82,329.51	$98,184.22	+$15,854.71

The increase of my net worth has been on an incredible trajectory. And it's so ironic that my emotional state has been on a recent downward spiral.

The breakdown and the history of my net worth can be seen here.

Re-Evaluating My Life

2010-04-03T09:41:00.000-07:00

To those of you who’ve expressed concern about my extended absence, thank you.

Since February, I’ve been flying back and forth to my parents’ place to take my father to his various doctors’ appointments. I’ve been depressed due to what I’ve been slowly learning about my parents.

During my visits, both my mother and my father take turns telling me how much they despise one another. My father actively calls my mother “The Monkey,” and refuses to acknowledge her presence or to speak to her. My mother still cooks, cleans and launders for my father, but nothing more. Both are mired in self-pity and have concluded that they are just “unlucky” people. It's just sad and frustrating to see how these people are actively choosing to be miserable during their last days/months/years of their lives. Neither have accepted any responsibility for their current miserable lot in life.

The silver lining in all of this though, is that I had the epiphany that I love my life. I don't want to squander it. I guess you could say that I am lucky to be observing a real-life “what-not-to-do-with-your-life” example first-hand. I've decided to step back and take stock of my life.

I have so much to say, yet it's hard to put down in writing, since I am experiencing a gamut of emotions simultaneously. Once I can get my thoughts organized, I will post bit-by-bit. Stay tuned.

$#|+!!! I'm Not As Healthy As I Thought I Am

2010-02-27T10:03:00.000-08:00

As you know, I'm thinking about getting term life insurance. As part of the application process, I'm supposed to undergo a blood test to see what rates I qualify. When I requested my quotes, I assumed I'm super healthy and used the "preferred rates" vs. "standard rates."

After all, although my weight has been steadily increasing the past couple of years (I'm currently 5'1" and 116 lbs), my BMI is 21.9, which is normal. My blood pressure is also generally good -- my systolic (upper number) is usually under 100 and my diastolic (lower number) is usually under 70.

I knew my waist-to-hip ratio wasn't all that great (I'm an avocado shape at 0.77 ratio), I didn't think this was a big deal since, again, my BMI is normal.

Although I do occasionally binge eat, I generally try to eat healthy. I've started incorporating more veggies into my diet and I take a multi-vitamin everyday.

The worst part of my lifestyle, though, is that I'm generally sedentary and rarely work out. I hate physical exertion, but since I'm not overweight, I figured my sedentary lifestyle is still okay.

Anyhow, I decided to go to my local pharmacy to get a cholesterol/blood glucose test for $25 before I submit my term life insurance application. I could've asked my primary physician to do the test under my health insurance plan, but I kind'a wanted to know what my numbers are before any insurance company does. I'm glad I did, since my numbers weren't as good as I thought they would be.

The Good
My total cholesterol was 188. The benchmark is to keep it under 200 mg/dl, so I'm good here.
My triglycerides was 101. The benchmark is less than 150 mg/dl.

The Ugly
My HDL ("Good Cholesterol") was 39. For women, the benchmark is greater than 50 mg/dl. 39 is considered "poor."

My LDL ("Bad Cholesterol") was 129. I'm supposed to keep it less than 100 mg/dl.

I guess I'm going to have to start exercising regularly and with greater intensity. Before, my only motivation to exercise was to lose weight. Now, it seems like my health is at risk. Oy gevalt!

Shopping for Term Life Insurance

2010-02-22T06:00:00.000-08:00

I considered getting term life insurance about a year ago, but since I'm single, with no children and no mortgage, I concluded it wasn't necessary.

But my recent trip to visit my folks made me reconsider. Although my parents are currently living independent lives (despite my father's dementia), I now have serious doubts that this will continue indefinitely. Only God knows whether or when my father or my mother will suffer some illness that would substantially impair their ability to handle basic ADLs (Activities of Daily Living) such as bathing, dressing, transferring, eating, toileting, and continence.

My parents don't have long-term care insurance and I am still in the process of getting my parents qualified under Medicaid. I still haven't quantified my parents' assets or income, so I have no idea whether they would even qualify.

Anyhow, I've now come to the realization that I will be sharing the caretaking duties of my parents with my sister when my parents are disabled or incapable of caring for themselves. Should I die an untimely death, the responsibility will fall squarely and solely upon my sister. I don't think this is fair or right, so I've decided to buy term life insurance.

I am already getting 1x my yearly salary automatically from my employer and the beneficiary to that policy is my mother. In addition to that policy, I got quotes from Accuquote.com for a $500,000, 30-year guaranteed level term policy.

Why 30 years? I don't expect my father to live that long, after all, the average life expectancy of a man over 65 with dementia is only 10.7 years. But I expect my mom to live well into her 90s. Members of her side of the family (and our ethnic group in general), live close to 100 years old. (Egads.)

Based upon a "preferred" rate class, A+ rated insurance company, my policy would run about $40/month. The quote already includes an accelerated death benefit rider (aka living benefits rider) where the policy will pay 50% or $250,000 (whichever is less), when I become terminally ill. If I added a waiver of premium rider (i.e., the premium is waived should I become totally disabled), my premium would run approximately $50/month.

I was also quoted a "Return of Premium" policy for $78.80/month or $104.17/month (with a waiver of premium rider). I think this is a bogus policy, a bit like giving the government an interest-free loan every year in exchange for getting a tax refund (but for 30 years!) And if I surrender the policy early, I may or may not get back some or all of the premiums I've paid. No thanks, I'd rather invest the $50 difference into my IRA.

I should be getting my application in the mail soon. Next, I'll need to see about getting myself some supplemental disability insurance. I already get 66.67% of my annual salary from my employer.

Update - Dealing With My Parents

2010-02-15T10:33:00.000-08:00

Wow. Thank you all so much for the outpouring of support and understanding. It really means a lot to me and I'm touched. Although this may sound selfish, I find it somewhat comforting to know that other people are struggling with the same issues I am (and even worse).

Anyhow, my posts in the near term will focus primarily on issues dealing with my parents versus my own finances.

The past couple of weeks have made me want to slam my head into the wall. Not only is it bad enough that my mother allowed my father, who suffers from dementia, to drive, she's been allowing him to handle their finances. She says my father, in a fit of anger and paranoia, took away the handling of their finances from her years ago. Ever since then, she took a "not my problem" attitude and let my father do what he did despite knowing that his dementia was getting progressively worse. She blamed his belligerence and intransigence for her failure to intervene. Again, this is an example of my mother shirking her personal responsibilities and blaming others for her problems.

I'll post my mortifying discoveries in a future post.

I recently took a couple of days off from work to visit my parents' to get some financial and personal housekeeping done. The airfare + car rental + gas cost me $500+. Joy.

Anyhow, here's an update stuff my sister and I've managed to address since my last post:

I made copies of my parents' executed durable power of attorney and medical power of attorney and healthcare directive. My mother has made it clear with her actions and words that she has no intention of being my father's attorney-in-fact or agent. That means my sister and I have to step up to the plate.

I took my father to see his primary doctor. Before the visit, I had my father sign a limited consent form that authorized his doctor to release his medical care information to my sister and me. I gave the doctor a copy of my father's consent form and a copy of his medical power of attorney. I specifically instructed the doctor and his staff that all future communications involving my father should be with my sister or me.

I drove my father to the DMV to surrender his driver's license and to obtain a state-issued ID. During the visit, he also surrendered his license plate, where he would receive ~$54 back.

I then drove my parents' to see their auto insurance agent. During the visit, my parents signed a proof of loss and other collision-loss related documents. Their insurance company agreed to cover the loss of my parents' car for $12,506.15 minus $500 deductible minus payoff of car loan (est. $6,000). Looks like my parents won't have to worry about paying back the car loan. The insurance company is also dealing with the PD claim to the brick wall/store sign that my father plowed into. This claim is still pending.

Got my parents a Reduced Fare ID so they can take public transportation for 50% of the regular fare.

Toured an adult daycare facility with my parents. I told my father that we are planning to send him to such a facility to give my mother some respite care and to give him some "stimulation" that he claims he is seriously lacking in his life. My father seemed okay with the idea but my mother was clearly displeased. I've estimated that the cost will run approximately $72/day, including food and transportation. My sister and I are still crunching numbers as to how much my parents can afford to cover this cost until he qualifies for Medicaid.

And this brings me to our To-Do List:

Go through my parents' finances to determine their assets and liabilities and their monthly income. This will help us determine whether my parents will qualify for Medicaid.

Schedule a physical for both my mother and father so that they will be ADA (Americans With Disabilities Act) certified. Fill out ADA Service Eligibility application so that they will both get priority treatment when they use the Dial-A-Ride service.

Schedule appointments with my father's pulmonary specialist and neurologist and give them copies of his medical power of attorney and authorization to contact my sister and me.

Contact my parents' CPA and ask for copies of their past tax returns. If not, contact IRS. Verify whether my parents owe back taxes and/or penalties.

Apply for Medicaid and Medicaid Long Term Care System. Medicare generally does not cover for long term care costs such as nursing homes or adult daycare. Medicaid is a State and Federal Government program that pays for some long-term care services at home and in the community. Who is eligible and what services are covered vary from state to state. Most often, eligibility is based on income and personal resources.

Apply for state/community-based subsidized or free programs that encourage senior independent living, such as S.A.I.L.

Apply for volunteer-based programs that provide free transportation.

I am currently resentful, angry, disappointed, frustrated and ultimately ashamed of my parents. Please be aware that I'm not feeling this way because they are helpless, poor or ill. I feel this way because they seem resigned and content to do nothing, assuming that my sister and I will take care of them if all goes to pot. They have absolutely no incentive or motivation to try to make things work. In a future post, I will reveal what my mother said to me recently, which made my blood boil and steam come out of my ears.

I really want to take a "not my problem" attitude that my mom was all too happy to take over the years. But I know the longer I ignore this and don't take control, things will only get worse. And my sister and I will have to clean up my parents' avalanche of a mess.

Drawing The Line In the Sand With My Parents

2010-02-07T14:10:00.001-08:00

Sorry for the extended absence. I've been dealing with family issues. I am just very angry and frustrated right now. The day that I've always dreaded is upon me.

My father, who suffers from dementia, recently crashed and totaled his car. The good news: he only caused property damage and didn't kill or injure anyone. He's a bit bruised and scratched, but relatively unhurt.

The bad news: My parents still owe $7,000 on the car and it's totaled. Additionally, I'm worried that the insurance company will deny the claim based upon the fact that his physical impairments were never disclosed. I'm also concerned that Medicare won't cover all or some of his hospital stay.

Although my parents won't admit it, they are looking for a bail-out from my sister and me. And I'm not just talking about a financial bail-out. During this ordeal, my mother expected my sister, who now lives in a neighboring city (approx. 45 minutes away), to serve as her personal chauffeur, since she refuses to rent a car to drive herself around. My sister, as a result, has had to spend entire weekends and time off of work to deal with my parents' affairs, including, dealing with doctors, insurance company, the impound lot, etc.

When my sister and I asked my mother why she would allow my father to drive in his condition, she said he looked forward to driving on the weekends. He would have fought her attempts to prevent him from driving. She said he was beyond her control.

As you can expect, my mother does not take to my sister and my questioning her very kindly. She is very defensive and mired in self-pity. She refuses to take any responsibility for any of her failures, her lack of initiative, her lack of motivation, etc. A prime example of one of my mother's failure includes her refusal to learn to speak or write English fluently although she's lived in this country for 40 years. She blames this failure on her "sacrifice" for her family. She also blames her parents for "forcing" her to marry a "loser" like my dad. (I just find it difficult to believe that if she totally despised my father back then as she claims, she would have had two children with the man. But I digress.)

My mother complained of my father's lack of self-reliance. When I pointed our her hypocrisy, her emotions ran the gamut of anger, self-pity, defeatist and accusatory. Some of the things she said included:

"Oh, now I see you and your sister just want your dad and me dead!"
"Fine! I won't EVER ask you or your sister for help!" (I rolled my eyes with this one.)
"I've done NOTHING wrong in my life to deserve this!"
"I've sacrificed EVERYTHING for you girls and this is how you treat me!"
"I've done EVERYTHING to not burden you girls, and there's NOTHING more I can do."
"Don't you see that being a burden to you girls is tearing me apart?"
"I just pray for death everyday!"

After significant soul-searching, I've decided I am not going to enable them or bail them out. I told my mother that no one is happy with this situation. If she's unhappy knowing that she's a burden upon her children, how does she think my sister and I feel? There's no point in pretending the inevitable won't happen. Complaining, blaming and wallowing in self-pity is completely unhelpful. I told her that her defeatist attitude is pissing me off as well.

My sister and I agreed that we are going to make our father voluntarily relinquish his driver's license. He will no longer be allowed to drive. Hopefully, with this accident, my father will agree without a fuss.

My mother now claims she is "too scared" to drive. My parents live in the desert, which means that during the summer, it would be very difficult for them to get around without a car. I told my mother, "If you choose not to drive, that's your decision. But you shouldn't expect my sister to chauffeur you around." (Of course, my mother took offense to this.)

In the event that my parents' auto insurance denies their claim, my sister and I agreed that we will not pay off their car loan or any judgment from the property damage. My parents will need to file for bankruptcy and have their credit cards taken away.

I am also considering exercising my power of attorney and taking control of my parents' finances. For once, perhaps, my sister and I can force them to live within their means.

I'll be traveling back-and-forth to my parents' and I will be taking a break while my sister and I sort through my parents' affairs.

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

Today's Schadenfriday

2010-01-22T04:48:00.000-08:00

Schadenfreude [shahd-n-froi-duh]
def: Satisfaction or pleasure felt at someone else's misfortune.
[Origin: 1890–95; G, equiv. to Schaden harm + Freude joy]

I'm feeling a bit masochistic today so I'm going to confess a sickening financial mistake I made.

I just discovered that back in 1999, I consolidated my Federal Student loans into a graduated repayment payment plan at 2.23% APR. Under the graduated plan, I had to pay a minimum amount equal to the amount of interest accrued monthly for up to 30 years. My payments start out low and then increased every two years.

What, in my moment of brilliance did I do in 2006? I re-consolidated the loan to a 5.125% APR extended repayment plan. I chose the fixed monthly payment plan under which I would pay the same amount for up to 25 years.

What's bad about this whole thing is that I'm not sure why I re-consolidated back in 2006 to a higher APR. I suspect that I wanted the assurance of a fixed payment, versus an adjustable plan where my payments will gradually increase every two years.

But seriously, I voluntarily went from a 2.23% APR to 5.125% APR? I didn't have the foresight or intelligence to stick with the original plan and just pay ahead? Sheesh. Give me the bonehead award.

It makes me sick to my stomach that I was so clueless about my financial situation and I made serious, long-term decisions so casually and willy-nilly. I guess the silver-lining to this is that I've changed my ways and hopefully, I won't be making stupid mistakes like this in the near future.

Anyhow, it's been raining cats and dogs here. Too bad it's not raining men. :-D

Have a great weekend!

Snowballing My Private SL Within a Snowball

2010-01-20T02:28:00.000-08:00

I took a break from my snowball plan in November and I'm back on that horse. I'm now down to paying off my last two debts -- my private student loans and my consolidated federal student loans (subsidized and unsubsidized). As of 12/31/09, I owed $43,182.39 on my private SL and $53,568.28 on my federal SL.

With that kind of balance, I'm not going to be able to pay it off in a short period of time, especially since I've decided against using my recent windfall to pay down my debts immediately. Bummer. But I thought it might make me feel better if I snowballed within my snowball.

Specifically, my private SL is broken up into 5 separate loans. Three of the loans were taken out during each of my law school year and the fourth was a "bar loan" that paid for my living expenses while I studied for the bar exam. The fifth loan is a head scratcher. It looks like a supplement loan for the 1997 school year.

Anyhow, here was the balance of my private SL as of 12/31/09:

Private Loan Breakdown	Original Balance	Balance As of 12/31/09
Bar Loan	$5,000	$4,139.63
1997 Loan Supplement	$3,500	$1,227.87
1997 Loan	$11,479.00	$10,535.84
1996 Loan	$14,242.00	$13,812.68
1995 Loan	$13,104.00	$13,466.37

My planned snowball payment towards my private student loan is $1,478/month. Rather than just letting the loan company apply the payment proportionally to each loan, I decided to aggressively pay down the smallest balance first.

My first snowball payment to my Private SL just posted and here's the current balance:

Private Loan Breakdown	Original Balance	Balance As of 1/20/10
Bar Loan	$5,000	$4,101.98
1997 Loan Supplement	$3,500	$171.09
1997 Loan	$11,479.00	$10,465.23
1996 Loan	$14,242.00	$13,718.82
1995 Loan	$13,104.00	$13,376.13

Looks like I'm on my way to paying off the 1997 Loan Supplement next month and the Bar Loan by April. :-D

Why does this matter? Back in December, I pulled my FICO score and it dinged me for having too many accounts with balances. Now that I'll knock down 2 account balances within 4 months, hopefully my FICO score will improve. (Yeah, yeah. I realize my FICO score is irrelevant unless I intend to take out a loan. But I eventually want to purchase my first home so I monitor it couple of times a year.)

My New Resolution to Declutter and Stop Hoarding

2010-01-19T06:08:00.000-08:00

I got a gift of a small jar of caviar this Christmas and I’ve been savoring its briny, popping goodness little-by-little, until I came near the bottom of the jar the other night. There was probably less than a teaspoonful left when I said to myself, "Better save that for later." And then I paused and thought to myself, "Save it for later for what? Why not just finish it off now?"

You may find this odd, but something clicked inside my head at that very moment. It was indeed a strange, "lightbulb" moment where I vowed to declutter, stop hoarding and stop purchasing stuff I don’t intend to consume immediately.

Bear with me while I digress a bit. My thoughts aren’t necessarily organized since this self-realization is a cumulation of recent events.

This past Christmas, my family and I went to IKEA to look for some furniture for my sister’s new house. While we were wandering through the store, my father noticed a small box of pencils provided by IKEA for its customers to mark down merchandise numbers. I watched my father take a couple of pencils and stuff them in his pants. At the next pencil box, I watched my father take another couple pencils. I stepped in front of my father when he gleefully tried to make a beeline towards the next pencil box. I said, "You’ve had enough. Don’t take anymore." Taken aback, my father mumbled, "Oh, okay." My sister was more direct, "Put them back." My father refused.

My mother told my sister and me that my father’s been doing this for years. He brings home buckets of golf balls from the golf range, toilet paper/tissue boxes from hotel rooms, fist-full of mints from restaurants, blankets from airplanes, etc. When my mother told my father to stop, he became belligerent and obstinate so she’s since stopped trying. She sighed and said he probably committed thievery during the war, during his poverty-stricken youth. He stopped as he matured and dug himself out of poverty. But now, with his dementia clouding his common sense and judgment, he’s reverted back to his old habits.

This made me wonder whether some trauma in our life causes long-lasting behavioral problems. I wonder, since over the years, I’ve developed one particularly disgusting habit - - I hoard.

Note: Not my fridge.

I think my own personal "trauma" started several years ago, when I maxed out my credit card and got rejected for a new one. I was a week away from payday, had nothing in my savings or checking, had no money or credit to buy groceries. For a couple of days, I survived on stale bread and Top Ramen I bought from God-knows-when. Thank goodness I had a pre-paid business trip that week, where food and drinks would be provided by my employer. I guess you could say I had a Scarlett O’Hara moment where I vowed, "I’ll never go hungry again!"

Now, I realize that I’m being over-dramatic about what happened. I had other options besides going hungry. I could’ve easily called my friends or sister for some money. But I just couldn’t bring myself to admit to my friends and family how bad of a financial situation I was in. I guess you could say my false pride traumatized me.

Ever since then, I’ve been telling myself to, "Save that for later. I may need it." Over the years, my freezer’s been stuffed with items that I’ve "saved for later." If you look in my freezer today, you’ll find bag of chicken wings that has one drummette, a bag of pita with couple of pockets, a box of pyrogies with 2 dumplings, a 1/4 bag of hashbrowns, etc., etc. You get the idea. Many items are so freezer-burned that they’re now inedible. What I've saved for later, that "later" never came.

My closet is similar. I’ve got clothes dating back to when I was in college that I can't/won't wear anymore. Yet somewhere in my mind, "I may need it for later." I somehow can't bring myself to donate something I haven't worn in over a decade.

It made me sad to see my father as a petty thief. Since I’ve also inherited a lot of physical characteristics from my father - - my looks, dark complexion, my curly hair, my asthma, etc. - - I am petrified that I will one day become like him. There's nothing much I can do about genetics but I know I can change my habits and way of thinking. I am hoping that if I make an ongoing and concerted effort now to stop hoarding and completely consume what I buy, I may not end up like my dad or those sad people you see on A&E's show, "Hoarders."

I'm slowly cleaning out my freezer. I've been tossing out items that are completely overtaken by freezer-burn and finishing off what's still edible. I've also cleaned out two bagfuls of clothes and shoes out of my closet. And I still have more to go. This will be a work-in-progress that will take weeks, if not months, to accomplish.

Anyhow, going back to the caviar - - I scooped out the final teaspoon and ate it all. And it was the best tasting part.

Shedding The Last Vestiges of Credit Card Indebtedness

2010-01-18T05:51:00.000-08:00

I started accumulating significant credit card debt in 1995. Once I started down this path, I became accustomed to living with debt. I saw my balances go up and down (mostly up) and I just paid whatever I could. I guess you could say that I expected myself to be in debt forever, especially since I also carried an onerous student loan debt (and still do.) I was really never successful in saving money and paying down my credit card debt.

At some undetermined point in my life, I decided to add a “credit protector plan” on my credit card. With the plan, I would pay approximately $0.68 for every $100 balance I had on my credit card. I wouldn’t need to pay my monthly minimum and I wouldn’t incur any interest in the event of a lay off, disability or hospitalization. Although I didn’t realize it at the time, I enrolled in this plan in lieu of having an emergency fund.

Flash forward to the present. I’ve paid off my stinking credit card and I’ve also managed to squirrel away some decent dough for my EF. I’ve concluded that I no longer need the rip-off credit protector plan.

I called Citibank to cancel the plan and, as expected, I faced some resistance. Initially, the telephone rep asked why I wanted to cancel my plan. I told her, “Because I no longer carry a balance month-to-month.”

The phone rep replied, “That’s wonderful! But this plan will allow you not to have to pay your credit cards in the event of disability, layoff or hospitalization. The benefits of this plan are quite exceptional and I will mail you some information as a refresher so you can have time to think it over.”

“Uh, no thanks. Please just cancel the plan.” (Internal dialogue: "That's what my EF is for.")

Undeterred, the phone rep pressed: “Since you’ve been a loyal customer for many years, I would like to offer you a discounted price of $XX for every $100 of your balance.” (At this point, I’ve stopped listening so I don’t remember the price she quoted me.)

Strangely enough, while I wanted to yell, “Just f&#*ing cancel the d&mn plan!”, I found myself giggling inside. I composed myself and said, “I admire your persistence. But my decision is firm.” (I didn’t want to be mean to the phone rep since she’s only doing what she’s required to do. No point in being nasty to someone for her employer’s idiotic policies.)

The phone rep finally relented and said, “Okay. I will go ahead and process your request. But I do want you to know that you’ve already paid $XXX into this plan and I would hate for you to let that money go to waste.” (Internal dialogue: “Uhhh… I think it was wasted the moment I paid it.”)

“Wait a second, how much have I paid into this plan to date?”

“$853.39.”

“Wow. Thanks for canceling the plan.”

I couldn't believe that I’d wasted $853.39 over the years to insure my financial irresponsibility. Once the shock wore off, I was dance-in-my-underwear elated that I no longer have to pay this premium. For some reason, this made me much happier than any of my recent milestones. Perhaps I was happy that I could brag about my financial accomplishments without guilt to my credit card company, albeit its lowly phone rep.

But after the ecstasy wore off, I calculated that I’d charged over $125,499 on this card over the years. (I’m assuming that the cost of this “insurance” remained constant at $.68 per $100.) OMG. And that’s just one card. God only knows how much interest the cc companies have made off of me...

Should I Set Aside Money for Morbid Reasons?

2010-01-13T04:00:00.000-08:00

I've set aside $5,000 of my recent windfall for my parents. No, I'm not planning to give it to them - - I'm thinking about setting it aside to deal with their eventual death.

It's no secret that my parents seriously mismanaged their finances. They don't own their own home (they rent) and they live off of Social Security (which barely pays their rent) and a small pension from my dad's old job. They have no retirement or savings to speak of and no life insurance. My dad bought himself a $200,000 term life insurance policy that will expire some time in 2011.

My mom (age 67) is in relative good health, but my dad (age 73) is a complete mess. He suffers from serious COPD, or chronic obstructive pulmonary disease. Just think of the person with the worst case of asthma you know, who's constantly wheezing and sucking on an inhaler/nebulizer. If that wasn't bad enough, my dad suffers from advanced dementia. When I saw my dad this past holiday, his memory loss has progressed to the point that he can't even remember what he did/ate the night before. And one last thing -- my dad's a diabetic. In other words, my dad is no longer insurable for life insurance.

My parents have made no plans for their death. No wills or trusts (not that they need one since they have no assets) and no pre-planned funerals. With no life insurance, the cost of dealing with their death will be borne by my sister and me.

This article talks about how to plan for a frugal funeral. The best way to save money on a funeral is to plan it and pay for it now. According to AARP, the price of a funeral doubles an average of every seven to 10 years. You could also spread out the payments over several years and the price still won't change. The pre-paid money is put into an insurance policy or a trust and can't be touched. Merchandise isn't bought and stored.

I don't expect or wish for my parents' imminent death. I just want to be prepared for it now. After all, there are 2 certainties in life, tax and death. I haven't broached my parents with this topic yet and I'm not quite sure how without giving them the impression that I want them dead.

I asked an older friend for advice about this and she felt that the money should be spent on the living. Since there is very limited time left where my parents will be both mobile, perhaps I should use the money to go on a vacation with them. She especially feels that my mom deserves a break for caring for my sick dad. I have to admit, my mom's caretaker fatigue is clearly showing.

What do you think?

January 2010 Charity - San Diego Food Bank

2010-01-11T20:09:00.000-08:00

My company revamped its Employees' Handbook this year and there were some bummers in there. For example, my company will no longer pay for its employees' educational costs to obtain certain industry certifications. They previously also used to pay its employees pretty nice bonuses for successfully getting those certifications. Needless to say, the bonuses are gone too. (There goes my Christmas Fund. Just kidding.)

But there's one bright spot -- my company used to match $2 for every $1 of its employee's charitable contributions in excess of $100 in the calendar year. This year, my employer lowered the threshold to $50 and they will now match $3 for every $1 donated! The maximum cap on the company match is $1,000, so I've decided to donate $1,000 total to various charitable organizations this year, or about $83 per month, per charity. With the company match, each charity will get about $332 (i.e., $83 my donation + $249 company match) total. Sweet!

Without further ado, this month's $83 goes to the San Diego Food Bank.

Miss (soon-to-be-missus) M noticed a while back that there seems to be two, concurrent yet separate recessions - - those who are affected and those who are doing remarkably well in this economy.

I too have noticed that high-end restaurants and stores catering to the well-to-do are doing brisk business in this "recession." Fact of the matter is, I can't help but to think that this economy is being supported by, and at the expense of, those who were laid off to shore up corporate bottom-lines. Many laid off people and recent graduates continue to struggle to find employment. That's why I will primarily focus on charities that help feed, train and clothe those in need.

If you have any worthy charities, please give me some suggestions. Thanks!

The Tax Man Cometh

2010-01-11T06:37:00.000-08:00

For the 2008 tax season, I made the mistake of buying Turbo Tax too early and missing out on subsequent price cuts and sales. This year I decided to be patient and just as I expected, Costco issued a $10 off coupon that's effective between 1/27 - 1/24/10. My taxes are relatively straight forward so I purchased Turbo Tax Deluxe (Federal and State) for $39.99. I spent a good part of Saturday morning estimating my tax liability for 2009.

I was a bit worried about my 2009 taxes in light of the fact that I got a significant windfall on New Year's Eve. The most I've ever paid in taxes was back in 2007 when I temporarily halted my 401k contributions and sold off a bunch of my stocks to pay down a significant chunk of my debts. In 2007 I had to pay $653 in Federal taxes and $489 in State taxes.

I thought my taxes in 2007 were pretty bad. Do you want to venture to guess how much I approximately owe this year?

Wait for it.... wait for it...

$916 for Federal taxes and $2,359 on State taxes. Oy! If you consider the amount of tax that had already been taken out, I'll be paying an obscene amount (IMHO) this year. I never ever thought I would pay this much tax.

I'm not complaining, mind you. I've always believed in a progressive tax system. In my opinion, taxation should be based on one's discretionary income and ability to pay. I also actually agree with Justice Oliver Wendell Homes that you pay for the privilege of living in a civilized society by paying taxes. There's absolutely no excuse for cheating on taxes and I'm prepared to pay my fair share.

Besides, I already suspected that I would I owe about $3,679, so I mentally took that amount off the top of my windfall from the get-go. There are no disappointments or surprises here.

Actually, I did learn something new while estimating my taxes. I sold my company stocks for a $305.97 loss earlier this year. In a separate transaction, I sold the stock for a realized gain of $405.91 for which I was hoping to take an offset of my $306 capital loss. Unfortunately, I am subject to the wash-sale rule and can only take a part of the capital loss.

A wash-sale rule occurs when you sell a stock for a loss and acquire the same stock (or a substantially identical stock) 30 days before and after the sale. The rule was established by the IRS from preventing taxpayers from creating a tax loss while still holding a position in the same stock (and thereby avoiding capital gain taxes). It is irrelevant whether you intended to harvest a loss or not.

Anyhow, I can only claim $168.31 of my loss in my tax returns this year. The $137.66 loss that I'm prohibited from taking this year can be used to reduce my cost basis for the stocks that I acquired during the 60-day period, though. I guess if I'm really motivated (or bored), I'll read the IRS Publication 550 - "Investment Income and Expenses" to learn more.

Crash Diets Are Easy. Lifestyle Changes Are Hard.

2010-01-08T06:03:00.000-08:00

Sorry for the lack of posts this week. Like most people, I gained an extra 5 lbs during the holidays. (The gift baskets, chocolates and other goodies we received at work from vendors haven't helped.) I've been trying to make a "lifestyle change" by incorporating exercise and healthy eating habits into my daily routine. When all I've been doing the past couple of years is sitting on my keister in front of the TV or computer, this change takes a bit of getting used to. I'm trying to get the hang of my new regimen and schedule.

I've been easing myself into a new lifestyle that is a compromise of eating/exercising moderately while very occasionally indulging in the so-called "bad" stuff. I know I won't lose weight quickly this way, but this is the only way to go. After all, I know myself - - I know I'll stick to a crash diet and exercise only for the short term because: (a) I'm a yo-yo dieter, (b) I hate exercising and (c) I love to eat, especially deep fried, salty, fatty foods. I'd rather try to aim for a lifestyle that may not be the paragon of health but is at least do-able for the long-term.

Just as much as I don't care for the boot camp-style crash diet and exercise, I don't care for the crash-elimination of my debts either. I'd rather attack my debts at a steady pace while trying to maintain a financially responsible lifestyle. (Keyword: trying.)

I bring this up only because I was pondering whether I should use my recent windfall to pay off a significant chunk of my private student loans. After careful consideration, I've opted not to do so based purely for psychological reasons, not economic.

I have a masochistic need to self-flagellate myself for the debt I've gotten myself into. Paying off a significant portion (over 50%) of my private student loans in one fell swoop with a windfall feels like cheating. Kind of like a weight-loss contestant who uses diuretics right before his/her weigh-in. I know, I know - - The analogy is not perfect. But just as water weight will inevitably return, I'm afraid that debt paid off with "easy money" will just as easily come back in a different form. I've witnessed too many people who "pay off" their debts by using inheritance money or refinancing their homes, only to get right back into debt. I have a deep seated fear that I will be one of them.

As you know, I fell off my snowball plan in October when I paid off my credit card debt. I spent money freely in November (and especially) December, knowing that I was going to come into the windfall. I have yet to get back to my frugal ways. I feel I haven't demonstrated to myself that I am financially responsible. Until I do so, I think it would be best not to put my debts on a crash diet. Instead, I'm sending my windfall to my savings account to gain some fat.

Opened An EverBank Account

2010-01-06T06:53:00.000-08:00

Some of you already know that I have an insane accounting system. Since I also rate chase, I also collect savings accounts like a crazy cat lady collects cats. I've added a new cat... errrr.... savings to my collection - EverBank.

At the time I opened my account on 12/31/09 the 3-month bonus rate offered was 2.51%. Looks like the bonus rate went down in the mean time. *Sigh*

Anyhow, the purpose of the EverBank account is to hold a windfall that I came into on 12/31/09. I can't discuss the source or reason how I came into the windfall due to confidentiality clauses and other legal reasons. All I can say is that it's not from an inheritance, illegal activity, lawsuit settlement, lottery, gambling or from a side job of stripping.

My net windfall totaled $33,475. For now, I intend to keep everything liquid and set aside in my EverBank account. I'm pretty sure that with this windfall, I'll be subject to the AMT, so I'll probably pay a big chunk of tax from it. I'm also embarrassed to admit that I spent over a couple grand of it already in December that I'll have to pay in January.

I'd eventually like to use the majority of the windfall as a down payment for my first home. But with all best laid plans, things can go awry. I could get laid off and I may have to use the money as an EF. I could suffer some uninsured loss. I've decided to call this chunk of money my "X-Fund" since I don't know what the ultimate purpose of this money should be. Heck, I may just use it to pay a big chunk of my private student loans off. I just don't know yet.

On a side note, I'm currently enrolled in a free free credit monitoring program through Southern California's AAA. It immediately alerted me to the fact that EverBank checked my credit report. I'm glad to know the free credit monitoring program is really working!

December '09 Progress Report

2010-01-03T23:50:00.000-08:00

Hope you all had a wonderful New Year's. I certainly did. My final 2009 net worth progress report looks pretty upbeat too.

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$43,557.31	$43,182.39	$(374.92)
Fed'l SL	$55,852.68	$53,717.32	$53,568.28	$(149.04)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$97,274.63	$96,750.67	$(523.

*Sigh* This is the last month that I'll put my snowball plan into abeyance. Next month, I'll resume my plan and hope to pay down my debts by at least 1% per month. It'll be hard to get back onto the frugality horse again, but I'm just gonna have to do it if I want to get rid of my debt in 4 years. *Sigh*

MY SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$8,372.41	$8,472.64	+$100.23

Eh, nothing new here this month. But I've come into some windfall that will be reported in a future post and next month's progress report. Stay tuned.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$47,358.27	$53,922.34	+$6,564.07

Whoa Nelly! My net worth increased by $65,862.20 in one year, but I'll only take credit for ~$53,213, which represents the sum of the contributions to my 401k (including employer match), Roth IRA, I-Bonds, savings and the amount of debt I reduced. ~ $12,649 arguably represents the market rebound. I'm not sure whether the market in 2010 will go up or down, but I just pray for less volatility for the sake of my sanity.

The breakdown and the history of my net worth can be seen here.

New Year, New Look

2009-12-31T06:50:00.000-08:00

I sometimes wonder whether I have some kind of attention deficit disorder since I can never seem to maintain interest in any new hobby I adopt. But I've managed to keep this blog alive for over a year with the support and encouragement of fellow PF bloggers. For that, I thank you all!

Anyhow, I decided to reward myself by retiring the goofy looking kitty that I drew up on MS paint and by getting a professional banner. I now know there are some things that should be left to the pros, like art, Botox, sushi, lobotomy...

The logo was created by Aric C. Harris from Tiki Kitchen.com Isn't the kitty adorable? Kind of reminds me of the coolest cat of them all, Jeannie. :-D

Anyhow, Aric managed to squeeze in time for my little logo right before his wife gave birth to their first baby. (Congratulations, Aric!) He also designed the Cake Wrecks website and logo. The guy has mad skillz.

Hope you all have a happy and safe New Year!

My PF Year in Review

2009-12-29T06:28:00.000-08:00

I really don't set up goals every year since (if history is any indication) I tend not to achieve them. Ha ha. But I do set up some personal targets that I haven't posted and I was wondering how I did.

Let's start with the bad news:

1. FICO score of 760 - FAIL
I'm a bit bummed by this one. Strike that - - I'm pretty P.O.'d. But one of the comments on this post made me laugh: "Dear Author shtinkykat.blogspot.com ! I apologise, but, in my opinion, you are not right. I am assured." You're absolutely right, Anonymous commenter. I'm daggum not right in the head. That's nothing new.

But going back to my FICO score, another Anon writer chastised me for being brainwashed by Suze Orman, et al. for being overly concerned about my FICO score. It's not that I'm obsessed with my score, but I do kind of see it as a report card or progress report on how I handle my credit. Although I think the scoring system is a bit bogus and arbitrary, I don't think it's irrelevant. After all, I do hope to be able to buy my first home in the next 2 to 4 years. I will continue to monitor my score.

2. Exercise Regularly and Maintain Ideal Weight - FAIL
You may wonder why I put this category in a PF blog. I do so because I believe that future health costs are one of the biggest threats to my financial security in retirement.

In January I was 110 lbs. Now? I'm a 120 lbs. I've been trying to squeeze myself into my skinny jeans for a couple of weeks and it's been painful. I think I can hear my jeans scream when I squat in them. Or maybe I'm just hearing the seams rip. Ugh. Worse yet, I lead such a sedentary life, my coronary and pulmonary health is probably not great. This is something I need to improve in baby steps.

3. EF Balance of $10,300 by 12/31/09 - FAIL but with good reason
As it stands right now, my EF balance is $8,472, or, -$1,828. The reason why I'm short, though, is because I used $2,219 of my EF to pay off my car early. There's been a bit of debate about whether an EF should be tapped to pay for a car, but I feel I made the right decision. This car is the first car I paid for myself and owned outright. It makes me feel great.

4. Investment Account of $10,900 by 12/31/09 - FAIL but also with good reason
In June, I sold 8 shares of my company stock to ensure that I would have enough money to pay off my credit card debt when the 0% promotional rate ended in October. Had I not sold the 8 shares, my investment account would be worth $14,000 today. :-(

Wanna know what really sucks about this? I sold the stock for $250.80/share in June. Do you want to know what it's trading at right now? $399.68/share. Doh! I guess this is why money you need to spend should never be in an investment account because you may be forced to sell at an inopportune time. *Sigh*

Anyhoo, onto the good news!

1. Reduce Debt to $103,282 - SUCCESS
I paid off my car loan and my credit card this year. I also accelerated the process by using some of my EF and selling off some stocks. My current debt load is $96,750.57. It's still a lot, but it feels for the first time, manageable.

2. Contribute $16,000+ to 401k - SUCCESS
I know I should be max-ing out my 401k contributions but I just do it the lazy way where I just instruct my employer to divert a certain % of my pre-tax income to my 401k. I really shouldn't take credit for this since, after all, it didn't involve any will-power or inertia to do this. But I'll take credit anyways. :-D

3. Buy $300 Worth of I-Bonds - SUCCESS
I decided to create a savings bond ladder in late 2008. My goal was to invest $25/month or $300/year and I managed to invest $350.

I guess I could also pat myself on the back re: my net worth. But I'm not sure whether it's something I could really take credit for. After all, last year's sudden drop in my net worth wasn't my fault. This year's rebound certainly wasn't my doing either.

Anyhow, I feel better about my financial situation now than I did on 12/31/08. And that's what counts.

Friend On A Financial Path to Disaster

2009-12-28T05:13:00.000-08:00

I have a mature friend who is turning 60 next year who frustrates me since she seems to be on the path to financial destruction. I've kept my mouth shut since I'm no paragon of financial responsibility. But it's been hard.

Here's her story:

This all started a couple of years ago. My friend (let's call her "Tina") and I often discussed our financial problems caused by our high debt loads. Tina is a spendthrift and she often quickly racks up $40,000 in credit card debts. Her solution often meant refinancing her modest home she got in her divorce about eleven years ago. In her divorce, she took on the existing mortgage from her ex that was worth about $72,000. In 2002, she refinanced her home for $136,750 and took out a second mortgage worth $20,000. In 2003, she refinanced her home yet again for $141,750. Because this was a easy solution and she didn't make any lifestyle changes, she often got herself right back into horrendous credit card debt.

Around that time, Tina broke up with her longtime boyfriend and literally went on the prowl. She met another mature man similar in age at a bar (let's call him "Bubba"). Bubba is an American who spent the past 25 years in another country south of the equator. Over the past 20 years, he worked as a developer/general contractor, got married, got divorced, had children in this foreign country. Of course, during this time, he never paid a cent of U.S. taxes while living abroad. (I'll get to this later.)

Everything about Bubba rang alarms in my head. First off, he lied to Tina about still being in a relationship when they first hooked up. Once things got hot and steamy, Bubba confessed and broke it off with his live-in girlfriend. Tina forgave him saying, "He was in a bad relationship and I helped him see the light."

Tina and Bubba courted long-distance for a few months, after which Bubba announced he was moving back to the U.S. My second alarm went off. I told Tina that she probably shouldn't let Bubba move in with her immediately. She brushed off my concerns and said, "We're older and we don't have much time left where we're both able-bodied and healthy. I want to spend as much time with him as possible. He's moving in." I also questioned how he could just pick up and leave his kids? "The kids are all adults." Tina didn't think it was strange that Bubba would be so willing to move back to the U.S. since, (a) he's an American and (b) he has family living here.

Once Bubba moved to the U.S., Tina started involving Bubba in everything she did. Girl's night out? Bubba tagged along. Lunch with former co-workers during the work week? Bubba was invited. Bubba had all the time in the world, since he was unemployed. But to give Bubba some credit, at least he does the cooking for Tina. He also helped doing some remodeling work in the yard.

A few months ago, Bubba got a job working at CVS. But I've now learned that he's no longer working there due to back problems. I also learned that Tina not only gave Bubba free shelter, but she also added him to her workplace health insurance as a "domestic partner." (Who knew in California, unmarried Seniors qualify as a "domestic partners"?) He underwent couple of expensive surgeries (ear drum repair and hernia) and he needs another one for his herniated disc.

Tina claimed to me that Bubba was financially secure. But she apparently confessed to others (who are less critical of Bubba) that he had deep financial problems in the foreign country due to bad real estate deals. I suspect this was probably the reason why he was so eager to move back to the U.S.

The bottom line - - Bubba contributes nothing financially to Tina's household.

During the past couple of years, Tina's spending went out of control. She bought a new SUV that she's financed on an 8-year term. She also decided to construct an addition to her home for which Bubba was supposed to be the general contractor. But since he's unlicensed in the U.S., Tina ended up hiring a GC. She also refinanced her home yet again to pay for the remodeling work. I don't know what she refinanced her home for, but she admitted she'll be paying her mortgage until she's in her 90's. (Keep in mind that her original mortgage amount was $72,000. By 2003, her mortgage more than doubled to $162k. I suspect that she's probably up to about $185,000 now. Her home is currently worth about $293,000.)

Additionally, I'm not sure how much Tina's 401k took a beating last year, but I'm quite certain that she did not have a conservative asset allocation. About a couple of years ago, she claimed her 401k was worth $250,000. Assuming it's probably near $250,000 today, I don't think she has enough saved to support both herself and Bubba in retirement. Even while working, she can't support herself and Bubba since she's (again) racked up credit card debts.

Did I also mention Tina has an adult daughter living at home who is also not working? God knows when the daughter will move out in this recession.

Oh yeah. Remember how Bubba never paid a cent of U.S, taxes during the past 25+ years while living abroad? I doubt he qualifies for Social Security or Medicare.

Everyone seems happy for Tina that she's found the "love of her life" in Bubba. I'm not suggesting that she dump Bubba since he seems to make her happy. But I can't help wonder whether she's seeing into the future what I'm seeing. And it ain't pretty.

Merry Early Christmas!

2009-12-22T21:19:00.000-08:00

I'm off visiting my folks this week. Happy belated Winter Solstice and Merry early Christmas, y'all!

According to the Star Wars Weather Forecaster, I'll be encountering Endor-like weather at my destination.

Penny-wise, Pound-foolishness Strikes Again

2009-12-21T06:00:00.000-08:00

I was meeting a friend for drinks in La Jolla couple of weeks ago. I didn't plan to spend more than an hour drinking, so I decided to park on the street rather than pay $10 for parking. I'm sure you've already guessed, I overstayed by about a couple of hours.

When I got back to my car, I was relieved that I hadn't been ticketed. *SCORE!*

But... Over the weekend, I just got in the mail couple of tickets totaling $80. *OUCH*

Stupid, stupid, stupid. I hate paying for the "privilege" of parking, but I hate paying for parking tickets even more. Especially when they're 800% more expensive.

Pinecone Looking For New Members

2009-12-17T06:28:00.000-08:00

Apparently, I'm a member in good standing with Pinecone Research and they have given me the opportunity to recommend membership to a friend or relative to join the panel!

To those who are unfamiliar, Pinecone Research is a subsidiary of the AC Nielsen Company and are one of the most reputable paid survey companies. They pay $3 for each completed survey which takes approximately 15-20 minutes. It's not the most efficient way to make money, but it IS easy snowflaking money.

Click on the logo to go the registration site.

Worst and Best Gifts Ever

2009-12-15T17:37:00.000-08:00

The First Lady told Oprah recently that her most treasured gift was a dollhouse. This made me wonder, what are my worst and best gift ever received?

After much thought, here they are:

WORST GIFT EVER: Make-Up Set
My ex gave me an expensive make-up set by Shiseido. I was thrilled until he said, "I thought I'd give you something you need."

Ahem..... Enough with the negativity! I want this post to be more about what makes a great gift, if not THE best gift.

And my BEST GIFT EVER is....

....a sock monkey!

Here's the boring backstory. Back in the '90s, Intel had a commercial that featured a sock monkey surfing the 'net in search of other playmates (and a soul mate).

I don't know why, but I was fascinated with this commercial because I'd never seen a "sock monkey" before. I really loved the fact that the sock monkey is quite ugly yet cute - - like a pug, an Ewok or a hairless cat. Anyhow, I casually mentioned to my sister how I loved this commercial. The following Christmas, I was pleasantly surprised when my sister presented me with a sock monkey kit. Although I liked sock monkeys, the kit remained untouched for months mainly because I can't sew. My mom, who worried that my sister would take offense, took it upon herself to make the sock monkey. The sock monkey has been my constant companion at work for the past 9 years.

At the time, I really didn't think much of this gift since it probably cost less than $20. But after nearly a decade, I'm starting to realize it's true value. My sock monkey is one-of-a-kind, and not because it's hand-made. It's special because it's proof that someone cared enough to listen to my useless drivel and remembered what I liked. It's priceless because every cut and every stitch was made with love. And the resulting product makes me smile everyday at work. Yeah, it's definitely the best gift ever.

If Your Boss Asks You To Cover Up His Affairs, Start Looking For a New Job

2009-12-15T05:09:00.000-08:00

I'm pretty sick and tired of the whole sordid Tiger Woods scandal, but it did bring up an interesting discussion I had with a friend yesterday. She is pretty sure that Tiger's affairs were organized, scheduled, coordinated and kept under wraps by one or some of his aides. She would know, since she had to do something similar for her ex-boss.

Many moons ago, my friend was an admin assistant for a lecherous man who paid her quite well. "The Boss" was a rainmaker who often wined and dined clients and potential clients to generate business. As part of her duties, my friend was required to make travel arrangements, set restaurant reservations, purchase gifts, etc. Initially, my friend didn't suspect much. But she did think it was odd that when she was first hired, she was told that "The Wife" was a needy, pill of a woman and she needed to be kept at bay during work hours.

When The Wife called and The Boss was out, my friend would tell her stuff like, "The Boss is in a meeting/golfing/dining with a client." My friend thought the excuses were all true. But to make a long story short, my friend eventually realized that some of The Boss' "client meetings" were just rendezvouz with skanky women. My friend didn't like that she was complicit in helping The Boss with his extramarital affairs, but she justified it as her job.

Predictably, The Wife also eventually found out about the multiple affairs. The Boss begged her for forgiveness and agreed to go to marital counseling. In the process, The Boss apparently told The Wife that my friend was the one who facilitated The Boss' affairs. The Wife demanded that my friend be fired and The Boss agreed. My friend was an at-will employee and was terminated after a couple of negative performance reviews. (Apparently, The Boss was savvy enough to use his own personal funds and not the company funds for his trysts. The Boss purportedly got a slap on the wrist but is still a "star" at the company.)

I don't blame my friend for what she did at her job. Some may say she deserved to get fired for doing something she knew was immoral. But how many of us really have the courage of our convictions to immediately quit a job when our boss asks us to do something immoral, if not illegal? Had she not, she probably would've been fired rather quickly for insubordination.

But I do blame my friend for staying at her job as long as she did, not because she was doing something immoral, but because she should've known she would've eventually been fired anyways. It happened to John Edwards' top aide and I'm sure some heads will roll at Camp Tiger.

I'm not sure there's a lesson to learned here but I know I'll immediately look for a new job the moment my job description includes "extramarital affair coordinator."

Are You Sure FICO isn't spelled FYCO?

2009-12-14T05:10:00.000-08:00

I think the acronym for FICO should be changed to FYCO, because it sure seems to be sending a clear message that it doesn't think much about me.

(Before I go on my tirade, I bought my FYCO score on myFICO.com with a 30% off coupon, promotion code: SURVEY30. If any of you are looking to get your scores, hope this code works for you as well.)

After my self-congratulatory post last Friday about paying off my cc debt, I admit I was feeling mighty smug that my FYCO score would be darn awesome. (After all, my CreditKarma score is 801!) But instead, I got a cold splash of reality last Friday when I learned my new FYCO score is:

The last time I got my FYCO score in May, it was 723.

Granted, the last FYCO score was based on Equifax's data and this credit score is based on TransUnion's data. But the data is pretty consistent between the two. You could also argue that the difference between 719 and 723 is de minimis, but here are several reasons why I think this whole FYCO scoring system is bogus:

1.) Paying Off My Huge Revolving Credit Card Debt Did Bupkis
One of the negative issues in May was that I was using too much (i.e., 18%) of my available credit limit. I didn't disagree with this negative mark since I had over $11k+ in credit card debt at the time. But as you know, I paid that debt off in October and am now only using 2% of my available credit limit.

Considering the fact that FYCO claims "usage ratio" plays a big factor in its secretive scoring formula, paying off a huge cc debt didn't do me much good. Do you want to know what FYCO is nit-picking about now?

I allegedly have too many accounts (11) with balances. First off, 6 of the 11 accounts are my student loans. The remaining 5 accounts only have balances between $26 to $1,613, which I already paid off in full this month.

In case you were wondering why I have 5 accounts with balances, it's because I'm splitting my cc usage over multiple cards so that I don't get dinged with "inactive" penalties like fees, reduced credit limit or outright cancellation by the cc companies.

Bottomline - - If I don't use my cards, I get penalized with fees and reduced limits by the cc companies, but if I use my cards responsibly, FYCO beats me up for it. Lovely!

2.) FYCO's Infernal (and Eternal) Scarlett Letter
I was always under the belief that a bad credit rating doesn't stick around forever. I believed that negative information (such as late payments) would fall off 7 years from the date the payment was late. Boy was I wrong! Apparently, FYCO still takes that information into consideration. For example:

TransUnion's data on one of my account indicates:

Seven year payment history

30 days late	0 times
60 days late	0 times
90+ days late	0 times

But guess what? It also says:

Worst Delinquency

90 days past due
The Worst Delinquency reports the worst missed payment status that has been documented on this account. Your FICO® score evaluates how recently that missed payment occurred and in general, the more recent, the more impact it has on your score. However, the fact that it occurred is still predictive of future payment risk and could be considered by your FICO® score.

I guess my late payment history WILL haunt me forever and ever. It reminds me of this tasteless joke:

This Scottish farmer walks into the neighborhood pub, and orders a whiskey.

"Ye see that fence over there?" he says to the bartender. "Ah built it with me own two hands! Dug up the holes with me shovel, chopped doon the trees for the posts by me ownself, laid every last rail! But do they call me 'McGregor the Fence-Builder?' No..."

He gulps down the whiskey and orders another. "Ye see that pier on the loch?" He continues, "Ah built it me ownself, too. Swam oot into the loch to lay the foondations, laid doon every single board! But do they call me 'McGregor the Pier-Builder?' No."

"But ye #$&! just ONE lousy sheep ..."

3.) FYCO Simulator is a Joke
Here's a joke: FYCO's simulator claims I can dramatically improve my score to 779 to 819 if I pay off 90% to 100% of my credit card balances! Uhhhhh... Yeah, sure.

Considering that my elimination of $11k in cc debt didn't do me much good, I doubt paying off my current credit card balances of <$2,000 in full every month will dramatically increase my score by about 60 to 100 points. Yeeeahhhhh....

And here's another sick joke: Back in May, FYCO's simulator predicted my score would increase to 723-763 if I paid off my $11k+ credit card debt within 6 months. Ummmm.... it's been 6 months and I paid off that debt. But my FYCO score did a backslide instead. What gives?

I am now pretty discouraged that I will forever have to live with a "below average" credit score. Perhaps I should rename this blog to "Hester Prynne's PF Blog"...

My Credit Card Pay Off Odyssey

2009-12-11T05:00:00.000-08:00

After I paid off my credit card debt in October, one commenter asked whether I had any tips on paying off my $30k+ credit card debt. I think everybody’s circumstances are unique, so I’m not sure whether my experience will be useful to anyone. But here’s a recap of my experience:

1. Created A Budget and Monitored My Spending
This shouldn’t come as a surprise to anyone. I’m not going to elaborate why or how I created a budget since the PF blogosphere is replete with articles about the beauty of the budget.

My only advice is, don’t try to “wing it.” I tried and was short on funds every month. I now know that I need to know how much I could afford to spend every month AND also be vigilant about my spending. Just paying attention to one or the other never worked.

2. Liquidated My Assets to Pay-Down Debt Immediately
I discovered, during the course of creating my budget, that my monthly expenses exceeded my monthly income. Quelle fromage! (Or was it quelle horreur?) Anyhow, I knew that I needed to pay down my debts significantly to bring it under control.

I initially looked around my apartment to see if I had stuff to sell on eBay or Craig’s List. But I was mortified to discover that I only had cr&p. Serious cr&p. (Makes me wonder - - how could I have been $30k+ in cc debt and have nothing to show for it?)

But… despite my irresponsible spending, I fortunately did some things right. I regularly contributed money into my Roth IRA and I participated in my company’s ESOP program. This allowed me to liquidate $17,000 of my assets (i.e., $1,400 out of my savings, $6,300 of my after-tax contributions to my Roth IRA and $9,300 of company stock) to immediately pay-down my debts.

This was one of the scariest things I did, since it wiped me out financially and emotionally. But…. it did cut my credit card debt by half.

3. Increased My Take-Home Pay
I didn’t say I increased my income since I failed at those attempts. I asked my boss for a merit raise and I got laughed at. I tried getting a second job, but dropped out after a miserable month. (I now know I’m the world’s worst telemarketer.)

Instead of increasing my income, I decided to increase my cashflow. I increased my take-home pay by temporarily halting all contributions to savings, including my 401k. After setting aside some of the increased take-home pay for taxes, I dedicated the rest to paying down debt.

I probably did this for about 5 to 7 months until my monthly expenses finally were less than my take-home pay. At that point, I resumed my regular 401k contributions.

4. Confessed to My Friends and Family
One of the reasons why I kept falling off the financial wagon was because I tried to create the façade of being financially successful. Whenever my budget wouldn't allow me to go out (e.g. shopping, taking vacations and eating out) with my friends and family, I made excuses. I eventually got burnt out by all the lies.

I finally confessed to my friends and family about my crushing debt. Many were surprised, but supportive. They considered my new-found frugality “responsible” vs. “miserly.” I also discovered that other people were buried with debt too. I’d like to think that I inspired some of my friends to change their spend thrifty ways.

5. Snowballed My Debts
I just discovered that outside of the PF blogosphere, most people will suppress a smirk when I say, “You should try snowballing. It's great!”

Ahem. I know there’s a big debate as to which method of debt repayment is the best - - Pay off the debt with the highest interest first or pay off the debt with the lowest balance?

Dave Ramsey says you should pay off your smallest debt first because it will give you momentum and motivation to tackle your remaining debts. Feh. I say you should do this because once your first debt is tackled, it gives you some “breathing room.” When you eliminate one debt, you have the option to ease up on the stringent budget you initially set up for yourself.

Yeah, yeah. I know my budget shouldn’t change since I’m supposed to apply my extinguished debt payments into the next debt. But I think rewarding myself with a little bit after each extinguished debt will keep me motivated to soldier on.

For example, now that I’ve freed up my car loan and credit card payments, I technically have $1,558 that I could apply towards my private student loans. But I’ve decided to reward myself $80/month out of that sum with a monthly massage.

I know, I know – this will extend my pay off date. But do you know by how much? Only 2 months. Feh. I’ll enjoy my monthly massages, thank you very much.

6. I Arbitraged My Credit Card Debt
It’s a long story, but I thought I had a long time to pay off my credit card debt because Chase promised me a 5.99% APR for the life-of-the-loan. But, like many other credit card companies, Chase reneged and did all sorts of nasty things. Out of necessity and frustration, I transferred my credit card debt to a 0% APR card that was good for 8 months. I paid a 3% transfer fee for the favor, but it was worth the cost.

I paid the minimum due amount each month and “paid” additional amounts into my high interest bearing savings account. In order to ensure that I would have enough funds to pay off the credit card before the 0% promotional rate expired, I sold some company stock again. When the promotional rate expired, I withdrew the extra money from my savings account and paid off the balance.

~~~

There’s no two ways about it when paying off debt. You gotta suck it up, make sacrifices and pay, pay, pay. It’s always the hardest when you first start. But the initial hardship eventually wears off and you get used to your new budget and financially responsible lifestyle.

By the way, it took me over 4 years to pay off $30,000 in credit card debt. It's easy to get discouraged every time you come across a set-back, but you just have to keep plowing forward.

I can almost see the end of my debt payment odyssey, but it won’t be any time soon (ETA 4 years). I know that I still have a long ways to go and the hardest challenges may still lie ahead. But I know I’ll fight like hell before I let myself fall back to where I was when I started this odyssey.

Do I Need to Give Gifts to All of My "Assistants"?

2009-12-10T06:15:00.000-08:00

Blogger Dog Ate My Finance's recent post about gift giving at the office reminded me that I probably need to get gifts for the admin staff.

Here's the conundrum I face and I'd appreciate your opinion. I work in a VERY small regional office and my employer laid off all admin staff in our office last year. Our office now shares one temp to do clerical stuff like make copies, scanning, filing, mailing, etc. The more technical stuff is spread amongst 6 different people in our home office. Some do more work than others, just based upon what they were assigned to do.

Do I need to get a gift for the temp + all 6 admin staff members? If so, should they all get the same thing? Should the few people who do more stuff for me get more? Or do you think I should just send one big gift basket for the admin staff in the home office to share? What do you think is the appropriate dollar figure for these gifts?

Thanks for your input!

Spoiled by American Retailers

2009-12-09T05:21:00.000-08:00

As an American consumer, I am spoiled by the "good will" price guarantees of retailers. I recently bought a gold hoop earring from Jewelry TV for $79.99. Less than 2 weeks later, I discovered that the earrings were being sold for $59.99. Jewelry TV promptly gave me a refund for $20 after I whined.

I've now come to expect retailers to give me refunds if the price of the merchandise goes down within a reasonable amount of time after purchase, which is usually 30 days. But how about 40 days? 45 days?

As I previously reported, I bought a Michael Kors trenchcoat at Nordstrom for $148. I just learned from my sister that my trenchcoat has been discounted to $98. Ouch.

It's been about 46 days since I bought the jacket. I was considering going back to Nordstrom to see whether I could get the $50 difference reimbursed. But it made me wonder -- why do I think I'm entitled to such a refund? I can't think of any other business transaction in which the other party would ever consider reimbursing me for the difference in a subsequent price drop. A car dealer wouldn't. I can't cry for a refund in a stock purchase that goes south. And there are certainly many homeowners who're wishing they could un-do their sales transactions during the bubble.

I've decided not to ask for the refund on my jacket. I'm pretty sure that Nordstrom would've given me a refund, or atleast a store credit, considering how service oriented they are. But the fact of the matter is, I was willing to pay full, retail price since I rarely find clothes in my size in the "sales" racks. The $50, in my mind, was a premium I paid to ensure I would have a jacket that fits.

Would you seek a refund in this situation?

Nobody Should Ever Wish On Their Deathbead That They Spent More Time At Work

2009-12-07T18:32:00.000-08:00

A short while back, J. Money posted a cute story about an American Businessman's enlightenment about the balance between work and personal life.

An Anonymous commenter posted: "It seems like the old myth that no one on their death bed ever wished they'd spent more time at the office. The sad truth is that millions have reached the end of their life, locked away in some Dickensian nursing home, thinking to themselves - 'Hum, I really wish I would have tried harder to make something of myself.'"

Interesting, since I've come to the opposite conclusion, especially from my dealings with my dad.

My dad's an "old-school" man, stuck in the custom and culture of the old country. He was never active in my life, other than to provide (i.e. pay for) shelter, food, education and other necessities. When I was an infant, he rarely (if ever) changed my diapers or fed me. When I was a child, he never played with me or took interest in my personal life. I doubt he was ever able to name any of my teachers or my friends. He delegated my entire upbringing to my mom.

Anyhow, my dad was diagnosed with mild cognitive impairment several years ago and my parents are emotionally, if not geographically, estranged from each other. Notwithstanding the emotional alienation, my mother still performs basic caregiving functions for my dad such as preparing meals, laundering and cleaning. As a result, mother is suffering from caretaker fatigue and resents my father.

I get stressed and depressed when my dad is around too. My dad claims he is starving for conversation. Yet I have nothing to say to him and he has nothing to say to me, other than to badmouth my mother. Because of his memory impairment, he can't converse about any current events. Even if I blather about nonsense to kill the awkward silence, he doesn't respond with anything meaningful to move the conversation further.

Truth be told, I don't really like spending much time with my dad. I have nothing in common with this man and never did. And since he didn't make any effort to spend any meaningful time with me during my youth, we really can't reminisce about the past either.

Don't get me wrong - - I am grateful to my dad. He gave me life and he supported me. That's why I've resigned myself to care for him when neither he nor my mom can care for himself. I hate to admit this, but he is a burden that I am not wholeheartedly eager to take on.

My father will likely die with no one, not even his daughter, truly missing him. (I am grateful that he is oblivious to this fact.) His monetary support has bought my gratitude, but not my affection or love. I think in the end, I don't think anyone ever thinks about whether they should've spent more time in the office. But I think some may wish they invested more time and effort in their relationships, since no one wants to die unloved.

November 2009 Progress Report

2009-12-05T11:43:00.000-08:00

Hope you all had a great Thanksgiving. I spent Thanksgiving with my family and it was a bit stressful. My dad's dementia and memory loss is clearly getting worse. But I had great meals and everyone seemed to be in good spirits. My net worth is up this month too so I guess I really can't complain about my November this year. :-D

MY DEBT

	Starting Debt (6/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$43,926.89	$43,557.31	$(369.58)
Fed'l SL	$55,852.68	$53,828.16	$53,717.32	$(110.84)
Car Loan	$9,779.33	$0.00	$0.00	$(0.00)
CC	$13,610.75	$0.00	$0.00	$(0.00)
TOTAL	$128,771.75	$97,755.05	$97,274.63	$(480.42)

November was a ho-hum month in terms of debt reduction. With my cc paid off, I could've started snowballing my remaining debt, but I decided to take a break. So I guess November was a spendy month. Either way, my debt's still down and I consider that a "win."

MY SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$8,265.57	$8,372.41	+$106.84

The savings that is reflected here is my "emergency fund" that I am not supposed to touch unless there is an absolute true emergency. I try to save about $100/month or so into my EF.

MY EARMARKS

I have an additional $5,000.00 or so set aside for "earmarked" spending for such things as car maintenance, Christmas, etc. I don't report my earmarks since it's not a true measure of savings because I intend to spend it. I also hate seeing my numbers go down.

But since someone once asked about the specifics, I'll report it this month. My accounting is a bit insane and some of my categories may not make much sense. (Oh, who am I kidding? It's ginormously crazy.) But here goes:

Earmark	Amount
Survey Snowflake1	$82.00
Mom and Dad (emergency, gifts, etc.)	$525.00
Car Fund (registration, maintenance)	$573.00
Christmas Fund	$833.00
2009 Tax	$204.00
Insurance and COLA	$942.00
Extra Paycheck2	$976.00
Vacation	$170.00
CD Ladder3	$303.00
Roth3	$300.00
Misc.	$116.00
TOTAL:	$5,024.00

1 -- I am snowflaking the money I get from completing online surveys. Once I hit $100, I think I will start converting these funds into either my EF or other investments like I-Bonds.
2 -- 2 months out of the year, I receive 3 paychecks. I deposit the 3rd paycheck into my savings and distribute 1/6 to myself every month to pay bills. I eventually hope to be able to bank my entire 3rd paycheck without having to spend it.
3 -- My CD Ladder and Roth funds are not "spending items" per se. I created these earmarks to see if I can get into the habit of saving for these items regularly. I was hoping to have $1,000 each in these funds, but as you can see, I'm way short.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$40,389.45	$47,358.27	+$6,968.82

I guess the market was really good in November. The big spike in my numbers appear to be because of my 401k. It's incredible to think that my networth was -$21,975.91 just a year ago. In just one year, my net worth increased by $69,334.18! But... I realize that this number is exaggerated because of the market crash last year. My 401k is still down -7.18% from 12/31/08. Oh well. I guess I'll just have to start focusing on my debt reduction again.

The breakdown and the history of my net worth can be seen here.

An Annoying Expense

2009-12-01T07:56:00.000-08:00

No, I'm not talking about car repairs or Swiffer refills. I'm talking about having to replace my "fat" (not phat) jeans. My one and only pair of jeans that fit me, has given up its ghost. I now need to replace it.

About a couple of years ago, I was invited to an old college friend's wedding. He happens to be a childhood buddy of my ex, so I knew the ex would be at the wedding. I dreaded seeing my ex, not because we had a horrible break-up, but because I had gained 25 lbs since our break-up.

Now mind you, I'm not fat. I'm relatively slender, compared to the average American woman. I was also extremely skinny while I was dating my ex during college (approx. 95 lbs).

Although I didn't have any residual feelings for my ex, my vanity couldn't allow him to see me 25 lbs heavier. I started exercising regularly and went on a strict diet. I managed to bring my weight down by 15 lbs. I was pretty happy being 105 lbs and I thought I looked pretty good! I was pretty certain that I could maintain this weight and got rid of a lot of my "fat" clothes.

As they say, the best laid plans of mice and men. Now that the wedding has come and gone, I lost motivation to keep exercising. (See the "exercise jar" on the right sidebar?) I've also started "emotional eating". And guess what? I'm back to my pre-wedding weight. **Sigh**

I guess I could try to squeeze myself into my "skinny" jeans. But I'm afraid of creating an unsightly muffin top. Or worse yet, a cracked muffin top.

I guess I have 2 options: (1) buy a replacement "fat" jeans, or, (2) lose weight.

I'm just not sure which route to take...

Happy Thanksgiving!

2009-11-26T05:12:00.000-08:00

I better watch out, I better not cry, I better not pout cuz I'm telling you why - - my crazy family's coming to town. :-D

Have a Happy Thanksgiving y'all!

My Short-Term, "Free Spending" Days Are Coming To An End...

2009-11-25T04:34:00.000-08:00

I started my debt snowball plan some time in July or August last year. At the time, my car loan had a balance of $8,500.50 and my credit card had a balance of $12,943.59. I paid off my car loan in February and I paid off my credit card debt in October.

I have to admit, it was a freakin' struggle to pay off $21,444.09 + interest in a little over a year! During that time, I had to deal with my jealousy /inferiority demon when I was with my financially better-off friends. I didn't have any money to spend to go out with my friends since my food + entertainment budget was $8.70/day. This budget was driving me nuts since I'm a total junk food junkie and I love eating out. But there was no other way I could afford paying $788/month in car payments and $265/month in cc payments in addition to $865/month in student loan payments.

I know the debt snowball plan required me to immediately roll my now extinguished car and cc payments into my next smallest debt, which is my private student loans (current balance ~ $44,700). But I needed to take a breather. I gave myself until the end of the year to spend $1,053/month however I saw fit.

I'm not proud, but I truly did spend every penny of the extra $1,053/month since October. What did I spend it on?

1.) Side trips to Washington D.C. and Chicago. (Note: I took the trip in September but I had to pay the piper, i.e. my cc, in October.)

2.) Eating out whenever I felt like it.(Which was almost always.) I normally don't dine out at chi-chi restaurants. I heart my local ethnic hole-in-the wall eateries. But I do like to splurge on a meal every so often. One of my most memorable meals in the past couple of months (other than the dine-n-dash restaurant) was at Rick Bayless' Frontera Grill in Chicago. Since Frontera doesn't take reservations, my sister and I waited nearly 3 hours to get a table. We had hibiscus martinis and shared a Tostada de Atun y Erizo at the bar. The tostada was absolutely mind blowing! But by the time we got sat, we were tired and exhausted. I ordered a watermelon agua fresca, pork tamale, goat enchilada and flan. The food was excellent, as you would expect. But I think I would've enjoyed the meal more had I not had to stand around for 3 hours, elbow-to-elbow with other patrons, waiting for a table.

Is any meal worth a 3 hour wait? No. Next time, I'll dine at Topolobampo, the sister restaurant next door that does take reservations.

3.) White Gold (14kt) and Yellow Gold (10 kt) Hoop Earrings for about $80/each. I bought white/yellow gold plated earrings at Macy's last year for about $20/each. I love those earrings but unfortunately, the plating on the earrings either discolored or flaked off. I decided to replace them with something more substantial. I'm happy I did (despite the fact that the metal in the yellow gold earring is excessively malleable).

4.) Casual lounge wear: My mother often bemoans the fact that I dress like a hobo at home. (Being able to dress like a hobo without recrimination should be one of the benefits of being single!) My "fanciest" lounge wears date back to 2003. (Ha ha.) I didn't go too crazy with this purchase, though, since I got a couple of track suits from Old Navy.

5.) Michael Kors black trench coat: I totally splurged on this one at Nordies - - $148. But it's totally worth it because it's soooo cute. (And we all know that "cuteness" justifies any expense. Not!) I'll probably wear it over the next decade, so I'm not going to kick myself for this.

6.) New PJs, bras, panties and other misc. clothing

7.) Snuggie! ($19.99 at Costco.) Laugh all you want. I suffered a really bad case of the flu and bronchitis this year. While I was congested, I had to sleep upright and my blankets always fell off my shoulders. I thought to myself, I could really use a Snuggie. Although I bought it after I recovered from the flu, I still love my Snuggie.

~~~

I'm sure there were more stuff I bought or consumed that belonged in the "want" and not "need" category. But these were the highlights.

I enjoyed the past couple of months of hedonistic spending. But it's now time to tighten the belt. I re-did my budget and I'm going to start paying $1,478/month towards my private student loans in January. That means I have to go back to living on a budget in December. *Sigh*. But at least I'm going to treat myself to a monthly massage ($59 + $20 tip) from now on. :-D

I am so going on a spending binge once this frickin' private student loan is paid off! (I'm estimating 30 months or so.)

Segregated My Emergency Cash and Credit Card

2009-11-24T03:24:00.000-08:00

My recent "almost" dine-n-dash experience made me wonder whether I need to keep an emergency credit card and a stash of cash outside of my wallet.

Which brings me to the topic of what's IN my wallet?

$92 in cash...

ATM cards, 7 credit cards, Driver's License, Telephone Card, Costco card, Supermarket Club/Store Club cards, Library Cards, Gift Cards (McD's and Coffee Bean).

Wow. I didn't realize my wallet has more plastic than a Playboy centerfold! :-P

With respect to my cash, I'm trying to take the advice of the late Dr. Randy Pausch, who gave one of the most inspirational lectures at Carnegie Mellon University. In his book, The Last Lecture, Dr. Pausch advised his kids to carry $200 in cash. It's enough to cover most emergencies and not enough to devastate financially if lost or stolen. I generally set aside $20 to use, and hide the remainder. I try to keep different denominations of cash (since it doesn't help to have a Benjamin when you need to tip someone) and I'm slowly working my way up to the $200 figure.

I've been pretty good about not spending my cash, since I purchase most of my stuff with a rewards credit card. But in the past, I used to origami my cash as a deterrent to spending. Ha ha.

Looking at all of my credit cards, it's no wonder I was so up to my eyeballs in credit card debt until only a couple of months ago. (I thankfully no longer carry a balance from month-to-month.) Most of my credit cards are "dormant." I try to use each of my Mastercards at least once a month to pay for stuff like my cell phone, cable and insurance bills. My department store cards may get used once or twice a year. (But I don't really care about my department store cards since I have such a low limit on those cards anyways.)

I've decided it's probably a good idea to keep my emergency stash of cash and credit card away from my wallet. I've put $70 of emergency cash and one "dormant" cc into a small coin purse. I've also included my most recently expired driver's license, just in case. It's expired but it's better than nothing when you don't have your wallet, right?

I (Kind'a) Dine 'N' Dashed Last Night

2009-11-23T05:29:00.000-08:00

I never really understood the term "food porn" until yesterday evening. After watching a marathon of Top Chef on Bravo, my tastebuds were so worked up, I craved something different and unusual. I decided to be adventurous and drove 20+ miles (one-way), to dine at Los Arcos, an authentic Mexican restaurant near the Mexican border.

Okay, okay. So Mexican food in Southern California isn't quite exotic, but it was an interesting experience. For starters, I noticed that this restaurant catered primarily to well-to-do Mexican expats. (In recent years, many of the social elites from Tijuana have relocated to Chula Vista, to escape the gang violence plaguing most of Mexico.) As if to reinforce their elite status, the male patrons all had arm-candy trophy wives and girlfriends who looked like Sofia Vergara (from ABC comedy, Modern Family).

Since this was a spur-of-the-moment thing, I didn't bother to invite anyone to join me. I started my meal with a mango margarita and a to-die-for shrimp ceviche tostada. For my entree, I ordered Puerto Nuevo-style lobsters. Unlike Maine lobsters, Puerto Nuevo-style langostas are Pacific spiney lobsters that have no claws. The lobsters are pan-fried in lard and served with drawn butter, rice and beans and homemade tortillas.

Although I was really fully, I couldn't leave without trying one of my favorite desserts -- Pastel de Tres Leches.

The food and service was excellent at Los Arcos. As I reached into my purse to grab my wallet, I made the most horrific discovery. I forgot my wallet at home. *CRAAAAAAP!!*

I asked to speak to the owner/manager. I sheepishly told Cesar, the owner, that I forgot my wallet at home. I asked if I could write him a check as collateral while I went home to retrieve my wallet. Cesar told me he trusted me and that he would wait for me to get my wallet.

Although I couldn't believe how trusting Cesar was, I was immensely grateful. I drove home feverishly, found my wallet and returned to the restaurant. Cesar looked relieved to see me since it took over 40 minutes to get my wallet and back. (I don't think he realized how far I lived from the restaurant.) My total bill came out to a little over $62. I left a $40 tip (~65%) as a sign of gratitude.

I guess this is my first (and hopefully last) dine-and-dash experience. I am so relieved that the restaurant didn't call the cops on me. This is one thing I can truly be grateful for this Thanksgiving!

My Itty Bitty censored Committee Sticker Shock

2009-11-22T04:51:00.000-08:00

I have a confession - - I currently wear ratty, daily-wear plain bras I bought from Costco several years ago. In other words, I haven't gone bra shopping in ages.

To those who wonder how I can be wearing bras that are so old, let me just say, my itty bitty titty committee don't need much support.

(Compare and contrast visual: To my right is Vegas Showgirl, Shannon O'Keefe from the defunct Harrah's Show, Skintight.)

In fact, I don't even wear bras during the weekends. (Humming Lynyrd Skynyrd's "Free Bird" as I type this...)

And since my dating life is either non-existent or disastrous, I've stopped buying fancy-shmancy lacy bras to entice men. You know the ones I'm talking about:

Victoria's Secret Miracle Bra $55

La Perla Castle Key Bra $214

$55 - $214/bra? Are you kidding me? I wouldn't pay that kind of price unless I knew I was hooking up with:

Jon Hamm of Mad Men

or,

Matt Bomer of White Collar. Meeeeeowwwwww!

I prefer my bras plain and seamless.

And when I need to fill out my blouse, I also need my boulder-holders to be sturdy enough to support silicone inserts that look like raw chicken breasts. (In case you didn't know, these stuffers are pretty darn heavy.)

Anyhoo, I went back to Costco and was disappointed that the Maidenform 3-packs I used to buy now only come 2-in-a-pack. If that wasn't bad enough, they've stopped selling A-cups. The smallest size offered is now a 34-B. Where's the love for mosquito-bite girls, Costco?

Dejected, I decided to shop at Macy's One-Day Sale last week where they had a Buy-2-Get-2-Free Deal on Warner and Maidenform bras. I also had a 20% off coupon. *Score!* I mentally calculated that I could get four (4) bras for about $34.80 = $20/bra x 2 x 80% x 1.0875 (tax).

But b-o-o-o-y, was I off on the price. Regularly priced bras now cost $31??? Are you freakin' kidding me? Anyhoo, my four bras cost me $53.94 = $31/bar x 2 x 80% x 1.0875 (tax), or $13.49/bra.

I realize I could get cheaper bras from Wal-mart or even Target, but I hate shopping for underwear there. I have to dig through disorganized racks only to discover they don't have my size. I'm also afraid to come face-to-face with back-boobs that are bigger than most breasts:

Credit (or Dis-credit?): People of Walmart

No thanks. I'll pay a premium for better service and neater displays.

My itty-bitty-titty-committee wants to know: How often do you replace your bras? And how much do you spend?

United Did Right By Me

2009-11-17T23:41:00.000-08:00

I recently emailed United Airlines to complain about an overcharge for an in-flight meal I didn't purchase. What I didn't mention in my prior post was that I also complained about the malfunctioning sound system on my flight. (I had to watch Julie & Julia in Español.)

I'm actually surprised that I got a response from United's customer service department.

What's interesting is that United appeared more concerned about the malfunctioning sound system than the overcharge. United's customer service rep started off his email with:

"We realize that any type of malfunction can impact your perception of our overall operation. Please know that we place a great deal of emphasis on proper maintenance of all equipment in our cabins. In fact, our maintenance division has recently completed an audit of each fleet type and taken inventory of problems. Based on that we have established a program to check the cabins of each aircraft every 400 to 1,000 flight hours. We will be identifying and repairing seats, carpets, galley equipment, lights and audio and video equipment. In addition, another maintenance team is concentrating on cleaning methods, audio and video functionality and improved cabin condition monitoring. Still, your disappointment with your flight is understandable, and I will give your constructive feedback to our maintenance and onboard management because we are committed to providing you a positive in-flight experience."

As a good will gesture, United gave me a $100 travel voucher for future travel. The customer service rep also indicated that United will be issuing me a check for $9 to reimburse me for the overcharge. Hurray!

I cautioned that we should all check our receipts at the time of purchase. But it always helps to voice our complaints. If the company values your business, they will do you right. Even if it's an airline.

Always, Always Check Your Receipt

2009-11-13T07:58:00.001-08:00

I've been on a business trip to the Big Easy for the past couple of days. I ate a huge Po-Boy sandwich for lunch, so I wasn't hungry before my return flight. But, of course, the moment I boarded the plane, my stomach started to rumble. Because airline food look less appetizing than the plastic food displays at family restaurants in Japan, I never order them.

But last night, I decided to buy an Antipasto meal ($7) on my United flight. (How bad could salami, cheese and breadsticks be?) Since United no longer accepts cash for in-cabin purchases, I used my credit card to purchase the item. The cabin was dark and I was tired, so I grabbed the receipt and scarfed down the "meal."

When I got off the plane, I finally looked at my receipt. And there it was -- I also got charged for a Thai Chicken Wrap ($9) that I didn't purchase. Although I was ticked off with United about this overcharge, I was more p.o.'d with myself for not checking my receipt while I was on board.

When I got home (after midnight, FYI), I fired up my computer and emailed a complaint to United. Surely if they took an inventory of their food supply for that flight, they must find that they overcharged me, right? I demanded a refund.

I know airlines are nickel-and-diming its passengers for an extra buck, but I hope they're not trying to make an extra buck by stealing. We'll see if United does me right on this. I got an automated response that they will respond within 5 business days. I'll keep you posted.

Greedy Daughter Post -- Cont'd

2009-11-06T05:52:00.000-08:00

In my prior post, I wrote, "I told my sister that ... if she [buys a rental property and rents to our parents], SHE will have to be the one to take care of our parents when there's an emergency. I should not be looked upon to care for my parents, especially if I'm not getting any money from parents." Some of you thought this was callous and cold, but also gave me the benefit of the doubt. So I guess some background information is in order.

My sister gets transferred around the country quite frequently by her employer. And by the nature of the work she does, she rarely gets to live in big cities. She often has to live in the ex-burbs (i.e., the sticks) where the closest airport may be about a 30 to 50 mile drive away. Over the past 10 years, she's lived in Maryland, Washington, Alabama and Texas. She is now moving to Arizona. I, on the other hand, have stayed put in San Diego for the past 9 years.

My sister has a strong personality and, in my opinion, is often not very empathetic. In some ways, she may just be more honest and upfront about airing her frustrations about our parents to their face than I. (I just rant and rave about them on my blog behind their backs. So perhaps I'm just two-faced.) My mom once confided in me that she often finds being alone with my sister a bit "unpleasant."

My parents have really never had any real emergencies in the past that required any significant assistance from my sister or me. But I know that my parents are now at an age where emergencies will arise, whether it's health related or financial. I also know that I'll probably be the one that gets the first call for assistance. Will I ever tell my parents to take a hike if they pay rent to my sister? Of course not.

I guess I made the comment to put my sister on notice that she can't use distance or inconvenience as an excuse to lay the lion's share of my parent's care on me. I especially feel this is true if her mortgage is going to be subsidized by our parents.

But some of the comments I received were enlightening. It never occurred to me that the landlord-renter relationship may not be as easy as I think it is. This would especially be true if my parents defaulted on their rent. (After all, they almost stiffed me in the past during financially tough times.) I guess I could also see friction arising if there are any disagreements about maintenance and upkeep of the property.

Bottomline is, family is family and fighting over money is really self-defeating and pointless.

Upon further reflection, I guess this was just a tangential rant about a more deep-seated fear of mine - - when and how much will I have to care for my parents in their old age?

So Am I A Greedy Daughter?

2009-11-05T06:34:00.000-08:00

Whenever there were salacious news stories about inheritance fights between kids of the rich-and-famous, my family always laughed, "It's a good thing we don't have any money." (Remember the inheritance fight between Anna Nicole and J. Howard Marshall, III, after the Cryptkeeper kicked the bucket?)

And my parents being broke is a wonderful thing, since they could never try to control me by threatening to write me out of their will. Anyhow, I just learned I'm apparently one of those greedy children who try to wrest their parent's money with their grubby little paws.

Here's the story: My sister bought a modest home about four years ago. Last year, right when the economy was cratering, her employer transferred her to another state. She had the option to rent her house out, but she really didn't want to be an absentee landlord. She luckily sold her home and broke even. My sister has yet again been transferred (three times in five years) and this time, she'll be living in the same city where our parents live.

My sister sulked that with her constant transfers, she could never buy real estate and own it to profitability without being a long distance, absentee landlord. She hatched the idea that perhaps if she buys a house, she can rent it to my parents once she is transferred again.

I told my sister that she has a great plan, but if she and parents follow through with this, SHE will have to be the one to take care of our parents when there's an emergency. I should not be looked upon to care for my parents, especially if I'm not getting any money from parents. My sister and my mom were aghast when I made this comment.

I know this sounds cold, but I think equity and fairness demands this outcome. Why should my sister expect an immediate transfer of wealth from my parents with no strings attached? Or am I just being a bratty, greedy daughter?

October '09 Progress Report

2009-11-02T12:02:00.000-08:00

Hope you all had a great Halloween! I went to Knott's Scary Farm this year and had a blast. There's nothing like spending 12 hours at an amusement park to remind myself how old and out-of-shape I am. (My legs and butt are still so sore.)

Good news is that my Progress Report this October isn't as scary looking as it was last year.

MY DEBT

	Starting Debt (6/31/08)	Last Month	This Month	DIFFERENCE
Private SL	$49,528.99	$44,306.73	$43,926.89	$(379.84)
Fed'l SL	$55,852.68	$53,961.10	$53,828.16	$(132.94)
Credit Card	$13,610.75	$11,086.08	$0.00	$(11,086.08)
TOTAL	$128,771.75	$109,353.91	$97,755.05	$(11,598.86)

Woo hoo!! My total debt is now below six-digits! To those who are new to this blog, I didn't pay off $11,086.08 in credit card debt in just one month. This was an ordeal that spanned years.

My credit card pay-off finally picked up momentum in March when I arbitraged my credit card debt with a 0% interest rate offer. Ever since then, I paid the minimum towards my credit card and pretended to pay additional amounts into my savings account. When the 0% offer expired, I used the "savings" to pay off my credit card debt.

Although I should be snowballing my remaining debt, I've decided to take a couple of months off before I get back into the grind.

MY SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$8,112.28	$8,265.57	+$153.29

The savings that is reflected here is my "emergency fund" that I am not supposed to touch unless there is an absolute true emergency. I try to save about $100/month or so into my EF.

I have an additional $5,000.00 or so set aside for "earmarked" spending for such things as car maintenance, Christmas, etc. I need to start replenishing my earmarks as well as continue saving into my EF. Ugh.

MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
$39,503.13	$40,389.45	+$886.32

Rats. I added an additional $1,612 last month into my 401k and my net worth only increased by $886. Must mean that the market went down again. I have to admit, it's a lot less stressful when I don't pay attention to market movements. It's a bummer to see a flat lined net worth at the end of the month, though.

The breakdown and the history of my net worth can be seen here.