Projecting My Biases and POV Upon Others

I always look forward to reading comments from readers since I believe that open, honest and civil discourse is the best way to learn from differing opinions and points of view. (And thank you all for being civil!) My last post about whether I would consider dating someone who is unemployed (or underemployed) got varied responses. One person thought I was being snobbish, although I didn’t intend to be. After all, I too expect to be unemployed in the near future. But re-reading my post, I guess it could come across that way.

Before I start on my mea culpa, I don’t regret at all how I dealt with the man at the bar. Quite frankly, I don’t know whether he’s unemployed - - it’s just my conjecture. (And, if you recall, I was oblivious until my friend suggested the possibility that he could be unemployed.) Perhaps maybe he’s uber-wealthy and was turned off by my questions about his occupation. Who knows? (And in this economic crisis, has an innocuous question like, “So, what do you do?” really become a Pandora’s Box?)

With respect to asking for his business card, I stress that I’m just not comfortable giving out private information to someone I’ve just met in a bar. (After all, I’ve seen too many news stories about women who get attacked by men they’ve met in bars.) As flawed as my thought process may be, I felt asking for a business card was a better alternative than to trade personal numbers. For whatever reason, he didn’t give me his business card and told me to, “Forget it.” I wasn’t about to jump out of my seat and give him my home number in response. C'est la vie.

With respect to why I’m reluctant to get involved with someone who is unemployed, I guess it’s because I project my own narrow biases and point of view upon others, which I realize is also flawed thinking. Regardless, I think it’s worthy to share where I’m coming from:

I was laid off from my first job out of law school some time in late-1998 or early-1999. My ex-boss (who was otherwise a scumbag jerk) spared my feelings and called it a “lay-off” although I knew I was actually getting fired. I was devastated, embarrassed and humiliated, but I smiled and thanked him and everyone in the office, before I packed my belongings in a cardboard box. I wasn’t about to let anyone see me break a sweat (or tear).

When I got home, I curled up in a ball and cried like a baby for days. I waited a couple of days before I told my boyfriend. I couldn’t even tell my parents or my sister for weeks. I was scared out of my wits. I was saddled with $100,000+ in student loans with virtually zero savings. I didn’t have a husband who supported me and I didn’t have rich parents to bail me out.

Eating out or buying wine or beer was unthinkable, since I lived on credit card cash advances and was only a breath away from being evicted. And, yes, I did go stir-crazy during this period since all of my energy was expended in trying to find a new job. (Hence, this is why I thought it was irresponsible for an unemployed person to go out for a drink. But I also see that not all unemployed people are in the same dire straits that I was in, and deserve to go out here and there.)

Although most people thought I was dealing with my unemployment well, I was an emotional wreck. I was able to maintain an upbeat façade in short spurts, but my boyfriend took the brunt of my mood swings during the remainder of the time, which ultimately led to our break-up. I was in no emotional state during my unemployment to try to build any new relationships, platonic or otherwise. It is therefore unfathomable to me why an unemployed person, who could be very emotionally vulnerable, would try to forge a new relationship that is not career-related.

I realize that people are different, and some deal with unemployment much better than I did (or ever could). But I’m still leery and suspicious that someone who is unemployed would be in the right frame of mind to start a new personal relationship. After all, there are studies that show that the mental health of unemployed men are worse than that of unemployed women.

I don’t know for sure, but I doubt I’ll be seeking new personal relationships while I'm laid off. I don’t think I have the ability or capacity to be a good companion to anyone under those circumstances. Only time will tell.

My Hypothetical 20% Pay-Cut Challenge

I've been talking to former colleagues who've already been laid off by my company. Few lucky ones have been able to find jobs with equivalent pay and comparable benefits, but most have taken jobs with pay cuts and fewer benefits. I asked how much of a pay cut they took, but none were willing to discuss specific figures. (I'm a bit ashamed of being so tacky and nosy, but I was curious for my own sake.)

It's not unheard of unemployed workers now taking 30%-70% pay cuts in their new jobs. In this article, one former bank employee went from a $125,000 salary to a $66,000 salary. Another former mortgage lender went from earning $110,000 to $33,000.




I'm relatively confident that based upon the industry that I'm in, I probably won't face such a dramatic salary decrease in my next job. But I AM expecting to take a significant hit in my salary, so I spent the weekend thinking how I'd deal with a hypothetical 20% pay-cut.

EXPENSES
I've concluded that I want to continue to maintain my current standard of living, so I'm not going to alter my spending, even in the face of a 20% pay cut. Fact of the matter is, I'm living a pretty frugal life right now. It's not like I'm living the high-life by subscribing to premium cable channels, drinking expensive wine, dining out regularly, buying Starbucks coffee, etc.

The big bulk of my expenses are eaten up by rent and debt repayment. The rest of my budget is quite modest. Although I'm open to the idea of a roommate, I'm not yet at the point where I am willing to share my living quarters with a stranger. With respect to my debt, my credit card should be paid-off by year end. However, I want to continue with my debt snowball plan and roll the credit card payments into my student loans. In other words, paying off my credit card really doesn't give me much relief.

Some people have suggested that I eliminate my cable TV/high-speed internet service/land line service. This is a great idea, but I'm not inclined to eliminate my internet service since I do a lot of online banking and I do not want to do so on a shared computer in a public place. Although I don't need cable TV, it's my primary source of entertainment, and I'm not going to give it up so easily. I also like having my land line, since out-of-state calls to my parents and big sis are included in the monthly flat fee.

INCOME ADJUSTMENTS
It's a bit depressing that a 20% pay cut will set me back to where I was in 2004. Looking at my 2004 paycheck, I've estimated what my take-home pay will be after taxes and other expenses. I then took out some expenditures that will help bring my take-home pay to what it is now.

	% of Current Paycheck	% of Pay-Cut Paycheck
Fed'l Income Tax	15.01%	16.25%
Social Security	6.15%	6.21%
Medicare	1.44%	1.45%
CA Income Tax	5.04%	5.60%
CA SUI/SDI Tax	1.09%	1.18%
FSA	0.51%	0.63%
ESOP	3.0%	0.00%
Long Term Disability Ins.	0.55%	0.00%
Personal Accident Ins.	0.09%	0.00%
Pre-Tax Dental	0.13%	0.38%
Pre-Tax Medical	1.06%	3.09%
401k	15.00%	2.00%

Through this exercise, I've concluded that I need to do the following:

• Eliminate my ESOP contributions;
• Eliminate long-term disability insurance coverage;
• Eliminate personal accident insurance coverage;
• Reduce my 401k contribution from 15% pre-tax to 2% (ouch).

I've also discovered that my current company's medical and dental benefits are cheap compared to other employers'. Based upon what my big sister is currently paying for her medical and dental benefits, I'm anticipating that these costs could easily increase 3x.

It pains me to have to dramatically reduce my 401k contribution and savings rate, especially at a time where I can dollar-cost average my retirement investments cheaply. But at least I have the comfort of knowing that I won't be sacrificing the pace of my debt elimination. Once my debts are paid off (hopefully before 2014), I'll boost my 401k contribution at such time.

Oh, what a fun exercise this was...

State of My Emergency Fund

With the economy cratering, everyone's job security is in jeopardy and the emergency fund is a hot topic. Even the Wall Street Journal is discussing it.

The WSJ writes:

Twenty thousand Americans are losing their jobs every day. This slump could be much worse, and last much longer, than most of us expect. No wonder families are being advised to keep six months', or even nine months', worth of expenses in an emergency fund they can tap if they end up out of work for a long time.

That's a fine idea in theory. In practice, it's not so easy.

According to federal data, a typical middle-class family spends about $42,000 annually. Six months of expenses is $21,000, and nine months is $31,500. A lot of people don't have that much on hand. And for many others, that would be pretty much all their retirement savings.

Sallie's Niece was curious about my EF since I expect to be laid off some time soon. I guess it's a good time to look at the state of my preparedness (or lack thereof) in the event of a layoff:

MY MINIMUM MONTHLY PAYMENTS
In my current budget, I pay extra towards my debts and set aside money for savings and earmarks. However, in the event of a layoff, I plan only to pay the bare minimum owed on my debts and I won't be saving. So the following are my expected bare minimum expenses:

Rent: $1,275/month. (This will likely go up in July.)

Electricity: Approximately $37/month.

Student Loans: I expect to be able obtain a temporary forbearance on my student loans while I am laid off. But unlike before, I will NOT allow my student loans to negatively amortize. By paying the interest only, I won't be paying down the balance, but atleast I'm not letting it grow again. I estimate my monthly interest on my student loans are $500/month (*eep*).

My cable/internet/land line: $152/month.

My cell phone: $53/month.

Minimum credit card: Approximately $240/month.

Insurance (car and renter's): Approximately $120/month.

Food/Incidentals: $500/month.

GRAND TOTAL: $2,725

MY EMERGENCY FUND

Liquid Savings: Not taking into account the bonus I have yet to receive, I currently have $6,166.37 saved, or 2.26 months.

Taxable Investment Account: If necessary, I can also liquidate my taxable investment account that was valued at $4,500 on Monday (i.e., before the recent 2-day market rally). If I were to anticipate a scenario that my account will go down an additional 20%, I'll have an additional $3,600 (or, 1.32 months) that I can tap. The good news in selling my stocks at a loss is that at least I won't owe any taxes. :-P

So, essentially, I have about 3.58 months worth of my expenses in my emergency fund.

Worse comes to worst, I can also liquidate my meager Roth IRA account (value: $1,000). Since again, I'm liquidating at a loss (i.e., my withdrawal is below my post-tax contributions), I won't owe any penalties or taxes.

The aforementioned bonus will help somewhat, but I was hoping to use some of it towards my long term savings like a CD ladder or Roth IRA.

Basically, I'm like most people - - my EF is not bad, but it is sorely inadequate to weather this current economic crisis.

Great News and Bad News from the Company Meeting

Since yesterday was a company-wide meeting, I didn't expect to hear news that would specifically address my situation, and I was right. It was just the basic "State of the Union" address by the company prez.

Due to confidentiality issues, I can't go into details. But let's just say that my parent company was one of the few companies that bet on the housing market correctly. As a result, it made tons of money between 2006-2008. My parent company's investment portfolio is now focused heavily on capital preservation versus capital growth. Essentially, future earnings won't be great. Reading between the lines, it means that the company will continue to cut costs, which I assume, will include labor costs. Continued layoffs are on their way. But to be fair, the company has never given me any reason to believe otherwise.



The great news is, most (if not all) of the employees are getting a bonus this year. After the meeting, I learned that I'll be getting a very nice bonus. Hallelujah!

The bad news is, bonuses next year may be non-existent. But that's okay. All the more reason why I greatly appreciate what I'll be getting this year.

All in all, it was a good news day yesterday. Seems like the market also had a decent bounce.

Would You Omit Good Information From Your Resumé ?

A co-worker and I were discussing our job prospects after we get laid off from our current employer. We discussed one local major employer who is still hiring, but at very entry level positions in our industry. My co-worker felt that the job would be "beneath" him and dismissed it as an option. I indicated that as a "bridge" job, I would definitely consider it since I can get good health care and retirement benefits.



My co-worker suggested that when I'm applying for these entry-level jobs, I omit some of my education and experience in my resumé. He indicated, "Who cares that you don't list your J.D. on your resumé for a job like that?"

You hear about people getting in trouble for "padding" their resumé, but I've never heard of employers getting upset over a "de-padded" resumé.

That being said, I personally feel uncomfortable de-padding my resumé since I think the employer is entitled to know whether I consider the employment as a "bridge" job versus a career. In addition, in this day and age of LinkedIn and other employment verification sources, the prospective employer will find out and this may affect my credibility.

On the other hand, if I'm desperate, I may change my mind. I may do so just to get my foot in the door.

What is your opinion of this?

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

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


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

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

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

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

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

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

November Charity - Food Bank

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

~~~

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


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

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

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

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

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

Opened A True Free Checking Account

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

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

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



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

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

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

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


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

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

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

Emotional Eating Wreaking Havoc With My Frugal Living

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

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

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

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

Reorg Madness

What a day. Mid-morning, we got a company-wide meeting notice via email. At the meeting, our new President (since about August) announced that my department's VP was "retiring" next year and that we were being consolidated under another department's VP.

My company is organizationally top heavy, so the elimination of certain people in upper management did not come as a surprise. What surprised me, though, was who survived the reorganization. The VP to whom my department will now report, has had serious problems with employee retention over the past few years. Her reputation is that she is tough and smart, but that she's also quick to anger and eager to point fingers. Although I'm not looking forward to this change, I also believe that I owe it to the new VP to give her a chance.

My immediate supervisor got demoted to a desk job. He's extremely angry and bitter about this turn of event because until this morning, he thought his middle-management job was safe. Instead, the woman who he thought was going to be demoted kept her job and he was transferred to a completely different division.

The worst part of this reorganization is that I'll now be reporting to a friend with whom I've had a flirtatious (but non romantic) relationship. This creates some awkwardness that I hope we can overcome. Thank goodness I never sh&t where I ate. (Remember folks: Never sh!t where you eat!)



A fellow blogger said it best:

Survived a layoff? Hooray! You didn’t just keep your job, you’ve won 3-jobs-in-1! You are awarded the added work of Laid-Off Loretta and Given-the-Heave-Ho Gary.

To help you handle the longer days and heavier workload, instead of overtime, which is morally repugnant because it involves time-and-a-half pay, Crystal Meth will be made available to you at market price.

Staying afloat is not an option. You must be more productive than before. Here's a helpful tip from management: to find your motivation, always keep in mind that a second round of layoffs is being planned.

Congratulations on still being employed! Now it’s onward to bigger things such as nervous breakdowns and heart attacks. You’ve earned it.

Two Steps Forward, One Step Back

My recent survival through another round of layoff bought me extra months of employment, but still no certainty. I guess in this economy, no job is certain.

I was told yesterday that my company intends to sublease our office space. Once a sublessee is found, my company tentatively plans for us to work from home. I think most people would be ecstatic with this arrangement, but I am a bit ambivalent.

Initially, although the exact date is unknown, this transition is expected to take place some time in June '09. I suspect that at that time, the company will have another round of layoffs. So, there's no guarantee that I'll be employed beyond that.

Secondly, even if I am asked to work from home, I currently live in a 1 BR apartment. I presently don't have space to do work at home. If I upgraded to a 2 BR apartment, I would have to pay an additional $350 - $400 each month in rent.

The good news is, I can probably afford this increase in my rent since I'm expecting to pay off my car loan in June '09. The bad news is, I was planning to roll over my monthly car payments into my monthly credit card payments. I'm very disappointed that half of that would now be eaten up by increased rent payments. :-(

Finally, I'm tired of this rolling layoffs. I realize no job is safe, but with my current job, a layoff is not a matter of if, but when. This ongoing uncertainty is wearing me down and my motivation to work hard is at an all-time low. I don't mean to sound ungrateful, but as much as this recent news was good, it also has its drawbacks.

Wha, Wha, Whaaat?

Holy cr&p. I survived another round of layoffs - kind'a sorta. I'm at work and I can't really post the details. I'll do that later tonight.



Part of the reason why I survived is because home office decided to close other offices. (This was completely unexpected.) It's horrible to think that someone else's job loss saved mine. As if this economy isn't depressing enough...

I have VERY mixed feelings about this and I'm really confused right now. Thank heavens for beer. And vodka. And ice cream.

Tomorrow is Day of Reckoning

Ever since I've started this blog, I've been commenting how I expect to be laid off at the end of the year. Well, a head-honcho from the east coast home office is visiting our office tomorrow. I reckon there will be some announcement tomorrow. Just don't know what it will be.



Que sera, sera... what will be, will be...

It's The End of the World and I Feel Fine

I've been humming REM's song a lot these days. It's no wonder since 60% of those polled think that we're very or somewhat likely to experience another Great Depression.

Whether we're in a recession or depression is really irrelevant when:

1. I'm about to be laid off,
2. my 401k is now down 35% from the end of last year and quickly cascading towards nothing,
3. I only have about 4 months of emergency fund saved up (including my investment account and ESOP), and
4. I'm up to my eyeballs in debt.

When I started writing this post, I was going to question all the relentless cheerleading going on right now by many financial writers who encourage people to stay in stocks despite the cascading market crash, like Liz Pulliam Weston of MSN Money and Brett Arends of WSJ. The advice is rooted in historical data that supports how those who pull out of the stock market during a severe downturn never get back in time to benefit from the rebound.

But as we all know, historical performance doesn't necessarily guarantee future performance. (I even state that in my disclaimer.) What if this market crash is different than before? What if our free market system, our banking system and stock market is irreparably damaged? What if the global community no longer considers the U.S. a safe haven of investments and stop investing in our economy?

I was curled up in a fetal position sucking my thumb until suddenly I just said, "F#(@ it. If I lose it all, I lose it all."

Once I said this to myself, I felt much better. Of course, I have the benefit of knowing I have decades to make up for such a catastrophic loss. But this is a key step to overcoming my fear, particularly my fear of making a mistake. This reminded me of FDR's seminal speech: the only thing I have to fear is fear itself.

A Wall Street Journal article writes:

During the Great Depression, an entire generation became convinced that owning stocks was dangerous.
...
Depression-level stock phobia might be making a comeback. Will you suffer from it or conquer it?
...
First and foremost, Americans are afraid. ... As finance professor Meir Statman of Santa Clara University says, "Fear increases pessimism."
...
[I]t is hard not to be bullish. As an intelligent investor, you must always ask: What is my edge? What information or skill do I possess that the people on the other side of the trade don't? In normal times, that is a high hurdle. Today, however, you need only two things in order to have an automatic edge: cash and courage.

For people who have the courage but not cash (like me, he he), the article recommends rebalancing my investment portfolio by selling a little of anything that's gone up and buying more of whatever's gone down. Since that's already part of my plan, I'll remain on course.

The Wall Street Journal article points out: if you were among the courageous few who bought and held stocks during and after the Depression, you earned spectacular returns.

To be frankly honest, I'm not looking for "spectacular returns". I'll be happy with returns that beat inflation by the time I retire. :-D



Regardless of what the market does today, I wish you all an excellent weekend.

Mental Health Break - In Search For ANY Good News

I'm scared. I'm scared that I may be laid off during possibly the worst financial crisis in the world. I'm scared that if the current "burn rate" (i.e., selloff) in the stock market continues, my 401k will be worthless in 19 days.

I know I have time on my side so I shouldn't panic. I also know if I dwell on these things, I'm going to drive myself crazy. So, for the sake of my sanity, I've decided to take a break from looking at my 401k/investment account statements for a while.

But why is it that I have this masochistic desire to look at them anyways? I'm just as stupid as the horror movie character who hears a strange noise and goes searching for the source!

Warning: Scene from Return of The Living Dead. This clip has graphic scenes and strong language.

I'm also considering not watching CNBC anymore despite the fact that I'm addicted to it, especially Fast Money. Giving up CNBC is going to be tough, though, since I have a mad crush on Dylan Ratigan. (Blush.)

Finally, as part of my sanity-preservation effort, I've decided to look for some (any) good news. Here's my list:

1. The variable interest rate on my private student loans went down from 5.336% to 4.518%, reducing the monthly minimum payment from $504.91 to $488.85.
   
   Since I'm not strictly following Dave Ramsey's snowball method with respect to my credit card, I'll continue to pay my private student loans $505/month. The fact that I'll be paying more than the minimum on my dreadful student loans makes me happy.




2. This article points out that for the first time since January 1998, consumers paid off more debt than they took on. I certainly fall into that statistic. As the article points out, paying off debts means households will have healthier finances. (Not to be a Negative Nellie here, but is this reduction due to the fact that many people are no longer qualifying for loans?) Regardless, the fact that my savings is going up and my debt is going down makes me happy. Now only if my net worth will go up....




3. My Citibank Ultimate Savings Account's interest rate recently went up from 2.25% to 3.5%. Woo hoo!

If anyone else has some silver lining from this economy to share, I can really use some right now!

These Are Useful Tips to Survive Joblessness??

The Los Angeles Times touted all last week that its Sunday Business Section will provide tips on surviving joblessness. Since I expect to be laid off at the end of this year, I was eager to read this article for some useful tips I may be able to use. I was sorely disappointed.

The article doesn't even include basic information on how to file unemployment benefits. Instead, it provided generic tips like:

Be Frugal

Talk to Your Creditors

Try the Safety Nets (Public and Private Agencies)

Take Temporary Work

Ummm... Duh... I guess this article pretty much sums up the helplessness of being unemployed, which is a depressing thought in itself.

I guess I'm on my own to develop my own plan. So far, my plan includes:

Seek hardship forbearance on student loans

Update resume and draft generic cover letter

Prioritize debt/payment obligations

Look into acquiring credit card involuntary unemployment insurance while I'm still employed

Shore up emergency fund by selling company stocks. (As a follow-up to my prior post, I did sell 14 shares of my company stock. This will help me significantly towards this plan.)

I expect to hear word in the next couple of weeks or so. Until then, all I can do is plan, plan, plan....

One More Hurdle Before My $800/Bonus

My company offers a $500-$800 bonus to any associate who obtains an industry professional designation. In addition to the $800 bonus, the company will pay for the education and examination costs associated with obtaining the professional designation.

This year I opted to obtain my Associate in Commercial Underwriting designation from AICPCU. In order to obtain this designation, I need to take 3 exams consisting of 85 multiple-choice questions each.

I'm happy to report that I just passed my second exam yesterday! Now I only have 1 more exam to go. Since I'd like to get my education reimbursement and bonus money ASAP, I'm motivated to pass my third exam by early October. (This bonus money will pay for Christmas!)

I've been employed with my company for 6 years and this is the first time I've ever taken advantage of this program. Other than the bonus, I decided to obtain this professional designation in order to "pad" my resume for when I get laid off at the end of the year. This is one of the many things in life I've taken for granted that I didn't appreciate until it's gone (or will be gone in the near future). Hopefully I've learned my lesson to appreciate all opportunities that are available to me and not squander them until it is too late.

My ESOP Account Down 20.82% for the Year

I contribute approximately $250/month into my company's ESOP. So far this year, I've accumulated 12.92844 shares of my company stock and the actual cost basis (including the company match) is $3,472.79. As of 9/7/08, the current value of the stock is $2,749.62. That's a loss of $723.17, or -20.82%. This is really depressing but I've decided to look at it differently for my own sanity.

My actual out-of-pocket contributions to the ESOP to date is $2,179.05 and the company match (30 cents to $1 contributed) is $1,293.74. (To my sharp-eyed readers: the reason why my company match amount totals more than 30% of my contribution amount is because my employer, for the first time I've ever been employed with this company, paid out a stock bonus due to a very profitable 2007.)

Since the company match is considered taxable income, I've calculated $362.24 of the company match as part of my cost-basis while $931.50 is treated as a windfall. So, if I re-adjust my actual cost basis to $2,541.29, I'm up by about 8% this year, all thanks to the generous company match and bonus.

I've pondered whether I should stop contributing to my ESOP and instead use the extra $250/month to pay off my debt. Afterall, if I use $250/month to pay off debt, I have a guaranteed a return on my money. In contrast, with the market being what it is right now, I have no idea whether I'll break even by continuing to contribute to the ESOP.

After considerable mulling, I've decided to continue to contribute to the ESOP. How many investment vehicles do I have where my investments can go down about 22% (after taxes) and I still come out even? Secondly, as you may know, I expect to be laid off at the end of the year. If anything, at least I could sell my company stocks if I ever need it. Since my EF is currently woefully inadequate, I guess this is another form of an automatic savings that I've implemented for myself for those inevitable rainy days...

Sleepwalking My Way To A Layoff

I’ve heard that prior to slaughter, cattle are resigned to their fate and walk in a trance-like state. Similarly, I feel like I am sleepwalking through my days until I get laid off at the end of the year.

I hate this feeling. I know I should be appreciative that I currently have a job and making a very good income. My work has always treated me well and I have no reason to be disgruntled. Yet I find it very hard every day to focus on my day-to-day tasks. I often find myself cyber-loafing or finding anything to do other than work. I remind myself that I need to be professional, yet I remain unmotivated.

I don’t only feel this way at work. When I am home, I can’t bring myself to do any housework or to do any of the activities that once brought me joy.

The good news is I used to deal with my blues through retail therapy. Now that I have a budget and a debt reduction/savings plan, I don’t feel tempted to go shopping at all.

I just need someone to slap me and tell me to “Snap out of it!”

And that someone should be me.

Sorry for this downer post. I just seem to be feeling a bit more blue than usual this morning...

I Survived on $6.75/day for Food in August!

As discussed in my prior post, my budget doesn't include any provisions for groceries, food, gas, clothing, toiletries, etc. Instead, I’ve allocated a $500 lump sum per month on my American Express card to pay for non-fixed expenses.

My American Express bill just ended its billing cycle for August and it totaled $796.20.

Of that amount, the following items do NOT count against my budget:

• $334.47 for 30,000-mile car service: Thankfully, I had the foresight to earmark $25 from every paycheck for this expense since February, so I had $400 saved to pay this expense. I charged it on my Amex rather than paying cash so that I can earn Membership Rewards for future vacations.

• $92.44 for reimbursement for food and gas during business trips: I’m confident that I will be reimbursed before the end of September when payment is due.

The result? Budget – Actual = $500 - $369.29 = $130.71 under budget!

Here’s the breakdown of my August expenses:

• Groceries: $209.38: This includes food, toiletries, cat food/kitty litter, etc. This is $6.75/day, folks!

• Entertainment: $12.00 for movies. I caught a couple of matinees on the weekends where the ticket only costs me $5-$6. I also took my own water and popcorn. (Did you know movie theaters allow outside food now?)

• Gas (Non-reimbursable): $121.01

• US Postal Service: $12.95

• Misc: $13.95: I bought a clay paw-print kit. I’m a bit concerned that my geezer cat, MJ, doesn’t have much longer to live. I wanted his paw print as memento.

As you can see, I spend very little on entertainment since I’ve already justified my extended-basic, digital cable and high-speed internet cost as a fixed monthly “entertainment” expense. I also borrow a lot of books, CDs and DVDs from the library.

With respect to food, I’ll write about my survival tips in next week’s post.

This is what I plan to do with the extra $130.71:
• $35 will go into my Emergency Fund
• $5 will go into my Christmas Fund earmark
• $5 will go into my Pet Care Fund earmark
• $5 will go into my Miscellaneous Fund earmark
• $25 will be earmarked towards my Costco renewal fee (due October)
• $50 will go into my Vacation Fund earmark
• $5 will be “cash”

I know, I know. I should be using 100% of the $130.71 to pay down my debts and/or to fund my emergency fund. Actually, I consider my Vacation/Miscellaneous Fund as a back-up of my Emergency Fund. In the event of an emergency, I’ll tap my Vacation Fund or my Misc. Fund if my EF is insufficient. Unfortunately, that “emergency” is looming in the horizon since I could get laid off at the end of the year….

Anyhow, next week, I’ll give my tips on how I made it through the month on $6.75/day.

Until then, have a great Labor Day Weekend, y'all!