Moneyapolis

Weekend articles

2011-11-20T08:08:00.000-06:00

Here are my favorites in this weekend's New York Times:

5 Ways to Think About Nuisance Fees
Doing the Ethical Thing May Be Right, but It Isn't Automatic
An Uprising With Plenty of Potential
Tips for Starter Landlords
Leveraged Moveouts
The Wish List Is Not Negotiable
Heaven Is a Place Called Elizabeth Warren
Older, Suburban and Struggling, 'Near Poor' Startle the Census
The Cash-and-Carry House
Could Every Day Be Black Friday?
Goodbye, Golden Years
Voices of the Near Poor

Weekend articles

2011-11-13T11:24:00.000-06:00

Here are my favorites from this weekend's New York Times:

Airbnb's Lodging Gets Tested, Yielding a Mixed Bag
Tax Burdens Tilt Coastal, and System's Fairness Is Debated
Happy to Call the City Home, More Now Move In Than Out
A Treehouse Grows in Brooklyn
It's Not Just About the Millionaires
My Parents Were Home Schooling Anarchists
Retiring Without a Home Loan
Living With Noises, Pleasant and Less So
The 421a Tax Exemption: Don't Say You Didn't Know
The Director of 'Sideways' Sees His Life Go Forward
Generation Sell
Whatever Happened to Discipline and Hard Work?
Markets in Sync: Finding the Downbeat
Young Farmers Find Huge Obstacles to Getting Started

Weekend articles

2011-11-06T08:00:00.000-06:00

Here are my favorites in this weekend's New York Times:

Pursuing Self-Improvement, at the Risk of Self-Acceptance
Volatile, but Nearly Running in Place
Donors Weigh the Ideals of Meaningful Giving
In the Company of Animals, Healing for Humans
A C.E.O.'s Support System, a k a Husband
Cuba to Allow Buying and Selling of Property, With Few Restrictions
Landlords No Fans of Fido
Psst, Seller: Your Stove Is Showing Its Age
Get Me Something In Economy Size
Oligarchy, American Style
Can Anyone Really Create Jobs?
Sheep Lawn Mowers, and Other Go-Getters
The Problem With Flat-Tax Fever
Salvaging Abandoned Bikes, Making Room for Others

November Net Worth Report

2011-11-01T14:19:00.002-05:00

My November net worth jumped back up thanks to the stock market. It's amazing how steep the ups and downs are, isn't it?

I added to our home mortgage debt because of some legal issues with a contractor, but now that matter is settled so we shouldn't have to spend any more money on it. But it means that four months of extra payments to our home equity line that I made were basically erased. Sigh.

Assets
Cash: $784
Investments: $3,359
Retirement: $227,648
Home: $250,000
Other Real Estate: $240,000
Personal Property: $4,000

Liabilities
Home Mortgage: $110,459
Other Mortgage: $236,549
Student Loans: $8,228

Total assets: $725,791
Total liabilities: $355,230

Net Worth: $370,561

Weekend articles

2011-10-30T11:10:00.000-05:00

Here are my favorites in this weekend's New York Times:

Clearing Up Some Confusion About the New Federal Student Loan Rules
The Best Investing Advice? Maybe Not the Conventional Method
Presidential Candidates? Few Are the 99 Percent
Hard Times for Gay Retirement Havens
Market Ready
Now That's a Quick Sale
Handling High Closing Costs
Staging, Ever More Virtual
Pounding the Pavement, Beyond Manhattan
Putting Down Roots in a Place Above Trees
In Brooklyn, Space and Light Meet Woodwork
All That Authenticity May Be Getting Old
Bargain Hunters, Hold That Click
What's Luck Got to Do With It?

Weekend articles

2011-10-23T21:17:00.000-05:00

Here's what I'm reading in this weekend's New York Times:

A Garage Converted to a Bachelor Pad
The Paint Doctor Is In
Knowing When to Refinance
The End of Cheap Chinese Goods
A Risky Investment, Made Unwittingly
Retirement Funds Built for Skittish Times
The Toys Are Gone, but It's Still Home
For a Bachelor Father, a Pad With a Pool
How to Tame a Loft: Add Lace, Talk Trollope
A Man, a Bike and 4,100 Miles
A Little Imperfection For That Smile?
Lunch, Landfills and What I Tossed

Student loan debt shackles

2011-10-21T14:48:00.003-05:00

Here's a disturbing story on Minnesota Public Radio: School Debt a Long-Term Burden for Many Graduates

Annie Spencer, who lives in New York City, was also the first in her family to go to college — a small state school, then private graduate school.

"I can't lie, I often fantasize about just fleeing the country and being a debt fugitive in Canada or Europe or somewhere," Spencer says.

She saw higher education as a way out of the precarious paycheck-to-paycheck existence she'd grown up in. So, despite merit scholarships and working 30 hours a week, Spencer racked up $85,000 in student-loan debt.

"From the minute I graduated from my master's degree," she says, "my job prospects were completely limited to the jobs that would help me pay back my loans."

She gave up on social justice work and landed a decent paying government job. But in New York City, with high rent, plus $600 a month in loan payments, it was tough.

Weekend articles

2011-10-16T09:58:00.000-05:00

Here are my favorites from this weekend's New York Times:

Rabbit-Hole Economics
Financial Planner's Red Flags
In a Volatile Market, Some Turn to Insurance Instead of Bonds
For Children of Same-Sex Couples, a Student Aid Maze
In Private, Wall St. Bankers Dismiss Protesters as Unsophisticated
Market Ready
The Lease Is Up, and Now So Is the Rent
A High-Rise Change of Plans
Eco Meets the Economy
One Couple, Two Houses and the Bridge in Between
Bells and Whistles Descend Upon the Throne
Is Race Reflected By Your Outfit?
The Land of Milk and Money
A Death-Row Love Story
Making the Most of Our Financial Winter
Online Banking Keeps Customers on Hook for Fees
America's 'Primal Scream'
A Progressive in the Age of Austerity

Weekend articles

2011-10-09T18:41:00.000-05:00

Here are my favorites from this weekend's New York Times:

How to Make Working at Home Work for You
So Far, It's Been a Half Empty Year for Investors
Checking Account Wars, Behind the Scenes
Adding Jobs, but Not Many, U.S. Economy Seems to Idle
Making Empty Homes Less Inviting to the Uninvited
Confronting the Malefactors
Room for One and Occasionally More
Triggers for Rejection
Back to the Land, Reluctantly
Occupy Poor Street
The Depression: If Only Things Were That Good
How We'll Survive the Economic Crisis
The Outcast of Brownstone Brooklyn
For Women, Parity Is Still a Subtly Steep Climb
Deer in the Headlights, Financially Speaking
An Ugly Forecast That's Been Right Before

New renovation series on the WSJ

2011-10-08T16:38:00.004-05:00

The Wall Street Journal has a new renovation chronicle series about a family re-doing their 1,300 square foot co-op in Queens.

But why did I — and it was my fault — ignore all common sense and personal experience and buy a place needing a total overhaul? Right now, it’s 1,300 square feet of soiled floors, peeling paint and ancient plumbing and electric. The kitchen must be entirely replaced. When the co-op board interviewed us, the first thing they asked was whether we were going to renovate.

Throughout the apartment are bizarre sayings — “Freedom of Love” is one; some sort of ode to beer is another — that were scrawled across the windows and walls when we arrived. Yeah, not our decorating style.

My wife won’t step into the place until it’s renovated.

But the apartment is in a leafy neighborhood with good schools (we know Forest Hills well, having been renting there for three years). For the city, it’s got a large living room and two nice-sized bedrooms. The many windows let in lots of light. And the old, brick building is handsome, with an Art Deco style, wood-lined lobby and lots of period details. Also crucial: a price, reflecting the need for a gut renovation, that we could afford.

As we ready for the work, I find my emotions alternating between anticipation and dread. There’s a stain in the second bedroom’s closet; but the super says it was from a leak fixed long, long ago. Our architects have some great ideas for modernizing the space; but will we able to afford these grand plans? Potential contractors have done impressive jobs elsewhere; but how do we guard against seeming inevitabilities like cost over-runs and delays?

Urgency is starting to set in. It’s not, er, ideal to pay both a mortgage and rent. I’m looking forward to taking the first step: demolition. And soon.

There have been two installments so far:

Renovation Chronicle: Remaking Our Queens Co-op
Renovation Chronicle: Ugh, Why Am I Doing This?

Ha!

2011-10-07T09:19:00.002-05:00

Weekend articles

2011-10-02T08:12:00.020-05:00

Here are my favorites from this weekend's New York Times:

Four Legs and an Eye for Landscaping
Life and Art, Side by Side in the French Quarter
Phony Fear Factor
Determining a Home's Value
A Two-Bedroom Trial Balloon
Mysteries Solved, Riddles Explained and Readers' Questions Answered
Can a Dinner Party Be Stress-Free?
The Money Is Gone, but the Winery and a Woman's Resolve Remain
Rewarding C.E.O.'s Who Fail
Question: Why Pay Bank Fees?
Challenging Dollar-Cost Averaging and Other Bad Ideas
The Freedom to Choose Your Pronoun
Super People
Calling the Nurse 'Doctor,' a Title Physicians Oppose
Coupon Sites Are a Great Deal, But Not Always to Merchants
The Problem With 'No New Taxes'
Battered by Economic Crisis, Greeks Turn to Barter Networks
The Messenger Goes Hollywood
Police Arrest More Than 700 Protesters on Brooklyn Bridge

October Net Worth Report

2011-10-01T16:35:00.004-05:00

My October net worth took a big hit. Like last month, my retirement savings are way down thanks to a horrendous stock market. DH and I are also still grappling with some credit debt and legal bills, so my extra payments to our mortgage principal are on hold for a while.

Assets
Cash: $681
Investments: $3,025
Retirement: $204,380
Home: $250,000
Other Real Estate: $240,000
Personal Property: $4,000

Liabilities
Home Mortgage: $110,749
Other Mortgage: $230,550
Student Loans: $8,719

Total assets: $702,086
Total liabilities: $350,018

Net Worth: $352,078

Weekend articles

2011-09-25T10:20:00.000-05:00

Here are my favorites in this weekend's New York Times:

Lean Toward the Sunny Side, but Don't Overdo It
'Buffett Rule' More Complicated Than Politics Suggest
A Tax Plan That Might Not Be So Painful
Developers Cater to Two-Wheeled Traffic in Portland, Ore.
A House Enveloped in Greenery
Making a Prefab Home Their Own
Is Junk Food Really Cheaper?
Gunning for Wall Street, With Faulty Aim
In Company Town, Cuts but No Layoffs
Not-So-Smart Cities
Wrapped in Plain Brick
Personality for Him; Practicality for Her
If It Looks Like a Bear, and Moves Like a Bear...
Worried Greeks Fear Collapse of Middle Class Welfare State
The Closer

Weekend articles

2011-09-18T08:32:00.018-05:00

Here are my favorites in this weekend's New York Times:

Free to Die
A Welterweight With Heavyweight Financial Clout
Steps Away but Worlds Apart
Bedrooms for 2, Dinners for 6 Guests
Spotlighting 401(k) Plans, Thanklessly
Decoding the Wide Variations in House Appraisals
The Role of Prices in Health Care Spending
A Two-Step Plan That Strengthens Your Nest Egg
Fine-Tune a 401(k) or I.R.A., and Cut Costs
The Company You Keep
Long-Term Stock Plans Help to Avoid Impulsive Moves
The Food Was Great, the Groveling Wasn't
Let's Hear It for Aunthood
The 83-Year-Old Money Tree
When Retirees Are Shortchanged

Weekend articles

2011-09-11T08:28:00.018-05:00

Here are my favorites from this weekend's New York Times:

Uprooting Their Lives for a View of the Hills
The Art of Living Well
Financial Lessons From Sports Stars' Mistakes
Barking Dogs and Other Threats to Neighborhood Diplomacy
The Now-or-Never Apartment
House of Strings and Feathers
The Even Longer Road to 'Sold'
The Enlightened Rich Want to Be Taxed
Just Me and My Shadow, Pedaling Toward Chicago
The Cult of Physicality
On Campus, It's One Big Commercial
Bicycle Visionary

5 factors in wealth accumulation

2011-09-09T08:16:00.001-05:00

Here's a helpful article from Liz Weston on MSN: 5 ways to get rich...or poor

Are you convinced the reason you can't save is that you don't make enough money? You're probably deluding yourself.
Income differences don't explain why some households accumulate wealth and some don't. Ivy League researchers Steven F. Venti and David A. Wise found that some high-income people wind up with little wealth and that some low-income people accumulate a lot.
A study of 3,992 households whose heads were near retirement age found income differences explained just 5% of the variations in wealth. Life events such as inheritances, big medical bills, divorce and the number of children accounted for just 4%. Investment choices accounted for 8%.
So what made the most difference? How much the households chose to save. Even some of the lowest-income households managed to accumulate significant wealth.
The takeaway. Making savings a priority, and paying yourself first from every check you get, turns out to be the No. 1 way to build wealth. So get started. For more, read Trent Hamm's wonderful post "12 excuses for being broke."

Weekend articles

2011-09-04T10:07:00.015-05:00

Here are my favorites in this weekend's New York Times:

The Limping Middle Class
Generation Limbo: Waiting It Out
Are You As Fertile As You Look?
Across the Hall, Diversity of Incomes
What? Can't Hear You! Let's Move
Refinancing While Underwater
For the Recently Widowed, Some Big Financial Pitfalls to Avoid
Using an Inheritance to Teach Your Problem Child a Lesson
One Path to Better Jobs: More Density in Cities
Do Happier People Work Harder?
Emerging Markets Are Down, Not Out
Trust the Evidence, Not Your Instincts
The Beauty Contest That's Shaking Wall St.
For Burning Man, an Airstream Done Up in Moorish Splendor
You're Not a Stranger When You Leave
In Maine, Gifts From the Sea, and the Landfill
Economic Stimulus Proposals
When Wheels Pile Up: Plant a Bike; Save the City

August spending report

2011-09-03T11:11:00.010-05:00

I'm ready to face our August numbers, I think. DH and I both maxed out our 403(b) plans at work (DH contributed $1,375 and I contributed about $1,400), and my employer threw in another $750. I also contributed $600 to my 457 retirement plan (also serving as an emergency fund). Now for the not-so-bright side of things:

August Income:

$2,696 My day job (net)
$3,936 DH's day job (net)
$20 Fitness reward
$150 Garage rental income
$300 Transferred from savings for vacation expenses

August Expenses:

$800 Credit card
$1,500 Home Equity Line of Credit principal payment
$1,190.40 Mortgage payment, taxes, insurance
$70 Gym
$16.16 Netflix
$15.97 DH's life insurance
$278.90 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$200 Ally Savings
$53.79 HourCar
$1,986.91 Vacation expenses
$809.82 Other (clothes, theater tickets, Spanish class, plane tickets)
$16.63 DH's bass
$498.98 Groceries/toiletries
$19.99 Cell phone
$1,215.33 Cats
$102.28 Restaurants
$20 Bus pass
$1,703 July spending over

Total Income: $7,101.96
Total Expenses: $12,230.20

Over by $5,128.24. My checkbook is about $1,000 in the negative at the moment until I get paid next week and pay off my rewards card, and DH's credit card balanced increased to $7,001. Gulp.

Our 10-day vacation cost us about $3,000 including last month's expenses. Considering we camped for most of the trip and spent two nights in a couple of the crummiest hostels I've ever been in, it hardly seems worth it. We basically did a bicycle tour between two East Cost cities, riding 350 miles or so. The biking part of it was fun, but the amount of money we spent doesn't seem to reflect the quality of the trip. But the spending includes things like camping stuff and bike gear/clothes that we'll re-use, and also bike tune-ups. And $1,000 of the spending was for a rental car, gas, tolls, and a cat sitter.

The other big expense this month was all our unexpected vet bills. I'm just hoping our two sick kitties feel better soon.

I also spent more than $620 on plane tickets for two future trips, but I know those will be worth it. DH and I have spent the last two winters saying we really need to go someplace warm, and then never pulling the trigger, so this year I sucked it up and bought tickets. One trip is in October (admittedly, not that cold yet but I already have to travel someplace nice for work) and another one is in January.

Hell of a week

2011-09-02T15:39:00.007-05:00

Is anyone else having a horrible week? My first week back from vacation I expected work to be a little crazy, but my non-work life has been nuts, too. From a spending perspective, it's been an absolute nightmare. Here are some highlights:

Our vacation cost a lot more than we expected and the level of fun we had didn't seem to match the money we paid. Boo.
Our rescued feline leukemia cat took a turn for the worse and while he seems to be doing better so we didn't end up having to euthanize him this week, his vet bills added up to almost $300.
As if one sick kitty wasn't hard enough, we took our other cat to the vet for a routine dental cleaning which cost about $450. We expected to pay for the cleaning, but our cat never really recovered after we brought her home so we had to take her back to the vet to find out what was wrong. They charged us another $300 for the follow up, saying the problem was unrelated to the teeth cleaning. WTF? Our perfectly healthy cat comes home from the vet all loopy and not eating for days, and that's just a coincidence? We got royally screwed and the worst part is we're still trying to get our kitty to eat. (And if we want professional help, we obviously need to find another vet.)
One of the contractors we worked with on the money pit has reappeared with some outlandish claims and we've had to hire an attorney to deal with it. Attorney=more money.
Our garage roof is falling down and we had to pay another contractor $800 to shore it up so it doesn't get any worse. That's almost 6 months of rental income from it.

My retirement savings are also down nearly $12,000 this month, which is insane.

So how have I been dealing with all the stress? By spending more money! I just booked a ticket for DH to join me on a work trip in the fall and then I splurged on cheap tickets for a warm getaway in January. Total trip spending? Another $620. But given all the above spending, that seems like a pittance. And I haven't seen fares this low all year.

So what's my strategy for paying off all this new debt? I'm going to reallocate the $1,500 I've been paying toward our HELOC/mortgage principal every month to the credit card. That, combined with the $1,000 or so DH has been managing to pay, should get us out of the hole in 3-4 months. I hope.

Keep your fingers crossed that next week brings better news on all fronts and a winning lottery ticket. Not that I play the lottery...

Plan C?

2011-08-13T08:16:00.004-05:00

I'm off for a road trip the next couple of weeks and won't be posting the usual weekend articles. Here's one from the New York Times to tide you over until I'm back: Maybe It's Time for Plan C

RONA ECONOMOU was a lawyer at a large Manhattan law firm, making a comfortable salary and enjoying nights on the town when she was laid off in 2009, another victim of the recession. At first, she cried. “Then it hit me,” said Ms. Economou, now 33. “This is my one chance” to pursue a dream.

Six months later, feeling hopeful, she opened Boubouki, a tiny Greek food stall at the Essex Street Market on the Lower East Side, where she bakes spinach pies and baklava every morning. This was supposed to be her Plan B: her chance to indulge a passion, lead a healthier life and downshift professionally — at least by a gear. Instead, Ms. Economou finds herself in overdrive.
Six days a week, she wakes up at 5:30 a.m. (“before most lawyers”) to start baking. Instead of pushing paper, she hoists 20-pound bags of flour, gets burned and occasionally slices open a finger. On Mondays, when the shop is closed, she does bookkeeping and other administrative tasks.
So much for a healthier life. “The second I feel a cold coming on, I’m taking Cold-Eeze, eating raw garlic,” she said. “I can’t afford to shut the shop down.”

Weekend articles

2011-08-07T14:48:00.000-05:00

Here are my favorites from this weekend's New York Times:

Candelabra and Chipped Paint
Finding the Potential in Vacant Lots
In the High Nevada Desert, Sleeping in Star-Surround
The Wrong Worries
Williamsburg on the Hudson
Pilfered Peppers in City Gardens; Tomatoes, Too
In Home Sales, Courtesy Goes a Long Way
Co-Signing on the Dotted Line
In Brooklyn, Blurring the Wealth Boundary
A Loft That Waited for Its Muse
Closets Even for the Kayaks
S&P Downgrades Debt Rating of the U.S. for the First Time
Resisting the Urge to Run Away From Home
Managing an Investment Portfolio for Risks, Not Only Rewards
As Corporate Profits Rise, Workers' Income Declines
An Ex Blogs. Is it O.K. to Watch?
The Dutch Way: Bicycles and Fresh Bread
What Happened to Obama?
Austerity Survival Guide
The Truth About Taxes
Bike Vacations Offer Freedom and Frugality
Back to the Simple Life, With Needle and Thread
Pressing All the Buttons for a Panic Attack
Supply, Demand and Marriage
Wall Street's Tax on Main Street

Saving for emergencies

2011-08-05T16:22:00.002-05:00

Ruth Hayden's latest interview on Minnesota Public Radio focuses on emergency savings: How to create a cash cushion

A recent survey indicated that nearly half of American households couldn't come up with $2000 in cash within thirty days. In this recession that just won't quit, what are you doing to build an emergency cash cushion?

July Spending Report

2011-08-02T15:09:00.003-05:00

July was an expensive month as we're getting ready for a vacation in August that's costing more than we expected. But as usual, DH and I both maxed out our 403(b) plans at work (DH contributed about $1,375 and I contributed about $1,400), and my employer added another $750 or so. I also contributed $600 to my 457 retirement plan.

July Income:

$2,695 My day job (net)
$3,936 DH's day job (net)
$20 Fitness reward
$150 Garage rental income
$940 Transferred from savings for vacation expenses
$47.20 Online surveys
$10.40 Work reimbursement
$650 DH sold two bikes

July Expenses:

$1,500 Credit card
$1,500 Home Equity Line of Credit principal payment
$1,190.40 Mortgage payment, taxes, insurance
$70 Gym
$16.16 Netflix
$15.97 DH's life insurance
$234 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$200 Ally Savings
$19.36 HourCar
$1,000.91 Vacation expenses (including bike clothes and a bike tune-up)
$228.66 Other
$122 DH's bass
$635.46 Groceries/toiletries
$107.78 Cell phone minutes
$170.75 Cats
$311.73 Restaurants
$1,100 June spending over

Total Income: $8,496.76
Total Expenses: $10,199.77

Over by $1,703. My checkbook is about $300 in the negative at the moment until I get paid next week and pay off my rewards card, but I'm not sure what DH's situation is or how this ginormous deficit is manifesting itself with him. Perhaps it's part of his credit card debt?

Our grocery bill was higher than usual because we had a little party and spent extra money on food and beverages. Our restaurant spending was higher than I'd like but includes a couple of Groupon purchases that we haven't used yet, and we also reciprocated with a couple of friends by picking up the tab for meals/drinks. Our "other" category includes the usual miscellaneous stuff like a couple of shirts for me, some theater tickets, gas for a friend's car we borrowed, a haircut for me, a decorative box I bought from a new local shop, and a laundry bag.

Our Feline Leukemia cat continues to be a ball of love in residence. Potential adopters seem deterred by the FELV situation, which is understandable. We'll just keep him if we can't find him a good home, even if it means higher cat food bills. We spent some money at the vet getting him vaccinated, too, since it will supposedly help his health situation.

August Net Worth Report

2011-08-01T12:50:00.003-05:00

My August net worth increased slightly. My cash savings are down because of some spending for an upcoming trip and my retirement savings didn't do so hot this month given the economy. But I did make an extra principal payment to our investment property mortgage and my student loans are down to (drumroll, please) four figures! Paying off just over nine thousand in student loan debt seems so much more doable than the initial fifty thousand dollar balance.

Assets
Cash: $683
Investments: $3,112
Retirement: $228,520
Home: $250,000
Other Real Estate: $240,000
Personal Property: $4,000

Liabilities
Home Mortgage: $111,338
Other Mortgage: $232,482
Student Loans: $9,699

Total assets: $726,315
Total liabilities: $353,519

Net Worth: $372,796

Weekend articles

2011-07-31T07:08:00.000-05:00

Here's what I'm reading in this weekend's New York Times:

Enjoy City Greenery, City Says, but Not as Salad
Governor Said to Have Irked Transit Leader Who Is Leaving
Is That All There Is? Milking Life for More
Muddying the Budget Waters
Options for Self-Publishing Proliferate, Easing the Bar to Entry
Usual Growth Leaders Absent From Recovery
Jobs Deficit, Investment Deficit, Fiscal Deficit
Old Windows Find a Following
The Permaculture Movement Grows From Underground
Gowanus: Big Development Can Wait
A Neighborhood for Man and Dog
An Apartment With a Little Give
A Paper Calendar? It's 2011
Money Cometh to Me Now!
Coming Soon: 'Invasion of the Walking Debt'
Some Bankers Never Learn
Debt Problem's Sure Cure: Economic Growth
Got Briefs? This Run's For You
In the Flood Zone, but Astonished by High Water

Laura Rowley's last money and happiness column

2011-07-29T12:32:00.003-05:00

I'm disappointed to see that this is Laura Rowley's last column for Yahoo Finance: Some Final Words on Money and Happiness

When I wrote the book "Money and Happiness" in 2005, just before I joined Yahoo! Finance, my thesis was that if you could clearly identify what you value most in life, set goals around those things, and use money as a tool to help you achieve them, you would find happiness. Not the immediate gratification, smiley-face kind of happy, but long-term contentment. Because everyone knows that pursuing your values is not the easy road and can mean short-term sacrifice — like taking calculus again when you're in your 40s, or coaching a squirrelly bunch of 9-year-olds in soccer when you could be laying in a hammock reading the Sunday paper.

I still believe that theory about money and happiness. But what I've learned over the last six years of writing this column is that money is something you should kind of watch from the corner of your eye while you live your real life. You obviously can't take it with you, and when someone writes the homily of your life, they're more apt to remember your attitude, character, creativity and spirit of generosity, than what you did or didn't do with your money or how much of it you had. So it makes sense to me to earn it doing something you value, something that gifts other people and the world rather than diminishing them. Save, invest and spend it the same way, reflecting your values, in a spirit of generosity and joy. And remember it's important, but it's not everything.
This is my last column for Yahoo! Finance. Thanks to readers who cared enough to comment, correct, argue and email me to share their financial wisdom. Those of you who emailed me with financial questions, I hope I helped. If you'd like to continue the conversation, you can find me on The Huffington Post, where I'll be writing about retirement (and occasionally money and happiness), or email me at laura@laurarowley.com. I wish you wealth and happiness in abundance.

Weekend articles

2011-07-24T13:28:00.000-05:00

Here's what I'm reading in this weekend's New York Times:

Back Home, Via France
In Philadelphia, Going Green or Growing Wild?
A House Built on Trust
The Lesser Depression
Bonuses for Billionaires
Carmageddon's Big Surprise
The Master's as the New Bachelor's
Social Media History Becomes a New Job Hurdle
Worthy Rivals for the Crown in Smartphones
Sorting Through Lending Costs
A Studio That Doesn't Smack of a Dorm
Still Counting Calories? Your Weight-Loss Plan May Be Outdated
Scientologists, Catholics and More Money Than God
Ladies, We Have a Problem
Cornel West Flunks the President
Bad Food? Tax It, and Subsidize Vegetables
The Personal Energy Crisis
Taxing and Spending, in Balance
Law Student's Alter Ego: Filmmaker

Rent hike forces married couple to move in together

2011-07-23T07:56:00.003-05:00

Here's an amusing story in the New York Post: Married couple lives in divided apartment

This quirky couple has a secret to a happy marriage — try not to live together!
Allen Sheinman, 58, says he and his wife, Collette Stallone, 56, kept separate homes for the first four years of their marriage, but when hard times hit in 2009 they did the unthinkable and moved into the same apartment.
Battle lines were drawn and plastic walls went up, as the kooky pair divvied up her tiny, 576-square-foot West Village apartment as though it were postwar Berlin.
“I told her I could handle getting married and living together, just not both,” Sheinman old The Post.

There was no crossing into each other’s domain without permission: She took the bedroom, he walled off the sofa-bed in the living room. The kitchen and bathroom were kind of a demilitarized zone.
Almost nothing is communal: They each have their own newspaper and magazine subscriptions, and when they watch the same TV show, they do it from separate rooms.
By keeping apart, they’ve made their marriage a blissful one, Stallone insists.
“I don’t need to see Allen brushing his teeth,” she explained.

Apparently the rent on his bachelor pad was going up to $1,800/month, so they decided to live together in her rent stabilized apartment for $800. Good luck with that!

Weekend articles

2011-07-17T12:46:00.000-05:00

Here are my favorites in this weekend's New York Times:

Getting to Crazy
Miranda July Is Totally Not Kidding
In the Catskills, Building Stone by Stone, Bale by Bale
The How-Tos of House Painting
After Rent Rise, Time to Pull Up Stakes
Porches Reclaim Their Place
House Tour: Greenport, N.Y.
Consumer Watchdog Is All Ears for Ideas
Adding to Jobless Woes, Little Turnover in the Workplace
Law School Economics: Ka-Ching!
Getting the Most Out of Social Security
The Wages of Virtue and Vice
Compelling Tales, Rarely Told Well
Is Anyone There?
Should Cities Drive Food Courts Off the Streets?
We're Spent
The Clash of Generations

Weekend articles

2011-07-10T09:27:00.000-05:00

Here's what I'm reading in this weekend's New York Times:

You 'Like' It, They Build It
Cape of Many Colors
In Paris, a Home Far From the Tourist Center
Just Offstage in Riverdale
Hiding in Plain Sight
What Obama Wants
Lessons From a Year in Bali
Seeking Investment Flexibility In a 401(k)
Advisers Keep Eyes On the Horizon in a Choppy Economy
When S'Mores Aren't Enough: The New Economics of Summer Camps
Wearing Your Heart on Your Skin
Throw Another Melon on the Barbie
Somehow, the Unemployed Became Invisible
Don't Fret. Just Ask For What You Need.
Investment Tips for the Accident-Prone
Not-So-Representative Investors
For Hire: A Visitor to the Grave of Your Dearly Departed

Marketplace Money stories

2011-07-09T15:16:00.003-05:00

A couple of Marketplace Money stories caught my eye this weekend. The first deals with Warren Buffet's investment style: Why investing like a girl is a good thing

Vigeland: So how exactly do women invest? What are some of the characteristics of us that distinguish us from our male counterparts?

Lofton: Well for one thing, we don't trade as much. We're more patient. We tend to buy and hold for the long term. We also are naturally more risk-adverse; that's something that's not only a characteristic of women when it comes to investing, but in other aspects of life. And we're actually better at managing our emotions than men are. I know that sounds controversial. Vanguard did a great study that showed when the market was tanking -- when things were just at their bleakest back in the fall of 2008, beginning of 2009 -- women held. We did not panic and sell, whereas more men actually did sell at the very bottom of the market -- the exact wrong time to do something like that.

The other one reminds us not to cash out our 401(k)s when we change jobs: Piggy Bank Award: TIAA-CREF success

Harlan: Hi, this is Harlan, from Fort Collins, Colo. This really is an affirmation of the importance of leaving 401(k) savings, or similar, intact. In 1978, I changed jobs, wanted to raid my TIAA-CREF account and about $10,000. I learned I would have penalties, so forth. I left it intact. Thirty years later, it has grown to nearly $350,000. I always kept it in the common stock bond, earnings were reinvested. Impossible to tell the future, but clearly time compounding can lead to excellent returns. Had I access to the $10,000 I'm sure I would have spent it up with current desires. Instead, it grew remarkably with no direction by me. Try not to disturb your retirement money -- years will pass better than you can ever imagine.

June Spending Report

2011-07-08T13:10:00.002-05:00

We both spent entirely too much money in June, but at least it was a three-paycheck month for me. As usual, DH and I both maxed out our 403(b) plans at work (DH contributed about $1,375 and I contributed about $2,100 with the extra paycheck), and my employer added another $1,050 or so. I also contributed $300 per paycheck to my 457 retirement plan. I found out that contributions to a 457 plan can be withdrawn at any time with no penalty (you just have to pay taxes), so this makes me feel much better about not having a bigger emergency fund. My 457 plan has about $7,500 in it, so that's my emergency-emergency fund for now.

But I digress...here are the numbers:

June Income:

$4,159 My day job (net)
$3,936 DH's day job (net)
$20 Fitness reward
$150 Garage rental income
$25 Credit card reward
$180 Parking spot income (for 6 months)
$44 Work reimbursement

June Expenses:

$1,200 Credit card
$2,250 Home Equity Line of Credit principal payment
$1,190.40 Mortgage payment, taxes, insurance
$70 Gym
$16.16 Netflix
$15.97 DH's life insurance
$195.06 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$300 Ally Savings
$15.08 HourCar
$186.77 Buses/Bikes
$801.17 Other
$90 DH's bass
$470.37 Groceries/toiletries
$512.80 Cats
$396.79 Restaurants
$280.79 May spending over

Total Income: $8,514
Total Expenses: $9,723

Over by $1,209. Gulp.

Our "other" category includes a weekend trip to see our families for a nephew's graduation, so that involved renting a car and paying way too much money for gas. It also includes a graduation present for one nephew and a birthday present for another one. We also spent more money on annuals and perennials, and a gift for a friend. I bought some new shirts ($50), paid for dry cleaning ($30), and paid a fee at my gym for one of the classes I'm taking ($50).

As for the huge cat expenses, DH brought home a beaten up stray cat who was hanging out near our investment property. He's a love bug with no microchip, so we paid some hefty vet bills to get him checked out and neutered/vaccinated. Turns out he has Feline Leukemia so we can't introduce him to our resident cats or go to a shelter for help (they'd put him down), so he's quarantined in the penthouse (aka our third floor) until we can find a home for him. If you know anyone who wants a solo cat with a great personality, let me know.

Weekend articles

2011-07-03T08:20:00.032-05:00

Here's what I'm reading in this weekend's New York Times:

Little House on the Baltic
Manhattan's Newest River
The Instant Heirloom House
Despite Fears, Owning Home Retains Allure, Poll Shows
We Call It Brown. They Call It 'Weekend in the Country.'
To the Limit
Practicing Medicine Can Be Grimm Work
The Benefits of a Biweekly Mortgage Plan
In Greenwood Heights, a Place to Stay Put
A New Type of Student Loan, but Still a Risk
Making a Portfolio, and More, at Money Camp
For Home Prices, It's Back to at Least 2004
Comparing Yourself to Others: It's Not All Bad
Detroit Pushes Back With Young Muscles
Married, With Infidelities
'Tough, Cold, Terse, Taciturn and Prone to Not Saying Goodbye When They Hang Up the Phone'
The Rock and the Hard Place on the Deficit
We Knew They Got Raises. But This?
The Swindler and the Home Loans
Big Banks Easing Terms on Loans Deemed as Risks
The Stolen Stroller: an Urban Bourgeois Problem?

July Net Worth Report

2011-07-01T14:34:00.003-05:00

I finally adjusted our home's value to reflect the $90,000+ (and counting) we've spent renovating, so my July net worth shows a big increase. I adjusted the value from $175,750 to $250,000, which I think is still conservative. (Zillow has our house valued at more than $300,000, which is down from the over $400,000 it estimated when we moved in, and a neighbor's house recently sold for over $350,000.) Although I don't want to get all caught up in my house's equity, especially since we have no intention of moving anytime soon, I do want some credit for all they money we've spent renovating -- even if that credit is just in the blogosphere and not actually in my bank account!

Assets
Cash: $1,421
Investments: $3,035
Retirement: $229,068
Home: $250,000
Other Real Estate: $240,000
Personal Property: $4,000

Liabilities
Home Mortgage: $111,630
Other Mortgage: $233,982
Student Loans: $10,189

Total assets: $727,524
Total liabilities: $355,801

Net Worth: $371,723

"But what makes wage slaves? Wages!" -Groucho Marx

2011-06-30T20:44:00.002-05:00

Laura Rowley's latest Yahoo column had some good advice: How Not to Be a Wage Slave

I was amazed by a recent piece in the Washington Post called "7 Life Lessons from the Very Wealthy" by Columnist Barry Ritholtz, chief executive of Fusion IQ. He discusses how the most talented and educated people get stuck in their jobs because their employers help them borrow to finance lavish lifestyles, even lending them cash on favorable terms.
Companies "encourage up-and-comers to spend extravagantly; they extend lines of credit to their rising stars," Ritholtz writes. "You need a big house with a jumbo mortgage; you cannot pull up to a business meeting in anything less than the best luxury car. It is part of their corporate culture. Isn't that nice of them?
"Not really," he continues. "The big banks, investment shops, law firms and accountants have learned how profitable it is to have 'golden handcuffs' on their best employees. These highly-leveraged, debt-laden wage slaves will work harder, put in longer hours and stay with the firm longer than those debt-free workers."
As a result, these over-leveraged employees can't risk moving to a start-up or a smaller, more family friendly competitor, he notes.
As far as brilliantly evil retention strategies go, this one is a whopper. I can practically hear the cackling in the C-suite.

The car debate

2011-06-29T14:45:00.005-05:00

I enjoyed this recent Room for Debate in the New York Times: Car Clash: Europe vs. the U.S.

Like eating right and getting more exercise, taking steps to make city streets more hospitable to walking, biking and transit can be uncomfortable at first, as the body, whether personal or urban, complains of having to change long accustomed habits.

But in a short time, new habits are formed, and you will find yourself feeling better – walking more, biking more -- in a city that is also as a whole healthier, happier and more efficient.

Of course, to do this means taking away some of the privileges and space from personal cars – and that’s fine. There’s very little downside here. We continue to subsidize car use in ways that I could exhaustively catalog – one example that routinely costs millions of dollars: requiring developers, even in New York City, to supply parking. Pushing the dial back the other way is certainly appropriate when necessary.
In center cities, we need to put drivers at their appropriate place in the urban hierarchy – which is quite frankly, at the back of the line. We need to not only change physical boundaries and traffic signals, we need to change legal boundaries to make drivers more liable for the harm they can do with their heavy, steel instruments.

The debate was a good follow up to the Times' recent article, Across Europe, Irking Drivers Is Urban Policy.

Weekend articles

2011-06-26T08:44:00.000-05:00

Here's what I'm reading in this weekend's New York Times:

The Post-Foreclosure Wait
The Lock, Stock and Barrel Listing
Jobless Claims and Home Sales Reflect Slowdown in Economy
The D.I.Y. Darling of the Paint Store
Room for 1.) a Dog, and 2.) Wedding Gifts
Sit Up Straight. Your Back Thanks You.
Picking the Brains of the Super Rich, and Picking Up Tips
Why the Reverse Mortgage Isn't Going Away
On City Rooftops, Scrappy Green Spaces in Bloom
Need a Six-Pack? Hit the Basement
All of His Crops Flourished. Too Bad They Were in a Park.
A Side Order of Romance, Please
Job Jugglers, On the Tightrope
The Payroll Tax Needs a Vacation
Even for Cashiers, College Pays Off
In Medicine, New Isn't Always Improved
When Bikers Clash, the Tape Rolls
Shyness: Evolutionary Tactic

$100 is a small price to pay for hilarity

2011-06-22T16:34:00.003-05:00

This might be the funniest purchase I've ever seen. The next time DH gives me grief about spending I'm gonna get him one of these (click on the link to The Bloggess for pictures): And that's why you should learn to pick your battles

This morning I had a fight with Victor about towels. I can’t tell you the details because it wasn’t interesting enough to document at the time, but it was basically me telling Victor I needed to buy new bath towels, and Victor insisting that I NOT buy towels because I “just bought new towels“. Then I pointed out that the last towels I’d bought were hot pink beach towels, and he was all “EXACTLY” and then I hit my head against the wall for an hour.
Then Laura came to pick me up so we could go to the discount outlet together, and as Victor gave me a kiss goodbye he lovingly whispered, “You are not allowed to bring any more goddam towels in this house or I will strangle you“. And that was exactly what I was still echoing through my head an hour later, when Laura and I stopped our shopping carts and stared up in confused, silent awe at a display of enormous metal chickens, made from rusted oil drums.

Laura: I think you need one of those.

me: You’re joking, but they’re kind of horrifically awesome.

Laura: I’m not joking. We need to buy you one.

me: The 5-foot tall one was $300, marked down to $100. That’s like, $200 worth of chicken for free.

Laura: You’d be crazy not to buy that. I mean, look at it. IT’S FULL OF WHIMSY.

me: Victor’d be pissed.

Laura: Yup.

Weekend articles

2011-06-18T15:12:00.001-05:00

Here are my favorites from this weekend's New York Times:

Avoiding the Misery of Remodeling by Choosing the Right Contractor
Financial Advice Gleaned From a Day in the Hot Seat
On the Hunt for a Better 401(k) Plan
For Want of a Word, Arizona's Jobless Lose Checks
Paying Off Your Mortgage Early
The Gift Apartment From Mom and Dad
A Big-Time Dose of Downsizing
Adopted by a Brownstone
Bad Credit, Good Vibes
With Botox, Looking Good and Feeling Less
How Divorce Lost Its Groove
'Underneath Every Hoarder Is a Normal Person Waiting to be Dug Out'
Paychecks as Big as Tajikistan
Backlog of Cases Gives a Reprieve on Foreclosures
The Big Switch, One Step at a Time
Seriously, Some Consensus About Health Care
Funny, but I've Heard This Market Song Before
The Weirdness of Walking to Raise Money

I'm grateful to have a job but...

2011-06-17T09:42:00.003-05:00

I'm feeling a little cranky and demoralized at work these days. Remember a while back when I mentioned how happy I was about a 3% increase I was supposed to be getting? I immediately went and increased contributions to my retirement savings account so I wouldn't get used to the raise. Well, turns out there was a catch.

Last year I took a pay cut of just over 1% so my company could "balance its budget." Then, in order to bring everyone back to where they were before the pay cut, they gave us a 2% increase on the reduced salary. So when my boss recommended a 3% increase for me, they said I'd already received a 2% increase (ha!) and would have to get approval for the extra 1%. So if and when the increase finally goes through, I'll have a net increase of just over 1% of what I was making when I started my job nearly two years ago. I'll be ahead about $1,200, or $100 per month. (As opposed to $2,100 if the 3% increase had been based on my starting salary instead of the reduced salary.)

Now, I don't mean to be ungrateful, especially in this economy. But there's only so many years of "in this economy" I'm willing to accept. A 1% increase after two years isn't even keeping up with inflation!

Back when I was a union employee (boy, I'm missing those days), thanks to the power of collective bargaining I always got a cost of living increase, usually in the neighborhood of 2-3% per year. Then if I was recommended for a merit increase, it would be on top of this negotiated COLA increase. And because my former company wanted to keep parity between union and non-union employees, the non-union employees always ended up with a similar arrangement. No wonder people stayed at that company for life.

Leveraging money for passive income

2011-06-14T16:02:00.002-05:00

I liked this post on MSN: If I had $1 million, I'd go into debt

The debt scenario: I chop up the $322,923 into a series of down payments for multi-unit houses. (Multi-unit houses are the best rental properties because your overhead is lower -- you only have to replace one roof, maintain one yard, pay one insurance policy.)

Each multi-unit property I want to buy costs $300,000. I plunk down a 20% down payment on each -- that’s $60,000 per house. At that rate, I can afford 5.3 houses (let's call it five houses, after closing costs).

Because I'm getting an investor loan, rather than a primary mortgage loan, my interest rate is higher: 5.5%, rather than the 4.5% that homebuyers with good credit are receiving. I get a 30-year fixed-rate mortgage, and don't have to pay primary mortgage insurance because I've plunked down 20%. This means my monthly mortgage payment is $1,362. (Try MSN Money's mortgage calculator.)

My insurance, taxes and water for each house remain the same, at $700 per month in total. My gross rental income for each house remains the same, at $2,450 per month.

Add my expenses: $1,362 + $700. Subtract these from my monthly rental income: $2,450. I'm now left with $388 in my pocket each month.

Multiply by the five houses I own: This means I receive a passive income of $1,940 per month, which equals $23,280 per year. Add this to the yearly $13,000 I'm getting from that dividend-paying ETF, and I now have $36,280 per year in passive income.

Debt can be a good thing

By financing those five properties -- rather than paying in cash for one -- I'm adding about $6,000 to my pocket in passive income each year.

As the years pass by, and inflation kicks in, I can increase the rent (at the rate of inflation), though my fixed-rate mortgage payment will stay the same -- which means the amount I'm collecting will grow every year.

At the end of 30 years, when I'm 57 years old, I’ll have five houses completely paid off and will be raking in an extra $81,120 per year on top of the inflation-adjusted $36,280 I'm already collecting ($1,352 monthly mortgage x five houses x 12 months = $81,120 per year).

This is why access to credit can be a very, very good thing.

Tips to save money on food

2011-06-13T09:16:00.001-05:00

Here's a helpful MSN article from Liz Weston: How to eat when you're really broke

The average American family of four spends $727 a month on food -- but you can spend substantially less and still be healthy.
Nutritious, low-cost meals for two adults and two kids can be prepared for just over $500 a month, said Robert Post, deputy director for the U.S. Department of Agriculture's Center for Nutrition Policy and Promotion. A single person can get by with a monthly food budget of around $226 a month.
"You do not have to sacrifice the healthy choices on a low budget," Post said. "There's a way to do it."
If you're newly broke, or trying to save money for other purposes like paying down debt, your grocery list is a great place to look for savings. Although food is the third-largest expenditure for most households, after housing and transportation, it's also one of the most flexible and can easily be trimmed on the fly. Here are some general principles to keep in mind:

Weekend articles

2011-06-12T12:18:00.000-05:00

Here are my favorites from this weekend's New York Times:

Rule by Rentiers
The High (and Hidden) Costs of Your 401(k)
A Slaughterhouse in Brooklyn, and Misery Next Door
Negative Online Data Can Be Challenged, at a Price
The Wowing of a Practical Person
In Harlem Buildings, Reminders of Easy Money and the Financial Crisis
Changes in Refinancing
The Decorated Shed
Death by Nostalgia
The Sickness Beneath the Slump
The Worry Meter May Overlook Some Warning Signs
For the Executive With Everything, a $230,000 Dog to Protect It
The Long Hard Ride of Damian Lopez Alfonso

Big win for us crazy cat ladies

2011-06-11T17:19:00.003-05:00

Here's a feel good article in the Wall Street Journal: Stray Cat Strut: Woman Beats IRS

Ms. Van Dusen, 59 years old, is a former family-law attorney living in Oakland, Calif., who lives alone in a 1,500-square-foot home in a modest neighborhood, with seven cats of her own. As a volunteer for Fix Our Ferals, whose mission is to trap stray cats, neuter them and care for them until they can be adopted by owners or released, Ms. Van Dusen provided foster care for about 70 feral cats. Some neighbors approved of her activities, while others didn't. One, she suspects, threw a chunk of concrete through her window.

Ms. Van Dusen tried to take the deductions on her 2004 tax return, but the IRS considered them nondeductible personal expenses and "wouldn't budge," said Ms. Van Dusen.

In 2009, the case wound up in Tax Court, a national venue for tax disputes of all sizes. Tax Court decisions set precedents, and taxpayers may argue their own cases. In December 2009, for example, a nurse won a decision helpful to many M.B.A. students seeking to deduct tuition.

Ms. Van Dusen knew little about tax law before the trial, but represented herself because she couldn't afford a lawyer. "If it came down to helping a cat with a medical problem or saving for retirement, I would spend on the cat's care—as will a lot of rescue workers," she said.

She said her pretrial encounters with IRS agents were "intimidating," and she felt that in court the agency's lawyers "tried to portray me as a crazy cat lady." She said she felt more comfortable with Judge Richard Morrison, who showed great patience: "He had to go through all these receipts from Costco and ask questions like, 'What were these paper towels used for?' "

She was also heartened when a friend told her court workers were sympathetic, saying, "Why is the IRS wasting taxpayer dollars to prosecute a Cat Lady?"

May Spending Report

2011-06-06T07:29:00.000-05:00

May was a spendy month. As usual, DH and I both maxed out our 403(b) plans at work (DH contributed about $1,375 and I contributed about $1,400), and my employer added another $700 or so. I also increased my contributions to a 457 retirement plan, adding $300 per paycheck (up from $100). Unfortunately that meant my net income dropped.

May Income:

$2,656 My day job (net)
$3,936 DH's day job (net)
$20 Fitness reward
$150 Garage rental income
$61 Laundry income
$117 Survey Check
$300 Money from last month that I didn't send to the HELOC
$500 Money from DH's savings account

May Expenses:

$1,015 Credit card
$1,500 Home Equity Line of Credit principal payment
$1,190.40 Mortgage payment, taxes, insurance
$70 Gym class
$74 Investment property expenses
$15.89 Netflix
$15.97 DH's life insurance
$202.63 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$200 Ally Savings
$123.83 HourCar
$742.64 Other
$555.49 Groceries/toiletries
$327.82 Cats
$255.07 Restaurants

Total Income: $7,740
Total Expenses: $8,020.79

Over by $280.79. Our restaurant and grocery budgets were both way over, so clearly we need to stop eating so much. We also took one of our cats to the vet for $161.

Our "other" category includes all sorts of random stuff, like some new clothes for me, a bike share membership for DH, and several hardware store trips to buy gardening/nursery stuff for the yard. We also spent money on a cat sitter for a few days when I was traveling for work (and DH tagged along), and DH sent his nephew $30 for his birthday.

Being an adult costs way too much money.

Weekend articles

2011-06-05T08:30:00.023-05:00

Here are my favorites in this weekend's New York Times:

Before Bike-Share Effort Starts, Concerns Are Raised About How It Will Work
Revealing Excessive 401(k) Fees
Assessing the Value of Owning Dividend-Paying Stocks
Fears, and Opportunities, On the Road to Retirement
Keep My Boldface Name Out of It
A Place With the Family Seal of Approval
When the Seller Is the Lender
Looking for a Plan B? Make It Gluten-Free
How Football Players Got Trounced by 'Glee'
The Annuity Puzzle
The Guilt of Trading Too Much
Fresh Tomatoes for Inner Cities
A Toehold in Paris
Living Large, Off the Land
Gardening Books
The Thriving (Online) Shelter Magazine Industry
A Warming Planet Struggles to Feed Itself
'For the Dogs' Has a Whole New Meaning
Inciting a Revolution: The Investor Spring
For the Jobless, Little U.S. Help on Foreclosure
Our Fantasy Nation?

Not bad for just two months of renovations

2011-06-04T16:49:00.006-05:00

I'm really impressed with how much S. Mitra Kalita of the Wall Street Journal finished on her home in just two months: Rowhouse Rehab: 'We Can't Go On'

We’re done.

Well, far from it. The bathroom could use a facelift. The brick façade needs a good steam cleaning. The windows warrant replacing. A finished basement sure would be nice.
But we’ve decided we can’t go on, financially or emotionally. Less than two months after we closed, our house is largely livable and we’re rejoicing in that small victory—and we’re putting a moratorium on any more home renovations.

My husband and I learned a lot in this process, about patience, about thrift’s limits and about our sense of style. A few weeks ago, readers were polled on when we would finish the work in our house. More than half of you answered “never.” At the time, I laughed.
Now I think there’s no shame in admitting a house might always be in progress, especially one as old as ours. Today our kitchen looks like Dumbo meets Delhi (the hip and industrial look of our 1950s steel cabinets with the heavy wood and ornate designs of the antique Indian furniture). In five years, we might wonder what the heck we were thinking.

Click here for the before and after slide show.

June Net Worth Report

2011-06-01T11:37:00.004-05:00

My June net worth inched up by about $3,000. The stock market is definitely down but my extra payment to the home equity line of credit helped with the increase.

Assets
Cash: $1,221
Investments: $2,972
Retirement: $228,058
Home: $175,750
Other Real Estate: $240,000
Personal Property: $4,000

Liabilities
Home Mortgage: $111,922
Other Mortgage: $236,622
Student Loans: $10,678

Total assets: $652,001
Total liabilities: $359,222

Net Worth: $292,779

Weekend articles

2011-05-29T08:33:00.004-05:00

Here are my favorites from this weekend's New York Times:

Investment Advice for Small Fry
Oprah, I Hardly Knew You
Goodbye Food Pyramid, Hello Dinner Plate
Studying Housing Through Distorted Lenses
Easing Out the Gray-Haired. Or Not.
Reacting to Police Rape Case With Anger, but Little Surprise
The Case for Laugh Lines
Bopping to Her Own Beep
Space, Light, Bragging Rights
A Little Less Subway, Please
'Bikini-Ready?' Who's Judging?
A Generation of Slackers? Not So Much
U.S. Has Binged. Soon It'll Be Time to Pay the Tab.
Funny or Die: Groupon's Fate Hinges on Words

Car-sharing with your unused cars

2011-05-28T12:25:00.005-05:00

I really like this Marketplace Money story about a new spin on car-sharing in the Bay Area. Instead of providing a fleet of cars people can share, the companies match people who have cars they're not using at certain times with people who want to borrow them: Car-sharing matches unused cars with people who need them

Casey Miner: Ali Fenn lives in San Francisco. And she'd be happy to let you borrow her Jeep, even though she's probably never met you.

Fenn: I had my first rental within a week. It was slightly awkward. The person was like, "How does this work? What do I do?" I said, "I guess I just give you my keys and you drive away." It was very easy.

Fenn drives her Jeep maybe once a month; the rest of the time, it just sits in her garage. A few months ago, she found out about a new company called Getaround, located just down the street from her. She registered her Jeep on Getaround's website, set up a calendar to show when it was available and named her price.

Fenn: I charge $15 an hour or 50 bucks for a day.

Renters pay for gas, and the company provides comprehensive insurance, so the car is totally covered.

Fenn: It was gone for 24 hours, it was gone overnight, and I walked down through my garage to go somewhere else and the car wasn't there. And I thought, "I have no idea where my car is at this moment."

Vanguard lowers its minimums

2011-05-23T07:07:00.002-05:00

Here's some good news from the Star Tribune: Vanguard opens door wider for target-date funds, cuts minimum initial investment to $1,000

Vanguard is making its target-date retirement mutual funds more accessible to small investors by cutting the required minimum initial investment to $1,000 from $3,000.
The change announced Wednesday applies to 12 funds in the Target Retirement series of the nation's largest fund company. Vanguard is also cutting investment minimums for 15 other funds that aren't part of its target-date series. The minimums are dropping to $3,000 for those funds, down from as much as $25,000 in some cases.

The reductions are designed to attract young investors and others with little available cash as they start investing.

Previously, just one among Vanguard's 170 U.S. funds allowed an initial investment as small as $1,000. Several other fund companies already set investment minimums that low, or lower. In some instances, investors can start with as little as $100, although additional restrictions may apply.

When I started investing outside my retirement accounts, the only diversified Vanguard fund I could afford to buy was the STAR fund because it required just $1,000. This is great news that investors like me will now have more options.

My ideal strategy with Vanguard would be to invest 1/3 in their total stock market index fund, 1/3 in their total international index fund, and 1/3 in their total bond market fund. Unfortunately those funds still have $3,000 minimums, so that would require $9,000 to start.

Weekend articles

2011-05-22T09:10:00.000-05:00

Here are my favorites from this weekend's New York Times:

Sexual Affronts a Known Hotel Hazard
An Investment Asks, How Much Can You Afford to Lose?
On Tyson's Face, It's Art. On Film, a Legal Issue.
For Gay Employees, an Equalizer
Many With New College Degree Find the Job Market Humbling
At I.M.F., Men on Prowl and Women on Guard
The 50-Foot Commute
How to Avoid Roommate Regret
The Gossip Machine, Churning Out Cash
Counseling Before Borrowing
A 30-Month Short-Sale Saga
It Teetered, It Tottered, It Was Bound to Fall Down
Making Things in America
A Live-in Cabinet of Curiosities
The Last Jam Session
A Doctor's Push for Single-Payer Health Care for All Finds Traction in Vermont

Weekend articles

2011-05-15T08:54:00.001-05:00

Here are my favorites from this weekend's New York Times:

In Debt, Far From Home and Claiming Servitude
Seniors, Guns and Money
In Minnesota, Above-Average Economy Hides Familiar Pains
Why 401(k)'s Should Offer Index Funds
Wealthy Hesitate to Take a Break on Estate Taxes
Dave Ramsey's 12% Solution
Buying a Trump Property, or So They Thought
Cautious Blogger 'Grim' Buys a Home
Financing Foreclosed Homes
The Joys of Staying Put
A Larger Nest in the Same Neck of the Woods
Family Compound on the 35th Floor
Inflation and Economic Hooliganism
Is Your Religion Your Financial Destiny?
Jim Cramer Hits an All-Time High
Corsets, Cleavage, Fishnets
Rich and Sort of Rich
Children of Hoarders on Leaving the Cluttered Nest
Why Worry? It's Good for You
The Flea Marketing of New York
Suddenly, Gold Isn't Looking so Solid

Minnesota Hipsters???

2011-05-11T10:01:00.002-05:00

Here's a funny post from BuzzFeed: The Most Hipster State In The US

Although Minnesota has less than 1/3rd the population of New York state, it leads the nation in searches for the term “hipster.” Understanding why is easy.
The typical Williamsburg hipster is essentially trying to portray the appearance of a Minnesotan. Don’t believe me?

Exhibit A: The Lumberjack Look

Click on the post to read about Exhibits B-J.

Los Angeles by bike

2011-05-10T11:51:00.002-05:00

I enjoyed this Marketplace Money follow up story about a bike commuter: Los Angeles by electric bike: An alternative, alternative commute

BOB MOON: Last weekend, we brought you a special broadcast of Marketplace Money all about you and your car, direct from the streets of Los Angeles.

At the top of the car show, we made sure to mention the show was not about alternatives to cars. But, that didn't stop you from writing in to remind us that there are other options to get around that are cheaper, more efficient, and better for the environment.

One of those comments came from our very own Senior Web Producer, Matt Berger. He downsized to a one-car family more than a year ago.

MATT BERGER: I ride my bike to work.

Well, sort of...

TESS VIGELAND: Um, that's not a real bike.

Ok, it's a bike with a motor on it. But it gives me some ooomph up the hills. And despite the office scorn, I have reasons for riding 15-miles every day from my home in South Pasadena to downtown Los Angeles. Yes - Los Angeles - where there are one-and-a-half cars for every person.

Weekend articles

2011-05-08T08:19:00.000-05:00

Here are my favorites in this weekend's New York Times:

A Little Less Suburban, Please
For Brooklyn Renters, Look but Don't Swim
Fears and Failure
The ID Theft Prevention Tool That Sony Isn't Using
Net Worth, Self-Worth and How We Look at Money
A Recovery Less Robust Than in the '70s
After Bust in Ireland, Ordinary People Make Do With Less
Buyer, Be Aware the Law Is On Your Side
Suburbia: What a Concept
Hop, Skip and Jump to Fitness
How to Beat High Airfares
And You Used to Think Hairballs Were Bad
If You Have the Answers, Tell Me
First Things First: Feed the Fish
Overqualified? Don't Be Overwrought

Landlording update

2011-05-07T07:06:00.002-05:00

We've made good progress this week with the investment property. Here's a breakdown of the projected cash flow:

+$1,915 Rental Income
-$1,536.21 Mortgage Payment
-$100 Water, Garbage, Recycling
=$278.79 Cash Flow

Since the mortgage payment listed above only includes interest on the HELOC, we'll apply any surplus we can to it. Once we get that paid off, our cash flow will increase $500 or so. We also have coin operated laundry in the basement that should generate some extra cash (including $60 that was already there after we closed!).

We decided to keep the long-term tenant's rent the same at $915, so we'll see if she signs a lease. If not we'll try to find a new tenant for $1,000. We priced the vacant unit at $1,000, and based on the huge response and number of completed applications we've received, I'd say we priced it too low. But I'd rather have my pick of qualified tenants at a lower price than be struggling to fill an overpriced unit. We're in the process of checking references and verifying employment for applicant #1 now, and if that doesn't work out we have three more applications to consider. DH is also continuing to show the apartment until the lease is signed.

Zillow values the house at about $199,000 and we paid $240,000. Considering the inspection was fantastic and the units are well-maintained and showing well, I think it was worth it. We looked at lots of other homes that cost less money per square foot, but then we'd have the inspection and get our contractor out there only to find out we'd have a major money pit on our hands. I don't have the energy or extra cash for that right now. The place is also just a couple of blocks from where we live, which is so convenient for showing the apartment.

Now I just need to start the spreadsheet to track all our costs so we can be ready to take tax deductions next year.

April Spending Report

2011-05-02T12:49:00.005-05:00

Alas, just one month after I celebrated paying off the credit card balance from when we had to replace our furnace, we ran it back up again. As I've mentioned, our tax bill was bigger than we expected this year because we didn't have any investment property to depreciate, and $5,000 didn't magically fall out of the sky in time for tax day.

As usual, DH and I both maxed out our 403(b) plans at work (DH contributed about $1,375 and I contributed about $1,400), and my employer added another $700 or so. I also contributed to a 457 retirement plan, adding $100 per paycheck.

April Income:

$3,019 My day job (net)
$3,936 DH's day job (net)
$20 Fitness reward
$150 Garage rental income

April Expenses:

$500 Credit card
$1,500 Investment property closing costs (instead of mortgage principal)
$1,190.40 Mortgage payment, taxes, insurance
$21.54 Netflix
$15.97 DH's life insurance
$181.43 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$200 Ally Savings
$105.87 HourCar
$2,454.91 Other (includes $2,191.91 in closing costs)
$90 DH's Bass stuff
$503.94 Groceries/toiletries
$94.35 Cats
$155.23 Restaurants
$40 Transportation (bikes, bus)
$200 March spending over

Total Income: $7,125
Total Expenses: $8,969.18

Over by $1,844.11. This was entirely due to closing costs for the investment property, which unfortunately turned out to be more expensive than we realized. We had negotiated so that the seller would pay closing costs but at the last minute the bank decided to cap the seller's contribution at 2%. That meant we had to bring more money to the table in exchange for a reduced sale price.

Other places where we splurged this month include buying cloth napkins on sale at Crate & Barrel Outlet ($1 each!) and buying theater and film fest tickets. We probably spend around $60 on shows this month. I also spent some money on a new fitness class and DH spent too much money on groceries (as usual). But our eating out spending wasn't too bad.

I still have $300 left sitting in my account that I had allocated for closing costs, but I'll probably end up sending that to the credit card or making an extra payment on the HELOC. So many balances to choose from!

May net worth report

2011-05-02T10:22:00.003-05:00

You may notice a big change in my May net worth, which increased about $13,000. No, it's not just that the stock market has been very kind lately -- we closed on the investment property! Deep breath about the huge "other" mortgage balance: this includes about $178k for the 30 year fixed mortgage and $60k for the home equity line of credit we tapped for the down payment. Our plan is to accelerate the home equity line payments so we pay this off over the next 2-3 years, then we'll have rental income coming in and can use the HELOC again if another investment property comes up.

Assets

Cash: $920

Investments: $2,887

Retirement: $227,801

Home: $175,750
Other Real Estate: $240,000

Personal Property: $4,000

Liabilities

Home Mortgage: $112,212
Other Mortgage: $238,162

Student Loans: $11,166

Total assets: $650,358

Total liabilities: $361,540

Net Worth: $289,818

Weekend articles

2011-05-01T12:40:00.002-05:00

Here are my favorites from this weekend's New York Times:

Making Sure a Plan for Long-Term Care Adds Up

Containing the Costs of Veterinary Care

A Reversal for Real Estate After Some Mild Gains

Internet Lets a Criminal Past Catch Up Quicker

In France, a Home Nestled in Nature

Financing a Vacation Home

A Pied-a-Terre for East Coast Sojourns

The Reconstituted Row House

Quality Time, Redefined

Law Students Lose the Grant Game as Schools Win
The Benefits of Telling the Ugly Truth
Needed: A Clearer Crystal Ball
The Aging of America, as Opportunity
A Castle for the King of Techno
The High Cost of Low Teacher Salaries

Why is car ownership considered mandatory?

2011-04-30T10:22:00.008-05:00

I was disappointed with this week's Marketplace Money report because it's all devoted to cars! I scanned the stories for ones that would ask the most relevant questions, like how much does car ownership really cost (I've seen averages of around $8,000/year) and what are the frugal alternatives (like biking, car sharing programs, and public transit), but instead the closest thing I saw was whether it was better to buy new or used vehicles. YAWN.

DH and I recently had the opportunity to buy a well-maintained used car from a friend for $1,000. We briefly considered it for the convenience, but once we started calculating insurance, gas, maintenance, etc., it wasn't that great a deal. I also worried that we'd gain weight, since we'd quickly get into the habit of just driving everywhere instead of walking and taking our bikes. No thanks.

And even when I'm tempted to think owning a car might make those cold, snowy days in Minnesota easier to bear, I remember the people I see who spend hours digging their cars out of snowbanks and the huge number of accidents on the roads. I'd rather take the bus.

Weekend articles

2011-04-24T06:50:00.004-05:00

Here are my favorites in this weekend's New York Times:

A Do-It-Yourself Rental in Hollywood
A Base Camp for Urban Exploration
Consider the Worst Case With Zipcar
Taking the Time to Pick the Right Financial Adviser
In a Data-Heavy Society, Being Defined by the Numbers
Builders of New Homes See No Sign of Recovery
In a Slow Economy, Rentals Zoom
Fallout From a Poor Credit Score
Her Decorators? Flotsam and Jetsam
Dog Massage? Isn't Petting Enough?
It's Love at First Kill
Poor Jane's Almanac
The Shifting Definition of Worker Loyalty
Beyond the Surge in Corporate Profits
Scenes From the Madoff Masquerade
For Many Chinese, New Wealth and a Fresh Face

Another instant win! Plus underemployment.

2011-04-22T10:20:00.008-05:00

Hey, I just won $50 on Opinion Outpost's instant win game AGAIN! I feel like those lottery winners who win two jackpots, except without the multi-millions. But hey, I'll take fifty bucks.

Usually I convert my survey points into an Amazon gift card and buy cat food, but this time I decided to request a check. My balance is over $107 at this point and I could put the cash to better use. The only downside is it could take 4-8 weeks to get the check, so there isn't that instant gratification.

In other news, here's an article from the Chicago Tribune I've been meaning to share: For many college grads, the old college try's not enough

Tiffany Groene is waiting tables.
Erin Crites is making lattes and iced coffees.
And Anna Holcombe is buying and selling gold.
These three Chicago women share more than just scraping by with low-paying jobs: They all have master's degrees and are unable to find work in their specialty areas.
There's even a name for their situation. They are referred to as mal-employed, a term coined in the '70s for college graduates who could not find jobs that require a degree. Instead, they settle for low-skilled jobs.

This is perhaps my biggest fear in this precarious economy -- that I'll lose my job and be unable to find comparable work/pay. It's really bad out there and there are no guarantees anymore, even with advanced degrees. And since I'll need health insurance until Medicare kicks in, I've got another 30 years to go in the workforce.

Unless perhaps I cash out and move to South America. I've been studying Spanish just in case.

Weekend articles

2011-04-17T07:00:00.000-05:00

Here's what I'm reading in this weekend's New York Times:

This Yellow Space for Rent
Too Young for Finance? Think Again
A Bunker Sets the Scene for Veterans to Exhibit Art
The Siren Song of a Fire Station
'Something New and Sparkly'
A Country Home, by a Modernist at Play
In the Shadow of 'What If'
Is Sugar Toxic?
The 3 Biggest Tax Breaks -- and What They Cost Us
How Little Sleep Can You Get Away With?
Is Sitting a Lethal Activity?
What's the Single Best Exercise?
Keep Your Thumbs Still While I'm Talking to You
The Sex Drive, Idling in Neutral
Hearts, and Lives, Out of Step
The Wall of Worry Has Never Looked So High

Real estate update and NY Times

2011-04-16T07:24:00.004-05:00

Sorry for being MIA this week -- it's been a bit hectic and work and in life. DH and I closed on a $60,000 home equity line of credit the other day that we're planning to use for a down payment on an investment property. We're in contract on a duplex and are supposed to close at the end of the month. The inspection went extremely well and the seller (an investor who's owned the property for years but is selling because it's not close to where he currently lives) has been willing to repair the problems that came up during the inspection, so I'm psyched to be moving forward.

We're paying $237,500 for the place and the seller is giving us 2% in seller's assistance. This is a little higher per square foot than other recent sales in the area, and it's certainly higher than some of the foreclosures we've looked at and bid on. However, the trade-off is that it's in excellent condition and won't be a money pit. I'd rather pay $237,500 for a smaller place that needs no work than $250,000 for a huge place that will require another $100k in repairs.

There are two units, one of which is vacant and the other has a long-term tenant paying about $915/month. That rent is probably under market -- I'd like to try getting about $950-$995 per unit. The rent roll will allow us to basically break even for now, and once we pay off the HELOC we'll net about $500/month. Our plan is to apply my extra mortgage principal payments to the HELOC and pay it off in 2-3 years.

I'm excited about the long-term cash flow potential and the tax breaks. Even if we're not making a lot of money every month, the tax incentives will be extremely helpful. As I mentioned before, this year was the first year we filed without any investment property write-offs, and we ended up owing about $4,000 instead of getting that much as a refund. So I know the tax savings are significant!

In other news, I haven't subscribed to the New York Times and I've reached my monthly limit several times. I've discovered that if I clear the history on my Web browser, the NY Times seems to reset itself and I'm able to view another 20 articles. We'll see how long that loophole lasts!

Weekend articles

2011-04-10T07:59:00.001-05:00

Here are my favorites from this weekend's New York Times:

Disabled, but Looking for Work
A Niche in the Wreckage of Florida Real Estate
Bargains on the First 4 Semesters
In South Delhi, a Home for Three Generations
Gallantry in Real Estate
A Cozy Studio in a Presentable Building
Avoiding Refinancing Costs After Divorce
Preserving the 'Gems' of The Gold Coast
A New Cottage in New Orleans With 'Katrina Patina'
The Upside of Foreclosure
Tina Fey and Me
Our Cowardly Congress
It's Not Mount Everest. It's My Workload.
Picking Stocks to Keep Ahead of Inflation
Jobless Rate Is Not the New Normal
The Drought Is Over (At Least for C.E.O.'s)
Enriching Executives, at the Expense of Many
It's Time For Your Face-Lift, Miss Piggy
Peter G. Peterson's Last Anti-Debt Crusade

More efficient than I thought

2011-04-09T07:41:00.002-05:00

I was surprised by the results of my household energy consumption on Energy STAR:

Energy STAR Home Energy Yardstick compares a household’s energy use to similar homes and gives it a score between 0 and 10 (10 being the most energy efficient). An average household scores a 5.

YOUR SCORE IS 8.7.

Annual pollution resulting from energy use in this household is 9 MtCO2eq of greenhouse gas emissions - the equivalent of 2 cars.

Who knew my giant house could be so energy efficient? The new energy efficient furnace probably helps, as do the energy efficient appliances we bought. And we never use the air conditioning. But we still have the original, non-insulated windows, so I just expected our score to be a lot lower.

To do your own assessment, go to Energy STAR's assess your home feature and be prepared with your household's monthly or annual electricity and fuel statements.

Weekend articles

2011-04-03T09:19:00.020-05:00

Here are my favorites from this weekend's New York Times:

Giving Strategically, When the Government Can't Help
College Plans You Thought Were Safe
Many Low-Wage Jobs Seen as Failing to Meet Basic Needs
For Some Phoenix Officials, Retirement Is Just a Pay Supplement
The Mellon Doctrine
In El Salvador, Design Thrives
A Queens Home Wallpapered With Memories
Arizona Transplants Survive Sticker Shock
Revisiting a House of Nooks and Crannies
It Only Looks Dangerous
Excuses, Excuses, Excuses
Why Gerry Ferraro Mattered
Gauging the Pain of the Middle Class
Why Red Flags Can Go Unnoticed
A Club for the Women Atop the Ladder
Line Dancing With the Markets
Don't Let Bureaucracy Ruin Your Day
Growth Industry

Here's what $1.2M will get you in Manhattan

2011-04-02T13:28:00.003-05:00

The Wall Street Journal presents the finale to their Brownstone Diary series: A Brownstone Remade in Harlem

Thirteen months ago, my husband and I embarked on a wildly ambitious program to buy and renovate a 100-year-old brownstone in Harlem that had fallen into disrepair.

For any couple, it would have been difficult to gut an old townhouse and rebuild it.

But for us, it was even more of a stretch. We are lifelong high-rise dwellers. We are renters who call the superintendent whenever anything breaks. We have dragged our grad-student Ikea furniture with us from apartment to apartment.

In short, we pour our creativity into our careers, rather than our home. Our friends and family cautioned us that we were not the type of people to embark on home renovation.
But we forged ahead, seduced by the relatively low price of the brownstone—$800,000, which is a steal in Manhattan—and our ability to get a low-interest rate loan that covered the construction costs as well.

Now, thirteen months later, we moved into our brownstone last week— and it's time to take stock. First, and most importantly, we were extremely lucky in picking a contractor. Our general contractor, Chris DiNapoli, was always available for us, worked quickly and was good to his word.

Even so, it took longer and cost more than we had estimated. We planned for the renovation to take 10 months; instead it took 13 months. And we planned to spend $350,000; instead we spent $420,000.

The carrying costs on that property -- even with low interest rates and a rental unit -- make my head spin. But I could relate to a lot of the renovation challenges and enjoyed the series.

March Spending Report

2011-04-01T13:57:00.006-05:00

This is the time of month where I am having a minor heart attack and cursing DH's name. I just got an e-mail from him with all his spending for March. #%&*@&(#@**!!!

Before I get to the details, I will try to focus on the positive: the credit card has been paid off. Woo hoo! Never mind that the debt is going to go right back up in two weeks when we face our $4,000+ tax bill. 2010 was the first year since 2005 that we filed our taxes without having investment property deductions, and boy does it hurt. Who knew investment properties made such a difference? We usually get a refund of what we owe this year. We both adjusted our tax withholding so our net income will be lower the rest of this year.

As usual, DH and I both maxed out our 403(b) plans at work (DH contributed about $1,375 and I contributed about $1,400), and my employer added another $700 or so. I also started contributing to a 457 retirement plan, adding $100 per paycheck.

March Income:

$2,972 My day job (net)
$3,936 DH's day job (net)
$20 Fitness reward
$150 Garage rental income
$11 Co-pay refund (the doctor was running 2.5 hours behind so I left. This was back in September and they just got around to refunding me.)
$1,050 Transferred from savings

March Expenses:

$474.79 Credit card (paid off!)
$2,000 Investment property down payment (instead of mortgage principal)
$1,190.40 Mortgage payment, taxes, insurance (our lower taxes are finally reflected)
$21.54 Netflix
$15.97 DH's life insurance
$198.25 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$800 Ally Savings
$83.96 HourCar
$1,022.28 Other
$116 DH's Bass stuff
$567.25 Groceries/toiletries
$51.12 Cats
$300.27 Restaurants
$138 Transportation (bikes, bus)

Total Income: $8,139
Total Expenses: $8,711.87

Over by $572.87. As usual, groceries and restaurants were insane (I am a vegan who eats bulk oatmeal, hummus, and soup almost every day -- how the heck are we spending so much, DH???).

The "other" category was also huge and includes the following:

$375 for an inspector for the prospective investment property
$50 for new bathroom lights
$35 for a continuing education class
$25 for a backyard tree
$50 for a Groupon for me
$50 or so for theater tickets on Goldstar
$350 for a 6-month membership to specialized gym classes. The usual cost is $90/month but I had a one-time 30% discount card, so I decided to pre-pay for 6 months. If I continue to like the classes, I'll regret not splurging for 12 months.
$50 for new workout clothes

So there you have it. It never seems like we're spending that much but then when I see it here in black and white, it's like holy crap. Is life just getting crazy expensive or is it me?

(Correction: DH didn't in fact spend $50 at the hardware store -- that was for the bathroom lights.)

April Net Worth

2011-04-01T09:52:00.002-05:00

My April Net Worth increased about $3,000:

Assets

Cash: $674

Investments: $2,705

Retirement: $217,720

Home: $175,750

Personal Property: $4,000

Liabilities

Home Mortgage: $112,501

Student Loans: $11,654

Total assets: $400,849

Total liabilities: $124,155

Net Worth: $276,694

I didn't make my usual extra payment to mortgage principal because DH and I are in contract on an investment property and I used the mortgage money (and some money from savings) for a down payment. Stay tuned for more details on that adventure!

Is your rewards card less rewarding?

2011-03-30T09:57:00.005-05:00

Has anyone else noticed reductions in benefits with rewards cards? I just logged in to my Wells Fargo credit card account and saw that I had 2,500 "points" ($1 of spending per point). I used to be able to get a $25 credit with this amount of points, or 1% back, but today I saw that I need to have 3,250 points instead.

The only benefit that would still give me 1% is if I have 25,000 points I can get $250.

I wonder if this changed for everyone or if I'm being penalized for making use of their car rental insurance coverage benefit. (Wells Fargo ended up paying about $800 to Enterprise a couple of months ago for damage they alleged I did.) May be time to shop for a better rewards card.

A new study about the super-rich

2011-03-29T08:46:00.004-05:00

Atlantic magazine offers this interesting preview of a new study from Boston College's Center on Wealth and Philanthropy: Secret Fears of the Super-Rich

The study is titled “The Joys and Dilemmas of Wealth,” but given that the joys tend to be self-evident, it focuses primarily on the dilemmas. The respondents turn out to be a generally dissatisfied lot, whose money has contributed to deep anxieties involving love, work, and family. Indeed, they are frequently dissatisfied even with their sizable fortunes. Most of them still do not consider themselves financially secure; for that, they say, they would require on average one-quarter more wealth than they currently possess. (Remember: this is a population with assets in the tens of millions of dollars and above.) One respondent, the heir to an enormous fortune, says that what matters most to him is his Christianity, and that his greatest aspiration is “to love the Lord, my family, and my friends.” He also reports that he wouldn’t feel financially secure until he had $1 billion in the bank.
Such complaints sound, on their face, preposterous. But just as the human body didn’t evolve to deal well with today’s easy access to abundant fat and sugars, and will crave an extra cheeseburger when it shouldn’t, the human mind, apparently, didn’t evolve to deal with excess money, and will desire more long after wealth has become a burden rather than a comfort. A vast body of psychological evidence shows that the pleasures of consumption wear off through time and depend heavily on one’s frame of reference. Most of us, for instance, occasionally spoil ourselves with outbursts of deliberate and perhaps excessive consumption: a fancy spa treatment, dinner at an expensive restaurant, a shopping spree. In the case of the very wealthy, such forms of consumption can become so commonplace as to lose all psychological benefit: constant luxury is, in a sense, no luxury at all.

Taken together, the survey responses make a compelling case that being fantastically wealthy—especially when the wealth is inherited rather than earned—is not a great deal more fulfilling than being merely prosperous. Among other woes, the survey respondents report feeling that they have lost the right to complain about anything, for fear of sounding—or being—ungrateful. Those with children worry that their children will become trust-fund brats if their inheritances are too large—or will be forever resentful if those inheritances (or parts of them) are instead bequeathed to charity. The respondents also confide that they feel their outside relationships have been altered by, and have in some cases become contingent on, their wealth. “Very few people know the level of my wealth, and if they did, in most cases I believe it would change our relationship,” writes one respondent. Another notes, “I start to wonder how many people we know would cut us off if they didn’t think they could get something from us.” Robert A. Kenny, who has trained as a psychologist and is one of the survey’s architects, says that extreme wealth can take away some of the basic joys of living—for instance, that some wealthy people don’t look forward to the holidays, “because they were always expected to give really good presents.” When you’re a millionaire, Kenny says, expensive gifts merely meet expectations. That was a pretty good present, the recipients might respond. But last year, you gave me a car.

Other people “glorify wealth and think that it means that the wealthy are smarter, wiser, more ‘blessed’ or some other such crock,” explains one survey respondent. “I feel extremely lucky, but it’s hard to get other, non-wealthy people to believe it’s not more significant than that … The novelty of money has worn off.”

Are you on track to become a millionaire?

2011-03-28T08:57:00.005-05:00

Here's a helpful article in Money magazine: How to become a millionaire in 3 easy steps

The single most important thing you need to know about building wealth: You're far better off being a dogged saver who's a mediocre investor than being a below-average saver who can knock the socks off the S&P 500.
"It's sort of like exercising," says Stuart Ritter, a financial planner with T. Rowe Price. 'You can devise the most optimal splits between cardio and weight training. But if you only go to the gym for six minutes, it won't really help you that much."
Let's say you have 20 years to invest and $250,000 already amassed. You can see from the table at right that boosting your annual savings from a modest $5,000 to an aggressive $20,000 could increase your chances of hitting $1 million in today's dollars -- $1.8 million nominally in 2031 -- from 31% to 67%, assuming a 60% stock/40% bond portfolio. If instead you kept your savings rate the same but upped your stock allocation to 80%, your chances of success would be less than fifty-fifty.
Savings may be the safer bet, but it's often the tougher task. Here are four ways to crank up the amount you're banking per year, in ascending order of difficulty.

My back of the napkin goal is to save $3M, which adjusted for inflation will probably be worth half its current value in 30 years. Assuming I withdraw about 4% in retirement, my money should last my lifetime and will allow income of $120k per year (or about $60k in future dollars). That, combined with social security and some rental property income, should be enough to support my frugal lifestyle.

DH and I are on track to reach that goal by about age 52, according to some online calculators and assuming an 8% return. For now, my short-term goal is to just keep saving as much as I can as early as I can.

Weekend articles

2011-03-27T10:22:00.006-05:00

Here are my favorites in this weekend's New York Times:

A Short Hop to Tax Savings
Apartment 10E, 'as in Effervescent'
A Renter Trims His Sails
Prices Say It's Time to Think Studios
If Taxes Are Done, Consider a Financial Tuneup
When Rockport Was My Own
American Rustic
A Housing Market Cycle Different From Others
Plane Tickets: Buy Early or Wait?
Online Poker's Big Winner
Revenge of the Friend
Bad News For Rent-Stabilized Tenants Paying Under $1,000
Smile When You Call Her Diva
Losing Our Way
G.E.'s Strategies Let It Avoid Taxes Altogether
A Bounce Isn't Enough to Recover From a Bubble
It's 2026, and the Debt Is Due
In Prison for Taking a Liar Loan
We Were Kittens Once, and Young

Marketplace Money series

2011-03-26T08:17:00.002-05:00

Here's the Marketplace Money weekend report for Friday, March 25 to follow up on the New York Times money series. It includes more details about the people they picked to address money issues in each decade.

Listen to the show

In this show. . .

To take or not to take on college debt?

We're starting our series on life through a financial lens at our teens. Tess Vigeland talks to the New York Times's Ron Lieber about a teenager who's trying to balance financial responsibility and college debt.

The financial lives of the 'Boomerang Generation'

Tess Vigeland visits one 20-something who's living with her parents, loaded with debt and facing slim job prospects.

Waking up to financial realities in your 30s

Tess Vigeland talks to the New York Times' Paul Sullivan about the new set of financial responsibilities people in their thirties face.

The financial challenges gay couples face

The New York Times' Tara Siegel Bernard discusses the financial and legal issues gay couples face through the example of Amanda and Kay Shelton, a lesbian couple living in Michigan.

The financially fabulous 40s

Commentator J.D. Roth talks about why he's feeling optimistic and financially secure about his future.

A big money decision before retirement

Most people want to kick back and relax in their 60s, but Tess Vigeland and the New York Times' Tara Siegel Bernard about one couple who are considering investing in and running a motel, instead of retiring.

Looking to the financial future in your 50s

Personal finance journalist Carmen Wong Ulrich discusses planning your financial future in your 50s using the example of Marina Sturm, a professor and musician who is looking to organize her finances.

What to do when you haven't saved enough for your 70s

The 70s are often when people are sitting back and enjoying the fruits of decades of labor. But many older Americans haven't saved enough for their golden years and are barely clinging on.

Financial planning to live 'til 95 and beyond

Financial planner Denby Brandon discusses money issues for people in their 80s and how to plan for your retirement.

NY Times special Money section

2011-03-24T13:29:00.005-05:00

Talk about money porn -- the New York Times has a whole section dedicated to money: Money Through the Ages. Good thing it came out before they start charging for subscriptions.

A guide to the financial challenges and goals at different ages, from late teens to the retirement years.

For each stage of life, this section provides a look at how individual Americans are coping with their own circumstances, and offers the counsel of contemporaries who are financial advisers and have been through similar experiences.

The articles and audio interviews are a collaboration between the Your Money staff of The New York Times and Marketplace Money, from American Public Media.

And for your own planning, an interactive checklist helps navigate the ways you can prepare and secure your financial future.

Weekend articles

2011-03-20T07:03:00.000-05:00

Here are my favorites from this weekend's New York Times:

Is Groupon Ruining Retailing?
More Borrowers Are Opting for Adjustable-Rate Mortgages
Towers Built for the Poor Hear the Call of the Condo
Lively Neighborhood Essential
Taking on the Ubiquitous Colonial
Lair and Sanctuary in the South Bronx
The Last Townie
New Health Plans for People With Pre-Existing Conditions
Escape From New York
A Shift in the Balance of Debt Obligations
As Remodeling Rebounds, Caveats for the Homeowner
Culture as an Economic Engine
The Suburbanization of Mike Tyson
Washington vs. the Merciless
Share the Risk and Share the Harvest

Renovation chronicles aplenty

2011-03-19T11:55:00.006-05:00

The Wall Street Journal has another Brownstone Diary update and they're almost ready to move in: Efficient Boiler -- Be Gone!

Our contractor was at the end of his rope. He hadn't been paid in two months because the failed inspection. He gets paid by the bank, which holds our mortgage and renovation costs, and the bank only pays when work is complete.

He had been paying his workers out of his own pocket for two months — and he couldn't afford to continue. He still had to build some doors and walls in the basement around the boiler to prepare for the inspection, and he was saying he couldn't do it without some cash.

Vijay decided that we needed to tide the contractor over until the next bank payment. After all, our contractor had been good to us. The vast majority of our problems with the renovation had been related to inspections.
"Can you get $30,000 in the next two days?" Vijay asked me.

"Um, not really," I said, beginning to hyperventilate. A few hours later, after I calmed down, I realized I had a few options. I sold a bit of stock that I had forgotten I had. And I called all my credit cards, my bank and my parents to see what I could get. It turned out that borrowing against my 401(k) was the best way to get quick money, because it was a low-interest loan and the repayments could be automatically deducted from my paychecks.

And so, I raided my retirement fund and our contractor stayed on the job. I tried not to mention this to my colleagues at the Wall Street Journal, many of whom spend their time advising against this kind of financial misbehavior.

If it was the contractor's fault they hadn't passed the inspection because he didn't vent the boiler properly, I would have made him wait to get paid until he passed. And I probably would have made him fix the venting so we could keep the energy efficient boiler, at his expense. Part of why you pay a contractor is for their expertise to know how to do a job correctly.

The Wall Street Journal also launched another renovation series following a woman's renovation of a rowhouse in Jackson Heights, Queens: Rowhouse Rehab: Part 1

We welcomed the home’s state because it made it more affordable. We paid $670,000 for a four bedroom with 2½ baths, a garage and a little yard—five blocks from the subway. We also saw an opportunity to preserve, restore and salvage a piece of a neighborhood we love. Among my immigrant father’s first homes in the U.S.—not counting the YMCA on the Upper West Side where he first stayed in 1971—is 13 blocks from our new house. Sometimes, I suspect my decision to settle in Jackson Heights puzzles him, since he worked so hard to get out and buy a house in the suburbs.

For the next few weeks, I’ll be chronicling our quest to rehabilitate our rowhouse. Wall Street Journal readers might see some similarities with my colleague Julia Angwin’s Brownstone Diary, but we’re not quite as ambitious as she. Our goal is to move into the home within the next two weeks, then do what we can while we’re in it.
Friends warn me this will be a lifelong endeavor. But my husband and I have always preferred houses with some history in them (this is our fifth, and maybe last, transaction). I suspect it’s a rejection of my New Jersey McMansion rearing.

Another monthly bill...

2011-03-18T08:47:00.004-05:00

The day I was hoping would never come has come. The New York Times is going to start charging for their online access if you want to read more than 20 articles per month. They announced details here; basically it's going to start costing $15 every four weeks. This SUCKS.

I don't want another monthly bill. But the NY Times, much as it annoys me at times, is my primary source of information. It would be painful to give it up.

But what if this sets a whole new precedent and other papers start charging, too? Another $15 to read the Wall Street Journal, $15 for the LA Times, $10 for the Star Tribune...where will it end? I jump around to so many different online news sources and I take the free access for granted.

Supposedly you'll be able to access an unlimited number of NY Times articles from blogs and other referral sources, so if I continued to publish my weekend articles you wouldn't have trouble accessing them without a subscription. Someone needs to develop a copycat Times blog so that ALL their articles will be accessible to cheapskates like me who don't want to pay.

What do you think? Would you suck it up and pay for the subscription?

Like 'em or not, unions do help the middle class

2011-03-16T16:09:00.008-05:00

I thought this article in Mother Jones did a good job summarizing the Wisconsin mess: Plutocracy Now: What Wisconsin Is Really About

The first is this: Income inequality has grown dramatically since the mid-'70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.
Second, American politicians don't care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early '90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that's not a surprise. He also found that Republicans don't respond at all to the desires of voters with modest incomes. Maybe that's not a surprise, either. But this should be: Bartels found that Democratic senators don't respond to the desires of these voters, either. At all.

It doesn't take a multivariate correlation to conclude that these two things are tightly related: If politicians care almost exclusively about the concerns of the rich, it makes sense that over the past decades they've enacted policies that have ended up benefiting the rich. And if you're not rich yourself, this is a problem. First and foremost, it's an economic problem because it's siphoned vast sums of money from the pockets of most Americans into those of the ultrawealthy. At the same time, relentless concentration of wealth and power among the rich is deeply corrosive in a democracy, and this makes it a profoundly political problem as well.

How did we get here? In the past, after all, liberal politicians did make it their business to advocate for the working and middle classes, and they worked that advocacy through the Democratic Party. But they largely stopped doing this in the '70s, leaving the interests of corporations and the wealthy nearly unopposed. The story of how this happened is the key to understanding why the Obama era lasted less than two years.

And here's an account in the New York Times of how an Ohio labor bill will impact the middle class: Ohio Town Sees Public Job as Only Route to Middle Class

Back to basics to pay off debt

2011-03-13T18:21:00.000-05:00

Here's a helpful story in the Star Tribune about how one couple used some PF basics to pay off their consumer debt: A debt-reduction strategy

Melissa and Zach Floyd came home from their Italian honeymoon with more than lifelong memories. They had $14,350 of debt between them, a combination of overspending and wedding expenses.

Both brought credit card debt into the marriage, but that's where the financial similarities end. Zach is a planner, who always makes sure to pay his bills on time. He may be the only 35-year-old who uses a checkbook register to keep track of his purchases on a daily basis.

Melissa's money personality is to buy first, pay later. She describes herself as a "pay-it-on-the-third-notice-kind-of-person" and once had the credit score to prove it.

So how did the St. Louis Park couple overcome their different money personalities and pay down their debt?

Weekend articles

2011-03-12T17:58:00.001-06:00

Here's what I'm reading in this weekend's New York Times:

A Red Flag On Reverse Mortgages
U.S. Inquiry of Military Family Foreclosures
It's Just Fine to Make Mistakes
When to Buy or Sell? Don't Trust Your Instincts
Dumbing Deficits Down
A Glow in the Desert
More Loan-Modification Options for the 'Underwater'
New Worries for Buyers Seeking Mortgages
Happenstance House
A Shorter Commute to the Office
Is There a Right Way to Spend Money When Traveling?
A Brutally Candid Oral History of Breaking Up
The Problem With Pointing Fingers
Give Up Familiar Light Bulbs? Not Without Fight, Some Say
A Changed Starbucks. A Changed C.E.O.

Talk about a missed opportunity...

2011-03-11T18:32:00.003-06:00

Wow, this post on Unpluggd is enough to make me cry: If You Purchased Apple Stock Instead of Apple Products

Apple stock is currently at $350 a share, which is 40 times more than what one share was worth only 7 years ago. If you’ve purchased a few Apple products over the years, you could have made quite a bit of cash had you spent your money on Apple stock instead. For example, if you bought a Power Macintosh G4 in 2000 ($1,699) and instead had put that money toward Apple stock, your stock today would be valued at $53,505.

Maybe I need to start buying individual stocks. Speaking of missed opportunities, Laura Rowley's latest Yahoo column is all about using opportunity costs to your advantage: Understanding Opportunity Costs Can Make You Rich

Good news at work and with the mortgage

2011-03-10T17:42:00.003-06:00

I have good news on two fronts. The first is that supposedly I'm going to be getting a 3% raise at work, which will increase my biweekly paychecks by about $80. It's not as much money as I dreamed it would be (I was thinking 5-8% would be more appropriate considering how much I have to work my ass off), but in this economy I won't complain. I should increase my retirement savings because although I max out the 403(b) option, I also have a 457 option I can contribute up to $16,500/year to that I'm nowhere near maxing out yet.

The other good news is that our property tax reduction finally went through for this calendar year, so our monthly mortgage payment will be reduced from $1,337 to $1,190. There's something so nice about the payment landing under the 1,200 mark, isn't there? (Factoring in the $180/month we make from renting out our parking spaces, our total monthly payment is just over $1,000!) We'll also be getting a check for the over-payments we made the past two months.

Given all the forecasts about increase fuel and food costs, it will be great to have some extra income and lower housing costs.

Suze Orman on PBS tonight

2011-03-08T17:19:00.004-06:00

Suze Orman has a new show airing tonight on PBS: Suze Orman's Money Class

In SUZE ORMAN’S MONEY CLASS, financial powerhouse Suze Orman delivers her expert take on what actions everyone needs to consider to secure a hopeful and sustainable financial future in light of the new economic reality. After the upheavals of the economic downturn that began in 2008, Orman believes it’s critical to rethink many of the traditional strategies we’ve been using to achieve our financial goals. SUZE ORMAN’S MONEY CLASS premieres Tuesday, March 8, 2011, 7:00-9:00 p.m. ET (check local listings) on PBS.

In this special, Orman offers hard-hitting advice in her trademark no-nonsense style on how to navigate today’s unsettling economic waters. The core of her message is an inspirational re-imagining of the American Dream — based on integrity and standing in your truth.

Throughout this financial master class, Orman equips viewers with timely, powerful and often surprising advice for getting a grip on the most important financial fundamentals: understanding the opportunities and pitfalls of the real estate market, raising financially aware children, borrowing for college and paying off student loans, building a career, saving and investing, planning for retirement and more.

This was taped in Minneapolis a couple of months ago -- I can't believe I missed it!

Weekend articles

2011-03-06T07:58:00.000-06:00

Here are my favorites from this weekend's New York Times:

Rich in History and Colorful Designs
One Secret to Clocking Out May Be a Moving Van
Remodeling Now to Avoid Accessibility Problems Later
A Planning Aid, but Not a Road Map
Go Play Golf, but Monitor Your Portfolio Too
Shifting Strategies for Target-Date Funds
Choosing the Right Executor for Your Estate
Answers to Retirement Questions
Making the Most Out of Less
Adding to Income by Caring for Pets That Aren't Yours
A Move Dictated by Miscellany
Oh, the Dinners She Has Known
In Pro Athletes' Finances, a Defensive Line Pays
Broke Town, U.S.A.
The Billionaire Who Is Planning His 125th Birthday
For City's Transportation Chief, Kudos and Criticism
U.S.Gets a Lesson From Developing Countries on Buses
It's Time to Face the Fiscal Illusion

A poorer forecast for the west

2011-03-04T14:46:00.003-06:00

Here's a frightening article from the Guardian: The awful truth: education won't stop the west getting poorer

Western Europeans and Americans are about to suffer a profound shock. For the past 30 years governments have explained that, while they can no longer protect jobs through traditional forms of state intervention such as subsidies and tariffs, they can expand and reform education to maximise opportunity. If enough people buckle down to acquiring higher-level skills and qualifications, Europeans and Americans will continue to enjoy rising living standards. If they work hard enough, each generation can still do better than its parents. All that is required is to bring schools up to scratch and persuade universities to teach "marketable" skills. That is the thinking behind Michael Gove's policies and those of all his recent predecessors as education secretary.
But the financial meltdown of 2008 and the subsequent squeeze on incomes is slowly revealing an awful truth. As figures out last week from the Office for National Statistics show, real UK wages have not risen since 2005, the longest sustained freeze in living standards since the 1920s. While it has not hit the elite in banking, the freeze affects most of the middle class as much as the working class. This is not a blip, nor the result of educational shortcomings. In the US, which introduced mass higher education long before Britain, the average graduate's purchasing power has barely risen in 30 years. Just as education failed to deliver social democratic promises of social equality and mobility, so it will fail to deliver neoliberal promises of universal opportunity for betterment.
"Knowledge work", supposedly the west's salvation, is now being exported like manual work. A global mass market in unskilled labour is being quickly succeeded by a market in middle-class work, particularly for industries, such as electronics, in which so much hope of employment opportunities and high wages was invested. As supply increases, employers inevitably go to the cheapest source. A chip designer in India costs 10 times less than a US one. The neoliberals forgot to read (or re-read) Marx. "As capital accumulates the situation of the worker, be his payment high or low, must grow worse."

I bought my first Groupon!

2011-03-03T16:46:00.003-06:00

I signed up for daily Groupon e-mails a while back and finally nabbed my first deal. Here's what I got for $49:

-One month gym membership at a club downtown
-A 30-45 minute fitness consultation with the gym's owner
-Four sixty-minute small group personal training sessions
-One week of unlimited spin classes

Supposedly the retail value of the above is $265. I'll probably start the month over the summer when biking downtown won't be an issue.

I was motivated to buy the above package after my current gym pissed me off enough times. I paid $55 for a 3-month pass to classes, but the past month alone I've had two yoga classes canceled (including one where the teacher just didn't show up), two yoga classes replaced with a pilates sub, and one yoga class that was interrupted by volleyball teams who were playing in a tournament in the room next door. The players kept going in and out of our room during the yoga class, and several team members talked so loudly right next to where we were trying to practice yoga that our teacher finally just ended class early. I don't think I'll be buying a 3-month pass again. You get what you pay for, right?

February Spending Report

2011-03-01T17:00:00.008-06:00

I wasn't as disciplined with the February spending as I would have liked (for example, I swore we were going to be on a restaurant moratorium yet we still managed to spend nearly $300 eating out). DH and I both maxed out our 403(b) plans at work (DH contributed about $1,375 and I contributed about $1,400), and my employer added another $700 or so.

February Income:

$3,159 My day job (net)
$4,058 DH's day job (net)
$20 Fitness reward
$150 Garage rental income

February Expenses:

$1,00 Credit card
$1,500 Extra payment to mortgage principal
$1,337 Mortgage payment, taxes, insurance
$21.54 Netflix
$15.97 DH's life insurance
$198 Utilities
$500 My student loan
$278.22 DH's student loan
$416.66 My Roth IRA
$416.66 DH's Roth IRA
$20 Tree House charity
$100 Vanguard STAR Fund
$400 Ally Savings
$13 HourCar
$548.25 Other
$160 DH's Bass stuff
$232.07 Groceries/toiletries
$84.75 Cats
$293.28 Restaurants
$107.78 Cell phone minutes
$70 Public Transportation

Total Income: $7,387
Total Expenses: $7,713.68

Over by $326.68. DH has one more $500 payment left to the credit card and then we can focus on saving $4,200 to pay our tax bill and another $7,000 to fix our chimney. Woo hoo!

Our "other" category is high as usual, partly because of a weekend trip we took up north, a couple of theater excursions, and two pairs of winter boots we got on sale for $65 each. But the fact that we only spent $232 on groceries proves to me that we've been spending way too much in past months. DH managed to go to Trader Joe's and only spend $39 (instead of the $150+ he usually spends), so we had that receipt on the fridge for a while as a reminder that it can be done.

March Net Worth

2011-03-01T11:23:00.003-06:00

My March Net Worth did very well, increasing by more than $11,000. I could get used to a stock market that keeps going up! Famous last words...

Assets

Cash: $1,524

Investments: $2,604

Retirement: $214,489

Home: $175,750

Personal Property: $4,000

Liabilities

Home Mortgage: $112,790

Student Loans: $12,142

Total assets: $398,367

Total liabilities: $124,932

Net Worth: $273,435

Weekend articles

2011-02-27T09:21:00.000-06:00

Here are my favorites from this weekend's New York Times:

Tax Breaks to Take Before They Are Gone
Consumers Hold On to Products Longer
Much Debate, Mixed Answers on State Workers' Pay
Tracking Down and Collecting Unclaimed Life Insurance
In Columbus, Conflicted Emotions on Unions
Bed-and-Breakfast Inns Being Sold as Vacation Homes
'Just Looking' Changes Her Tune
The Almost Landless Gardener
The Man at the Center of a Dispute at the Dakota
Shock Doctrine, U.S.A.
Queen of the Mommy Bloggers
Fact-Free Science
In Buenos Aires, Light and Luster
Empty Rooms, No Regrets
Indiana Informs Wisconsin's Push
Paying for Old Age
The Man Who Won't Be King
Waiting Seven Years for Two Answers
Suddenly, Emerging Markets Look Complicated Again
The Debate That's Muting the Fed's Response
The War on Women

Money's role in marriage stability

2011-02-24T19:25:00.003-06:00

I enjoyed the subject of Laura Rowley's latest Yahoo column: The Business of Staying Married

Meanwhile, a study on debt found that sinking into the red — whether it's due to economic stress or a lavish lifestyle — hurts a marriage no matter how much income the couple earns. The study found that all married couples reported a decline in happiness over time. But those who registered the smallest drop in satisfaction were couples who started with no debt and stayed debt-free. Couples who suffered the biggest decline in satisfaction were those who started the marriage with no debt and fell at least $5,000 in the red.
Perceptions of how well one's spouse handles money also play a key role in shaping the quality and stability of marriage. In one study, participants who felt their spouses spent money foolishly had increased the likelihood of divorce of by percent for both men and women. Only extramarital affairs and alcohol/drug abuse were stronger predictors of splitting up.
Jenny Anderson, co-author of the new book "Spousonomics," argues that couples can improve their chances of staying together by applying principles of economics to their marriage. "There is plenty about love that is completely irrational but there is also a business of marriage," says Anderson. "You get married on love and hope and aspiration, and suddenly you have to be more rational and calculating about how to make it work. The more you can strip away the simmering resentment the better you can get to the solution. We're trying to frame the understanding of relationships through a slightly different lens."

"Luke. Bring Down This Imperial Walker" (a protest sign)

2011-02-21T10:14:00.006-06:00

This editorial by Paul Krugman in the New York Times summarizes the debacle in Wisconsin -- and its potentially horrific consequences for most of us -- nicely: Wisconsin Power Play

For what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.

Some background: Wisconsin is indeed facing a budget crunch, although its difficulties are less severe than those facing many other states. Revenue has fallen in the face of a weak economy, while stimulus funds, which helped close the gap in 2009 and 2010, have faded away.
In this situation, it makes sense to call for shared sacrifice, including monetary concessions from state workers. And union leaders have signaled that they are, in fact, willing to make such concessions.

But Mr. Walker isn’t interested in making a deal. Partly that’s because he doesn’t want to share the sacrifice: even as he proclaims that Wisconsin faces a terrible fiscal crisis, he has been pushing through tax cuts that make the deficit worse. Mainly, however, he has made it clear that rather than bargaining with workers, he wants to end workers’ ability to bargain.

The bill that has inspired the demonstrations would strip away collective bargaining rights for many of the state’s workers, in effect busting public-employee unions. Tellingly, some workers — namely, those who tend to be Republican-leaning — are exempted from the ban; it’s as if Mr. Walker were flaunting the political nature of his actions.

Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes.

So it’s not about the budget; it’s about the power.
In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.
Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.
You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions.
And now Mr. Walker and his backers are trying to get rid of public-sector unions, too.
There’s a bitter irony here. The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence.

It's hard not to feel total despair at the state of things in this country. At least people are protesting.

Weekend articles

2011-02-20T09:16:00.000-06:00

Here are my favorites from this weekend's New York Times:

Warm Nights, Cold Noses
His Real Estate Agent? Craigslist
Healing a Wounded Credit Score
Many Americans See the Economy Improving, but Not for Them
Protecting a Reputation Is Tougher in a Viral World
Why Does College Cost So Much?
A Health Insurance Insider Offers Words of Advice
A Renovator Gets a Taste of Compromise
New Fed Rule for Mortgage Brokers
Pets Help Sell Manhattan Apartments
Independent Scholars: A Nomadic Lot
Writing 'Danger' In Ever-Larger Letters
Find the Taxes That Do Double Duty
A Home for Two Households
Space for Spices, Gadgets and Guests

More evidence to keep saving for retirement

2011-02-19T08:03:00.004-06:00

The Wall Street Journal has this article about the DIY retirement approach: Retiring Boomers Find 401(k) Plans Fall Short

The 401(k) generation is beginning to retire, and it isn't a pretty sight.

The retirement savings plans that many baby boomers thought would see them through old age are falling short in many cases.

The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse.

This analysis uses estimates of 401(k) balances from the end of 2010 and of salaries from 2009. It assumes people need 85% of their working income after they retire in order to maintain their standard of living, a common yardstick.

Facing shortfalls, many people are postponing retirement, moving to cheaper housing, buying less-expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined.

Bye, bye middle class

2011-02-16T19:39:00.001-06:00

Here's a depressing but not surprising article from CNN/Money: How the middle class became the underclass

In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.
Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.
But there's more to the story.
A real drag on the middle class
One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University.
Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said.
But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
"The erosion of collective bargaining is a key factor to explain why low-wage workers and middle income workers have seen their wages not stay up with inflation," Rodgers said.
Without collective bargaining pushing up wages, especially for blue-collar work -- average incomes have stagnated.

Public employee scapegoats (as the rich stay rich)

2011-02-14T12:03:00.008-06:00

The Star Tribune has an interesting article about the continued attack on public workers: Public pay, benefits set off new 'civil war'

Government workers say they are sick of being demonized at dinner parties and on the stump, where they are reviled as lazy and inferior. They also resent the criticism for hard-fought union contracts they say are tough, but fair.

Mike Buesing, 62, said the rancor has reached a crescendo. A skilled highway construction planner, Buesing has put in 38 years at the state Department of Transportation. He owns a modest townhouse in Shoreview with a mortgage and makes $54,000 annually. When he retires later this year, he'll take in about $3,000 monthly from his pension.

"I am not living high off the hog," Buesing said. "It's a struggle, paycheck to paycheck. People think I am making a lot more money than I am. When I tell them, they usually are surprised."

Union leaders note that employees like Buesing are on the high end. State retiree pensions average a modest $13,000 a year.

Eliot Seide, president of AFSCME Council 5, said that such pensions are a testament to the union belief that middle-class workers should be able to enjoy retirement "with dignity."

$13,000/year isn't a lot of money. Let's compare that to the banker bonuses discussed in this New York Times editorial, Bankers and Their Bonuses

Bankers are done with contrition. Lloyd Blankfein, chief executive of Goldman Sachs, paid himself a $12.6 million stock bonus for 2010, 40 percent more than in 2009, despite plummeting profits. Brian Moynihan of Bank of America got $9 million in restricted stock despite the bank’s $2.2 billion loss.

An analysis by The Wall Street Journal found that pay and benefits at the top 25 publicly traded banks and security firms on Wall Street hit a record of $135.5 billion.
This return of outsize self-remuneration suggests more needs to be done to tame bankers’ appetite for high-risk financial strategies that shower them with profit in good times and leave the taxpayers holding the bag when their bets go bad.

How many average pensions would Goldman Sachs' CEO's $12.6 million stock bonus fund? 969.

Weekend articles

2011-02-13T08:42:00.000-06:00

Here's what I'm reading in this weekend's New York Times:

A Move in the Direction of 'More Life'
Losing Patience With the Open House
Calculating the Annual Percentage Rate
The Accordion Apartment in NoHo
When Love Outgrows Gifts on Valentine's Day
Some Remedies for the Pain When Couples Talk Money
Tiptoeing Out of One's Comfort Zone (and of Course, Back In)
Adam Smith, Marriage Counselor
Dispute Sheds Light on How Homes Are Measured
A Feng Shui Cube Brings Intimacy to a Loft
Speck by Speck, Dust Piles Up
How Rising Rates Could Choke the Rally
When Factories Vanish, So Can Innovators
Imagining Life Without Fannie and Freddie