Tired but happy

New house spending

2009-08-24T12:05:00.003-04:00

When we bought our first house, I was shocked at all the things I found myself buying. Our landlord had provided us with a garbage can at our old apartment, but now trash day was coming up and we had no can. Our old tomato-red towels looked terrible against the light yellow tile in the new bathroom. We had 1700 square feet of hardwood floors, and only a few small area rugs. We had so many more windows, and only a few pre-fab curtains that didn't fit anywhere.

But for some reason, I thought with our second house, this wouldn't happen. We already had everything, and the new house is only 500 square feet bigger than the old. Except I forgot to account for my own urge to buy my dream furnishings now that I'm in my dream house.

I am trying to keep myself in check. I really am. But there is so much I want, and so much I need, for the new house. And I'm not always sure whether something is a want or a need.

Example:
I've spent about $200 on perennials, edging material, and tools for the new yard. Of course that's a want. But when I talked my spouse into agreeing to move, and doubled our monthly mortgage payments, all because I wanted a yard big enough for a vegetable garden, it seems silly not to get the stuff I need to start the garden, right?

And now we have two bathrooms. The old towels look fine in either bathroom, but we all tend to use both bathrooms. It sucks to get in the shower and realize my towel is upstairs in the other bathroom. So I bought a second set of towels.

And the furniture! In most cases, the old stuff is just fine. But in some places we have nothing that will fit. And now that I have a beautiful new dining room with high ceilings, I am tired of that old flimsy hollow-core Ikea dining table. It cost us $80 almost 8 years ago. I want grown-up furniture. And our bed is still just a mattress and box spring resting on the floor--the newly refinished 100-year-old pine floor that is getting scratched by the staples in the bottom of the box spring. I want/need a real bed frame.

All this is adding up to a lot of money. So far, we have only spent a few hundred dollars on new stuff for the house, but we're up late at night shopping for furniture online, and we've made scouting trips to Ikea and to a place that sells imported antique furniture from Asia. We're getting close to pulling the trigger on a $1000 dining room table.

How much is a reasonable amount to spend to furnish our new house? I really have no idea. I just know that this time I don't want to buy anything that is just "good enough for now." I'd rather wait until I can get what I'm going to want for the long haul, even if it means I have to sleep on the floor a little bit longer.

The recession hits my family

2009-06-26T09:07:00.003-04:00

Not my tiny three-person family, not the family I have to feed and clothe. We're still fine. My spouse still has his job. I still have my three jobs.

It's the rest of my family that's hurting.

One relative owns her own business. Thankfully, it seems to be pretty recession-proof, because the services she offers can save people money. So her income is okay. But she has an albatross of a house she can't sell, and that's having a really big impact on her life. She's having some health problems, and the house takes a lot of work to maintain, especially to keep it pristine for the few potential buyers who come to see it. She is also hoping to relocate to a less expensive area, but she can't do that til her house sells.

Another relative is a salesman. His income is commission-based, and he has had no commissions so far in 2009. Zero. Meanwhile, his company pays him a salary based on expected future commissions, so he's essentially going into debt to his company every month as they pay him for commissions he has not yet earned. He has worked for the company for decades, and this is the first time he has ever been behind like this. He has suffered some big investment losses, and is also living in an expensive area, trapped in a too-big house.

A third relative, also in sales, has just been fired. Although he's been in the job for many years, and had several years in there where he's helped triple the company's sales in one year, the recession has taken such a big bite out of revenue that the sales organization needed a fall guy. That's him. He's got a kid in private college, and another one approaching college age. Fortunately he's got another job lined up, but it's a temporary position.

And then there are the friends, the one who was laid off and is the sole earner for a family of four. There is the friend who took a much lower-paying job he hates rather than stay unemployed. There are the stay-at-home mothers who are going back to work much earlier than they hoped, or at least looking in vain for jobs. And in my area there are a lot of families pulling kids out of private schools because of money, or sending the youngest kids to public school while the older ones stay in their private prep schools.

I know all signs point to the end of the recession being closer, but it seems to be hitting my friends and family more and more all the time.

Anybody else noticing this? I feel very lucky not to be directly effected, but this is very hard to watch.

House sale update

2009-06-08T11:11:00.003-04:00

Our enormous gamble paid off.

We found a new house to purchase, went under contract, went to settlement, and only then did we put our old house on the market. Fortunately we got multiple offers within a week and we are now living in the old house until it sells and fixing up the new house.

Now we just have to keep our fingers crossed that the sale on the old house will go through without a hitch. And we have to fix up the new house quickly so we can move in. And we have to adjust to heating and maintaining a larger house. And we have to adjust a larger mortgage payment. The old house has a payment of $585 per month. The new house has a payment of $1320 per month. Ack! But much of the difference will be made up by not having to pay preschool tuition any more, since our son will be in public school in the fall.

Fortunately, we're still employed, although one of my employers has been trimming hours a bit. So far I've lost only a little bit of work.

And now I'll subside back into defunct-ness. I hope the recession isn't hitting any of you too badly.

Psychologically important, and a bit of rambling

2009-02-19T22:17:00.005-05:00

The Dow closed below 7500 today. I am so not logging into my retirement accounts. But who cares about retirement accounts right now, anyway? I am just glad to be employed.

In other news, I am not busier this week, really, but for some reason I am feeling more underwater than usual. There was some unexpected extra work that cropped up on one of my projects, and I finished another project on Sunday that I've been working on for about six weeks, but other than that it's all business as usual. Why the perpetual stress-headache?

Probably the holiday on Monday (President's Day) threw me off. I did a bit of freelance work but not much, and worked at my moonlighting gig in the evening, but my spouse and my kid were home that day so it felt like a play day. Also, I took most of the day off today to spend time with my sister, which was long-scheduled and totally enjoyable. And tomorrow I'm knocking off work early to go on a weekend trip. So there has been less time in which to do the same amount of work. Oh, and I had to run around picking up medical results and getting blood tests and so on, nothing major, just putting in the extra time it takes to be a responsible cancer survivor. Having health issues can really be like having another part-time job. And I'm taking a class this semester and I'm trying to stay caught up with that. Also, this blog, which I neglect terribly, has seen some activity lately--a new advertiser, and a few other inquiries.

Okay, that's a long list. I'm allowed to feel a bit overwhelmed. I'm pretty much caught up now, though, and I am looking forward to seeing some old friends this weekend. One is a friend I've known since I was a kid. The other one I've known since 1996. So it will be nice to catch up, meet one friend's new fiancee, see the other friend's little boy.

Have a good weekend, everybody.

House hunt update

2009-02-17T11:06:00.003-05:00

We are super discouraged. The first couple houses we liked turned out to have insurmountable problems. One was the right size, but the layout was really weird and couldn't be fixed easily. Also, we both hated the kitchen for different reasons. No matter, this is all part of getting clearer about what we want. I can't live without a bedroom that DOESN'T open into my son's room. My spouse can't live without an eat-in kitchen because he cooks a lot and likes to have company while he cooks.

The next house was much better. It had great flow. I loved the way it looked outside and in. It had a nice yard that backed up on some other nice well-kept yards that had gardens and toys, so we anticipated lots of neighborly playdates where the kids could just climb the fences to play in each other's sand boxes. But it is not much bigger than our current house, although it has 5 bedrooms instead of 3. Also, the basement seemed chronically musty and damp, and there were only a few tiny closets in the whole house. Conclusion: We'd have to use at least one bedroom as a large walk-in closet. We'd be shoehorned into that house from day one. That house was eliminated.

Then we found a house with a nice big yard, gorgeous Victorian woodwork everywhere. Love love love that house. The problem? It is really enormous. I have sort of gotten used to the idea of heating, maintaining, and cleaning all that space, but my partner is adamant that he doesn't want a house that big. We agreed that it would work if we could rent part of the house out. That may be feasible but we're still trying to figure out how to get around the zoning board. Major headache. Meanwhile, we have been trying to decide on this one particular house for several weeks now. Nothing else in our price range is coming on the market. Eventually someone else will buy the house from under us if we don't make a decision. In some ways it would be a relief if it sold to someone else. That's probably a sign that we shouldn't buy it, but we don't see anything else we like.

We are talking about ways to rearrange our current house to make it more livable. I am sad about that. I have been wanting to move for the entire 5 years we've been in this house and I finally finally got M to agree. Now we can't find a house.

I am trying to save money, trying to make a decision about the big house, and hoping more things come on the market soon. Meanwhile I'm starting to get worried that if the economy drops even further, even our very secure jobs will become less secure. And if we did buy a house with a rental unit, what if rents dropped significantly? What if we get a tenant and that tenant loses his/her job? There are many things to be anxious about.

Luckily, work is going well, and we are still employed. We still have an affordable place to live for as long as it takes for us to find something else. We have agreed we're not going to put this house on the market until we're under contract somewhere else, and in the meantime we are slowly getting this house ready to sell.

I'll let you know when we have some movement on the house situation.

Mortgage shopping then and now

2009-01-11T22:04:00.000-05:00

We are looking for a new house. Our current house lacks a yard and a home office, and the lower house prices around here are really tempting. We're not totally positive yet that we'll be moving, but it's changed from "possibly" to "probably."

And so we're also shopping for a mortgage. I've been struck by the differences in our situation now versus when we bought our current house in 2004. And I've been struck by the differences in the responses we're getting from mortgage providers.

Then:
We had a new baby. I had a new part-time job which the mortgage company wouldn't consider because I hadn't been working there very long. My spouse was working full time and earning $37,000 per year. On that $37,000 household income our lender said we could borrow up to $300,000. We told the bank's agent that there was no way we could afford to buy a house that cost that much. She was offended. I will never forget this. She said, "We would never approve you for a house you couldn't afford." They were pushing us toward an 80-10-10 loan, where we'd put 10 percent down, have an 80 percent first mortgage and a ten percent second mortgage. We had the down payment but knew we couldn't make the payments. We decided we could buy a house costing $130,000, max. We were delighted to find one that cost only $70,000, and we were able fix it up right away because the down payment and monthly payments were low.

Now:
We have a five-year-old. I have the same part time job, and I'm also doing a lot of freelance writing now, partly as a result of finding clients through writing this blog. My spouse is working 4/5 time for his same old employer. Our annual income fluctuates a lot but is around $75,000-85,000. Taking that lower number of $75,000, a mortgage broker told us that we could borrow up to $200,000. She is urging us to go with an FHA loan, which requires a very small down payment (I think it's 3 percent). She said it's easier to get financing with an FHA loan right now. We're unwilling to put less than 20 percent down, even though we'll have to use a home equity loan on our current house to do that. We're hopeful that this house will sell easily because it's a good starter home.

We'll see what happens. It's certainly more fun looking for a house in a buyer's market, but when we are the sellers this might be a painful process.

Net worth report for December 2008

2008-12-04T22:43:00.003-05:00

Our household net worth is slipping, of course, but not plunging.

As of Dec 1, we were at about $223,000. Retirement accounts and college accounts are in the toilet. Cash is holding steady but will go down when I pay taxes in a couple months. I save 35% of my freelance income in a special account set aside for taxes, and that will be depleted if not wiped out when I pay my 2008 taxes. I recently paid all the back taxes I owed the City of Philadelphia because I didn't know I was supposed to be paying the Business Privilege Tax and the Net Profit Tax on my self-employed income. I learned about it a few months ago and just submitted tax returns to the city for 2004, 2005, 2006 and 2007. Maybe they should publicize those taxes better....

I'm rambling a bit. Must be bedtime. Long, long day.

Complete net worth report is here:
https://www.networthiq.com/people/TBH

Giving thanks

2008-12-04T22:36:00.004-05:00

Around thanksgiving I always get a sappy phone call from my mother saying she's thankful to have me. Shucks, mom. And this year on Facebook I got a few nice "I'm thankful for you" messages and wall posts. I'm thankful for my family and friends too, believe me, but you know what I have been feeling really thankful about?

I'M EMPLOYED.

These are scary times. I am so, so glad that I have a steady job. My freelance gig is not set in stone, but my part-time job is very secure because a.) it's a union gig and I have a decent amount of seniority and b.) it's in higher education and people tend to flock to college during tough economic times to improve their job prospects.

I'm not so thankful about the state of my retirement accounts, but at least I have them. I was at a conference a few weeks ago and someone said he was glad he hadn't contributed much to his retirement account because he didn't have a lot to lose in that case. I know many people who have locked in their losses by "going to cash", that is, selling securities and keeping the money in savings or money market accounts. I have one colleague who told me she and her husband are planning to liquidate his 401k after January first and use the money to pay down their HELOC. I tried, gently, to talk her out of it, but I didn't want to be too bossy.

Me? I'm steadily putting money in, trying to ignore the wild gyrations of the market, and trying to rebuild my emergency fund now that I've paid for my new roof and decided not to replace my car.

Oh, and thanking my lucky stars every single day for my good job.

Relationships and investment strategy

2008-11-07T14:27:00.003-05:00

Watching the dramatic plunge in my retirement accounts, I've been a little jealous that my partner hasn't lost as much money. How did he do that? By having an extremely conservative investment strategy, keeping 20 percent in an annuity, and another 15 percent or so in bonds. Me? I'm a 90 percent equities kinda girl.

But I guess we balance each other out. In good times, my strategy will help to keep our buying power up in spite of inflation. And in bad times, his strategy will help to keep us from losing 40 percent in a few short weeks.

You can just call us Mr. and Mrs. Jack Sprat.

Not buying a car after all

2008-10-22T12:14:00.003-04:00

We decided several months ago to replace our 14-year-old car. We wanted something newer, less than 10 years old, with fewer miles on it.

But we realized that all we could get for $4000-5000, the amount we felt comfortable spending, was a rattletrap not much better than what we have.

So we talked it over and this morning we decided to repair a few things on our car that we've been putting off. We'll drive it for another year, and try to save money to buy something more reliable later on.

I am still worried about driving our car for another year. It is becoming more and more of a junker. If it breaks down and we are forced to buy something else quickly, we might not be able to find a good deal. But we are still trying to do some necessary house repairs, and although we have the money to do the repairs, our savings account would get very low if we finished fixing the house AND bought a car right now. We're lucky to have 3 different income streams, and our jobs are fairly secure, but it's still a scary economy and I know I'll be anxious if we don't have a cash cushion.

So, time to fix that oil leak that causes the car to smoke when the engine gets hot. Time to fix that gearshift that gets stuck in park, requiring me to keep a rubber mallet on hand to wallop the gearshift to get it into reverse. Time to shampoo the seats, and polish up the interior. I've got to live with this car for a while longer yet.

I wonder if everybody else is changing plans, too, because of the economy. Sure, people are having to delay retirement, but what about smaller stuff. Are you taking that vacation you had planned? Are you still going to buy your teenager that car? How much belt-tightening is going on these days?

Net worth report, Sept 2008

2008-09-29T13:52:00.003-04:00

It's not too bad, actually.

I forgot to do my August net worth report (too much work, too much traveling), but my numbers haven't slipped too badly from the July report, especially considering the stock market's recent shenanigans.

See the details here.

My cash savings are creeping up slowly, which is good, because we are still looking at some major expenditures this year when we will hopefully get around to buying a new-to-us car and finish some home repairs that got interrupted in early summer when we fired our contractor mid-job.

Also, has anybody else noticed that ING direct now points out that you are making a FREE transfer when you move money around? This makes me nervous. Are they about to start charging for transferring money? I hope not. I move money to and from various ING accounts very often. Money comes in from freelance work, and I move this chunk to the account where I save for taxes, this chunk to the emergency fund, this chunk over here to split between our Roth IRAs, and this chunk to be use to pay bills. If I had to pay for all these transfers, I'd have to totally change how I manage my money.

Philadelphia city wage tax LOWERED

2008-09-24T13:13:00.002-04:00

In this time of financial meltdown, I just got some good news.

The Philadelphia city wage tax was lowered effective July 1, 2008.

The old rates were 4.219% for residents and 3.7242% for non-residents who work in the city but live outside. New rates are 3.98% for residents and 3.5392% for non-residents.

Okay, it's less than a quarter of a percent change for me as a resident, but still! Come on, I'm trying to be upbeat about something here. I know it's falling a little flat.

Excuse me while I go play the shell game with my bills to try to pay my October COBRA premium and my mortgage out of a $600 paycheck....

What a week!

2008-09-18T22:48:00.002-04:00

Jeez, Lehman Brothers, Bank of America, what next?

But don't worry. I'm taking measures. Tomorrow I am liquidating all my assets, including my retirement accounts (darn that early withdrawal penalty) and putting it all in cash. Actually, I think I'll buy gold bullion and bury it under my basement floor. I'm also stockpiling gasoline in giant drums, and planting a massive food crop under growlights in the house. I'm buying a handgun and I have forty 5-gallon bottles of water. I have ordered my own personal windmill to generate electricity.

Not really.

What I'm really doing is working, and being glad I have a job. I'm trying not to look at my retirement account balances very often, and I'm making my regular account contributions. I'm watching local businesses close, four in the last few weeks that I know of. I'm fairly sure I have the money to pay my son's preschool tuition tomorrow, but I don't think I'll be able to cover the mortgage this month without dipping into savings. I am, as always, grateful that I have savings to dip into. Basically I'm trying not to freak out.

What are you doing this week? Are you glued to the news? Are you checking your account balances every two hours? Are you buying stocks at bargain prices? Are you closing your bank accounts and sewing bundles of cash into your mattress? Please, tell me you're not doing that last thing.

This too shall pass.

Right?

Should I pay more for health insurance, voluntarily?

2008-09-10T11:18:00.000-04:00

I'm trying to decide between two different employer health insurance plans, and it's proving to be a difficult decision.

For the past 15 months, I've been had COBRA coverage, which has kept me on the health insurance plan of my former employer. Let me just take a moment to enjoy, yet again, the fact that I don't work there any more. Good riddance, old job.

I've been paying $425 a month for COBRA coverage, but it hasn't hurt too much because my other employer, where I work part-time, reimburses almost $300 of my premiums. So my actual out-of-pocket cost has been about $125 per month. Not too bad.

My COBRA coverage runs out in a few months, and I need to decide between going on my partner's workplace plan, or going with the plan offered by my part-time employer. Both plans have the same health insurance carrier I have now, so I won't have to change doctors.

1. For my partner's plan, the cost for my premiums is $350 per month, but once again, my employer will reimburse about $300 of that. This brings my monthly outlay down to about $50 per month. The catch is that that plan has astronomical co-pays. Since I am a person who tends to need a lot of specialized medical care, and has a greater than average chance of having really crazy medical adventures, co-pays are a big deal for me.

2. The premiums on my employer's plan are a bit more. I'd be spending about $150 per month, and obviously there would be no reimbursements because I'd be using their plan. The good thing is the co-pays are extremely low. And I wouldn't have to send in those annoying forms every month to get my premiums reimbursed.

So why am I even considering paying $100 more per month to be on my employer's plan instead of my partner's plan? He couldn't believe it when I told him I might not use his plan, so I've been doing some soul-searching to figure out why I'm thinking of spending an extra $1200 per year. The difference in co-pays will probably bring the cost difference down to about $900 per year.

There are two main reasons.

The first, and most complicated, is that I resent the hell out of M's employer. It's a little irrational, but it's true. He has worked there for almost 8 years, and he's pretty happy there. He has held four different positions there, or is it five? In the early years he was on soft money, which meant he was paid through grant funding and didn't have a guarantee of permanent employment. They did a great job of scrambling to find enough money to keep him on. At this point he has a permanent job in management, and works closely with other leaders in the field all over the Philadelphia area. That's great, I'm proud of him, and I appreciate the fact that his bosses recognize his worth. They have also reorganized their staff twice in the years he has been there to allow him to work part-time because of our family's needs. They even changed their policy to give part-timers benefits in order to give him a reason to stay.

But there are some little things that drive me crazy. For one thing, they treat their professional employees like hourly employees. In his field, it is pretty common for professionals to work 35 hour weeks, but M's workplace has a 40-hour work week a mandatory half-hour lunch break, so he has to spend 8.5 hours at the office every day. If he needs to leave 15 minutes early, he has to make up the time in the same pay period, even though he often works extra hours in the evenings at home. I know in many fields managers work much longer hours than he does, but his field is incredibly low-paying, and his employer is on the low end of the range. With all his years of experience and his level of responsibility, he makes only about 10-20 percent more than many entry-level people do at other similar institutions. His benefits, too, are crappy. The retirement contributions are meager, and although they pay his entire health insurance premium as long as he works full time, the co-pays are astronomical and we pay through the nose for our son to be on his plan. If I was on his plan, it would cost us even more. His take-home pay in that case would be well under $1000 per month, after his 15% retirement contribution and the $100 he has taken out each month to pay for public transit. The only reason we can even contemplate having me on his plan is because my employer will reimburse us for part of our premiums.

Another gripe--after all this time he does have 3 weeks of vacation, finally, but he still only gets 6 sick days per year. SIX. Have you ever had a young child in preschool? Our son doesn't get sick much any more, but he does have pediatrician appointments, and he sees a specialist for a minor but chronic health problem, and and and. Throw in my visits to the oncologist every 3 months, not to mention my long hospital stay last year, and the upshot is that M rarely gets to use his sick days for himself. If he's sick, he goes to work or takes unpaid leave. In a pinch his employer will let him go into the red in terms of sick time, but I still resent that they think this is a reasonable amount of sick time for anyone, especially an employee with a family.

So I know that if I'm on his plan, every time I go to the doctor, I'm going to resent the hell out of those high co-pays, which will remind me of all the other ways his employer bugs me. It's going to rankle. I have enough anxiety and stress about going to the doctor. In addition to my oncology visits 4 times a year, I have to get CT scans twice a year, blood tests every 3 months, and that's not even counting visits to my primary care physician for things like allergy meds. If I have another recurrence of cancer, I'm going to wish I had stayed on my own plan, because the hospital co-pays will very quickly eat up the money we'd be saving on the premiums.

The other reason I don't want to go on his plan is even less rational. It's a desire to be totally self-reliant. My employer, my health insurance. It's pretty silly, because M and I are financially interconnected in many ways. I'm not really independent, and neither is he. We both work, and some years one of us makes more money than the other, but it usually balances out. We own a house together, and we pay a mortgage together. We share a car, we share bank accounts, and we share credit cards. Oh, and we share the kid, of course. We each have some liquid savings that we've kept separate, maybe about $10,000 each. And our retirement accounts are separate, too. If we were to split up, which is very unlikely, we'd have to unravel all those financial ties, and it wouldn't be a big deal for me to get on my employer's plan at that point.

But I was raised by a woman who didn't maintain her financial independence from her man, and I am a bit fanatical about ending up the same way.

I think in the end I'm going to suck it up and go with M's plan, because when I lay them all out my reasons for not going on that plan are pretty ridiculous. I don't like his employer. Well, that doesn't much matter, because he likes it there. He doesn't feel underpaid or exploited. And really, I should be enough of a grownup that when I go to the doctor and pay those high co-pays, it shouldn't send me into a tizzy because it reminds me of all the negative aspects of M's workplace. I should be able to separate the issues, right? The co-pays are high but the coverage is good, so I should just be grateful. And this strangely fierce independent streak that has cropped up also seems ridiculous to me. I could always go on my own plan later if I needed to, and there are worse things than having the entire family on one plan.

Okay, I've talked myself into it. I will go on M's plan, continue to submit the forms to get reimbursed by my employer, and try to remember how lucky I am to have not one but two sources of affordable health insurance.

Confession

2008-08-26T22:16:00.003-04:00

Do you want to know why I haven't been blogging?

Well, there's a long list of reasons, but the most embarrassing one is that I recently switched email accounts. I'm now using Gmail as my primary email account. This is the account I stay logged into all day long, and check ridiculously often because email is the worst drug in the bouquet of drugs that make up my internet addiction. But my Gmail account is under my real and true name, while my Blogger account is under this fakey anonymous made-up name. (I know you're shocked to learn that *Tired but happy* is not my real name.)

So, to log into my Blogger account, I have to log out of my Gmail account. Pain in the butt.

Things that motivate me to do that:

When someone wants to pay me money to put a new ad on my blog. Then I'm motivated to log out and log in and log out and then in as many times as I need to.

Things that do NOT motivate me to do that:

Half-formed ideas for posts.

Now you know how lazy I am.

Amazon bought ABEbooks.com?!

2008-08-16T22:37:00.004-04:00

Why was I not told?

Who approved this?

Now even the independent used booksellers are all going to have to sell through their direct competitor. I guess most of them have been doing that for a long time anyway, because it's cheaper to list books on Amazon than on Ebay, for example.

I'd like to hear the American Booksellers' Association's take on this.

Sniff.

Goodbye, ABE.

Housing bill may increase my deductions

2008-07-29T13:38:00.004-04:00

The New York Times says, Housing Bill Has Something for Nearly Everyone--and in my case, they're right.

It looks like I'll get a bigger tax deduction from this.

"If you are a homeowner who takes the standard deduction on your federal income taxes and does not itemize, this one is for you. You can now take an additional federal tax deduction of $500, or $1,000 if you are married and filing your tax returns jointly. Again, this one is gravy; you get it in addition to the standard deduction."

That's me--I take the standard deduction because my mortgage interest is only about $2000 per year, not enough to allow me to itemize. This will mean an additional $500 deduction.

Hey, I'll take it.

I'm still alive

2008-07-24T17:20:00.002-04:00

...just not blogging lately.

You know. The usual excuses. Working a lot. Traveling frequently. Chasing my kid around. Not enough childcare. Etc.

I hope everyone is feeling prosperous and happy out there in PF blogland.

Time over money

2008-07-09T20:22:00.002-04:00

Once again, M and I are making one of our unorthodox decisions about our careers and our income and our family life.

Effective immediately, M is reducing his hours from 40 per week to 32. This means a pay cut, of course, but it will also mean he can spend more time with our son L, and it will free me up to work more. Or rather, to work the same amount I'm working now, but to do less work on the weekends and in the evenings.

Ever since I started my new freelance gig, I've been working every weekend, and most nights until way too late. And while L is at camp every morning, I race home and put in a couple hours' worth of work. And then I pick him up at camp and give him lunch, and then he watches a video while I do more work, while the summer is passing us by outside.

This is a bit scary, because freelance work is notoriously inconsistent, and this is a new gig and I'm still working out the kinks and so is my client. So we're reducing our steady income and relying more on irregular income. Also, I had high hopes of saving most of my freelance income for things like a different house, etc. With this new arrangement, we're pretty much guaranteed to be in this house for a long long time. There will be no moving up or moving out.

But I feel good about it. Money, schmoney, right?

And hopefully I'll be able to get a little more sleep.

Gratitude, pride, and a little bit of guilt

2008-07-01T13:03:00.005-04:00

My net worth is so high these days that even this month's large drop due to stock market drama doesn't really bother me. It may not seem all that high to some of you, but to me it seems like a huge amount.

I don't mean to sound cocky. On the contrary, I feel very humble about this.

M and I had a conversation the other day about whether we are in good shape financially because we're good with money or because we've had huge financial advantages from our families. He says he thinks it's about half and half. I would be happy if we could take even half the credit for it.

* We both got very good educations, paid for through college by our parents (or, in M's case, his parents' tuition remission because they were university employees). I did get some scholarships in college, and we both worked, but the vast majority was paid for by the parents.

* We both got very good graduate degrees, paid for by full tuition scholarships. In fact, we both chose that school because we were offered the scholarship, so we often joke about how we wouldn't have met if it weren't for the Big Rich Alumni Muckity-Muck Scholarship Fund at the public university where we got our graduate degrees. But I guess we can feel proud of ourselves that we won the scholarships, and that we went to that school because of them. We both would have chosen other schools if money were no object.

* We were given money by both sets of parents to help us buy our house.

* But even with that big financial leg up, we were careful to buy a house we could afford without further help and even without expected future raises. This was in spite of major pressure from my parents, who wanted us to buy about five times the house we ended up with. We could have bought this house without parental assistance. The parental assistance just meant that we were able to fix it up much, much more quickly than we would have been able to do otherwise.

* Neither one of us has ever carried a balance on a credit card or bought a car with credit. We have each had times in our lives when we made very little money, under $10,000 a year. But we managed not to get into credit card debt. Again, this was a combination of luck and good sense. The most serious example that comes to mind for me is when I needed a root canal that cost about 2 months' salary. Most people would have been forced to put it on a credit card. Not I. It was one of the rare times when I called Daddy for help.

So I guess he's right. In almost every financial scenario, we have had advantages that most people don't have, and we've also been able to use those advantages well.

Most of the time I just feel grateful. I guess I can feel just a little bit proud of myself, though. And as I get older I'm getting better at not feeling guilty about the advantages I've had, and instead doing what I can to make sure other people also get those advantages.

Paper stimulus payment

2008-07-01T12:59:00.003-04:00

We just got a notice that my partner's stimulus payment of $600 will arrive this week. I got mine a long time ago, because I had a refund coming so I put down a bank account number for direct deposit. Because M owed money and had to send a check, he forgot to put down a bank account number.

The stimulus payment will be sucked up into one expense or another if we let it. I think we'll put it into the savings account, to be taken out only a few weeks later when we hire a second contractor to clean up the last one's botched job, and also hire someone to repair our roof. We got a third quote on the roof, and it's nicely in between the other two. It like this middle company the best anyway. Their quote was very clear, and they provide a good written 10-year-guarantee. Now, how to convince our neighbor in the attached row house to do her roof, too.

Summer utilities

2008-06-27T09:20:00.002-04:00

We're in that funny, early-season period when the budget billing on our electric and gas have not yet reset. That means I'm running fans in every room, but I'm still paying low electric bills based on my winter and spring usage. Meanwhile, the heat is obviously off, and I don't use the oven or even the stove as much, but we're paying high gas bills based on the amount of gas we were using when the weather is colder. The same thing will happen in the fall. I'll be paying astronomical electricity bills, a la summer, and low gas bills even as I'm cranking up the thermostat.

I'm happy to say that I'm feeling less pinched, though. I don't know if I'm just used to the higher food prices now, but I don't have that same gasping for breath feeling when I'm paying bills. Also, one of my employers was five weeks late in paying me, and now I'm all paid up, so that helps.

In a couple weeks, I should start getting paid for my new ongoing freelance writing gig, so that will also help, although I'm still hoping to funnel most of that money into savings.

General update

2008-06-18T11:39:00.002-04:00

House:
We had to fire our contractor mid-project. That sucked. So the new facade on our house is not finished. I'm in the process of getting quotes from two other contractors. This time, I'm making sure I get someone experienced. And insured. And who is not a friend. Yes, it's true. We hired a friend. Who didn't know what he was doing. And wasn't licensed. Or insured. Now you know I have not business giving advice to anyone because I make all the classic mistakes myself.

And there's another house for sale in my neighborhood that I've fallen in love with. I know it's not the right time for us to buy, but it's so so tempting, especially when the renovations on this house are such a huge pain in my butt. I just want to sell this problem and buy a different one.

Work:
My weekly freelance gig started, altho they're still publishing the articles I wrote and got paid for earlier in the year. But it's finally up and running and I'm very excited.

Family:
School is out. I have a preschool tuition payment for September due in July, but other than that, it's nice to have a break from those big monthly bills. The kid is in camp, which is wicked cheap, but is not nearly enough childcare. Gotta go pick him up in a minute here. My two-hour workday is just about over.

That's about it!

Hope everybody in the Northeast is enjoying the cooler weather, and that everyone in the Midwest is starting to dry out.

Single-stream recycling

2008-06-18T11:36:00.002-04:00

For years, I've taken my plastic bottles and cardboard to a monthly recycling drop-off.

Finally, finally, almost the entire city has single-stream recycling, and all this stuff can be recycled on the curb.

Hooray!

Now, how to get more people to compost?

Book review: Cash-rich retirement

2008-06-18T10:59:00.003-04:00

I've had my review copy of Cash-rich retirement by Jim Schlagheck sitting on my bedside table for months. Here are the key take-away points that I've found the most helpful.

Schlagheck's book starts with the usual scare tactics. They're scary because they're true. Most people aren't prepared for retirement! You may be one of them! Good thing you bought this book! I can save your golden years before it's too late!

But Schlagheck's book does make some interesting points that I haven't seen emphasized to the same degree elsewhere. He talks about the history of retirement, which is a relatively new concept, and is perhaps becoming passe as people re-think the possibility of ceasing to work for pay altogether during the final third of their life.

Schlagheck says that we should be looking more closely at demographic trends and letting them inform our investing. He's not the only one who is worried about the boomer retirement wave that we're just starting to see. He thinks that boomers will have a huge impact on the economy. Especially scary: Boomers own a lot of houses, and as they sell or downsize or die, there is going to be a huge amount of housing inventory on the market, which will drive prices down. Great. Just what us working folks need. Further depreciation in our largest single asset.

Another major point: He doesn't hold with the standard wisdom that you should gradually shift out of securities and into bonds as you get closer to retirement. He writes about the fact that bonds are not risk-free, and one of the biggest risks you run in bond investing is inflation. He thinks that your retirement money ALWAYS needs to be diversified and conservative and have inflation protection built in. You can't afford to lose that money at any point in your career, and you certainly can't afford to let it get whittled away by inflation during the 30 odd years you may be living in retirement.

This is definitely a new idea for me. I have never seen myself becoming a blue-haired old lady with 60, 70, or 80% of my money in bonds and only a token representation in the stock market. No, I've always imagined myself as a blue-haired old lady who is still actively managing her portfolio and keeping a diversified mix of stocks. All while I'm going on adventure travel expeditions or writing books about sex for octogenarians, of course.

But this idea may impact my investing in the near term as well. I actively manage my Roth IRA, which accounts for a little less than half of my retirement savings. But my workplace plans (all 3 of them) are invested in target-date funds. Schlagheck hates target-date funds. This is bad news for a lazy investor such as myself, and this book has made me want to rethink my strategy a bit.

He is also a big, big dividend guy. He thinks investments should produce income. Period. If your main profit lies only in appreciation, whether it's real estate or stocks, he thinks you're risking being hammered by market downturns. If you're receiving income all along from your investments (which you of course reinvest), market downturns don't take all the profitability out of owning assets.

Schlagheck published this book in 2008, which means he was probably writing it in 2006 and editing it in 2007. It's obvious to him that the real estate bubble is bursting, although it's not clear yet how bad it's going to be. And the economic woes of 2008 are not upon him yet. The book is an interesting time capsule of what we were all thinking two years ago. It's amazing how fast this stuff changes. But many of his ideas will be relevant for a long, long time. His ideas are certainly thought-provoking. Maybe we should all be looking at our portfolios and asking ourselves how demographics will effect us. Maybe we should all give dividend stocks another look. Maybe we should kick those target-date funds to the curb.

And maybe not. But the book is an interesting read, even if the guy uses way too many exclamation points!