Wednesday, November 26, 2008

Giving thanks

I have so much to be thankful for this Thanksgiving - our house sold without foreclosure, I have a good job in a nice community, my family is together, our kids seem to be doing okay in school. My wife and I love each other. We have plenty to eat and a nice place to live. We live in a great country and we just elected a good guy as president!

It's important to remember one's blessings, especially when times are tough.

Have a happy Thanksgiving, everyone, and be sure to "Buy Nothing" on Friday!

Moms doing without plus update

Here's an article from today's Times saying the moms are foregoing spending on themselves to make sure that their little darlings get all the goodies they "need" this Christmas.

And an update: A little while ago I mentioned that we had been told that DK1 needs about $3600 in orthodonture (and that's only "Stage 1"!). Being good middle-class parents, we want to do it - we feel like we have to do it - but the payment plan that the orthodontist offers has to be paid off in 18 months. That's $200 a month, and there just ain't no way we can swing that right now. There was another, "third party" plan which involves getting a loan and spreading the payments over a longer period of time, but they took a look at our credit report and that was the end of that.

The kids have also been asking for a dog - I'm not against it in principle but I just will not take on the expense right now when we're barely (and I mean barely) making ends meet.

It's about time in our lives when the answer to every need has to stop being, take on more debt. We can't do that anyway, the decision is no longer ours. So both of these will either have to wait a year or so until some of our debt is paid down or else, ahem, we're going to have to see some increase on the income side, ahem, coming from the distaff side, if you get my drift.

Tuesday, November 25, 2008

Monday, November 24, 2008

Buy Nothing Day

Popular legend has it that the day after Thanksgiving, “Black Friday,” is the busiest shopping day of the year. Anti-consumerist activists have for some years been designating this day “Buy Nothing Day.” This is a day not to go to the mall, not to add to the balance on your credit cards, but rather to start thinking about how to spend this holiday season giving the gift of love, of self, rather than of material goods.

This year, of course, we’re in recession, so is it irresponsible to “Buy Nothing” when the economy depends so much on consumer spending? Well, as Juliet Schor points out in this post on the Center for a New American Dream website, it was financial shenanigans and the housing bubble that caused the problem. For an economic recovery, the pump will need to be primed at a level high above the average consumer.

In addition, many Americans are in hock up to their ears with credit card and mortgage debt, and the wiser option at this stage is to cut down on purchases, pay down debt, and increase the rate of savings, which hovers around zero for Americans. (According to Consumer Reports, in 2006, 23% of shoppers were still carrying holiday-related credit card debt the following March.)

Remember that the cost of every purchase includes not just the price of the item but the price to advertise it, ship it, package it and dispose of it when it breaks down. Much of this cost is in oil, something to think about in this time of global climate change.

And most importantly, real meaning and purpose cannot be found in the mall, or in the exchange of material goods. Real purpose can only be found in human connection, in time spent with friends and loved ones, in volunteering – generally giving the gift, not of stuff, but of self. And that’s the gift that keeps on giving.

(Of course, Jews who observe Shabbat know that “Buy Nothing Day” comes every week!)

Thursday, November 20, 2008

Feckful frugality

Here's an article from today's Times about some of the contradictions of what I would call "early frugality," or losing the forest for the trees: buying too-large amounts from a big-box store, or a flat screen from Wal-mart rather than Best Buy, because you're getting a "bargain," or driving a long way to save pennies on a grocery item. Walking 8 blocks (NY, right?) to save a buck and a half on califlower at a place when the other things on your list are more expensive.

I think these are issue associated with "early frugality" because eventually people wake up to them - that clipping coupons for cereal that is more expensive is not actually saving any money:

As Americans attempt to perform cost-benefit analyses of their needs and behaviors, they are whittling pennies from cable bills only to squander dollars on gas driving miles to discount stores, or on coupon-spurred splurges for nonessential items, like Cheez Whiz or organizing supplies. Pinched by shriveled retirement and college accounts, battered by ballooning mortgage costs, rent and co-op maintenance increases, and hedging against the possibility that a job might vanish, some are practicing economies that may not deserve the name.
The Times, of course, tends to see these as cases of "feckless bargaining," and an opportunity to allow yourself that $4 Starbucks seeing as it's not really that much in the grand scheme of things. I also love this example of money being relative:

“In my book I tell the story of the $15 pen,” he said. “What if you were told the same pen cost $8 less at a store seven blocks away? You’d walk to the store, right? But if you’re buying a suit for $1,115, and the salesman says, Guess what, you can get the same suit for $8 less at a store seven blocks away, you’re not likely to take that walk.”
Well, I suppose that's true, but maybe I could raise my hand meekly to ask why someone who is trying to save money is buying a $1,400 suit?

Eventually, as I say, people wake up to these contradictions, and take the steps to resolve them - either by going deeper into Amy Dacyzyn-land, having a price book and organizing your shopping so that you buy things at the store that has them for the cheaper price, or even (gasp!) by doing without - or by ignoring them, giving up and basically giving yourself everything you want, the $4 latte, the $1000 suit, or the $4,000 big screen, under the "life's too short" philosophy.

I think there will always be contradictions in a simple lifestyle, in that there are things that people will buy that they don't "need" but that they really do feel makes life worthwhile. For me that's the Sunday Times. Whenever I talk about this in public, I get apologetic people coming up to me to say they'd like to be frugal but they don't want to give up X or Y. Usually where that goes is, if they can't give up X and Y, they aren't really frugal, so isn't it contradictory or hypocritical (the "h" word, as far as I'm concerned) to even try? They want absolution, but I can't give it to them. My answer is, go ahead, give yourself X and Y, but how about not getting Z right now?

Here are some thumbnail rules:
  • Driving a long way to save a little money probably isn't worth it. Spending a lot of time on something that doesn't save much money likewise, unless you enjoy the activity.
  • Be hesitant to buy something that you think is going to save money "in the long run." Chances are you really won't use it enough to get the perceived benefit.
  • Unit pricing (per ounce, for instance) works in big box stores as much as in smaller stores. Just because something comes in a bigger package, doesn't mean it's less expensive, you have to check.
  • No large ticket item can be considered "frugal." That doesn't mean you shouldn't ever buy it, but you shouldn't fool yourself into thinking you're getting a deal, even if you buy it at Wal-Mart.
  • Hey, here's an idea - get a few poker chips, and mark them with a L for "life worth living." Give yourself, say, 5 of them - for the year. Then, when you are planning an elective purchase, and you really think you can't live without it, you give up one of the chips. That way, "life worth living" doesn't become an endlessly open category. Because you know what - none of these things really make life worth living. And the realization of that, more than reversing calculator tape or saving a buck on califlower and all the other "hows", is really the "why" of the whole project.

    Wednesday, November 19, 2008

    Emergency funds 911

    Here's a post on Get Rich Slowly about emergency funds. He recommends putting away 3-6 months of basic living expenses in a cash, low-interest-bearing account. It's a good post, very thorough, and it's standard advice for the personal finance genre, but c'mon - 3 to 6 months? That's a downpayment for a house.

    I'd guess we have about maybe one month in our emergency account, and it's sort of lucky we have that much, as we built it with the rather rare occurrences of a high holiday pulpit and a tax rebate. Plus, we're always battling against tapping into it to make our monthly bills. At this point, it could cover a car repair, or a low-grade medical situation, but if (God forbid ptui ptui ptui) I lost my job, well, we don't have enough in there to cover that.

    This strikes me as the kind of advice that, if you were able to take it, you wouldn't need to be looking at frugality websites. It's also the kind of advice that makes people despair of ever being in a plus situation, if you ask me. (Advice that's impossible for the average person to follow is not good advice, imo.) Also, if you're saving so much this way, are you neglecting your retirement savings? That's another big goal that (based on financial advisors) I'm consistently underfunding.

    So I'd be interested to know what people think about this, so leave a comment: how much (on a month basis) do you have in your emergency savings? Do you think it's enough - how much would you say is optimal?

    Thursday, November 13, 2008

    Unexpected expenses 2

    DK1 and 2 are still sick. DW took them back to the doctor ($25 each co-pay) and it turned out that 1 has an ear infection (prescription antibiotics $20) and 2 has, get this, "clinical pneumonia," whatever that means. Well, it means $60 for an antibiotic, that's what it means. So if you include last week's visits and my visit and med, this adds up to a total of $291 on doctor visits and meds in the past 10 days.

    We see here, my friends, the benefit of having a bit of an emergency fund. If I hadn't had that High Holy Day pulpit, and socked away some of the money from it, I would have had to put all this on a credit card.

    We're supposed to be going to Omaha tomorrow for a bat mitzvah, a 5 hour drive. I'm not sure if I want to put 2 kids who have been sick for more than a week into the car for a 5-hour drive, even if they are fever free. So maybe DW will go alone, I'm not sure. I'd like to cancel it altogether because the $300 we spent on meds is what this weekend will cost us, but that's probably not fair to DW, whose family it is.

    Saturday, November 8, 2008

    Oh, those unexpected expenses

    It's not really a lot as these things go, certainly not on the level of a major car repair or a new furnace ...

    (sidebar - did I mention that we got a new dishwasher? The old one must have been 15years old and it just stopped working; a repairman (sent by the rental agent) said it was pretty much unfixable, so they put in a new one, much better, and it didn't cost us a dime. I have to say that I find this landlord more responsive than any I have ever had, and I have rented basically since I moved out of my parents' house, save for that 3-year period in Illinois. Of course, that responsiveness may have something to do with the fact that he's in Taiwan and the decision-making is made by someone whose money is not at stake...

    ... but the kids have been sick all week, one gets better and the other two are home, and then one of those gets better and the other one gets sick again. It's been going on like this for over a week now. Finally someone at school convinced DW she should take them to the doctor, she took DK 2 and 3 (it was DK1's day to be okay) and the nurse-practioner said, no pneumonia, no strep throat, no pink-eye (irritation isn't enough, look out for pus), just give them Tylenol and wait it out. $60.

    So with three sick they go through cough med and liquid Tylenol pretty quickly, I had to bring some more home on Friday. $16.

    Then I was home last night with DK1, who was feverish again (DW and the other DKs went to "Temple"), and all of a sudden my left eye started feeling really irritated and (bingo!) producing "matter." It was glued shut this morning so I went to the doctor ($25 co-pay) and it was pink-eye, he gave me a script for eye-drop antibiotics - $60! He said it would go away by itself in 2 weeks and I wasn't really contagious unless someone touched the goo but DW wouldn't come near me and it was pretty bothersome so I did it. I'm a baby, what can I say.

    It seems to me that the difference between someone who is middle class and someone who isn't really is that I will spend $60 on a prescription even if I don't really have the money available, whereas someone who's really poor will forego that. I consider myself fortunate that I am able to do that, although the definition of "necessity" can be pretty fluid, as I think past entries on this blog have proven.

    Now I'll have to put some money from savings into checking to make it to payday, I was hoping not to have to do that this month.

    Thursday, November 6, 2008

    Thanks a lot, Todd

    It still seems a little early to be talking about this, but Tightwad Todd has a post about people planning to be more thrifty this holiday season. Thanks a lot, Todd.

    With the economy in a shambles, 76 percent of those surveyed say they’ll cut back this season.

    • Fewer people intend to charge this season’s gift purchases....
    • Far more consumers are trying to manage their spending. Fifty-nine percent say they plan to stick to a gift “budget;” that’s 17 percent more than last year. ...
    • When it comes to cutting back, most respondents -- 59 percent -- intend to give fewer gifts this year.
    On the other hand, of course

    Despite the penny-pinching, we remain a highly optimistic people. Eighty-eight percent of respondents say these holidays will be at least as happy as last year’s; and 28 percent expect them to be even happier.
    And even though the article says that kids (and pets) will not be cheated out of their "fair share" this year, that's too bad, because the same thing applies to them as applies to anyone: When it comes to gift giving, less is more. One well thought out gift means a lot more to the recipient than a dozen fancy doodads. You might not think so - or rather, you might think so for yourself, but for other people, well... - but it's true.

    Another site that's really worth looking at, on the same subject is the "Simplifying the Holidays" section at the Center for a New American Dream. This is an organization that I really like and am (modestly) supportive of financially. The site is full of good ideas, alternative gift registries, and a "simplify the holidays" PDF that's really worth looking at.

    I'll say more about this as we get closer, or at least past, say, Thanksgiving.

    Wednesday, November 5, 2008

    Saving money on the gym

    This is one that DW gets all the credit for. The answer is: join the Y.

    DW is a big gym rat - she's up at 5AM every day to go do her workout thing. When she was pregnant she worked out up until the day before the kids were born, and got back to it as soon as the docs allowed her to. It's really an important part - maybe the only part - of her "self care" regimen. And I have to admit, admiringly, that all that hard work pays off, if you know what I mean. Woof!

    Anyway, when we moved to Illinois and I finally had a salary after 5 years in school I gave her the option to join any gym she wanted. You know nowadays they have gyms with all sorts of fancy amenities and what have you, massage-istes and the like, and she did join one for a while, but then being the frugal sort and not really having that much interest in the amenities she ended up quitting the fancy gym and joining the Y.

    The Y costs all of about $60 a month, you can take all sorts of classes (the kids all take classes there: karate, gymstastics, and dance), it's got plenty of machines so no waiting, and it's clean. You could spend three times as much somewhere else for the same basic thing. Also there's reciprocity, and there's Ys everywhere, so you always have access to the gym wherever you are without having to have guest passes or anything.

    And before you ask: not joining any gym isn't really an option, because they have weights and other machines there that we could never have at home, and also because even Kansas has seasons so you need to be prepared for inclemency.

    So there you go. It's good for you too. The only drawback is that I have to explain to my son what the "C" stands for, and why it's okay for us to go there anyway.

    Tuesday, November 4, 2008

    Barack Obama for President

    I've been doing most of my political writing over at FedReb but in case there's anyone over here that doesn't read that I will say that I am strongly endorsing Barack Obama for president.

    The philosophy of conservatism is bankrupt, which coincidentally is what it has done to the country. You can see from the shameful and empty McCain campaign that there is no substance to what they are proposing, nothing different from what's been done for the past 8 years, which is why they need to resort so primarily to personal vituperation and the overemphasis on incidentals.*

    But that's not the main reason I've voting for Obama. I believe that Obama has the temperament and the judgment to lead this country through a difficult time (one that we have been led into, it bears repeating, by conservatives). I believe he has values that resonate with my own, values of diversity, peace, empathy and a tolerant and expansive faith. I believe he is a progressive, and that he is educated, intelligent, articulate (which seems to be a crime in some circles) and modest enough to know that he doesn't have all the answers.

    This is the first time in the 7 elections in which I have voted that I am actually voting for someone because I think they would make a good president, and not because he's the best we could do. And that's enough of a reason for me.

    I know that Obama will be tugged in all directions, especially by those who don't want him, for their own reasons, to be able to fulfill his broader vision. I know that those of us who are progressives will have to work hard to get him not to take us for granted. We will need to hold him to his vision. But he has one, my dears, he has one, and that I believe makes all the difference.

    * Here's a clue: If the word "socialism" has anything to do with who you're voting for, then you are talking nonsense, because if you look at his advisors and his plans, Obama is just a moderate, mainstream liberal on economic issues - ie just as protective of the free market system as anyone else.