Merry Christmas!

We are in the middle of an 18-day road trip and are currently in Idaho. We've had a very frugal Christmas so far, and I will write more about that later. I hope that however you celebrate your Holiday (or your avoidance of the whole deal) you enjoy the day (week, etc.) and have a great experience.

Happy Holidays!

Mortgage Roundup

I've noticed a lot of articles about the current mortgage crisis in the PF community, and there is a lot of finger-pointing going on in the media as well. Here's a few articles I ran into this evening:
The Seattle Times writes It's a Wonderful Mess (great discussion thread on Seattle Bubble):

Nowadays, it's impossible to watch the 1946 holiday movie "It's a Wonderful Life" and not feel a twinge of respect for Henry F. Potter, the villainous banker played by Lionel Barrymore. Potter was not above drawing the last drop of blood, but at least borrowers knew whom to hate. And if they were late paying, they knew where to crawl.

That's not necessarily the case today. Mortgage companies often ship the loans to Wall Street, which repackages them into securities sold around the globe.

So if you're a borrower in trouble, and your loan is diced up into some mortgage-backed security, you'd be hard-pressed to find a lender's ear. How's your Chinese?

Newsweek writes about When Mortgages Made Sense:

Greenstein says loan modifications—whether done on a case-by-case basis or via the standards recently set out by the Bush administration—are the logical starting point. He also wonders if we'll hear more about steps to help people who have invested in securitized mortgages, which are now suffering losses. He hopes the lending process will move back toward stricter underwriting, to a time when people wouldn't be issued a mortgage that would consume 40 percent of their income. The Fed's reforms will help, but Greenstein says he'd also like to see the loan documents borrowers sign become more comprehensible.

The Wall Street Journal had an article entitled If Homes Cost Too Much, Is It Okay To Rent Forever? (more discussion at BostonGalsOpenWallet):

As a renter in an up-and-coming neighborhood in Manhattan, I’m particularly interested in this subject. I pay an admittedly low rent — for New York City — of under $2,300 for a large two-bedroom apartment. When I run the numbers on any mortgage calculator, it looks like we’d be spending more than $3,500 per month on a $400,000 mortgage (including taxes, but not including all the unknown expenses that come with home ownership). I know there is an upside: tax breaks, an appreciating asset, a home to call our own and shelter from the shock of rent increases. But, increasing our outlay on housing by 50% or more sounds like asking to be house poor. We’re still going to save up and sure, we’ll likely get raises along the way, but we’ve resigned ourselves to being renters for up to another decade.

There's even a movie in the works, called Maxed Out:

Maxed Out begins as Beth Naef, one of the most successful real estate brokers in the country's hottest real estate market, Las Vegas, gives us a tour of a $5.5 million spec house. What's important to her clients, she says, are elevators, massive kitchens and wine cellars. Beth is building a ten-thousand square foot McMansion of her own, a home she admits she won't be able to afford if interest rates go up. But, as she concludes, "if you look like you make money, I guess eventually you will."

Single Ma has something to say about this whole mess:

I don't even know what to say about the current mortgage industry. I don't want to pass judgment on the borrowers and I don't want to place all the blame on the lenders. But there's one thing I do know for sure - it is affecting the entire US economy. Ruthless scammers are trying to take advantage of the uninformed, savvy investors will profit from their misfortune, the government is making futile attempts to help, tax dollars will be wasted, home values are rapidly declining, and responsible borrowers are pissed...and rightfully so.

In my opinion, it's just a hot butterball mess!

Here's an interesting piece from Millionaire Mommy Next Door:

Good friends of ours built their home in Phoenix before the prices skyrocketed. They plunked a lot of cash into their home and accelerated their mortgage payoff. They now own their home free and clear. A couple years ago, they shared the exciting news that their home's value was evaluated at over $850,000 and they expected the price to appreciate to $1,000,000 very soon.

You can guess how this story ends.

Here's another one from Millionaire Mommy:

"All current living generations in America have been force-fed the idea that home ownership is absolutely essential to financial freedom. It is an article of faith in the national religion. Question this and you are branded a heretic. Somehow, through an Orwellian twisting of the language and a corruption of the educational system, debt became wealth. The last two generations that would have disputed this have passed on."

Dear readers, don't just take my word on this topic. Ask questions, do some research and come to your own conclusion. The purpose of my site is not to tell you what to do. My intention is to educate.

There's a lot of information out there. As for us, we wanted to sell our house in 2005 and start renting; it would have made us debt-free. My instincts were good, but a serious illness kept us from making that happen. Now, oh, how I wish we had done it! Regardless, we will pay our debt the slow way, and if our house gets to be too much -- we'll rent it out and downsize. Luckily we got an excellent loan and bought a house well within our means; we are the minority today, I guess. Happy reading!

Another college post

In an earlier post I wrote about my extremely expensive college education, and the diminishing returns I have received from it. Part of the problem of my education choice was the fact that I was the very first person in my entire extended family to attend college, so nobody really knew what I needed. My parents dropped me at school with $50 in my pocket. They felt it would get me to my first paycheck; after all, I had a room in the dormitory, and a meal card, and a backpack with pens and notebooks. What else did I need?

Books.

My first paycheck didn't come for 6 weeks, and in that time I needed to come up with $400 worth of books. I called my parents, who said, "We don't have that kind of money! I thought your scholarships covered everything?" Well, they didn't -- the $2400 work "scholarship" allotted to me as a student worker I earned slowly, as I actually worked. I didn't understand this, so between my student work "scholarship" and my books, I was $2800 short for the year. So what was a young person to do? I wandered around at a loss until I finally ended up at a counter where they handed me an application -- for a credit card.

One week later it came in the mail. I went immediately to the bookstore, blew $400 on books and then headed to the mall to buy a winter coat. By the time I went home for Christmas, I had put $660 on the card. By the time I graduated, I owed $6,400. I finally had to negotiate a settlement, which I did, paying just $900 and getting a black mark on my credit.

Lessons I learned from this:

• Only go to college if you can afford it.
• Books cost A LOT. If you're smart, you can utilize some great new programs that weren't available when I went to college, like chegg.com or bookrenter.com -- sites where you can rent books for a fraction of the cost.
• Avoid credit cards. Avoid credit cards. Avoid credit cards AT ALL COSTS. I nearly dropped out of school because I had no money for books again my second year, and sometimes I wish I had (of course, I planned to take my credit card to Europe, so probably it was best I stayed).
• Find a mentor. Rely on them. Heavily. Seriously, I found a mentor my second year, and although he did not help my financial situation much, he did help me graduate. By my second year I was $15,000 in the hole with student loans, so graduating was smarter than dropping out.
• Ask questions! Ask the school what additional expenses you should look for, and don't disregard their response. I could have asked financial aid what to expect and they would have told me; instead I took the 1-year scholarships as a sign that I was going to make it, and when those scholarships went away after the first year I just took out more and more loans to make it through.

Learn from my mistakes; if you're going to go to college, be smart about it.

The Appliances have been Paid For!

Last week I paid took out $1400 and paid off our Sears credit card. We had to buy new appliances last month and we decided to put them on the card, but I just couldn't see paying interest on a credit card in order to keep our emergency fund filled to the brim. We decided to cut our fund to just $500 in order to pay this card off. We now have one less bill...I just hope it was the right choice.

What the heck is a Kindle?

Okay, here's another abnormal post...I guess it's just been one of those days. I was looking over my Amazon accounts (I still have that Amazon versus eBay versus Half.com post to write, and it is coming, I assure you) and I saw something about Kindle referrals.

What's a Kindle? I thought. Some kind of new phone, I assumed.

Well, it isn't. It is an electronic reader, otherwise known as a e-Book. It is about the size of a book and you can download text, newspapers, etc. to it. It doesn't use WiFi, it uses cell phone technology so you have fewer dead spots. Here's a picture:

And I have to say, while I would never buy one at the cost of $399.00, the idea of fewer books in my house...well, it's tempting. Selling my books via eBay, Half and Amazon has been stressful at best and an exercise in futility at worst. I have long known that something like this would come; is the time finally here? Has the paperback run its course? I guess I'll just have to wait and see.

Pentecostals push Entrepreneurism in Poorest Countries

I was drawn to this series about Pentecostal missionaries facing members of organized crime in Brazil; I read The Cross and the Switchblade as a teen and have always been impressed with what one man can and did do (it's the story of how Teen Challenge centers were started). Of course, religion is not the focus of this blog, nor do I ever want it to be. But when religion crosses with finance, the end result is interesting -- at least in this case.

Wealth gospel, long the territory of television evangelists and charlatans, has apparently moved to the slums with a surprisingly positive result. It sounds as if the movement is having a varying degree of success; critics point to a $33 million dollar mega-church in Guatemala that seats 12,000 and sports a heliport -- hard to justify in the middle of an impoverished region, after all. It's sort of like building a cathedral in the middle of a slum. But for those grassroots churches that are giving people seed money to start a business -- well, that seems more fiscally responsible. Or perhaps it would be better to simply say it sounds more fair. It's hard to say, but any program that encourages finance education is good by me.

The 'Gospel of Prosperity' helps Guatemalans help themselves out of poverty

Early Pentecostals reached out to the poor with the idea that poverty on earth would lead to riches in heaven. They gained a reputation for being concerned only with the "otherwordly." But the movement has unabashedly adopted a new ethos: God doesn't want anyone to be poor.

This message, known as "prosperity theology" or "health and wealth gospel," is most often associated with the newer Neo-Pentecostal branches of the religion where adherents, mostly upper and middle class, fill massive megachurches. But in Guatemala even the more traditional denominations are adopting a message of social mobility, making the words "self-improvement" and "ascent" part of the daily lexicon.

In churches like Showers of Grace, Pentecostals are told that poverty does not equal humility. They are offered business classes, taught how to save money, and encouraged to be community leaders.

Is College Worth The Money?

I was perusing Millionaire Mommy Next Door's blog (who wouldn't? I want to be a millionaire mommy too) when I saw a link to this article, entitled Is college worth the money? As someone with $49,000 of student loans still to pay, I couldn't resist. Here's what it said:

If you check the College Board's Web site (.pdf file), you'll find a reassuring study indicating that education really does pay. Without considering the intangibles, the study says each additional level of education draws a higher lifetime income. While the median high school graduate age 25 and older earns $26,300, the median college graduate age 25 and older earns $42,200. That's an annual income premium of $15,500, or 59%.

Well, maybe not.

According to the College Board, it takes 14 long years before the four-year college grad's income, net of loan payments, starts to beat what the high school grad earns. During all those 14 years, college doesn't pay. High school pays.

. . .

If college pays for the median-income worker, it may not pay as well for graduates who aren't so fortunate. Worse, if you earn less than the median, the burden of your college loans will weigh very heavily. They could, in fact, exceed your earnings gain.

Bottom line: College, particularly an expensive private college, is a high-risk investment, which, for many, won't pay.

I have to agree. I went to an expensive private college, expecting to make a lot of money when I graduated, but that wasn't the case. Not only did the private college not give me an edge -- you'd be surprised the number of "alums" from state colleges and universities that would prefer to hire their own rather than someone from a "fancy" private school -- a lot of times it actually made it more difficult to get a job because the school was small. Imagine my surprise when, five years after graduating and paying $80,000 to go to an "excellent" private school on the West Coast, someone on the East Coast asked me if the school was accredited? I nearly had a heart attack. If I had gone to Washington State University, on the other hand, I could have paid 75% less for tuition and the name recognition of the school would follow me anywhere in the U.S. -- no questions of "accreditation" required.

My alumni association constantly presses me to encourage teens to apply for the school, but I simply cannot in good faith do it. I loved my school, it was a great experience, but financially it was disastrous for me. I will soon attend my 10-year college reunion without a lot to show for the education I received.

As for my kids, I plan to send them to a state university, at least for two years. If they have the scholarships and want to get that private school diploma, they can go for the last two years.

After all, education is only as good as it frees you to do better and more interesting work; a high debt-load, even with student loans, is nothing but a different set of chains.

There's no place like home for the holidays...

We are gearing up for 3 weeks of traveling in a car with two children. One an infant.

I don't plan on being sane when I get back. :)

Anyway, if posts are spotty or nonexistent, that's why. I should be back in business in January, with lots of tips about what not to do on a car trip with children.

Until then, Happy Holidays!

Umm, what did I say about there being no recession?

While the U.S. overall is avoiding recession, apparently Arizona is not. The Arizona Daily Star had some great business articles today, starting with this one on the recession:

Arizona is among five states in the nation either in recession or on the verge of it, Vest said. The others are Michigan, California, Florida and Nevada, he said. For most, the primary cause was likely a boom and bust in the housing market with heavy speculation and prolific use of risky mortgages, he said.

"Things got a little crazy here during the housing bubble," Vest said in a press conference before the event. "It was a lot of fun while it lasted. Now we're suffering from a hangover."

Next there was a great article about the Federal Reserve stepping in to toughen rules on mortgages. What struck me was the part about loans that don't escrow taxes and insurance -- that's just plain crazy!

The proposal, expected in two weeks, is emerging as the most muscular use of regulatory power at the central bank since Fed Chairman Ben Bernanke took office in early 2006.

It is expected to target certain prepayment penalties as well as loans that don't escrow taxes and insurance. The plan also targets low-documentation loans and loans that are made regardless of a borrower's ability to make payments, Fed officials have said.

Last but not least, Fannie Mae and Freddie Mac have changed their rules on mortgages, effectively freezing out sub-prime borrowers, but the new rules will also affect prime borrowers with medium-level credit records. Looks like it's going to get a lot tougher to get a mortgage the next few years:

Giant investors Fannie Mae and Freddie Mac are imposing significant increases in fees for a broad range of borrowers who have lower than 30 percent down payments and formerly were treated as "prime" credit applicants. At the same time, the two largest private mortgage insurers — MGIC Corp. and PMI Group — are raising premiums on consumers who have low down payments and FICO scores in the mid- to upper 600s.

. . .

"This is outrageous," said Steven Moore, a mortgage broker with 1st Solution Mortgage in Falls Church, Va. "On a loan of $300,000 and with a credit score of 675 — which is not a bad score — and a 75 percent loan-to-value ratio (25 percent down payment), the cost is an additional $2,250 per loan." If the same borrower wants to do a cash-out refinancing to consolidate debt, the new Fannie-Freddie fee schedule will add another $1,500 to total costs on a $300,000 mortgage, said Moore. On a $400,000 loan, he estimates the extra fees would total $5,000.

The Backup Plan for Sub-Prime Mortgages

Here's another Kiplinger article about mortgage rates and the relief in the works:

It's a private sector plan brokered by the government that aims to prevent a wave of expected foreclosures. It would do that by allowing troubled homeowners facing interest rate hikes in the form of resets in the next two years to keep their lower introductory, or "teaser," rates for up to five more years.

Those whose rates have already reset are out of the picture, as well as non-home-owners, people who can't pay at the current rate, or those already in arrears or a month behind or more. So, basically, those who've weathered the first storm are in for some relief, with mortgage companies and their investors essentially footing the bill. While there is some talk of investor backlash through lawsuits, they say the litigation risk is "manageable," probably because nobody wants to see the entire economy tank because of this, or the housing market go into a freefall.

All in all, not a bad plan, although it's a shame there has to be a plan at all.

Focus (and I don't mean the car)

Today we decided to drain our emergency fund in order to pay down one of our credit cards. We've been waffling on this for quite some time, or at least I have, because I really wanted a $10,000 savings as a cushion, but, I know that we absolutely must get rid of our consumer debt in order to make that happen.

This is what's hard about getting out of debt...making these kinds of choices. Having that money there makes me feel comfortable, but I shouldn't feel comfortable. I should feel like I'm in debt.

*sigh*

So, here goes nothin'...

Kiplinger says Good News, Bad News on Economy

Well, I've been waiting for the words "recession," but so far the economy seems to be stabilizing, which is good news. Kiplinger writes that the fallout from housing hasn't crashed the economy, but job losses continue to bring things down. I know we've lost $35K of unrealized gain, but on the other hand, we've gained $98K on our house the past five years for a total gain of around 10%/year -- pretty decent. So it depends on which side of the housing boom you stand, I suppose.

The positive message is that the economy is bearing up despite the fallout from housing, which is clearly taking a bite out of hiring. The overall monthly gain of 94,000 jobs hides big losses in manufacturing, construction and financial services, all linked to housing woes. Fortunately, a broad array of service industries continues to add workers.

The negative message is that housing-related job losses will probably worsen in coming months as home builders continue to scale back output, many mortgage lenders pare staff, and homeowners shy away from home improvement projects. And managers in other industries will be more cautious about taking on more staff as economic growth slows.

Stressing, 35 years in advance

I keep reading all these great articles about saving for retirement, and frankly, it stresses me out. I feel moved to save money, except that I shouldn't save any more than I am -- I really need to finish paying off our consumer debt and move to student loans. Now that I am embroiled in a dispute with one of my student loans, it is even more imperative that this be behind me.

We are expecting a small inheritance this year as soon as a property sells; we are divided as to whether we should invest it or use it to pay off student loans. There are fair arguments in either direction, but what it won't do is eliminate all of our debt (it won't even come close) so a decision must be made.

Meanwhile, Vanguard has a great site on investing and how much you need to save in order to have a certain amount at retirement. We should be saving and investing $200 a month right now, but like so many families with small children, we just can't seem to get out of emergency mode. My husband does contribute around $250/month to a state pension, and when I was working I contributed $300/month to a 457 plan. But for the moment, we are living month-to-month and trying not to think of the future.

Master of my Domain...

I am now the proud owner of www.tiredintucson.com. I decided to purchase the .com domain name of my blog for a couple of reasons:

First, I think that blogging about finance is helping me and I want to continue to do it. I really do enjoy looking up information and reading other PF blogs. Learning how to handle money, how to budget and how to be frugal is something I need to do for happiness and balance in my life.

Plus, I blew $60 on some seriously sexy boots today. What can I say? It was a 60% off sale and I got sucked in. My husband refuses to let me take them back, saying they are the sexiest things I've bought this year. I guess my $9 t-shirts from Walmart just aren't cutting it...I said I needed a miniskirt to go with the boots and he offered to buy it himself. That's love, or desperation, or maybe a combination of both.

Secondly, the domain registration only cost $9.95/year. I can keep my blogger settings and continue to use blogger to support my blog (including those nifty templates - I've built sites on my own and it's a pain) for no additional cost. I can go with different and more lucrative ad accounts and there are other perks only available to domain-name owners. So, hopefully I will recoup that money by the end of the year, plus some. That's my big goal for this site for 2008 -- make more than $9.95. Whoo hoo!

Lastly, I think I have something to offer the blogging community. I read a lot of PF bloggers, but very few have children and even fewer have young kids. There's a reason for this -- people with young children are usually broke! They don't have time to think about finances, and live from disaster to disaster. How many times have I broken down because my insurance company decided not to pay for -- my C-section? Or a 5-day hospital stay when my son's throat swelled closed with croup and he nearly died? How about the $13,000 surgery my daughter needed for a birth defect last year? These crisis aren't covered by most of the books, and I think there is a need.

I nearly chose money4mama.com, but at the last minute decided to stick with TiredInTucson. It doesn't reflect the subject matter of the blog, but it's how I felt when I started it -- tired, discouraged, and looking for answers. And I'd like to continue sharing whatever I find.

So...onward! This domain is mine!

It's beginning to look a lot like Christmas...

And PF bloggers everywhere gear up for the season of madness. Here are some great Christmas articles from the PF blogging community. The first is from one of my favorite bloggers, Single Ma's Fabulous Financials:

Every single year, my mom is the hardest to shop for and I'm stumped yet again. She doesn't like me to buy things for the house. "Gifts are supposed to be for ME, the house is for everyone!" She doesn't like me to buy clothes and shoes. "SM you want me to dress like an old lady and THAT I'm not!" She's not into perfume, makeup, jewelry, or other girlie stuff. The collection inside her armoire proves it. Money is tricky because it never feels like the right amount, no matter how much I give. And she doesn't NEED anything. So what is a daughter to do?

We're in Debt talks about one Christmas ritual that doesn't cost money -- anymore, anyway. We, too, decorated our tree again last night, with my four $1 ornament additions (including a new snapshot of the two ninos) and my one splurge -- a $2.99 ornament. Our tree looks a little less bare every year...

Decorating our Christmas tree is always a fun time for the two of us. The best part is that our tree grows at about the same rate as we buy new ornaments. This means that our tree always looks full, without us having to spend more money.

Don't Mess With Texas writes about children and play credit cards. I know a friend of mine actually lets her kids play with the "fake" credit cards companies send with pre-approved offers, but I've always shredded ours. I love piggy banks but I know the new rage is an ATM machine for allowance money. Teaching kids they can withdraw without any deposits (the deposits come from mom and dad) is a little disturbing to me...

And the use of plastic by young (and younger) people is now being reinforced by some popular board games. The trend started a couple of years ago, but it's really taking off this holiday season, according to a report this week on the CBS Early Show.

Financial expert Dave Ramsey and program host Harry Smith took a look at all the toys that are not-so-subtly teaching kids to pay with plastic.

Among the games that now supply kids with fake plastic instead of toy money are Monopoly, Life, Barbie (not surprisingly; look at the clothes she buys!) and even Dora the Explorer. Can SpongeBob SquarePants be far behind?

My Open Wallet recommends a good antidote for all the consumerism this holiday season: giving to charity.

It's that time of year: all the fuss over Black Friday and holiday gift guides can lead to a certain level of disgust with rampant consumerism and greed. The story that did it for me was a mention of a woman who hurled her entire body onto a pile of $50 digital photo frames at WalMart to make sure she'd be able to buy one.

So what's a good antidote? Thinking about ways to help people whose needs are more basic, or organizations that do valuable work.

PF Advice talks about the phenomenon of Christmas in December November October and how parents eventually can just get by with one fall Turkey dinner:

As the Christmas juggernaut rolls on, it consumes and assimilates all Holidays in its path. Soon Santa Claus will get credit for Thanksgiving and that tradition will die off on its own. Jolly ole St. Nick will come down your chimney with a sack of presents and a turkey. The presents will be left under the tree and the turkey dinner will be left on the dining room table.

This will mean two things for parents. First, they will have to sneak the presents under the tree while preparing Christmas dinner, and giving the credit for the wonderful meal formally known as Thanksgiving to the fictitious reverse burglar as well. Second, they will only have to have one major Holiday meal. No more turkeys and hams and double doses of mashed potatoes and candied yams. Just one Turkey dinner that will satisfy all.

From Millionaire Mommy, a thousand words:

And with that, a Merry Christmas to all, and to all a good...avoidance of the holiday crowds.

Fiscal Responsibility?

I am deep into negotiations with my loan provider, also my alma mater, on the student loan that mysteriously went up by $318.73 last month (5% interest on $5200 can hardly explain that; the interest should have been $24). Here's a quick recap of this journey that is quickly turning into quagmire:

1. The loan handler, mycampusloan.com, does not have ANY RECORDS of anything except the amount I paid every month. They don't have an amortization chart (the rep couldn't even pronounce it, called it an "immunization chart," which I may find humorous later but don't now) and they don't have a record of how much the loan is or how much it is reduced every month.

2. The financial officer at my university, someone whom I know personally (in a removed, business sort of way) also has NO RECORDS OF ANY KIND. She shows my payments being made every month, and how much goes to interest or principal, but that's it. She offered to send that information to me, "for me to figure out," and I said I could get it online. It still doesn't tell me anything; I can add it up but cannot calculate capitalized interest and such without some serious software.

3. When I expressed my disbelief, she said, and I quote, "But I don't need that information. I just subtract your payment every month from the total." So I said, "What was my total at time of payment last month?" and she said, "I don't have that information." So I said, "Why?" She replied, "Well, because it depends on what day you make your payment what your total should be." So I said, "But you know what day I made my payment last month! Shouldn't you have a record of the total that day?" And she said, "This isn't helping. We're just going around in circles."

I'm going to have to conclude at this point that some kind of fraud is happening. I mean, my payments aren't going where they are supposed to be going, or there is some kind of rerouting. I requested 12 months of statements and my payment schedule going back to 1998. Part of the problem is that I have not received any statements since I started paying my bills online. Apparently, the loan handlers should have been sending me statements, and when I hung up with the school loan officer, she was sounding rather panicked.

It is everyone's worst enemy, the idea that your loans would not be going down as much as they should, but you know, when I was overseas, it seemed like my loans should have been going down faster (although I didn't track them closely like I do now) and I actually accused my mother of forgetting to send the payments for me. I started sending them personally via cashier's checks from overseas, telling her it just made me "feel better."

But maybe it was the cashier's checks that were more trackable; maybe I was right and the money wasn't going where it should, but my mother wasn't at fault at all. I am feeling a little panicked and overwhelmed at the moment, and wondering what to do about all this. I do have prepaid legal services. Is $300 worth calling a lawyer? What should I do?

December Net Worth

Here's a *big sigh* for the month of November. What went right, what went wrong.

1. Consumer debt -- up. This is primarily because we bought a new stove and dishwasher. Our old ones just didn't cut it anymore -- oven did not work and dishwasher did not wash. We spent $1600 on new, energy-efficient versions, but we won't see the savings from that anytime soon. We put it on our Sears card in order to take advantage of a 15% off deal, and our rebate check just came two days ago. We should have this paid off by January. As for the others...I used my credit card for a few Christmas gifts. It was very bad of me, but it put me about $75 over what I paid on it this month. So, one good choice, one bad choice.

2. House value -- down. I finally and officially dropped our house value from $218K to $205K. I don't know how accurate this is, but I do know this -- our house was worth $235K in 2005 and dropping any further is really going to start hurting. I had dropped the worth of the house on NetWorthIQ last month, so the net worth totals are different; I didn't do it on the spreadsheet until this month. The spreadsheet hurt more, for some reason.

3. Student loans...up? I'm glad I'm tracking these things, because I noticed an unexplained $200 increase on my Perkins' Loan (actually $318, but my $120 payment hasn't gone through, so I am giving them the benefit of the doubt). Whaaaa? I have auto-debit on this and there should be no problems whatsoever. So why am I $200 in the red all of a sudden? I was close to breaking the $5000 mark and should do it in February or so, so this was a real blow. Add to that the fact that I don't get physical mail from this loan, and there was no amortization schedule available online, and all my red flags are waving. $200 isn't an enormous sum, but hey -- it's still $200!!

4. Investments -- down. I lost heavily on my investments, with a slightly shaky recovery just before I ran this spreadsheet. Had I done it two days ago, it would have been worse. So, my investments were down by quite a bit, which is disheartening.

So around $13,400 of our losses this month were completely out of my control. $1398 of the decrease to our net worth is explained by our appliance purchase; that leaves the last $2.00 to me. So at most we treaded water. We had a lot of expenses come up in November, and I kind of feel that, particularly around the holidays, treading water is a good thing. We bought most of our gifts with cash. We had a flood disaster in our house, and the insurance money from that went to cleanup but there was enough left over to finish sealing our floor and help pay for holiday expenses. I had to have new glasses and contacts, and my son has grown out of nearly every article of clothing he owns.

Side note: For some reason, I had miscalculated investments on NetWorthIQ, so our networth seems to go up (and it does, really; what shows is accurate). This, too, is no fault of ours, and doesn't show the kind of fiscal discipline I am striving for.

Right now we are getting ready for a vacation, and I doubt we will save more in December. In a way, I wish I could just call it off, stay home and save money, except that I really, really want to see everyone we are visiting. So, we are making some financial decisions that are emotional right now -- I want to see my friends and family, even if we can't afford it, for example -- but, as we learned while trying to sell our house, some decisions about money are not just about the numbers. My children need to see their grandparents. We need a break from Tucson. I can never get my husband to take a vacation, so I've got to take the opportunity while I can.

Hopefully we can sell the Volvo to come up with extra cash and to cut expenses. After Christmas, I am keeping my fingers crossed we will be able to rent the guesthouse weekly as planned without a lot of vacancy. Mostly I am just hoping that we can have our financial house in order by summer, when the GI bill money is gone.

I am taking some financial risks; I just hope I don't get burned.

Old-fashioned values...wrapped in a franchise known for its lack of them

I'm always interested in old-fashioned business values. I guess it is a bit of nostalgia on my part; on the one hand, I wish all businesses had Jimmy Stewart as the manager. On the other hand, I am aware that Silent Spring was written during that "Golden Era," and that it was a time of child labor, unfair wages and pitiful working conditions. It's easy to look back and see either the good or the bad, but every age is mixed.

Today McDonald's is known for its poor employee benefits, lack of available health insurance, union-busting and environmental destruction from buying cheap South American beef. So it seems odd to feature a McDonald's franchisee as the epitome of the best of old-fashioned values, but it's true. I heard of the Canchola family and their incredible success with a McDonald's store on the U.S./Mexico border shortly after moving here; just mention the name to any long-time Tucsonan and they will probably nod. Rumor is that their first year, every child (there were six) worked to keep the store going. The family contributed to the community and became the stopover for those going shopping over the border (we've been there multiple times). I'm not a big fan of McDonald's, but I am a big fan of the Cancholas and their compassionate business ethics. For this reason, I am sad that the store is being handed over to someone outside of the family, and I also give the family my best wishes. I only wish everyone could be as amazing in their community; it would be a different world.

End of era at Golden Arches in Southern Arizona
"...'You have to give back.' "
That attitude is something Canchola credits others for instilling in him.
"A lot of people helped me in my life. I learned from them, and I learned that you don't pay those people back. You can't; you pay forward," he said in an interview with the Star in 1988. "You help somebody else that's coming along."
From that mind-set grew the idea of a Christmas Day celebration for children living in dilapidated, hillside shacks on "el otro lado" — the other side of the border.
What began as a family-sized event grew to involve thousands of children, coordination with immigration officials and volunteers from all over Southern Arizona who were drawn to the Canchola family fiesta.
This year, the burger joint will stand dark on Dec. 25, although the new owners hope to host the party again starting next year.
Dr. Richard Carmona, who volunteered at the Christmas party for 20 years, called the news the "end of an era."
"The Cancholas are a wonderful family who have done so much for this community," he said. "The situation is very sad."
Carmona, president of Canyon Ranch Institute in Tucson, would travel to Nogales from Washington, D.C., for the annual event when he was U.S. surgeon general.
"I always remember this one little girl who wouldn't eat her hamburger because she wanted to take it home and share it with her family," he said. "The event brought so much happiness — at least for a little while — to so many." (picture from www.azstarnet.com)

A minor remodel...for the rest of us

One of my major frustrations in house remodeling, house decorating or anything that has to do with the appearances of our private or semi-private lives, is that magazines frequently feature only the upper middle-class. By this I mean people who think they are middle class, but really are upper middle class. Anyone who makes over, oh, $85,000/year is, in my opinion, out of the middle class bracket. So I'm always amused by the statement, "middle-class couple Jane and Jack made $250,000 last year..." I mean, I'm sorry, maybe I grew up a little too poor, but my dad made $20,000/year in the '80s and there were 5 of us and we were not on any government assistance.

My husband makes $54,000/year for our family of four. We currently supplement that with a combination of free school (my husband is a university employee) and the GI bill, as well as $350/month from our tenant. We are not rolling in dough; soon we will be a one-car family again. But I think we're fine. Sure, it would be great if I worked full-time, bumping our income up to $87,000/year, but we've made our choices.

This summer we did a lot of remodeling. We redid our guest house, refaced the kitchen, tore out and redid the hall bath, put in new flooring in the entire house and knocked out a wall in the kitchen. We also had the house painted and the landscape redone, all new appliances put in and we purchased a new dining room table, office desk and bedroom set. Our total? Around $42,000, including rent on another place while we did it.

So when I see people earmark $54,000 for a kitchen redo, all I can do is roll my eyes and wonder, who the hell spends that kind of money? I mean, we might replace our cupboards in the spring, but only if we can make it happen for under $5K. I have a word for stories about expensive remodeling...sponsored.

According to Remodeling magazine's "2006 Cost vs. Value Report," a "minor," midrange kitchen remodel averaged $17,928, and 85% of the money was recouped at sale. A "major," midrange remodel averaged $54,241 and returned 80% of the cost. Both projects include replacing the sink, faucet, countertop, flooring, oven and cooktop.

How's your gift-giving etiquette?

Here's a great little self-test from Kiplinger on gift-giving etiquette.

Test Your Gift-Giving Etiquette
When giving or receiving this holiday season, there's a right -- and wrong -- way to go about it. For example, is it okay to re-gift? Do you know how to handle an unexpected present? Is an e-mail thank-you note acceptable?

I regret to say I only received a 60%, which in most schools means failure. However, I don't mind re-gifting -- it wouldn't bother me if someone re-gifted to me, and I think it's fine to send unusable things on, so long as they are still in their original packaging -- and I always gift my boss a gift. I give the same thing to my boss and co-workers (when I'm working), which is usually just a tiny box of chocolates, or a card for a free latte with a card. Regardless, it was fun to see what was there and how others scored. Enjoy!

Making a list, and really checking it twice

So I caved and went to the mall and and a few other select stores yesterday and today to pick up some deals. A dear, dear friend of mine, whom I recently visited, has three children aged 7, 9 and 13. While I was there, I noticed the state of their bedding was horrible, and there were hardly any towels in the bathroom that were a single piece. So, this year, even though I am not buying gifts for any other friends, I decided to buy each child a bed-in-a-bag and to buy my friend some complete sets of towels. I budgeted around $150 for the family, knowing that I could buy super-cheap items for that but hoping I could find some nicer deals this weekend. After all, the problem with super-cheap stuff is that it just doesn't hold up, and clearly, THIS STUFF NEEDS TO HOLD UP.

I hit multiple stores looking for deals. I shopped Linens-n-Things late Friday night. I cruised Target at 10:45 p.m., noting the gaunt and exhausted faces of those poor Black Friday workers. I found one bedding package at Linens-N-Things for $49.99, and two towels sets (each with bath towels, hand towels and washcloths) for a mere $15 a piece. I had a 20% off coupon for the bedding, but I could hardly buy 3 without exceeding my budget. I soldiered on.

I haunted the basement of JCPenney's at 10 a.m. I dragged screaming family members into Sears. After an hour of picking through a few hundred comforters, I finally found two amazing comforters for just $18 each. Bingo! They were soft. They were warm. They were blue. They were perfect!

Then I found two sets of 300-thread-count sheets on clearance -- not only were they a decent thread count, but they matched the comforters. They were marked down to $16.97, with an additional 20% off. I took my haul to customer service to listen to them try to sign me up for a Sears card and to finally ring up my merchandise.

They forgot the 20% off. So okay, that's fine, I go back and show them the sign and they nod and then take my 20% off the sheets, saving me another $6.00. This would seem unremarkable, except...

I then found some really nice Skechers for my 5-year-old for Christmas. He really wanted a pair (purely due to t.v. advertising, I'll admit) but since I've only just gotten him out of plastic Spiderman sandals, I was actually happy he wanted nice shoes. I found a pair at Sears later that day marked down from $44.99 to $19.99. This is only a few dollars more than a regular pair at Target or Walmart. I seized the box (they had his size!) and took it to the register.

It rang up at regular price.

I took yet another saleslady to the sign, she checked the numbers, and then we proceed to wait nearly 20 minutes (I am serious) for a manager to show up to clear the transaction. My savings? $25.00 But this is getting a bit old...

Except for the fact that, earlier in the day at JCPenney's, I picked up a pair of jeans for my son (he's also grown out of everything the past month) that were marked down to $10.00. There was another, nearly identical pair next to it. When they rang it up...the second pair was $17.99. I had them take it back. My savings: $7.99 (actually $17.99, since I didn't go search for another pair).

So...the total mistakes for today totaled $39.00. That's nearly 40 bucks! It's hard to believe that these are all honest mistakes, and not retailers' deliberate sloppiness. This sloppiness means money in their pocket. How many people would weather the embarrassment of waiting 20 minutes for a manager to show up (who was, incidentally, completely unapologetic for the wait)?

It has only been recently that I've started really scrutinizing my receipts. My mother used to do this, but I never acquired the habit. Then I saw this article on Get Rich Slowly, and I decided to start checking and see what would happen. In addition to my $39.00 savings today (or $49.00, depending on how you see it), I have also noticed mistakes on my grocery receipts three times. For two of them it was an incorrect price, for a savings of $7.39 (the third was an item under the wrong sign, and I opted to pay the higher price for it).

If you add up the grocery mistakes, I made $46.93 this month, just by spending the time to check the receipts.

So for everyone joining the rat-race we call Holiday shopping, here's a tip: don't just check your gift list, check your receipts -- and recheck. The money I saved today meant that I came under budget for my shopping this weekend.

(On a side note: By using my coupon and insisting on the advertised discounts, I managed to buy the two towel sets and 3 complete bed sets for my friend for the low, low price of $143.79, tax included. I came under budget by $6.21 while still buying really nice, good quality items. I am very proud of my shopping this year, and glad that my good friend will have nice, warm blankets for all her kids!)

Black Friday Online

I've been surfing the web, looking for Black Friday deals, and it looks like the best ones are actually online. I have to get up to take my mother-in-law to the airport early Friday morning, and I thought if anything I was already looking for was on sale, I would drop by and buy it.

I have never shopped on Black Friday, choosing instead to sleep off my large Thanksgiving dinner and ignore the mania. Last year, a friend of ours waited in front of a Best Buy in San Diego all night long, only to have to run for his life as some stressed out consumer pulled a gun. But here, in laid back Tucson, the thought of such craziness seems impossible. Maybe I'm wrong, but it looks like this year, at least, I'm not going to find out. My Black Friday will exist online this year, if at all.

Amazon.com has a great Friday sale every Friday of the year; I expect great things from their online Black Friday Sale. And if you're looking for a list of online retailers and what they are offering, here's a list of Black Friday Sales.

Just keep in mind, as one poster to this site put it; if you search around the web, most of the deals can be found anytime. So save your crazy for something more deserving than consumer goods, and keep your dollars in the bank.

Move over, E-Bay

This year, I lost a $720 diamond ring. I had bought it at a discount at the Gem and Mineral Show here in Tucson. Since I lost it through basic stupidity (leaving it in a place my toddler could reach), I decided not to replace it and instead purchased a very similar ring made of cubic zirconium via Amazon.com. The new ring is small, tasteful and virtually nobody realizes it is not a diamond. The price? $13.49.

However, had I seen this site called Bidz, I might have considered buying another diamond ring, particularly if I could get one for less than $100. I don't know how long my silver and cubic zirconium ring will actually last. That being said, the prices on this site show yet another aspect to this; although the ring had been a gift, diamonds are not a good investment of money. Instead of buying a diamond ring, it would probably be worth it to take that cash, however much it may be, and buy the company that sells them -- shares of it, at least.

It may not be shiny and sparkly, and may not fit on your finger, but extra money in the bank? Now that's pretty.

DIAMONDS MAY BE forever, but on Bidz.com they're hardly priceless — and that's turning out to be a valuable strategy for this online jewelry auctioneer. Rings, ruby bracelets and pearl earrings all start off at $1 on Bidz. Shoppers decide the final price, with winners often making off with their bounty for under $100.

Bidz is the creation of Chief Executive David Zinberg, an immigrant from Moldova who took his first job in the U.S. in a shoe store. He went on to form a business selling jewelry on eBay and parlayed that into what is now Bidz.com, a roughly $400 million company whose stock has risen 125% since its May initial public offering. In August, Zinberg decided to forgo his annual salary and receive a nominal $1 a year, with no stock options or bonus, saying the move more closely ties his pay to the company's performance. The CEO owns close to three million shares of the company. (Read the entire article here).

Black Friday's comin'

Black Friday is next week! How did this happen? Luckily we've already done our Christmas budget, and my family has agreed to draw names this year, which means we may actually come under budget. Also, my mother-in-law is coming for a visit next week, which I hope means I can send gifts back with her and save on shipping. I've never been a Black Friday shopper; I don't much like shopping, and the idea of standing in the cold for a "possible" deal just doesn't appeal to me. For those of you who do, Kiplinger has a list of ten ways to save money on Black Friday. My favorite is the last one -- curling up on the couch and relaxing. Because the best way to save money is not to spend any at all! I like the two below, too, and plan to spend my Black Friday doing just this:

6. Clean out your closet, basement or garage. Are your old clothes, knick knacks, books, CDs and other household items taking up precious space? Donate your used stuff to a charitable thrift store such as Goodwill or Salvation Army and get a tax write-off. Or sell it on Craigslist, eBay or Amazon.com to make some extra cash for the holidays. Learn more about where and how to sell online.

7. Assemble your financial emergency kit. This fall's California wildfires serve as a somber reminder to get all your important documents in order. A couple hours of preparation could prove priceless if disaster ever struck your family.
Gather all your important documents, including insurance policies, birth certificates, property deeds, car titles and investment records, and store them in a fireproof safe. Also, consider creating a couple of backup CDs of digital family photos to stash in your safe. Pictures are often the number-one item people wish they could take with them in an emergency.

Ironically, the one thing Kiplinger doesn't mention is a magazine subscription to them, which is a great gift that doesn't need to be shipped. My parents have talked to a financial advisor this year and are actually trying to save money. My mother is 60 and my dad is 56, and they have been spenders most of their lives (they actually did best when they were poorest; when me and my two siblings were small, they paid off their house in just 6 years. They re-mortgaged it when I was a teen and maxed out its value with an equity loan just this spring). I am happy they are starting to sort things out, and hopefully they will get good information from the magazine. I don't think they'll be offended; my mother has been asking for some kind of books or reading materials all year. I think Kiplinger is a good resource, but if anyone has a better magazine or book that works for them, leave a comment!

Preparing for the Plunge

After reading about how Net Worth can be artificially high because of house prices, I've finally decided to take the plunge and adjust our net worth down. I did not use Zillow for this; instead, I found out what a similar house on our street sold for and used the price-per-square-foot to figure out ours. It is only a few thousand from the Zillow figure, anyway.

So, the worth of our house will go down $13,000 this month to reflect the housing crash. Since we've just put $25,000 into remodeling and $2500 into new appliances, this is hard for us to chew. On the bright side, we only owe 72% of the worth of the house, even having taken out money for remodeling and such, and our mortgage interest rate is just 4.375%. While we don't want the worth of our house to drop, if it did, we could weather the storm. The majority of our debt is the mortgage and our student loans; in fact, it comprises 95.7% of our total debt (24% is student loans). Our consumer debt is just 4.3% of our total debt. So, while our net worth is not terribly high, a large portion of our debt can be deferred during hard times.

Because of this, what I really want to concentrate on right now is saving for retirement and having a really well-funded emergency fund. Right now we only have 2 months worth of expenses saved, but my goal by May 2008 is to have 6 months or more saved. That way we will be ready for an impending recession.

I will say that, as a state employee, my husband has very little chance of losing his job. He was moved from "soft" money to "hard" money four years ago, and is vested as a state employee, so it would be pretty hard to fire him. We have been hoping to move and for him to get a new job in a couple of years; a recession could stymie that plan. But I think we are reasonably well prepared to weather some hard times, although we could be much better.

My big worry is if this impending recession will last more than a few years. In the 1980s, it went on forever, and if that happened, things would get very tight. Right now my husband has a secure job, but the pay isn't that great for a four-person family. He will finish his degree in May 2009, but if there aren't any other jobs out there we could be stuck. Right now he gets the GI bill to supplement our income, but that will end next year. That's a reduction of $800-$1100 a month. Living on his salary alone will be tough, and right now I am trying to live just on his income and use the GI bill as savings or to pay off debt.

I feel like we need to practice being disciplined and not just expand our living expenses because the money is there. It's hard, but things are finally starting to fall into place as we slowly reduce what we spend every week. We will get rid of our second car in the next few months; we've gotten rid of our storage unit, are using the scooter to save gas, are eating in most nights a week and making lunches. All this means that this month we have an extra $800 to put on our debt. It's not much, but every little bit counts.

Next up: Amazon versus Half.com. I am selling around 300 books and using both sites, with the extra money to go onto our debt, of course. Keep an eye out for the update.

November Net Worth

November Net Worth: not great. Although we show a slight raise in our net worth, this is about to plummet, as we just purchased two major appliances. Our stove chose the month of October to go out, and our dishwasher hasn't worked for three months. It's just our year; it seems like everything in the house is on its last leg.

The end came with me trying to make an apple pie; I had to light the stove six times, and it took nearly 3 hours. The pie came out like applesauce, and we finally decided it was time to bite the bullet and buy new appliances (it is more than the stove is worth to fix it; we've been coaxing it along for nearly 3 years). Sears had a nice 15% off deal for people buying two appliances, so we got a new, very energy-efficient dishwasher, and a brand-new gas stove. Our 1963 Kenmore 36-inch monstrosity of a stove is no more.

In addition to buying appliances, I used the credit cards to buy some needed storage cabinets and a new drill to install them (we need a special drill for our masonry walls). This purchase, like the appliance purchases, was born out of continued frustration. I am continuing to try to get boxes unpacked and our lives in order, but some of the changes we've made to the house greatly reduced our storage space. Renting the guesthouse is a loss of 400 square feet of space as well, so I finally decided it was time to buy some cupboards for the laundry room and some under-bed storage boxes. I spent several hours considering the best course of action, and my final decision was carefully and knowingly made, even if I did have to use our credit cards. So, our credit cards went up slightly, rather than down.

On a brighter note, my investments have really taken off, and I've seen a $300 raise in their worth in the past two months. In addition to this, I am trying a few money-making things this month. They won't make up for the $1275 we spent on appliances, but it will at least help out with clutter. I am selling books via Amazon and Half.com. So far my only sale (Amazon) has resulted in a loss of .55, primarily because I chose the wrong postage (priority rather than media mail). I hope that, when this gets going, I will earn a little bit, at least enough I can buy a new novel or two when I'm done. So far I have listed about 60 books, and have 3 more boxes to go.

Our bill for the appliances hasn't shown up, so I don't have it reflected in our net worth yet, but expect it to drop sharply. I may edit it this month, or I might leave it for next, depending on when the bill comes. I am hoping, however, that next year we will see some nice savings from upgrading to energy-efficient appliances, and a lot fewer headaches.

Making a list, and sighing over the cost

We have already sat down with a list and decided on most of our Christmas gifts. So far our total is around $500 for non-family members. I will be trying to reduce that as much as possible; I'd like my husband's family to start drawing names, rather than having to buy for two sisters-in-law, three brothers-in-law and six nephews and nieces, just on his side. Plus his parents. More than half our total budget will be on his family. *sigh*

Here is a great article from Kiplinger about some online tools to reduce the costs of the holidays. I am starting to feel like my father, dreading the holiday season and the loads of money it requires spending...

Sure, Thanksgiving is the traditional kick-off to the holiday shopping season. But why not get a head start before the crowds? Think of the lull between Halloween and Thanksgiving as the calm before the storm. You can take advantage of this time to prepare your budget, draw up gift lists, comparison shop for the best deals or even look for ways to earn extra cash this season.

You can't invest in love...

...but you can invest in hour-long stays in themed rooms with vibrating beds. Japanese love hotels, one of my favorite Japanese things, will soon be available for the discerning investor.

The articles focuses a lot on the aspect of organized crime in the Japanese love hotel business, but unlike "by-the-hour" hotels and motels in the U.S. (which are beyond sleazy -- I know, I stayed in one with a Journalism team as a joke in college. I still can't get the image of the pink, heart-shaped bed and the red carpet out of my mind) Japanese love hotels are frequented by regular people, primarily because of the culture of large, extended families living together combined with the tradition of paper dividers between rooms.

I have a little money left to invest, so I am waiting to see what the IPO looks like, and if Americans can invest too. An eight percent dividend is pretty sweet...

TOKYO (Reuters) - Japan's secretive love hotels are opening up to European investors as one player in the sector prepares for a debut on London's stock market this month.

Japan Leisure Hotels, which owns five love hotels worth some 21 million pounds ($43.68 million) in Japan, hopes to lure investors to its IPO with an 8 percent dividend and promises of fast growth -- shedding light on a sector that is often associated with sleaze and organized crime.

Pointing your finger: not just for third grade anymore

Kiplinger recently published an article called The Earnings Blame Game. Basically it is scapegoating, with companies using everything from El Nino to the recent housing crash to cover poor business models and falling income. Since I've invested in solar power and cable, I haven't seen much of this (my investments are, luckily, going up) but it might be something to keep an eye on; a company doing badly overall might just be using the latest disaster for justification.

Merrill Lynch's massive $8 billion subprime-related write-down was stunning, and the list of companies blaming housing, subprime mortgages or the credit crunch for their troubles includes not only homebuilders, banks and financial-services companies, but also car dealers, big-box retailers, semiconductor makers and freight companies.

. . .

Even Hershey (HSY) blamed the credit crunch for weakness in its candy business, saying that higher interest rates cut into distributors' profits, forcing them to whittle inventories.

In fact, you hear the same excuses in so many earnings releases that it makes you wonder: Are some companies latching onto a convenient scapegoat to camouflage other weaknesses? It wouldn't be the first time.

Sitting on $25,0000

Or sleeping on, actually...

BERLIN (Reuters) - A Berlin student who bought a second-hand sofa bed at a flea market learned she had been sitting on a small fortune when she found a baroque painting hidden inside the couch.

The artwork fetched 19,200 euros ($27,660) in Hamburg after the student discovered it stashed between the folding sections of the couch she had paid 150 euros for last year, the auctioneers said Tuesday.

How to conserve the jungle: Jobs

An article in CS Monitor tells how the New-York Based Wildlife Conservation Society is trying to stop poaching in Zambia: the old-fashioned way, by giving people something else to do.

The program goes beyond teaching former poachers new ways to earn a living; it is creating a sophisticated network of markets that makes money for locals while reducing poaching, improving land use, and supporting conservation.

They are also introducing carrots for those who comply (while keeping the sticks for those who don't)

Mr. Lewis notes, "[poachers] can't do it without the support of the local community."

In that context, promoting conservation means recognizing the reasons poachers hunt – and setting up a business model that gives local residents the opportunity to make a real, legal, living, says Lewis as he sits outside the program's local trading center.

Beating the Collection Companies

A recent article in Kiplinger personal finance talks about lingering debts and how it can destroy your credit:

Q: I recently checked my credit report and found a $104 collection account dating from July 2006 for an unpaid utility bill. Xcel Energy claims I owe $86 from 2001, when I was in college, but I was never notified. This has knocked 100 points off my credit score. What can I do?

A: You may have to bite the bullet and pay the bill. That will at least get the collectors off your case -- but unfortunately it won't help your credit score. "Having a collection account on your credit report is statistically significant for predicting future delinquency," says Craig Watts, of Fair Isaac, the company that compiles the FICO credit score. "What you do later on what that account doesn't change its significance to the scoring formula."

In reality, after three years (the statute of limitations in Arizona) you can no longer be sued for that debt (three years for credit card debt and oral contracts, six years for written contracts and five years for promissory notes). If you're unsure of what the statute of limitations is in your state, here's a great interactive map from Bankrate. Should the company or collection agency continue to report the debt, know that you have rights and must stand up for yourself.

I think it is morally important to pay valid debts, but if you choose not to pay the debt for whatever reason -- unfair billing, for example -- you might just have to live with collection agencies calling you for a very long time. It's called Zombie Debt Collecting. Collection agencies buy that debt for pennies on the dollar, so if you pay the full amount, practically all of it goes straight to their pocket. Should you decide to pay very old debt, consider paying the original company rather than the collection agency. This keeps an unethical company from getting your money -- and possibly selling your debt again without reporting it collected.

Also, once seven years has passed, you may have to write to each of the three reporting agencies to ensure they actually drop the mark against you. I was surprised to find 9 and 12 years debts -- that had been long paid -- still on my credit report when we decided to buy our house. And, a student loan that had been paid had been accidentally marked "delinquent" rather than paid by the loan company! That was a shock.

If you're curious about your score and what's on your report, you can now check your score for free once a year at AnnualCreditReport.com.

Green Investing

It's as if old hippies died and went to heaven; terms like "off-the-grid power" and "wind technology" are now as popular as Internet startup was a few years ago. I personally have put my money into Evergreen Solar and Composite Technology Corporation, but there is a wealth of companies vetted by finance publications, and many are saying that buying green could put you ahead of the game financially as green companies come into their own.

From Kiplinger: 25 Stocks to Invest in a Cleaner World

We've sifted through the implications and put together the Kiplinger Green 25, a list of companies we believe will get a big boost from the growing focus on climate change and the move toward alternative fuels. Our picks vary widely in size, and four are based overseas. Some of the stocks may be expensive, and shares of some of the smaller companies may be volatile. But we think all will do well over the long term. In addition, check out our separate profiles of five up-and-comers -- small (with market values of less than $1 billion), more-speculative companies that someday could grow into green giants.

CleanTech Blog talks about Solar Power 2007, a conference about green solar technologies, and what companies are hot right now:

In 2006, PV grew over 40% to $20 billion in revenue and over 2,500 MW of new solar power. The European Photovoltaic Industry Association (EPIA), forecasts a €300 billion industry by 2030 which will meet 9.4 per cent of the world's electricity demand. By 2030, solar is forecasted to be the least expensive source of energy in many sunny regions of the world.

Get Rich Slowly says, "Want to Save the Environment? Buy Less Stuff!"

Every time I buy something, it has an impact on the world around me. When I buy a new kitchen appliance, for example, there’s an environmental cost for the manufacturing process, for the packaging, for the transportation, and for the marketing. By reducing my role as a consumer, couldn’t I help myself and help the environment? Here are five strategies that I’ve developed to help me accomplish both goals at once...

Millionaire Mommy tells us to ignore advertisers and their siren song:

Advertising media leads us to believe that in order to be beautiful, hip and happy, we need to buy their product. What they don't tell us is that when we do, we often pollute our earth, poison our body and empty our bank account.

Last but not least, here's a few energy saving ideas of our own:

As mentioned before, we switched our commuter vehicle from a small, compact car to a 163 cc scooter. This will save us almost $200 a month in gas, insurance and parking fees as well as 1,347 pounds of carbon dioxide a year. I also plan to take my son to school on a bicycle twice a week; that saves us another 425 pounds of carbon dioxide. That's a total of 1,772 pounds saved a year. (Want to calculate how much you pollute? Go to the EPA website here).

We started shopping at a local farmer's market and I found someone who sells eggs in Tucson. Her chickens get the run of her yard, and I get cage-free eggs for $1.50/dozen. That's a savings of $1.25 per dozen versus buying the ones in the store. Next spring we'll look into buying a share of our local CSA, otherwise known as community supported agriculture, to further reduce our impact and save money on groceries. Check out Animal, Vegetable, Miracle to find more resources for buying locally.

Because we're in Tucson, we planted low-water use, native plants in our yard five years ago when we first moved. This year I turned off the watering system and everyone lived, so we look forward to saving about 1200-1500 gallons of water a month (and between $10-15/month) by having a desert landscape.

Our goals for next year include purchasing window quilts or similar to help insulate our house, purchasing an energy efficient range and dishwasher, and looking into solar panels via the Tucson Electric Power GreenWatts Program.

Got any ideas about how to reduce your footprint AND save money? Leave a comment!

Food Troubles

I just got back from Wild Oats with groceries that will last for the week, at least I hope so. I have some other staples here to supplement that, but our goal is to stop eating out as much, and to eat more meals at home.

My problem is that I tend to like really good food. I have a hard time cooking unless the food is good; I use fresh spices, organic produce, and try to use hormone-free beef, lamb and chicken as much as possible. I love really fresh, good food, the kind that was mooing or growing in the sun recently. The problem is the cost. I spent $100 on groceries today, and I hope that will get me through Wednesday or Thursday. I rarely make it through the week on less than $200. I don't know how bad that is for a family of four.

The Motley Fool makes some recommendations, including joining a CSA. Our CSA, unfortunately, has a waiting list! Our name finally came up on the list in August but were unsure if we were staying in Tucson. Since it is an upfront cost of nearly $300, we decided to wait (and need to get back on the list now).

Get Rich Slowly also had a few articles on saving money at the grocery store: Tips and Tricks to Save on Food and How to Feed Yourself on $15/week. Here's another one from We're in Debt: Eight Ways to Save at the Grocery Store.

I had hoped to get by on $75 this week, but I had to buy chlorine-free diapers (my daughter gets rashes otherwise -- she struggles with eczema) and we started buying organic milk. Mostly I think the cost has to do with Tucson, and the fact that water for agriculture is expensive and most items are shipped in, increasing the cost. I know when I visited my family in Idaho, I was practically drooling at the fruit stand, the costs were so low. And my parents used to buy a side of beef every year, too. Along with the deer or elk my dad killed hunting, it usually provided meat for the entire year.

One of the difficult things for me to adjust to is city living. When we ran out of milk as a kid, we drove to my grandmother's dairy farm and dipped a couple of glass jars into the stainless steel tank. We rented a pasture and raised our own beef one year. I ate so much wild game (pheasant, grouse, deer, elk) that I did not even know these things were unusual (or in some cases, a delicacy). I feel like a foreigner in most cities; what, exactly, is normal here? Butchering my own beef and skinning the carcass was normal growing up. I raised and helped butcher my own chickens. Living in the city where everything is under cellophane is much cleaner, I'll admit, but also a lot more expensive.

For me, one of the difficult things about saving money is that you have to try, over and over, to make a concept work. It's a lot like learning a language; repetition makes for ease of use. For me today, I went into the store with a definite list, I had a budget, and I still went over my budget by $25. I could have stopped when I got my organics and chlorine-free diapers, loaded the kids up, and driven to Safeway to buy my apple juice and cheddar cheese, but I did not. It seems like a waste of gas and resources to do that, too, in addition to taking twice as long.

I suppose I ought to congratulate myself on small triumphs. Today I found myself putting back the bunch of organic kale ($1.99) and the organic leek (yes, that's leek, singular, for $2.49), even though they were both in plastic bags already. I bought nearly no produce there because it was outrageously expensive. That saved me $4.49 (plus tax) on my total. I also bought a jar of apple juice because I needed a big glass jar to make sun tea, so for $5.49 I got apple juice AND a reusable jar, when I planned that much for just a jar.

Just like debt becomes a ball that grows, reducing our costs is also a ball that grows slowly, over time. I need patience, as well as discipline, to get through this period.

*sigh*

We did it!

We finally finished cleaning out our storage unit late last night. Yay! That's $174.50 a month back in our pocket.

Issues

From The Tao Of Making Money, the author of M's Blog says, "Most PF Bloggers Are Rich, Self-Righteous and Inflexible." While the author did recant her comment to some degree here, it certainly made for some interesting discussion, and I realized that, while I have focused on my finances on this blog and my financial decisions, I haven't talked a lot about a whole host of other, more personal issues that do, in fact, affect how I think about money and, more importantly, how I think about life in general.

I started this blog because I admired people who used their blogs as a way to record their finances, and also because I hoped I could be like them -- that I could get out of debt that way. As this year has shown, it isn't that easy, and it was somewhat naive of me to think that way. But, what might not show is that the naivete comes from growing up poor and not really understanding the way things work. There's a kind of mentality that comes from that that is really hard to break. I tend to emulate more than innovate because I don't have the confidence someone with a large income and assets might have. I have a lot of education and I consider myself something of an academic, but it's still hard to shake the idea that "money is corrupting" (love of it is, or so the quote goes). Poor people tend to despise the rich also (I've found that wealthy people are blissfully unaware of how much the poor really despise them -- not jealousy, but real hatred, I mean). So what happens when I become, well, "rich"? It's not an easy thing to deal with, and already there are murmurings in my family when I say I can't afford so-and-so because my husband and I aren't living hand to mouth.

The worst thing that happens to the lower-middle-class because of this belief that money and wealth is bad, is corrupting, is that they tend not to make their money work for them. That is the real reason I started this blog; I wanted to really find out about retirement accounts, brokerage accounts and a whole host of other things, and I did. And you know what? Last quarter my 457 account made a 28% profit. Twenty-Eight Percent. Unbelievable!

Regardless, this comment (and the many comments that proceeded from it) reminded me that my position as someone going from a blue-collar life to a white-collar life might be an unusual one, so look for some interesting posts about it, from paying for a private college alone to how I felt about my first real paycheck to dealing with depression and chronic fatigue while looking for a first job. This is some ancient history for me, but I still am dealing with decisions I made right out of school that were directly related to my complete ignorance about personal finances and the reality of office jobs. I hadn't planned to add this element to my PF blog, but perhaps it is fitting, after all.

Breaking It Down

I've wanted to break down our finances for a while now, and I finally sat down and figured out how to use Google Docs to do it. I use several computers and it makes it hard to keep track of a spreadsheet; Google Docs makes that easier, but it is a little different from Excel. Perks -- easy to use, convenient. Drawbacks -- hard to format, exporting a bit tricky. Anyway, here's the result.

As you can see if you click on the picture to the left, we have some serious debts to reduce over the next 12 months. We are in slightly worse shape debt-wise from the changes of the past six months, but in much better shape savings and retirement wise. We hope to pay off the American Express this month; we used it to buy the scooter so we could get 1% back, but we have to be careful not to pay that 17.22% interest by leaving a balance! This month we hope to: reduce our expenses by getting rid of a storage unit ($174/month), sell our car and rely on just one car and the scooter ($4500-5000 to pay off credit cards, insurance reduction of $750/year, gas reduction of $40-60/month) and move some money from a pension account into my IRA invested in stocks.

Comments? Remarks? Questions? Feel free to ask.

The U.S. Postal Service, or How I Lost $50

Recently I had a little reminder pop up in my e-mail about my brother and nephew's birthday. We are heading into birthday season; 90% of my family were born in the winter, I swear. From November through February I have seven birthdays, one anniversary, Valentine's Day and Christmas. It's a financial nightmare.

Usually I ignore my brother's birthday, but this year we haven't gotten along very well and I thought I should at least send him a card. While I was at the shop, I saw a cute one for my nephew, so I picked that up, too.

I needed a good pen and there was one at the counter for $1.49, so I bought that long with the two cards for $2.25 each. My one-year-old found a cute pen that attaches to a keychain, and I am always losing pens, so I bought that too for $3.99 (yes, I knew it was a foolish purchase).

I thought I might just put stamps on the envelopes and send them, but my nephew is 17 and I knew a card without cash wouldn't be considered "thoughtful." I debated slipping a $20 bill inside, as $10 seemed chintzy, but I had already spent $9.98 plus tax, and, after all, we were trying to save money, and I had splurged on the silly pen. So, I ducked into the cute little toy/novelty shop next door to see if I could find something funny to tuck into the envelope.

I found fun bobbing ninjas for the dash of a car for the low, low price of $10. Then I found a global warming mug for my brother (the coastlines disappear when you add hot liquid) and it was $12.50. Well, I thought, for $22.50 I can get a gift for both of them, sort of like a two-for-one.

You know what's coming.

So then I walked over to the little postal shop nearby. I am terrible at sending things so I knew I had to do it right away or I would forget. Since I didn't have packaging, I had to buy it, and the mug had to be bubble-wrapped so I had to buy that too. I got the addresses from my mother while I stood there, and even though I slipped the ninjas into a plain padded envelope ($2.39) rather than a festive one, my total came to $24.52.

Ouch! I could have sent each one a twenty dollar bill and still saved $7.02. Or, I could have stuck with my original idea, swallowed my pride, and saved myself $50.00.

*sigh* These are the things that making saving money so terribly difficult -- the little decisions I have to make every day. I just hope the gifts get a laugh, but that laugh -- it's an expensive one!

Next time, I'll think twice, or at least I hope I will. Gifts are my biggest downfall, and I just don't know how to stop (and I always, I repeat, ALWAYS, lose money when I make gifts).

I'm not looking forward to Christmas...

Adding $13,500

I just added $13,500 to our retirement accounts. This is the amount currently in my husband's pension fund. We debated whether or not to add it but it seems logical to put everything in. Of course, technically I should go back through the months and adjust according to how much was there, but we didn't know how much, so I decided to just add it this month and leave it. I already know we increased our net worth by $1,102.

Right now I feel like a serious revamping of our accounts is in order. It becomes more and more difficult to track what we actually have because we have so many accounts. This is primarily because of banks; at one bank, we have a free business account, another offered $100 to start a checking account, etc., etc. We have six accounts we use frequently (yes! six!) and another three that we could get rid of. We also have savings accounts at ING (one each) and a PayPal money market account. Most of these don't have fees (I think just one account does and I plan to have it canceled this month) which makes it easy to leave the money there. The hard part is keeping track of it.

Next up: a spreadsheet tracking our loans to date. I've been wanting to do this for some time, and I hope to get it up in a day or so.

Not great, but smoothing out

Calculating this month's net worth wasn't as bad as last month, but things are still a bit rocky. We bought a scooter this month and haven't yet sold a car, so we look like we are in the hole more than we are. We had both cars repaired which helped us to decide which one to sell, and I adjusted their worth up accordingly. We will soon have the a/c in the Volvo repaired, which will set us back about $1,000, but we'll gain that in its value, too.

We've made moves to lighten our lifestyle and it will become apparent the next month or so. Getting rid of our Ford will save us in gas and insurance, plus pay for the scooter. We will save almost $60 a month just in insurance, and probably another $40 in gas, and we will soon see the $350/yr savings from switching to a motorcycle parking permit for my husband's work. Altogether that amounts to a $1,550 savings a year, or $130/month that we can put towards debt or savings.

Even though I want things to go faster, we did raise our net worth by $1,100 this month (yay!). Our debt (other than credit cards from the scooter purchase) went down slightly, and our retirement went up quite a bit as I discovered I had money in a pension account I didn't know about. I'm debating whether to add in the money in my husband's pension account too; I suppose that would be the logical thing to do, but since I don't track it monthly (cannot) then I hate to put it in. It would add another $16,000. It makes us look slightly less irresponsible regarding our retirement if I do that. ;)

I changed my ING account to an automatic withdrawal of $15 twice a month. I'm arranging to rent out our guesthouse weekly in the spring but only have it rented for 10 days at the moment, so I hope I can keep it occupied.

I checked my 457 account and noted that I received a 26% return this last quarter! Wow! Annualized that's 14.8%, which is wayyyyy beyond my expectations. Right now I'm faced with a decision regarding the money in my pension; leave it in at 8% or roll it into my stock-based IRA? It's hard to say. Right now my stocks have only just recovered from the recent dip, but we'd like to buy Google stock. I checked and someone who bought just $400 of IBM stock when they opened would have $1.1 million in shares right now. I know Google is overpriced, but we are looking at this long-term; will they be there in 2040 when I retire? Will they keep innovating ahead of the rest? It's hard to say.

My personal IRA account is really for venture capital; I am invested in two "green" firms that create solar panels and a special kind of optic cable. I just read that green investing is the new "Internet start-up" in Silicon Valley. I never wanted to be cutting edge; I just care about the environment and wanted to invest in that sector, so I'm curious to see how this pans out. Anyway, we'll be discussing whether to accept a no-risk 8% return or whether or not it's worth it to take the risk with the few thousand I have in this state pension system. It's a hard call (if I leave it, I can get $63/month pension when I retire, which is pretty underwhelming, but the interest would turn it into $40,000 which I could withdraw at that time).

So that's this month: more downsizing, an unexpected retirement account, and a move to "turtle" savings rather than "rabbit" savings. Hopefully we can hold steady.

Clutter -- out of control

Luckily, this isn't my fridge. This is the refrigerator of this guy's mom, who appears to have a problem with obsessive-compulsive hoarding.

We are still working on clearing out our storage unit, which costs us $175 a month and is sucking money away from our new rental. I think we can finish it up by this weekend and the whole house-selling fiasco will be at an end.

If I didn't feel the urge to purge right now, looking at the pictures of this house convinced me that I don't want to go down that road:

Greenspan -- On my side

Although I didn't start this PF blog until last year, my husband and I have been discussing investments for quite a few years. This all started back when we were newly married and living in Washington, D.C. All my co-workers invested heavily, and thus we were introduced to the concept of investing money (we were also introduced to the concept of having money period, but that's another story). We saved and saved, and I read a lot of investment brochures. An unexpected pregnancy stalled our plans, but I kept reading and learning terms.

As I have written here, this year we branched out. Not only did I start this blog and start tracking our triumphs -- and mistakes -- we even put a tentative toe into the swirling waters of stocks, via an IRA. We turned our guesthouse into a rental, discovered online savings accounts, even discussed the meaning of "equity fund."

My husband and I agree on most things, but we have a fundamental disagreement about Economics. Now, I think that my theory is the best, primarily because we usually make money on it. This is primarily because I actually invest the money, rather than thinking about investing it. This is the fundamental problem my parents have -- all talk, no money in the bank. Honestly, though, I wish he was investing his own way so we could compare. That is a future goal, I think, but for now, it's just me.

In essence, I am a psychological investor. I look at people's attitudes and try to guess what they'll do. For example, if a stock crashes, it gets my attention. If it splits, I find that a good time to buy -- people's attitudes are positive, more people are selling, etc. My husband disagrees. For him, it is math. Two stocks at $25 are the same as one at $50. Sure, that's true enough. But for me, money is an idea; math is just a convenient way to tabulate it.

What do you think, PF community? What strategies do you take when investing in stocks, and does it work? As for me, I was surprised to find that Alan Greenspan, the math genius and long-time Federal Reserve Chairman, says that stocks are based on the emotions of fear and euphoria. While I can't try to time my buying with fear and my selling with euphoria -- that really is a crap shoot -- I have to say that it sounds like Alan Greenspan is agreeing with my point of view.

Which, what with our terrible financial year, makes me feel a little euphoric myself.