Dow goes running...

Yesterday the Dow dropped 400 points. What are you doing today? Shoveling more money into the market or trying to sell off? I guess because of my age I wish I had more money to invest into the market. Right now I am about to rebalance our portfolio DH's 401k, our Roth IRAs, and a few other things. If we had more money we'd be funneling it into the market.

Do you think this is a start of a "bear" market? Or is this just a correction in the current bull market and an opportunity for some to buy more? The last bear market ended in October 2002 and we've had really great time since then. Many people would say not yet the S and P has been performing 10%+ since then annually.

As a twenty-something, my advice to other twenty-somethings dive into market. We've got a long time until retirement and this should be looked as a golden opportunity. Just remember time and diversification solves most problems. Just don't panic everytime something happens with either really good or really bad.

March Madness

It's not what you think. The march madness involved is 114 bloggers competing for the top blogging spot of most enjoyable article. We submitted our articles to Free Money Finance into a round robin contest to see who wins. I submitted my article on "is life passing me by."

I thought about submitting a different one, but the mood hit for something more personal than fun or amusing. Anyway just thought I'd share.

Why can't we get along?

Why are there people out there who are rabid Dave Ramsey fans and hate everyone who uses a CC? Or they dislike those people paying off debt based on interest rate. Why can't we all just get along? Why not just accept that as long as people are trying to become debt free it doesn't matter what method they use?

Or why not accept that some people can use CC responsible? And instead of saying the people using CC spend more, show scientific studies and data proving this. Just quoting Dave Ramsey, who doesn't have the actually study isn't enough. The study that DR quotes as people spending 17% more on CC, does not appear to exist. I've looked through journals online and in one of the most extensive business libraries. I have no been able to find this study. If some reader should have it, I would love to read it.

I would hope that people who are anti-debt would be supportive to hearing about others experiences. And learning why they do what they do. I find that people who manage their money properly and are financially savvy are very open to listening to debt free people. They do not bash those who are asking questions. Many DR followers I've found will immediately jump on those who "fall off the wagon" or "stop drinking the cool-aid." This makes me wonder why? Because no one is perfect and I wonder how many people in cyberworld are really following the DR plan to a T?

I think it takes more guts to say you make mistakes and be honest than it is to be perfect. To be constantly struggling in life is more realistic. I constantly struggle against wanting to keep up with the Joneses. I want to charge and not pay it off. I want more than what I can afford, but I have to strive everyday to curb these impulses and keep them in check. But blogging about it helps. And being honest about it helps. It's a change in lifestyle, not just a change in behavior for a little while.

Carnival of Personal Finance #89

Very cute and chic Carnival of Personal Finance Ediciton up at Binary Dollar. In this carnival I'm Halle Berry, how cool is that? My article on being a a good condo neighbor is included. Enjoy many great articles.

Monthly Fixed Expenses

I'm pretty shocked by our monthly fixed expenses. The total is $826/month. Of course if we were laid off or something a lot of things could be cut to save a few dollars. But overall part of our problem is we pay quite a lot for heating of our home and a lot for car insurance. We have only liability on a 99 Corolla and a 00 Focus, and our annual insurance is $1762 for two drivers.

I wonder if there is a way to decrease our monthly liabilities? Should we drop the dog insurance? I think DH would have a conniption. I guess we could get rid of Tivo and drop the landline. But I love my Tivo. Currently we're not tight on money but I feel like such a spendthrift.

$180 HOA
$64 Gas(heating)
$172 Electric
$146 Car Insurance
$25 Home Insurance
$62 Dog Insurance
$52 phone, internet
$55 directv
$70 Cell Phone
=$826/month

2/24 February Spending Update

This wek I sort of spent off budget a bit. I spent at Border's $2.95 on a smoothie, last night we bought buns and meatballs for $10.49, and today at Costco we spent $26.31 on corned beef, medicine, broccoli, and bread. We also ate lunch at costco for $3.66 for a hot dog and pizza slice. And we ate dinner at a Chinese place for $46.74.

All in all our current monthly spending is $730.69, with $160.78 going to eating out. I think we had a pretty good month overall. I think our biggest expenditures this month unfortunately was buying a ton of soda. Of course I'll continue tracking our spending next month as well. I'm trying to curb our eating out and groceries as much as possible because we're trying to live on a "budget".

Home Depot 0% CC payoff

Woohoo. I paid off our 0% purchase from home depot yesterday. We had one year 0% interest free on the home depot CC for purchases made for our home 18 months ago. I finally paid it off today, it was due 4/22/07. I always pay it off about a month early to make sure everything is okay.

All we have left is another 0% CC at Best Buy due 8/10/2007. We used it to purchase our computers and washer and dryer about two years ago. It was 2 years 0% so I've been paying it monthly. We had the cash but find it easier just to cash flow it and keep the cash on hand. We did this for the first time in 2002 when we bought our condo in San Diego. This is how we managed at afford our washer/dryer at the time. At that time we didn't have the money saved up. It worked beautifully.

Because of all this CC 0% offers, I wonder if I shouldn't pull money out of our CC and use it to sit in the bank? I'm not sure if I have the stomach for it though, with the number of things that could go wrong. It's a lot more money, and a lot more hassle. Using the 0% interest rate on these two cards haven't ever been a problem. But I wonder if I tried to do what others do if I'd run into trouble? Something to ponder...but for now I'm quite happy with not doing the 0% CC offers and just taking advantage of 0% on purchases.

bad karma...

I really believe in karma and doing good unto others will allow good fortune to run your way. For me I've lost my wallet three times since 2000, and I've always had it returned intact. Great karma right? So I've always returned anything I've found or tried to be honest because of it.

Today DH walks into the parking lot and finds his front right bumper dented, lights cracked and hanging off. Arrgh. This is so frustrating, and yes there was no note. I can't believe someone just hit him and left without a note. This is not the first time this happened. And in a "locked underground" garage.

We're not making a claim, and we may not fix it entirely. This has happened to us multiple times. For some reason people love hitting our cars in parking lots and leaving no note. This has happened to my car in walmart, work, DH at work 2x before, mall, target. I can't believe that someone he works with would be so dishonest. It's so frustrating because this happens to us a lot with our cars.

Being a good condo neighbor

Last month during the extreme cold front that came through NE, the valve on my refrigerator broke and water went pouring into the downstairs unit of our condo. There are three units, two side by side townhouses and 1 basement unit. The basement unit's two bedrooms and living rooms were damaged.

We were gone during this time, and while the heat was set to 50, unfortunately the design our house is poor. The hvac is in the attic and must pump down three stories to heat the bottom floor through only 1 vent. This vent is in the living room/dining room combo and the pipe/valve in the kitchen is exposed to an outer wall, another huge flawed design. Anyway the insurnace did not find us liable, so it is not going on our personal insurance and according to the condo by-laws it is covered by the master condo policy.

So we will not have a claim against our personal insurance. That being said, there is $1k deductible, which the condo association must pay. The question is should DH and I offer to pay the entire deductible because it was our condo? Or should we just allow the association to pay? Second it is not our fault, our neighbors about 3 days later did not have running water in their kitchen (ours was working), because of the cold, and they leave their house at 70.

The main problem is the flawed design of the heating and the kitchen is poorly planned for cold weather.So I know we can pay the money. But we are also worried if we admit to guilt then if something else should happen it can come back to bite us later. And we're very conscientious about our liabilities. Should we just ante up and say it's our fault? Should we not admit guilt but say it was our condo? We're going to mull this over this weekend. The damage was pretty extensive around $60k to repair everything. The floors have to be redone, the basement unit HVAC replaced possible because water went down the floor vents, walls, closets, bed, our floor, wall, etc. So making a claim was necessary we couldn't foot this out of pocket.

American Express Cash Back Rebate

Today I got my American Express Cash back rebate of $36.65 for the year. Which is pretty awesome. This was just for spending money on the CC. I know you'll say that I spent more on the CC rather than cash, which is doubtful. I never pay interest and having been tracking our spending, I don't think we really overspend.

I've looked at our CC statement for the year and we didn't buy anything we didn't need. Did we spend money we shouldn't? Yes but even if we had been on a cash-based system we would have spent it. Why? Because mainly our vice is eating out. And whether we ate out on the CC or in cash we would have gone out to eat. Our thing is that we don't buy stuff like normal people.

People talk about going to the mall, we don't. We don't shop even online. I don't buy stuff, but we enjoy eating out. But I limit that to $400/month both on the CC or cash. I track how much we've gone out to eat and put a stop limit on eating out. So we don't really overspend on CC. I'll put stuff back and say if I want it, I'll come back next week. If you have been reading our spending for the month of february, we bought 1 shirt for DH and the rest has been eating out and groceries.

Thus curbing our spending would not be helped by cash because I unfortunately enjoy good food. Whether in cash or CC, I would buy beer, buy meat, seafood, or cheese. I would go out to eat, in fact this month we've only eaten out $100 which is really low for us. Typically I'd say abou$250 easily but we've been sick and busy. I expect march we'll spend a lot more eating out, for sure because we're taking some friends to dinner.

That being said I'm estatic that I earned $36 from my CC, and in 1 week DH should be getting his rebate check of $47. Which is a great amount considering this is not our primary CC, we mostly use it for costco. Earlier in November I wrote about how much cash back last year we earned and it was a ton.

Too frugal? No bedframe...

Okay I was poked at by Trent over at Stock Market Beat for not buying a bedframe. Now I really want a bedframe, but I am having the most difficult time buying one. And the reasons behind it are not at all financial.

First DH and I have to agree on which set we should buy. Second finding a bedroom set which fits up the stairs. It's so tough because our master is on the third floor of our townhouse and the staircase is so narrow. When we moved in we had to buy a split boxspring for a queen size bed. It just is not feasible to order any set. We ordered two bedroom sets, which when the furniture guys came out to measure didn't fit.

I'm sick of this condo. I hate living somewhere that you are constantly measuring any stupid piece of furniture because it's impossible to fit. When I am able to live large, I want to live in a one story house with french doors to a back yard and a front door large enough to fit any furniture.

Arrgh. Enough whining, I will hopefully get furniture when I find the time to shop more and get something nice.

Carnival of Personal Finance #88

The Carnival of Personal Finance #88 is up a the stock market beat. My post on the latte factor was included as the first post. Trent commented that I'm being extra frugal by not having a bedframe. I guess I need to explain that in a followup post. But anyway enjoy a fun carnival.

Carnival of Money Stories #5

The Carnival of Money Stories #5, a new personal finance carnival about personal stories about finance was up today at Digerati's Life Blog. It included my post about my stupid timeshare. I hope that readership and enjoyment of this carnival grows.

Happy Chinese New Year! Eating out on a holiday

Okay so starts the new year based on the lunar calendar for chinese people. DH and I hate going out on holidays. So for valentine's day we usually go out the weekend before or after. Same thing with chinese new year, instead we'll go out for dim sum tomorrow because it will be less crowded and better service.

I notice that whenever you go out to eat for a holiday, like valentine's day, easter, mother's day, etc the need for a reservation is essential. Also restaurants charge more for their specialies of the day. And the service is absolutely terrible. The wait for a table is often longer than planned and the wait staff is running ragged by the sheer volume and duration of clients.

Though I love eating out and don't mind spending the price, I realized a more than a few year ago it's not worth going out on a holiday. I don't get to enjoy my food because I'm constantly rushed or ignored. The food itself is often sub-par compared to any other normal time And I feel that my money didn't buy me the meal I was expecting in my head.

But anyway, I thought I'd wish me a gong hi fa choi (happy chinese new year) and a happy belated valentine's day.

Real Financial Dreams?

The question for the next festival of under 30 is what are you financial dreams and how do you plan on getting there? I don't really have any financial dreams. I am more a practical planner. I just plan on taking advantage of retirement accounts, saving what I can, while enjoying life.

I think it's hard to have financial dreams because I am pretty content with my life. It might be easier if we made a bit more, but not necessary. Thus contentment in one's life makes it difficult to really dream of more.

2/16 Weekend Spending

Today we spent $6.79 on Papa John's Pizza. I had a gift certificate for $10, so we just paid $6.79 for the cheesesticks and pizza. On Saturday we bought a 24 pack of Sam Adams beer from Costco, and lots of chicken at $1.69/lb at Stop and Shop. On Sunday we bought plywood from Home Depot. On Monday to celebrate chinese New Year we ate out Dim Sum.

2/16 Papa John's $6.79
2/17 Costco $23.19 beer
Costco $107.67
Stop and Shop $23.44
2/18 Russo's $13.68
Home Depot $5.85
2/19 Green Tea $25.00

Thus the spending this far this month is $640.54, with $107.43 going to Eating out.

Reneging on a home purchase

My parents got out of their impulse home purchase! Woohoo! I am soo happy. They were going to purchase a 1 bd condo for $377k, the list price was $389k. They had put in an offer before it was even listed in early January. They were set to close in a few more days, had the home inspection, but decided it was an impulse purchase. I think my nagging made them step back and think a bit more before jumping into buying a condo.

Now the place has been listed on the market for a month and there were no other backup offers. I am hoping that the condo is unable to sell for even $377k and will show my parents that real estate is not easy money. And that it doesn't usually sell for list price. This was a 3% discount because they were buying the condo from the seller and the seller's agent WITHOUT an agent to represent them. So basically they were paying full price of the condo less commission to another agent. Not smart, but luckily they did not go through with the deal.

In today's buyers market I think that it would be crazy to not push harder for more concessions from sellers. I also strongly feel that buying without advice is not a great idea. So my parents have successfully avoided a huge financial mistake...YES!

2/15 Spending Update

My DH only spent $35 for dinner and beers at the hockey game. I had given him $100, but was terribly surprised. It was probably because the guy he went with left in the middle of the second period from feeling ill. So DH didn't want to drink alone. I probbaly shouldn't be so happy about it.

I also went grocery shopping for $13.77 at stop and shop yesterday. I bought some celery, a mousse cake, and bread. Yep I bought bread, though DH likes to make his own. I feel so guilty but we had the loaf so much faster than we usually do. So far our spending has been pretty good this month.

Valentine's Day Plans

Okay I have to figure out today what my DH spent last night. Anyway tonight I thought about going out, but instead we are going to roast a chicken. Which should be great because it is snowing so it could possibly be very tough to go out. I sort of want to eat fondue, so maybe I should call DH to stop at the store and buy some cheese and bread (we ate most of the loaf he made this weekend).

Festival of Frugality #61 is up...

The newest carnival I'm participating in is the Festival of Frugality #61. It includes my article on coupon shopping or not. There are a lot of very money saving articles there. Enjoy.

$200 night out

Since I already set aside the money for DH's night out I'm not couting it in this month's spending expenditure. However if he goes over $200 I am, because he doesn't have more cash than that. What the heck costs $200 for one guy a night?

Try rinkside hockey tickets. His absolutely hometown, grew up with, hockeyteam is coming to town for the only time in about 5 years to play. And someone he works with has season rinkside tickets which are $150/seat, a discount from the regular price of $175 because it's a season ticket. Anyway though, I doubt $50 will be enough for dinner and beers, so I'm guessing an extra $50 which is valentine's day gift early.

So my spending for today will probably be $50. Sure it sounds like a very expensive present/gift, but the truth is my DH is such a frugal guy he deserves a great night now. I hope that he has fun. Anyway I told him to call me to pick him up in case he drinks too much beer, because a DD infraction is $1k out of pocket at least.

Submitting a Tax Abatement

So last week we turned in an abatement of our property taxes. That means we are challenging what the assessed value of our home is. We just feel that it's assessed extremely high comparated to other homes in the area. Part of the problem is that when you purchase a house where we live, often times the taxes haven't kept pace with the sales prices.

So someone who lives in their home for 10-15 years is paying substantially less taxes than someone who just bought. Because the assessor at that point comes out and reassess the home. Our neighbors with single family homes instead of our condos, and are larger with a private yard, are assessed for less money than our condo. Is there homes in poor condition? Nope. And are they larger? Yes.

But the problem is the assessed value of their homes have gone up since they purchased it 10 years ago 3% a year, when prices have actually skyrocketed for 20-30% a year since 1998. So how is that fair?

When I questioned the assessor's office, their answer it's not. But they are underworked and unable to properly boost the assessed value of homes that have been lived in for years. Rather it's easier to reassess newly purchased homes. Thus it's worthwhile filing and abatement to have your assessed value matched up to your neighbors. And that's what we did. I expect an answer within the month.

Carnival of Personal Finance #86

The Carnival of Personal Finance #86 is up at 2millionblog. It is featuring a lot of great article including an article from Jeffrey at savingadvice talking about the lies we tell ourselves. Included in this weeks carnival is my post on the tax break from kids. Enjoy.

2/12 Spending

Because I had to mail a book sold on Half.com, I ended up spending money today. I spend 4.28 at CVS for a bubble folder and valentine's day card. This is DH v-day gift, well actually an extra $50 for the hockey game tomorrow. Also I spen $2.07 on postage mailing the book I sold for $35.

So the running total is $362.55! Not bad for almost half a month. I think I'll be doing this a lot more in an effort to keep out spending to a minimum.

Suze Orman...

Okay I admit to last night watching Suze Orman's TV show on CNBC. It was very amusing and highly entertaining. I think that she uses a lot of simplification on her show and if you are reading this blog you probably shouldn't watch her show. It's really simple. BUT I think it's easy enough to understand for the average person just getting started in investing and understanding debt.

My favorite part of the show is her deciding whether someone calling in can afford to buy the item they want to purchase. They tell Suze what the item is, how much it costs, and how they will finance their purchase. Then she says approve or deny. Last night there were people asking for a cruise (approved), culinary school (approved), dog daycare (denied), a used Audi (denied), and investment property (denied). One of the biggest factors in deciding approval or denial was whether the person had consumer debt (CC or auto loan), any savings, and what their income was.

Overall though the show is extremely simple, I think it is a great tool for beginners. I suggested to my mom to watch the show and start watching it every Saturday night. She has basically just started to grasp what a stock is, mutual fund, and bond. This show I think will get her more interested in personal finance without intimidating her like other shows.

So I guess I'll give Suze a thumbs up for providing the inital steps to personal finance. Or a personal finance for dummies...

2006 Taxes Prep

So I did and off the cuff estimate of our taxes. Because of my stupidity regarding DH's bonus at the end of the year, it appears we will be getting back over $4k from the federal government. Also maybe another $1k from the state. Most people are probably like wow. But me, I'm smacking my head going darn it.

We just gave the government an interest free loan. Granted that a lof of it came from the end of the year bonus taxes taken out, but still. It's really baloney that I did something so done. Anyway, we're still taking it to an accountant. We want to be sure we do the timeshare donation correctly and are able to recoup our donation fully. It's a lot more complicated also with our bonuses this year, but hopefully if nothing major changes next year we'll be doing it ourselves.

We were supposed to go this morning, however due to my DH forgetting his schedule we're not seeing our refund until at least two weeks from now.

2/9-2/11 Weekend Spending

This weekend we didn't spend nearly as much on groceries, although we did spend a substantial amount more in the eating out category. We usually don't eat at applebee's but it was walking distance to our house and we were pretty tired on Friday.

2/9 Gas $21.41 (my car)
Stop and Shop $2.58 (water and butter)
Applebee's $27.28

2/10 Shaw's $13.27 (2L soda, celery, tomatos)

2/11 Asian Market $4.28 (tofu, hot sauce)
Stop and Shop $28.71 (4lbs of sausage, eggs, green beans, water, 3 lbs of onions, broccoli, red peppers, white peaches, and dented box of banana nut muffins).


I think this is sort of indicative of what we normally buy. We try to stay away from processed food, although the sausages are mainly for my DH. He loves them. But overall not a terrible weekend, we spent $97.53 overall for a running total of $356.20 this month. I am hoping to keep it under $1k this month but we'll see.

I'm not sure whether I should count normal bills like the electric, gas, cable, internet, cell phone, etc? Also if I should include our car registrations $62.50 for two cars, or the car insurance. Also if we should count paying the accountant. I am leaning towards not because a lot are fixed expenditures, not easily changed.

Huge stupid tax...timeshare

Yep, years ago we bought a timeshare. Really dumb, probably our dumbest mistake. Very very stupid. Bad idea. Our biggest problem was the annual maintenance fees. I never actually calculated how stupid it was but I am about to here. This is also something stupid we did that we never mentioned to anyone.

First the cost, we bought a timeshare 2003 for $5k for a great week in Daytona Beach. It was Bike Week a motorcycle week. Not a bad idea, but we were never going back to florida to use it. Instead we were just going to trade it in. So that $5k should have gone into my Roth IRA or paid off the house or bought a nicer car. Stupid idiot (me).

Second there were annual maintenance fees of $200. Sure it doesn't sound like a lot, but it adds up if you keep it for years. Idiot! Again it's just a reoccuring cost that adds to what you spent to "vacation."

Third, there is a fee for RCI, a timeshare exchange company of $99/year. Sounds like a great idea. But how will you really trade your timeshare in? We did, and it was great, but when you "exchange" your timeshare then you end up needing to pay another fee of $189/exchange. So annually you are out of pocket spending $600 for a hotel room. Yep it's a nice room, but you also spent the $5k upfront costs.

Thus why people have such trouble giving away timeshares. I believe that we spent $5k + (2x300) + (2x100) + 189 = $6000 in all for our timeshare we never used. Great idea. So there was my brilliant vacation plan.

Yep my stupidity now out in the open for me to look at and cry about. It was such a dumb dumb idea. I hope no one in my family reads this because I can't believe how stupid I am. Or how dumb I was.

But I finally got rid of it this year. Buyer's remorse. I couldn't sell it though we tried. Instead we donated it. Which turned out to be a blessing in disguise. Good thing we did it now when our income was much higher and we get better tax break. You can't undo our stupidity, but you can try to stop the money leak.

All in all, would I change a thing? Not really, I need to make a few money mistakes in my life or else I'll never learn anything. But this was one of my more idiotic lessons.

Festival Under 30 Finances Edition 16

Today the Festival of Under 30 Finances is published at the Endless Gibberish. The theme of this festival is if you could turn back time and change things financially would you? My answer NO! Here's my post on if I could turn back time...Enjoy a few insightful posts and many other stories from under 30 bloggers.

Latte factor necessary or fake?

Okay in his recent money magazine article Walter Updegrave writes about not giving up lattes but instead focusing saving on the big ticket itemes. The summary of his article is that you can save $400k easily by doing three things. One, drive cheaper cars, for example a new $21k Honda Accord instead of $30k Acura RL. The lifetime savings will be $180k. Two, send your child to a public university instead of a private university, lifetime savings $164k. And finally save $1k each year on your vacation. The lifetime savings is $122k. All of this will add up to an easy $400k saved over your lifetime.

Do I buy this or do I think it's easier to stop buying coffee everyday? Truth is I think carefully thinking over big purchases more important. Yes it's important not to waste money and perhaps buy less fancy coffee. But that coffee can be paid for in cash if you aren't "house" poor or "Car" poor.

In today's world it seems like people are more very expensive homes and having trouble affording them. This drives the use of CC and HELOC, etc. So how to curb this? Not buy cutting out daily lattes $5 x 365 = $1825/year. Yeah that's not enough. What would really help someone annually is not having a mortgage that is 36% of gross but rather 28%. Or not having a car payment of $500/month. Those items would save THOUSANDS of dollars a year not just $2k at most.

I understand that tracking your money is important. And foolish spending isn't helping the problem. But if a lot of people are already running towards the red with just a house payment and car payment, then tracking every penny doesn't matter if there isn't enough income to cover even bare bones expenses.

What do you think? Is it the latte factor or the overconsumption of expensive big ticket items?

New Debt Free Website

A friend has started a message board for those who follow (either die hard or loosely) Dave Ramsey's plan. Also if you are just looking for a way out of debt or motivation or anything...then use this website "financial peace". http://financialpeace.proboards107.com/index.cgi
By the way I am LivingAlmostLarge there and am back in BS2. Though hopefully the day DH graduates that debt is wiped clean (Cross your fingers for me, I think it will happen).

401k lagtime...real or BS?

Okay I'm really pissed with DH's 401k from his company. They take forever to deposit the money into the account. The last deposit was on 1/17/2007 for the deduction from the 1/5/2007 paycheck. He is paid biweekly, so the 1/19/2007 paycheck has not been deposited, nor has the 4th quarter match from the company. What is going on? Also he got his annual raise/bonus on 2/2/2007 and of course nothing has occurred, though his 401k was deducted out of the bonus for $1500 that should be deposited.

I think this is utterly ridiculous that the company can't get their act together. I am fine with the company taking 2 weeks to input the deduction, but it's over well over two weeks now for the 1/19 paycheck and it's been over a month for the company match since the end of the 4th quarter of 2006.

Is this how all companies work? I think that the company should be paying for this loss of time. I am hoping that it gets posted by the end of February which might make up the shortfall we experienced last month in net worth.

Heat Auditor determines...

Our house is super inefficient! Woohoo! That explains our heating/electric bills.

Okay, so today I had a honeywell heat auditor come out to our house to determine how efficient/inefficient our heating system and house is. He laughed when he saw our house. First of all our furnace is in the attic. Yep it has to pump down hot air through three stories of our townhouse with only 1 vent. Thus why our bottom floor never gets warm. And why it is absolutely necessary to use electric space heaters.

But what do we pay for heat? We use on average to heat our house only 424 therms/year. Low right? Well we also pay $2/therm so about $850/year for heat, not including using electric space heaters. Also because we use keyspan our heating bill will be going up by 40% in March, since they were currently bought out.

Another point our house is cold. Period. We leave it cold because getting it warmer is not possible. How cold? We leave our house to 50 when we are gone, 68 only when we're home, and 62 when we are sleeping. That is cold, most people leave their homes at 72 when home and warmer when gone. But for us getting the third floor to 60 is next to impossible.

Also this winter in the NE has been very mild even compared to last winter. Thus our bills have reflected this by a substantially decreased need for heat. So I expect if we had a terribly cold winter our bills would be double what they are now.

Second our house is entirely electric. Yep, our washer/dryer and water heater is run on electricity. Woohoo. And we have gas in the house, which makes it more unbearable to have an electric water heater. Our electric bills run about $156/month for an average usage of 836 kWh/month. Meaning we pay about 18.6 cent/kWh. The average cost of electricity in the us is 6.66 cent/kWh. Yep we pay 3x that on average.

So overall we pay approximately $300/month all year long for gas and electric on a newly refurbished 1900 sq ft 3bd/2.5ba townhouse. What were his suggestions?

1. Insulate the attic pulldown staircase, $200
2. Caulk flooring
3. Insulate all wall outlets
4. Install gas log in fireplace to heat bottom floor, $4k
5. Heating unit in basement for bottom floor, $40k
6. Install water heater in attic using gas instead of electric
7. install ceiling fan in bottom floor
8. Suggested a different energy efficeint light bulbs
9. More ducts from attic to bottom floor ($20k)

The company offers financing at 3% for 10 years up to $15k to do these renovations to your house. Will we do any? I have no idea, I am guessing we are going to do the caulking and pull down of the attic and insulating the wall outlets. One consideration will be that we may end up installing the gas water heater, which will cost about $500.

Coupon shopping yea or nea?

Do you coupon shop? I've been trying since the beginning of the year to look for coupons online and in the Sunday paper that I would use. We typically spend about $400/month for two people for groceries. This includes all toiletries, household goods and cleaners, etc. Yet rarely do I find the opportunity to use coupons.

So what should I do? The problem is that we don't eat a lot of the foods that are sold using coupons. You are probably think I'm nuts. For example we spent $267 this weekend on groceries. The bulk of which was soda, on sale for 1.99/12 pack. Great price. So I loaded up and bought 42 x 12 packs of soda = $108 including tax, bottle deposit. Yeah I know, but soda is a major vice for DH and I won't have him buying it individually.

The rest we bought a 7 lb ham, half a pound of sliced steak (hot pot), $2 off steak, beef and shrimp balls, 3 crowns of broccoli, cauliflower, 2 heads of lettuce, pack of carrots, 5 bananas, 10 yogurts, 3 lbs of grapes, 5 bags of chips, 1 dip (superbowl stuff), 5 cans of soup, milk, hoisin sauce, peanut oil, and that's it. So I guess I could have looked for coupons for the soup, peanut oil, chips (though it was $10 for the 5 bags and dip). But we don't usually buy chips and the soup is backup for when we don't make lunch.

I guess the point is that we're not huge coupon shoppers. We try an shop sales mostly and eat a lot of fresh, non-processed foods. I notice that a lot of coupons are for processed foods and toiletries. Instead I just load up on toiletries when they go on sale at Costco. Example I bought 8 bottles of dove body wash for $30. Not the small size bottles but the large 24 oz bottles. Same with toilet paper, paper towels, and laundry detergent. Because there is only two of us, we just load up when there is a sale and live with it.

But I'm not sure if maybe coupon shopping could be cheaper. I'd love to try, but DH refuses to eat most of the stuff on sale. As I track my shopping this month, I'll post about coupons I manage to use or not.

Carnival of Personal Finance #86

The Carnival of Personal Finance #86 is up at the Simple Dollar. A lot of great articles this time, beautifully summed up by Trent. My article "is life passing me by part deux" is posted. Hope you enjoy the carnival.

Brown bagging it everyday?

How often do you bring your lunch to work? It's an interesting question. I posted on www.savingsadvice.com and WIR message board. The most common answer is everyday. I guess because most people on financial message boards are very financially savvy. So the population of people polled will not spend a large amount eating out.

That being said, I had a fun laugh this weekend. DH sit in bays of 4 people, so out of the 4 people there is one guy who eats out every day, the other two eat out 3-4x/week, and he's the only one who always brings lunch. He was told on Friday that he's the most disciplined guy they ever meet, he pretty much never goes out to eat lunch and brings something everyday. He's worked there over a year, and before this job, DH pretty much always brought lunch.

Eating out is a luxury for us. I guess both of us grew up with moms who always packed lunch, though they could afford to eat out. Both of our moms thought that what we ate should be monitored as we got older because we'd get fat. When we were kids it was price because they were less affluent, later because it would encourage fast food eating. So to both of us we've never had exposure to not brown bagging it.

I wonder if we'll change as we have kids and earn more money? I don't think so because honestly I gain weight very easily eating out. Even with portion control it's very fattening. Thus for me personally, it's not the cost of eating out, it's the weight gain. I find I don't monitor as closely my calories and I eat a lot more unhealthy food choices eating out. So I guess I'll have to be a brown bagger for life.

I did want to do a poll for people, but was unable to figure out how to embed a poll. But if you'd like to weigh in on how often you bring lunch versus eating out, that would be great.

2/4 Spending

Today we went and bought a few more cases of soda and peanut oil for lunch. The running total is $19.22. The monthly total thus far is $258.67, what I expected because of our loading up on soda this weekend.

Stop and shop 13.25
Stop and shop 5.97

2/3 Spending

Today we spent $166.48. Broken down as:

Russo's 11.51 (groceries)
Stop and Shop 69.14 (18 x 12packs of soda, groceries)
Super 88 26.85 (groceries)
Petco 38.84 (dog food
Post Office 6.76 (mail off book sold)
JMP 8.39 (indian food)
Indonesian Food 4.99

Well we ate out for lunch today. Our first time of the month. It'll be interesting if I can manage to keep our eating out to once or twice a week or less. I have a few free gift cards which I guess count as eating out.

Spending today

Today I spent $72.97. I spent $19.89 on Gas, $52.08 at Stop and Shop, and $1 on a Redbox movie. Unfortunately this will be a budget breaking weekend. Why? Because coke is on sale at Stop and Shop for $1.99/12 pack. Which is a fantastic deal. So we bought a total of 12 - 12 packs. Yeah I know we could have saved a ton today by not drinking soda (4 x $7.77 = $31.08).

But DH takes a can everyday for lunch. It's his major vice. Second he also like to have a can with dinner and usually another one later in the evening. So what's a person to do? And nope he's only a BMI of 19 with excellent health so it's tough to play the overweight card.

Another thing, today someone at work commented that DH is the MOST disciplined person they know. They mentioned he always brings a lunch to work. This has been a habit for us since we've pretty much meet. We've never had a chance to be able to afford to eat out for lunch, and perhaps we should eat out? That'll be tomorrows post.

Want a tax refund??? Have more kids...

Okay, I've known for a long time that we can't afford kids yet. I mean we can, but not comfortably. Anyway this year I realized that with each child if you are married and make less than $110k, you are able to get a $700/per child tax credit. Insane.

Sure it costs more to have kids, but on a message board someone is getting $9k back from the government on top of not paying any taxes. Holy Cow. Here's the woman's post "Yes, you can definately get back more than you pay in.We have 8 children and hubby claims 10 on his W4 so they hardly take out anything and our return (fed. and state) is almost $9000 this year! Rebuilding EF, paying off son's private school tuition for the year, and the van!!!"

I am okay with people not paying taxes, when we pay a lot. However I wonder if it's fair to get back so much when they pay nothing in? It makes me wonder if someone pays no taxes, makes $60k and gets a $9k refund doesn't that mean they are making substantially more than someone who has 1 or no kids making the same? Does it equal out having kids and paying less taxes?

I don't know. I guess it just got me thinking that having kids really isn't as expensive as people think. With these tax credit and incentives, it seems like we're encouraged to have children. But this is all hypothetical. Mainly it's coming because I'm sad at how much in taxes we have to pay. But for what it's worth, it's because we chose to live in a high cost of living area. So I'll accept full responsibility for that, until we are able to chose to live in a cheaper area.

January 2007 Wrap Up

This month has been a bad month for us financially. We ended up decreasing our networth by $4232 or 2.15%. This was mainly due to DH getting the second half of his stafford loan disbursed. This increased our total debt to $8500 in student loans.

Hopefully next month is a better month with a raise, bonus, and tax refund.

Spending more than we earn?

I can't believe that for the second year in a row Americans are spending more than we earn. Our savings rate is at -1% for 2006, shown here in this article. In 2005 the savings rate was a -0.4% also bad. Only two other years has the savings rate been negative in the US, 1932 and 1933, during the Great Depression.

Can you imagine that we as a country are spending more than we're earning? Of course this does have positive effects because it appears that consumer spending is up 0.7% and driving the economy. This helps people in general.

But the truth is that this will hurt us long term. Long term that means people are not saving for retirement, not saving for an emergency. Instead they are spending tomorrows savings today. Betting on having more money when there could be none.

I'm not sure what the answer is. I would love to have higher retirement contribution limits. That would really help us. But that may not be the answer. The answer could lie in automatically enrolling people in 401k and IRA. And making SS private and letting all contributions go back to the people who contributed. I'm not sure because a lot of people will suffer, however as a nation we are a capitalist society, so why is there SS at all?

I mean everyone wants to pay less taxes, have less government intrusion, then why even pay for SS or expect anything in return? It comes down to personal responsibility. If all these americans are crying about taxes and SS, then they should step up and say they want to take of savings by THEMSELVES.

However it appears that as a nation we are incapable of doing so. How else do you explain a negative savings rate?