The Almighty Dollar

Restoring some fiscal sanity in our -- negative savings rate -- lives

2.28.2006

Getting Married? Tips from a Survivor

The latest flurry of wedding-related posts from the newly-engaged bloggers among us has inspired me to get on the bandwagon.

Having "been there, done that," I look back on my wedding experience warmly with only a few regrets. I suppose that's natural. It taught me a lot about love, money, and relationships. Sadly, it also made me mourn what was once a beautiful tradition, originally intended to celebrate love, and is now a shallow and commercialized one. The worst part about this unfortunate development is that our society condones, even encourages, it.

I think we can all agree the bridal industry is ruthless and relentless. Heck, it nearly suffocated me. But I managed to survive by knowing what I wanted, what I could afford, and sticking to it. Equally important is knowing what I didn't want. It's that simple.

My husband and I were married on a terrace overlooking a strikingly picturesque Italian village under a clear, blue sky surrounded by our closest family members. From there, our families continued their first trips to Europe while we honeymooned in the south for two weeks.

Not only did we have a unique and memorable celebration, but our wedding abroad cost thousands less than had we done it here.

That's impossible, you say? I say it is possible. It's just impossible to include everything the bridal magazines brainwash you to need and want in your wedding.

Don't be afraid to toss out the predictable wedding rituals. Make your own traditions. Don't succumb to the pressure of others. Do what YOU want.

In subsequent posts, you will find my manual on Getting Married, My Way: the engagement, wedding, and honeymoon.

2.27.2006

Penny earned is a penny spent

Did someone discover the fountain of youth hidden at the bottom of a venti Starbucks cup and not tell me about it?

I'm pretty sure, actually quite certain, that I will be old one day (barring any freak accidents). So old, in fact, that I will be unable physically to go to work every day of my life. But that's fine with me; I wouldn't want to and don't plan to. That's why I save.

An article in today's Christian Science Monitor discusses the negative savings rate in this country and what motivates people to spend, spend, spend like there's no tomorrow.

I'm obsessed with pfblogs.org

As a newbie in the personal finance blogging world, I am trying not to become addicted to pfblogs.org.

The site is refreshingly ad-free and exceptionally user-friendly. Each time I post, I check pfblogs.org to see if my post made it up and hope that people will click on it. Then I refresh periodically (ok, a lot!) to see if there are any more clicks.

Be careful not to confuse it with the .com site, which is more restrictive and not as comprehensive. Before discovering pfblogs.org, I relied on my bookmarks to visit other blogs not knowing if they would have new posts. No more! Now I just use pfblogs.org.

35 dollar t-shirt

Every time I walk into a store these days, I feel like an old lady. And I'm only 30!

As I mentioned earlier, I spent most of last week catching up with my best friend, who came to town for a visit. She had been away on travel for days and wanted to bring back a present for her boyfriend.

Tourists in DC usually flock to one of the ubiquitous outdoor stands selling 3 for $10 tees with the bold letters FBI plastered on the front. She said a T-shirt was OK, but those were tacky. (I always wonder if tourists really wear them back home).

So we browsed around a few stores looking for cool t-shirts when I spotted one that would be great for him...until I saw the $35 price tag. I shoved it back on the shelf, but the tee caught her eye. She asked me how much it was. Reluctantly, I told her, thinking it cost way too much. "Oh perfect!" she exclaimed.

I remember the days when t-shirts could be bought for $6.99 on sale at the Gap. They were versatile, too, appropriate for casual or work wear. Now the exact same shirts are considered a bargain at $9.99 or $14.99.

I understand that inflation is at play here, but I'll be 60 and senile before handing over my $35 for a T.

2.26.2006

Following in the footsteps

My brother has bought more cars than I have deodorant in the last 5 years. I kid you not. Granted I don't sweat much, so one stick lasts me quite a while.

The longest period he has held onto a car was 2 years, the shortest being 6 months. Minus a pick-up truck, he's owned them all: sports car, sedan, SUV, and minivan. When automakers introduce new gadgets in cars, he upgrades in order to get them. Leather seats, seat warmers, CD players, and of course, built-in DVD players. Naturally, he was horrified to learn that I still use his old tape adapter to hook up his old portable CD player to get me through long road trips.

Now you're probably thinking, "Hey some people spend a lot of time in their cars and have a right to buy one that's not only comfortable but looks cool, too." That's true, some people really like their cars.

But in addition to cars, my brother routinely upgrades his clothes, shoes, cell phones, computers, furniture, and his apartments. Since graduating from college, he has found a reason to move every year. Same state, different suburb. And with each apartment comes an additional room, making it necessary to buy more stuff to fill more space.

After years of competing with the Jones', my brother finally surrendered. Aggressive collection agencies phoned daily, threatening legal action until he repaid tens of thousands of dollars in credit card debt. Ignoring them didn't help -- they began calling my parents instead. He fell behind on rent, utilities and car payments. (Before I thought he didn't understand upside-down loans, but he said he did and didn't care.) And just like my parents, he kept his hell a secret and assured everyone that things were under control.

I observed from afar and had my suspicions. I started inserting my financial advice into our conversations and forwarding personal finance articles by email. My efforts later proved worthwhile. He thanked me for teaching him about snowballing debt and credit counseling.

Today he has no credit card debt and just bought his first home. He says he has learned from the past and feels free. I admire him for sticking to a plan and paying off his debts. I want to believe that he is a changed man. But when I hear about another appliance or flat-panel TV he's bought for the new house, not to mention the 2 new cars he got the day after closing, I have my doubts.

2.21.2006

Intro to be continued...

I've got a visitor in town, so posting will be light or non-existent for the week. When I return, I'll introduce you to my brother. Cheers and happy blogging to all!

Parent Trap - Vol. II

In my circle of friends, the average age is thirty. We bond over this milestone birthday, mostly complaining about the dull state of our lives and wondering what the future will bring. Notably, the one thing we don't have in common is the state of our finances.

I am married without children and own a home. My husband and I save regularly for emergencies, retirement, and travel (it's what makes the world go round for us). In simple terms, we do all right. Despite practicing good financial habits, we still feel uneasy about the future because someday we expect my parents will come to us for help. And who knows how dire their situation will be at that point?

Don't get me wrong -- I am fiercely proud of our financial independence. But I envy friends who don't have to worry about their parents. Their biggest concern is making it through the next week without bouncing a check. When they need a new suit for a job interview, they call Mom and Dad. And most don't think about their own retirements, let alone their parents'.

My childhood was financially instable. Defaulted loans led to foreclosure on the home, which led to an unhealthy reliance on credit cards, which eventually led to bankruptcy. In all fairness, my parents were unlucky victims of certain events that were out of their control.

What ticks me off is that they tried to maintain an unaffordable lifestyle and sought help so late -- just to protect their image. When they were struggling to put food on the table, they still drove new cars and bought nice clothes. They were ashamed at how bad things had gotten, so they didn't tell anyone. That's how I learned the value of prioritizing one's spending.

I vowed never to repeat their money mistakes. So far, I've succeeded. I wish I could say the same for my brother. He's learning the hard way, as I'll elaborate in my next post.

2.20.2006

Parent Trap - Vol. I

A recent phone call from my mother went something like this:

"OmigodIjustgotthepropertytaxbillinthemail,it'ssohigh, I think we have to move!"

It was 9AM on a Monday morning, and I had just arrived at the office when my cell rang. She sounded breathless, like she had just run up a flight of stairs, which only exacerbated the alarming nature of her call.

Before continuing, I should mention that I have tremendous respect and admiration for my parents. Both immigrated to the United States in the early 70s under courageous circumstances, and English is their second language. They are gracious, loving, caring, and always supportive. That's why it pains me to see them struggle in their old age, primarily due to a succession of poor financial decisions.

Fortunately, there is a silver lining in this case. While they may never fully learn from their mistakes, I have.

My parents moved to a newly-constructed home (it had to be the model) in the spring of 2005. This action was finally taken after I staged an "intervention," resembling those of the drug and alcohol abuse kind. I flew out to their Midwest home armed with spreadsheets full of calculations. Basically, they stopped being able to afford their mortgage -- and maintain a business -- ummm, sometime in 2003.

Payments on the luxury car were also weighing them down. It had brought one week of joy and six months of misery since Dad drove it off the lot. (Note to couples: consult your S.O. or else car = bad surprise.) To my brother's astonishment (he said I could never convince them to sell) and mine, they agreed to downsize the car and home.

In ex-urban counties, where housing developments like my parents' are sprouting up, new residents typically are charged a monthly fee to help pay for infrastructure costs, such as water and roads. Property taxes in the first year are also lower. All of this information is available before, at, and after closing.

So about that phone call... Why did Mom panic upon receipt of the bill, when she knew the taxes would go up this year? The simple answer is my parents weren't prepared.

Problem is, they are never prepared.

I know life is hard to predict. But the control we do have, however small, can make a radical difference in the quality of our lives. Use it wisely, and your sons and daughters will surely thank you for it.

2.19.2006

Intro to my financial history

I just came across a personal finance blog, Make Love Not Debt, a newly-engaged couple's chronicle about liberating themselves from a 6-figure debt. They've openly admitted past money mistakes and vowed to correct them. But they are about to face the ultimate test -- how to have a beautiful wedding without going deeper into the red.

What they are doing is commendable, and I hope their blog will hold them accountable for future slip-ups. Because there will be slip-ups. Lots of them. There are kinder, softer ways of saying this, but from personal experience, I must tell you: it's going to be a long, hard slog.

Their blog made me realize that I have yet to share with you my financial journey. It is a story also encompassing massive debt, shopping sprees, credit counseling, auto purchases, eviction, and yes, the unspeakable -- bankruptcy. Thankfully, this didn't all happen to me. But it did to my loved ones, thus resulting in great physical and emotional involvement on my part, as well as consultation, on a daily basis.

In my next posts, I will provide some lessons learned from these challenges with a bit of humor and probably a little bitterness. Please bear with me, because they don't all come wrapped in pretty packages with bows on top.

2.18.2006

It only takes 5 to cut and save

I usually spend my Saturday mornings pretty leisurely. Brew a hot beverage, make some toast, and sit down with the newspaper inserts. I don't go through all the sale pages, only the stores I shop at regularly.

Luckily for me, there is a CVS Pharmacy right near my home, which is where I do most of my household shopping. It's especially convenient after having purchased heavy and bulky items like laundry detergent and 12-roll packs of Charmin. Since I don't have a parking space in my building, I am forced to lug my bags from a spot on the street several blocks away. So I avoid buying those items from big box stores that require me to get into the car.

Anyway, I estimate that it takes no more than five minutes total to leaf through the coupons from the paper and cut out the ones for items I use. The $1.00 coupons for Tide, Crest, and Charmin add up to considerable savings, since these products regularly go on sale at my CVS.

This 5 minute time investment often saves me a minimum of $5 every other week. That $5 buys me a Potbelly sandwich on the days I don't bring my lunch to work. That $5 buys me more laundry detergent when it's on sale (the stuff is expensive!).

I've read personal finance articles that encourage coupon cutting. But surprisingly, many stories also discourage it as being a waste of time. Are we so busy that 5 minutes of our time aren't worth 5 extra dollars in our pockets? I don't think so.

How many of us have taken advantage of department store sales offering coupons for 15% off all clearance items? It feels pretty good buying that $25 shirt with a coupon. You saved $3.75 (oops, minus the 5% sales tax, you really saved $2.50 but who's counting?). Still, you got a bargain.

So take the 5 minutes out of your precious day to cut coupons. You'll save just as much, if not more, than that bargain buy at the department store.

2.17.2006

Our Fine Presidents

While sipping my morning cup of green tea, I began skimming The Washington Post newspaper headlines: Updates from Turin (sorry don't care about the Olympics), Iraqi death squads, suicides in Rwanda. Some pretty hard-hitting stories. The Rwanda one particularly interested me.

I tried to continue reading the story on page A16, but couldn't flip to the page on the first try. Instead I landed on page A11 and was blinded by these words in giant bold print: "The Sprint Presidents' Day Sale."

The opposite page had same thing. You can't miss Parvizian Fine Rugs' "Presidents' Day Gigantic Sale" or Bassett Furniture Direct's "President's Day Sale." Nearly every other page contained ads for a sale commemorating this Monday's holiday. Marlo Furniture gets the prize for originality. Its "GW Birthday Mattress Sale" was the rare ad not containing the word "presidents" (where does that apostrophe go?).

At first I was disgusted that these companies will stop at nothing to lure us into their stores. I mean, come on, Presidents' Day? Then I realized I didn't even know what the holiday commemorated. So I googled it. I wanted to find an authoritative source, so I checked out The White House link on Presidents' Day. The link directed me to a kids page lacking any history about the holiday. No mention on the Web pages of Congress either.

Doesn't it seem strange that we choose to celebrate the legacies of George Washington and Abraham Lincoln by fingering brightly-beaded necklaces at Macy's or slipping on a pair of new sneakers at Sports Authority?

I'm not a history buff. I won't be participating in the festivities at George Washington's Mount Vernon estate. But I definitely won't get suckered into spending my dollars on a holiday that no one even knows how to spell.

2.16.2006

Was it worth it?

So a day has passed since showering your Valentine with flowers, candy, love and affection. Maybe you splurged on a prix fixe menu at that four-star restaurant you've always wanted to try but never had the occasion. Or perhaps the evening was spent quietly at home, catered by yourselves -- with a little help from Rachael Ray.

My husband and I spent the holiday in our humble abode. He quickly cooked up a few things from the fridge to nosh on, while I took down wine glasses from the cabinet. Overall, we had a perfectly pleasant meal, listened to music, read our favorite books, and called it a night. It cost us nothing.

However you chose to celebrate, I expect the final tallies should be in by now. With a couple days of hindsight, I'd like to know:

Was it was worth it?

I expect many of you will say that it was worth every penny. OK, fair enough. Now fast forward a few months...

You are writing a check for $1000 made out to the IRS for income taxes due on April 17, 2006. You knew there wouldn't be a refund. You knew you would owe money. Deep down, you hoped it would be less. Either way, it sucks to pay and now you're stressed out, because it's going to be tight for a while.

With a few months of hindsight, let me ask you again: Do you think it was worth it? I bet some of you would have a different answer.

I know it's impossible to anticipate every bill down the road, and yes, emergencies always seem to happen at the most inopportune times. But, generally, we all have fixed monthly expenses (rent/mortgage, utilities), and whatever is leftover is ours to spend.

You didn't mind being price-gouged for a dozen red roses, and you bought Godiva chocolates since the drug store brand would make you look cheap. Fine, maybe it was worth it that day.

Personally, I'd rather spend that money on vacation in South America, where I can treat a family of four to dinner in a respectable restaurant for the same amount. But that's because I am an avid traveler with a modest income and would rather have $100 to spend during my next trip, not on roses and candy.

Prioritize your spending.

The next time you're about to hand over 50 bucks for another sweater, think about that ratty old mattress you needed to replace years ago. Or that Caribbean cruise you plan to take this winter with your best friend.

If nothing else, think about your tax bill that's coming in the mail.

2.14.2006

Be My Valentine

I think it's highly appropriate that my first post falls on Valentine's Day -- and not for the obvious reason that this uber-commercial holiday makes us measure our feelings for loved ones by how much money we spend on them. Whatever happened to the thought that counts? By way of introduction, I'd like to share a V-day story that may help explain my commitment to personal finance and rational spending.

In February 2001, I had been living with my boyfriend (now husband) for less than six months. We were never into the forced romancing that comes once a year -- candlelight dinners and thoughtful gifts happen year-round. However, on this V-day, I wanted to find a present to celebrate our relationship's new phase. Sharing a roof meant more to me than saving a few bucks a month. I knew I eventually wanted to marry this man.

So that night, I surprised him with the latest version of Quicken (yes, I am a true romantic). I'm sure some of you are appalled that I even thought about financial planning software, let alone bought it, on Valentine's Day. But in all honesty, he loved it. (Hey, I included a card with sweet somethings, too!) I guess that's one of the million reasons why we're happily married today.

After reading this story, you probably won't believe me when I tell you that my life is filled with romance. Trust me, it is. I may not wear a huge diamond ring on my finger, and I'd hate it if my husband surprised me tonight with a teddy bear and a box of stale chocolates.

But on countless evenings, I've come home to a set table and a dinner reminiscent of that delectable meal we had at Da Salvatore on Italy's Amalfi coast. Then I notice he still has on the clothes he wore to work, because he didn't have time to change before cooking. Now that is sweet.

Don't let the multimillion-dollar marketing strategy of some mega-corporation tell you how to spend The Almighty Dollar on yourself or your loved ones -- I mean, how unromantic is that?

Thanks for reading, and welcome to The Almighty Dollar!