M is for Money

The wheels have come off the wagon. The budget is blown. Somehow we’ve spent a bunch of money in the last few days without noticing it slip away. There’s nothing to do now except juggle the numbers and find room in the budget to pay for it all. We didn’t even buy anything big, just the usual errands and expenses - funny how it adds up so quickly. It all started Friday night.

Friday nights in LA are filled with glitz and glamour. Ours was spent in Home Depot picking up gardening tools - oh the joys of homeownership - followed by a gourmet meal at The Crazy Chicken (aka El Pollo Loco). OK not exactly high society living, but the evening damages totaled $60. Saturday morning we hit Costco early, never a good place to go when you’re on a budget. $200 later and I can’t even tell you what we bought, the place is like a black hole for money – and the day was young. Grocery shopping drained another $230. No wonder our waistlines are expanding. The dogs needed kibble - $55, the car needed gas - $65, and we went back to the Depot for more - $65. It was my uncle’s birthday - $25 towards dinner and a card. Then there was the stolen mailbox we had to replace - $20. Add it all up and that is $720 in everyday expenses over one holiday weekend.

So hard to earn it, so easy to spend it.

Fortunately our budget can absorb the damage, but it wasn’t always this way. My early attempts at budgeting were a failure because I expected myself to be perfect, that nothing unexpected would occur – how unrealistic. These sort of spending bonanzas happen to everyone, so ignore them at your own peril.

We set aside money each month into a so called miscellaneous fund (slush fund, reserve fund etc). It helps pay for the unexpected expenses and for when we go over budget, a cushion you might say. This little spending spree was more than I wanted to take from this fund, but all was not lost. We save so much money each month, both for the future and for goals like a wedding, that we can cover unusual spending by setting aside less. We don’t have to go into debt, but the progress towards our goals is hurt. I find it’s enough motivation to keep our spending (mostly) in check.

The moral of this story – keep a flexible and realistic budget. Also, saving a large portion of your pay allows for the occasional indulgence. Follow this and a little spending spree won’t turn into a big budget disaster.


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The foreclosure crisis hits home, or family to be exact. My uncle recently committed voluntary foreclosure, AKA jingle mail. Unable to pay the mortgage, he sent the keys back to the bank. He wasn’t irresponsible, he didn’t buy more than he could afford or refinance to take out equity. He lost his job.

Actually he was fired, for interviewing somewhere else. The boss found out he was thinking of leaving and made the decision for him. He is well respected in his field and makes great money, but there are limited opportunities. He was living in a rural part of California and bought a nice house during the bubble years. He commuted many miles to his job, because he liked living away from the city. Unfortunately that meant fewer available jobs and fewer buyers when it came time to sell. When he lost his job there weren’t any others within the area. He quickly found a new position, but in another state. He packed up, listed the house for sale and moved to Arizona. Meanwhile, the bottom fell out on California real estate.

Housing prices have collapsed in California, stranding people like my uncle who have to sell despite the market. He didn’t have years of equity to keep him above water and even his 20% downpayment wasn’t enough to save him. The rural area where he lived isn’t a popular vacation or rental market, so his options were limited. After trying to sell the house for many months, he finally gave up. Rather than wait for the inevitable he went ahead and mailed back the keys.

He doesn’t seem angry or bitter about his situation, merely resigned to the inevitable financial damage. He still has a job and will keep marching on, but the loss will follow him for years to come. He bought a house he could afford and lived within his means, he isn’t the poster child for irresponsibility you see portrayed every day. Rather he is one of the unintended victims of this current crisis who never realized the danger they were in.


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While grocery shopping Saturday Mr. M tossed a bag of Mothers Iced Animal Crackers into the cart. Wait a minute, I said, I thought they went out of business. In fact last fall I wrote a post lamenting the demise of the California cookie institution. Mr. M then accused me in the aisle of lying to him about the cookie’s fate. I was saved by the bag, which proclaimed Your Favorites are Back! Apparently the food behemoth Kellogg’s couldn’t stand to see Mothers disappear either and bought the recipes and name. Not all of their cookies are making a comeback, only the top sellers were resurrected. Still, I can’t help but smile that out of the many companies lost in this recession, Mothers is one of the rare ones to be saved. My family moved away from California when I was six, Mothers cookies are among my few memories of those early years. They are a common facet of the California childhood. I hope everyone had a wonderful and relaxing Memorial Day.

FNBO Direct is my favorite online bank and the one where I choose to keep most of my money. To encourage everyone to start saving they recently ran the Pay Yourself First Challenge, a six month long savings competition. Out of thousands of applicants, five finalists were chosen to compete - saver to saver. As an incentive, FNBO Direct matched the competitor’s savings dollar for dollar and threw in a vacation for the winner. Financial columnist Liz Pulliam Weston reigned as expert in residence, offering advice and guidance for the finalists. Each competitor had their own goals they were working towards, like a new house or a new baby. Challenge winner Kristen has a selfless plan, to pay for nursing school and establish a clinic to serve the poor of the Dominican Republic. I had the opportunity to ask Kristen a few questions about the Challenge and her plans for the future.

Kristen,

First, congratulations on reaching your savings goals and winning FNBO’s Pay Yourself First Challenge. Your dream of helping the impoverished people of the Dominican Republic is admirable and I wish you continued success. I have a few questions for you about savings, goals and participating in the challenge.

1. A competition is a great way to motivate yourself. Do you think you would have achieved your savings goal without the added incentive of the PYF Challenge?

With our own personal approach to savings, yes, but the added bonus of matched savings (and the possible grand prize $) really got us moving to explore creative ways of earned extra income on the side. I think our savings lifestyle grew a little during the challenge, but the challenge really encouraged us to learn new ways to bring in the alternative revenues.

2. How has participating in the challenge changed your outlook on earning and saving money?

Since we will be returning to the Dominican this fall some of the lessons we learned will have to be applied within the context of that country’s economy. In the D.R., it’s actually quite hard to spend very much money, and the stark reality of poverty around us, brings selfish spending into perspective.

Through the challenge we have learned that saving money shouldn’t be something that consumes our thoughts, rather, we should educate ourselves enough to create systems that serve us. If we have a broad understanding, it makes it easier to spend our time on life, not on thinking about money.

Obviously through this challenge we have learned that saving is rewarding. In a very big way thanks to FNBO Direct!

3. Many people struggle to begin saving. What wisdom can you share from this experience to motivate people to save?

I would say that the average person struggles with saving because it boils down to denying instant gratification in order to gain larger long-term gratification. The incentives of self interest made it hard to stay on task.

A somewhat radical idea would be to save for something completely selfless. Get the focus off of personal goals and save towards something to bless someone else. With a goal like that, maybe the vipers of self interest would be kept away from their daily snaps. You could try and save $35 a month to support a child in a developing country. Or something like that. That would get the focus off of self. The rewards are that 1) you would learn the discipline of saving, while 2) gaining an outlook on life that is less pointed towards self, but to others. I think both of those are key in becoming a saver.

As much as possible, I would encourage people to look at life with the end in mind. Where do they want to be in one year, five years, etc. Not just what do they want to have, but who do they want to be. Attaining the discipline of saving is a vital ingredient in making those dreams come to life.

4. From the challenge - what savings habits will you continue, and more importantly what habits will you be dropping now that it is over?

We will definitely continue with the budget. My husband Michael has already created budgets for when we move back to the Dominican in 2010, and 2011. He is kind of funny like that. Also, we’ll continue keeping an eye on new ways to cut expenses, talking finances through as a family, and giving generously.

In the Dominican it will be hard to continue producing secondary incomes due to a stressed local economy. Most likely that element will weaken or drop all together due to recessions both here and there. Most likely we will also, slack up just a bit on keeping track of daily expenses. Now that we have Quicken, we can record our spending with less time and have an even better look at how we are doing in meeting our monthly goals.

5. What are your savings goals going forward and how do you plan to achieve them?

As a part of our ministry in the Dominican Republic, we are saving towards building a community center where we live and work. Out of this facility, we will be able to offer many benefits to the community, basic health care being one of them. Many of the funds will come from our own family budget, but we have the added advantage of being able to raise support for the center, which throws a whole different element into the mix.

For personal savings goals, we would like to purchase land in the Dominican by the beginning of 2011 to begin building our home. We are also saving for our five year anniversary to Alaska next year. You could say we are somewhat of savings goal freaks, with about 15 categories in our budget. But just a little bit each month starts to add up over time. And when a windfall happens, it feels great to boost up the areas that are lacking instead of spending it right away.

Kristen, thank you for taking the time to answer my questions and much luck with your future endeavors.

Miss M


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It takes money to live, it takes money to die.

My grandmother passed away early Tuesday morning after a roller coaster six days in the hospital. There are certain to be bills from that final hospital stay not covered by Medicare or insurance. Especially since the hospital where she died, the closest to where she lived, was not “in-network”. Those bills will start rolling in soon, but the bill for the funeral had to be paid already.

Tuesday afternoon we went to the funeral home to make the necessary arrangements. Because my grandmother is a veteran most of her burial costs are covered by the government. She will be buried in a local national cemetery with military honors, the family does not have to pay for the service, plot or the plaque that will mark the spot. She did not want a separate church service or any adornment or flowers at her funeral. The military service is short but very moving, with the playing of Taps and the 21 gun salute. When my grandfather passed away many years ago I held up through the church service, but completely broke down during the military one. This simple style is in keeping with how she lived, and meant a huge cost savings for the family.

Even with the cemetery and burial costs for free and no service planned, the funeral arrangements cost $5000. We chose a very basic metal coffin in her favorite color, with tax it came to $975. The remainder of the costs, $4000, were for the various funeral home fees – their service fee, transportation from the hospital, storage of her remains until burial and transportation to the cemetery. We are not having a viewing, which saved the embalming and other preparation costs. In fact the funeral home is doing practically nothing for that $4000, but it’s not like people shop around when they are in grief.

For most funerals you would have to pay for the cemetery plot, the service and burial fees and a headstone or marker. These will add thousands of dollars to the cost, pushing the total to $10,000 or more. Even the cheaper alternative, cremation, runs several thousand dollars. Unfortunately a lot of families are unprepared when it comes to the cost of burying a loved one. In our case grandma had enough cash to cover these final expenses in a joint account with my uncle. If she hadn’t, most of her offspring are well enough off to have covered the bill. The service is set for Wednesday, so posting will remain light into next week. I appreciate everyone’s thoughts and prayers.


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A pioneer, a trail blazer. A woman before her time. I wish those words were describing me, but this honor belongs to someone else. I walk in my grandmother’s footsteps, a humble woman with an amazing life story. She never set out to change the world, she was simply determined to live on her own terms. Along the way she defied gender stereotypes and laid the foundation for generations of independent women.

It’s hard to imagine the world she was born into. She grew up on a homestead in Oregon, the 160 acres the government gave away as long as you promised to live on and work the land. Her family was poor farmers, with plenty of food but not much in the way of material goods. The food was important when you had 10 kids! In 1916 rural Oregon there weren’t any modern conveniences, transportation was your own two feet - or a horse if you were lucky. I think my grandma’s frugality was not born in the Depression, but rather in early childhood. There were a lot of mouths to feed so nothing was allowed to go to waste. In that place and time, the girls all got married at 18, settled down and had kids – my grandmother had other ideas.

She shocked her parents and went off to college. She wanted to be a school teacher, one of the career paths open to women at the time. She was teaching on the rugged coast of Oregon at the time World War II broke out. When the Women’s Army Corp (WAC) was formed she hopped the train to Seattle to sign up, against her father’s objections. She was considered an old maid at that point, 26 and unmarried. With nothing to hold her back she threw herself into military life, stationed in England and commanding a group of men! She rose to the rank of captain, so a lot of those guys had to salute her. At the end of the war she and a group of gals went gallivanting around Europe and Morocco. Their stories would make for a great movie.

Afterwards she returned to the States and eventually went on to university, where she met and married my (much younger) grandfather. She taught elementary school faithfully through three children and thirty years. She was married rather late in life so she didn’t have children until her late 30’s and early 40’s, which wasn’t common at the time. She enjoyed having a family and a career, and always felt proud of both. While this sort of story is ordinary now, that is only because women like her were doing it back in 1950.

Early this morning I received a broken message from my mom, grandma is in the hospital and they don’t expect she’ll make it. My mom was on her way to the hospital to get more information, which for me didn’t come till evening. She is lucid and conscious, but she has suffered an aortic aneurysm that is leaking. Either it will heal itself or it will kill her, surgery is not an option at her age. For now she is stable and resting. I will be at the hospital early in the morning to meet with the doctors and to see her. All we can do is wait and see, after all her mother lived to 93. If it gets a bit quiet around here, spare a thought for a great lady who helped usher us into the modern era.

Postscript:
For anyone foolish enough to read this blog regularly, the family tree. The earlier tale of my outlandish outlaw of a grandpa is from a different side of my family, my father’s father. This lovely woman is my mother’s mother, and my last grandparent. My father’s mother died of an excess of booze and alcohol when I was a baby, my mother’s father of an excess of bacon and brisket when I was 16.


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I figure my most controversial post – to date – deserves a follow-up. After all many commenters far and wide advised me to NOT Buy My Own Engagement Ring. I’m sure at least some of you are wondering how it all turned out.

First the let-down, no engagement ring yet. But money is no longer an issue and the solution is something both my liberated and traditional sides can embrace. Originally I had a different idea, to just get engaged with an everyday ring - a simple ring that Mr. M could afford. The ring I wanted would wait for the wedding, after we had saved up money. It would still be special, but I would have to wait. And suffer through more than a fair share of pitying glances.

In the meanwhile we combined finances and started saving for a wedding. And along the way a miracle happened, Mr. M’s career had a rebound. And in Hollywood when it’s good, it’s really good. Mr. M has been too busy to think of any manner of engagement. But we have a topped off expense fund, the bills covered through June and are paying down the debt by several grand. Once all the paychecks arrive, we’ll also have enough for The Ring. No waiting, no compromise. While this is now “our” money, it wouldn’t have been possible without Mr. M and his work. His income and his paycheck are going towards the ring, with a little help from me and my money management skills. It seems a fair balance, and a fair compromise for a sticky situation. I’m not certain either side in this battle will be pleased with my solution, but I don’t really care what they think. I only care about what works for me.


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How does our financial history shape us? Does growing up wealthy leave a certain imprint on you, lead you towards a certain financial path? What about those growing up in poverty? Does it shape your outlook on life, on money? It’s easy to imagine each life, to make assumptions about each person. What about those who have lived both lives?

We all know the classic story of the plucky underdog raised in poverty, raising themselves up by their bootstraps and finding riches. This is a story in reverse, of someone who went from a life of luxury and privilege to life in a cardboard box, all by the age of 16. What imprint does that leave?

Mr. M is the product of a fourth marriage. His father was the 50-something businessman, his mother the 20-something model. While his father was successful in his own right, he was also a member of a prominent local family. Their name graces institutions and charity boards around Los Angeles. Mr. M grew up surrounded by the children of celebrities and sports stars in a wealthy enclave of Los Angeles. His grade school girlfriend was a supermodel. Groomed to be a titan of business - a child of privilege - until an accident changed everything.

The marriage between his mother and father began deteriorating before Mr. M reached his 10th birthday. By his tween years they kept separate households. Mr. M and his mother never saw eye to eye, so while his sister went to live with mom, Mr. M stayed with dad. Unfortunately old age and health issues soon caught up with his father, who died at home when Mr. M was only 14. Mr. M was left with no choice but to move in with mom, straining their always troubled relationship. When he was 16 he came home from school one day to find the house empty. His mother and sister had vanished, moved and left him behind. He spent a year on the streets of Hollywood, eating out of dumpsters and squatting in vacant houses. He hustled tourists for money to get by. A year later he was made a ward of the state and placed in a group home for orphaned teenagers. His mother’s parental rights were terminated.

Mr. M isn’t sure what became of his father’s fortune. Some was lost while his father battled illness, some remained with his mother. He only has a few mementoes from that past life, hints of wealth I can’t even imagine. Strangely enough he still had a relationship with his mother after she abandoned him, it wasn’t enough to sever that tie completely. Defying the usual gold-digger clichés she moved on to the heiress of a well known business. I have my own opinions on how these experiences shaped him personally and financially, but that is for another post.


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I suddenly have the urge to travel, to take a vacation. It’s probably a normal reaction to working too hard and for too long. Getting away to some place special would make the extra hours feel worth it. But where to go and where to find a deal? It’s been years since I planned a vacation and I always had a destination in mind. All I know is I’m feeling foreign.

Supposedly travel is cheap right now, or at least cheaper than it has been. My mom just returned from a cruise of Turkey and Greece, she said the ship was half empty. But that only made for more elbow room, the trip was still pricey. We certainly couldn’t afford to spend that much times two. Any suggestions on where to shop for travel and how to save?


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I don’t want the recession to end, at least not yet. I’m not insensitive to those who have lost their jobs or who have seen their nest egg decimated. I know people are watching their carefully planned futures vanish in an instant. After all I have been hurt as well - my house is $100k underwater and my investments lost as much as 60% last year. Mr. M’s income has shrunk as advertising dries up. But there have also been many positive changes in our society that I don’t want to see end.

Frugality is suddenly fashionable as belt tightening becomes mandatory. Is it just a passing fad, will Americans return to their wasteful ways once the economy recovers? The longer the recession lasts the more likely that new habits will take hold forever. Look at anyone raised in the Great Depression, their frugality lasted long after WWII. The decadent consumerism that fueled our economic engine is unsustainable, I’d rather we all lived and consumed within our means without the bubbles and crashes. If our economy bounces back soon then I know there is no hope, people have short memories.

People are focusing more on family, friends and community. Troubled times always make people more aware of what is most important. New stainless steel appliances and granite countertops look nice, but don’t add to real happiness. Without money to waste, people are turning inward and relying more on their connections with others. This has to be a positive change.

Saving is suddenly sexy. The proliferation of subprime loans made people who paid their bills look like the fool. If anyone can get a loan then there is little incentive to build good credit. Now money in the bank and a solid credit score are a must to get a loan. Financial responsibility is in vogue. In the long run this will benefit us all. But again I fear this trend won’t last unless the pain is strong enough to make us never forget.

There are positive sides to this recession. It can change us into more conscious consumers and teach us the value of being financially prepared. We no longer take luxuries for granted, no longer borrow like money is an infinite well. Hopefully these lessons will stay with us long after the economy recovers.


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Hopefully everyone had a chance to do something nice for their mom on this Mother’s Day. My own is traveling today so we’ll be celebrating next weekend. Our time dog sitting is almost over and I’m looking forward to going back to the relative calm of just three dogs. But five isn’t as bad as you’d think, we’ve managed to maintain peace and harmony in tight quarters.

I went to work yesterday, finally relinquishing my weekends. I have a deadline Monday and I’m still not ready to meet it. The money is nice too, if I keep working like I have been those impossible goals don’t seem so unrealistic. I can’t keep it up though, at some point I’ll completely burn out.

This week’s carnivals:

-Carnival of Personal Finance at Weakonomics: The Family Bailout
-Festival of Frugality at Always the Planner: Recession Radio
-Carnival of Pecuniary Delights at Greener Pastures: FSA vs HSA


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Acronyms are confusing. First there is the sheer number of them, practically infinite since every topic has its own set. Then the same acronym could have many different meanings depending on the subject. Personal finance of course has many abbreviations and acronyms that everyone should know. Here is a short list of those acronyms most pertinent to personal finance.

AGI – Adjustable Gross Income
AIP – Automatic Investment Plan
AMEX – American Stock Exchange
AMT – Alternative Minimum Tax
APR – Annual Percentage Rate
APY –Annual Percentage Yield
ARM – Adjustable Rate Mortgage
ATM – Automatic Teller Machine
BRIC – Brazil, Russia, India and China
CD – Certificate of Deposit
CFA – Chartered Financial Analyst
CFP – Certified Financial Planner
COBRA – Consolidated Omnibus Budget Reconciliation Act
COLA – Cost of Living Adjustment
CPA – Certified Public Accountant
CPI – Consumer Price Index
DTI – Debt to Income Ration
DRIP – Dividend Reinvestment Plan
DCA – Dollar Cost Averaging
DJIA – Dow Jones Industrial Average
EIC – Earned Income Credit
ERISA – Employee Retirement Income Security Act
ESA – Education Savings Account
ESOP – Employee Stock Ownership Program
ETF – Exchange Traded Fund
FAFSA – Free Application for Student Aid
FDIC – Federal Deposit Insurance Corporation
FHA – Federal Housing Authority
FICA – Federal Insurance Contribution Act
FRB – Federal Reserve Board
FICA – Federal Insurance Contributions Act (Social Security)
FICO – Fair Isaac Corporation
FOREX – Foreign Exchange
FSA – Flexible Spending Account
HSA – Health Savings Account
HELOC – Home Equity Line of Credit
IRA – Individual Retirement Account
IRS – Internal Revenue Service
LTV Ratio – Loan to Value Ratio
MAGI – Modified Adjusted Gross Income
MMA – Money Market Account
P/E Ratio – Price to Earnings Ratio
PITI – Principal, Interest, Taxes and Insurance
PLUS – Parent Loans for Undergraduate Students
PMI – Private Mortgage Insurance
REIT – Real Estate Investment Trust
RMD – Required Minimum Distribution
ROI – Return on Investment
S&L – Savings and Loan
SIMPLE – Saving Incentive Match Plan for Employees of Small Employers
SS – Social Security
T-Bill – Treasury Bills
TIPS – Treasury Inflation Protected Securities

Know of any acronyms I missed - leave me a comment.


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Yesterday Paranoid Asteroid asked if I like the work I do, the stressful job that is slowly killing me. The short answer is no, I do not. If you asked the childhood me would I be doing this when I grew up, I would have screamed hell no. But I like the money, it pays well. And lately I’ve been getting a kick out of the fact that big men are scared of me.

I’m passably pretty, very petite and always pleasant. I’m known for my ability to work with anyone, even the impossible ones. So it’s funny that I work around a bunch of big burly men who tiptoe around me. I couldn’t figure out why for the longest time. It must be the one time I told the head burly man that he didn’t know what he was doing. The silence that met my remark meant he knew I was right. Now he sends his underlings with his questions, it makes me chuckle. He isn’t alone, a few of the burly men seem intimidated by me. I only tell them the truth and it’s usually not what they want to hear. They don’t challenge me though, I do good work and they know I’m right. The image of little old me scaring these big guys is pretty silly. It doesn’t make up for the stress and the long hours, but it does put a smile on my face.


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I’ve become unbalanced.

All work and no play makes Miss M a dull girl. I’m back to the life of a workaholic, running on a dangerous diet of caffeine, junk food and stress. I lose track of days, lose track of calories. My waist is bulging while my mind dissolves into some kind of goo. But I can’t quit. It’s a love/hate relationship, of course I love the money. I don’t love the long hours, the time away from home and losing touch with my life.

I had a decent balance going for about a month. I had cut back to a normal 40 hour work week, which still consumed a huge portion of my life. We were sticking to a budget not based on overtime. I had time to come home and relax, write posts and keep up with fellow bloggers. I should have realized that the lull wouldn’t last and now I’m paying for it with deadlines I can’t meet. The work must be done by a certain date, it doesn’t matter that we’re short on people or that the targets constantly shift. If I could only explain the madness of our operation, but that would be a scandal.

I’ve resigned myself to this life until my current assignment ends. I made a deal with the devil and now I have to pay. I knew the job would be hell, but a $20k signing bonus and a 25% raise made me do it. This job has rescued me financially and ruined me physically. Is that always the trade off? Is pay proportional to stress? It’s a steep price to pay and I don’t want to stay in this place for long.

It’s a necessary evil to trade time for money. For now I’m busy trading as much of my time as possible, the feast doesn’t always last. But I would be perfectly happy to work less and to earn less. While money is nice, a balanced life is better.


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Mother’s day is coming up this Sunday and as every child knows, you must never forget to somehow acknowledge the day (or face mom’s wrath). Hopefully she hasn’t been watching too much TV, the airwaves are filled with ads suggesting that true love comes in the form of expensive jewelry and flowers. But, you don’t have to spend a lot of money to show mom that you care. In fact some of the most memorable Mother’s days come practically free. If you’re looking to make both mom and your wallet happy, here are a few ideas.

Something Handmade

Didn’t kindergarten teach you anything? Mom always loved those handmade cards you brought home from school because they came from the heart. Handmade items require more time than money and show that you care. Dads can help the kids assemble cards, create crafts, bake a treat or make a meal. You could assemble family photos into a memory book or use them to create a collage. Moms are suckers for the sentimental. Make her a recipe book with the family favorites carefully preserved, reach out to an earlier generation for ideas and special recipes. Whatever your talent, make something special for mom and she’ll have a memorable day.

Sunday Brunch at Home

Brunch is regarded as a special occasion meal, so why not treat mom on Mother’s day. But a nice Sunday brunch out is expensive. Never fear you can create your own at home for less - what are mom’s favorites? Most breakfast foods are easy for beginners, or you can pick up a readymade meal from the store. Another idea is to buy a selection of pastries, fresh fruit and juices. This continental breakfast is always classy or a bagel platter with a selection of toppings. There are many ways to assemble a tasty brunch that mom will remember.

An Outing

Why not get out of the house on Mother’s day. Go to the beach, the park or a local attraction. Take a walk, a hike or go for a drive. Doing something special makes the day feel special, choose an activity or location that your mother enjoys. I’m planning to take mine to a local museum that she’s probably never heard of but that she should appreciate.

The Gift of Experience

Memories last longer than stuff, so give mom a family experience that she’ll cherish long after the flowers have wilted.

-Rent a beloved movie and get her movie favorites like popcorn and candy
-Head to a local garden, the one mom has always wanted to visit (but no one else did!)
-Look for a free concert or show, many places offer free or reduced admission for moms on Mother’s day
-Simply spend the day together, great for adult children who no longer live at home

A Day of Pampering

Most moms would enjoy a day of leisure above all else. Don’t let mom lift a finger all day, no cooking meals and no cleaning house. Help mom relax with a book and no distractions. You could plan a spa day with moms and daughters. Start with breakfast in bed to really rock mom’s world.

The point of Mother’s day is to make moms feel special. Often their love and sacrifice is taken for granted, so what is one day to show mom you care. With a little thought you can create a Mother’s day to remember that is both frugal and fun.


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The new rate for I Bonds was announced last week. As many anticipated, I bonds purchased between May 2009 and October 2009 will earn 0% (0.1% fixed plus semi-annual inflation rate of -2.78%). This reflects pretty steep deflation at -5.56% annually! The 0.1% fixed rate is only slightly better than the 0% offered last year. I bond rates never drop below zero, hence the current rate in the face of deflation.

What are I Bonds?

For those of you unfamiliar with I bonds, they are inflation indexed savings bonds issued by the US government. The rate you earn on an I bond fluctuates every six months, depending on inflation. If inflation goes up, the rate you earn goes up, when inflation goes down, the rate is adjusted downward as well. You always earn the fixed rate at the time you purchased the bond (the current 0.1%) on top of inflation. They are guaranteed by the government, no worries about losing your money, and exempt from state and local income taxes. A few other facts:

1) Purchase at face value
2) $5,000 paper and $5,000 electronic annual purchase limit per person
3) Cannot redeem for the first 12 months
4) If redeemed in the first 5 years, 3 month interest penalty

I bonds are meant to protect you from the effects of inflation. Right now we are experiencing the opposite – deflation – where prices are progressively falling. Under this scenario I bonds offer limited protection, the rate is never below zero. In essence the buying power of your money is preserved, but to anyone used to positive interest the zero return is disappointing. The current rate of deflation is much higher than the fixed rate of return I bonds offer (or have ever offered). All I Bonds will pay 0% for 6 months, even those bought years ago when the fixed rate was above 3%. This includes all the bonds I hold too. It’s tough times for savers right now.

I Bond FAQ


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What could be crazier than three boston terriers? Three boston terriers plus two shelties, all crammed together in one tiny house. 5 canines to 2 humans, we’re sorely outnumbered. My mom is on vacation so we’re pup sitting her two seniors. They’re sweethearts, but rather frail and having a hard time on our hardwood floors. The two groups exist in a state of truce, they don’t bother one another and everyone gets along just fine. The shelties are only slightly larger than my crazy bostons, but they have so much hair they appear at least 2 to 3 times their actual size. My three give them a respectful distance. They’ll be here for awhile, good thing they’re not too much work. Here are this week's carnivals:

-Carnival of Personal Finance at FIRE Finance: Opposites Attract – When a Saver Marries a Spender
-The Festival of Frugality at The Paycheck Chronicles: A Tale of Two Economies
-Carnival of Debt Reduction at Automatic Finances: Changing Needs Mean Changing Goals

Investors everywhere are wondering if change is in the air or if this April rally will show us all to be fools. We will have to wait and see. Personally, I’m enjoying the effect on my net worth. It’s a lot easier getting to your goals when the market isn’t dragging you backwards. I have added new categories and savings accounts to the tracking based on my changing goals. Let’s take a look at another great month.

Savings – I added $450 to my FNBO savings account. Their current rate is still 1.9%. Remember when rates were over 4%, those were the good old days.

Bonds – I forgot to transfer a $35 check to my snowflake bonds. I’m not planning to buy more until our debts are paid down and we’ve reached our savings goals.

Sharebuilder – No trades. T Rowe Price – I invest $300 per month, the rest is market gains!

Lending Club – I just started investing with Lending Club. The first interest has come in.

Fidelity 401k – from a former job, I no longer contribute

Wells Fargo 401k – I save 8% of my salary Company ESOP – our company stock is structured as a retirement plan

Savings Accounts – this is where I set aside money for future expenses. Since I know I will spend this money eventually I do not include it in my net worth

Property Taxes – Property taxes and annual homeowners insurance were due this month so the fund is now wiped out.

Dog Fund – D got sick and had a trip to the vet. They should name a wing after us.

Misc Fund – used for irregular or unexpected expenses

Care Credit Arbitrage – the care credit balance is 0% till the end of the year, here is my arbitrage plan.

ROTH IRA –I still have no idea where I’m going to set up my Roth. For now I’m setting aside the money I plan to invest.

House Fund – I transferred some leftover funds from the property tax money to the house fund. If I buy an investment house with my mom I’ll be using most of this money.

3 Month Fund – this fund is part of my plan to smooth out Mr. M’s irregular income. We’re still waiting for another check and then I’ll have the planned $3000.

Mr M Tax Fund – we’re setting money aside to pay taxes on Mr M’s independent contractor earnings.

Wedding Fund – no more excuses, no more delays. We’re going to have to get married eventually and now we’ll have the money to do it.

Care Credit – the balance is slowly creeping down. This total does not reflect the money I’ve saved in arbitrage so the balance is actually lower.

So my net worth went up 11%, these types of months make me happy. And no, I didn’t include the credit card debt I took on. If you must know, I’ve gotten the $8400 starting balance down to $7800.

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