M is for Money

Net worth updates are way more fun when the stock market is rising. I remember the dread of last winter, when we were losing ground each month despite adding to our savings and investments. Now the opposite is happening, each month’s gains look better than the previous months’. I wonder how long this will last, I’ll be sure to enjoy it while it does.

I’ve started implementing some of our long range plans, like ramping up our savings. I paid off a chunk of our remaining debt, the care credit card we’ve used for vet expenses. The interest earned on arbitrage is minimal, I just want to see that debt disappear. The rest of the balance will be paid before the end of the year, when interest begins to accrue. I definitely feel we are on the right track and if the trend continues, all things will become possible. Here are the numbers.

Savings – We still have the bulk of our money in a FNBO savings account.

Bonds – After a hiatus of a few months, we are once again contributing to our snowflake bonds. Now that our debt is paid off any extra money that comes in will be set aside for one of our retirement goals – a boat.Sharebuilder – No trades.

T Rowe Price – We invest $300 per month, in September I plan to increase it to $500 per month as part of our retirement goals.

Lending Club – We have a small amount invested with Lending Club and are adding more as part of our retirement plans.Fidelity 401k – from a former job, I no longer contribute

Wells Fargo 401k – I save 8% of my salary and plan to increase that as soon as the Care Credit balance is paid off towards the end of the year.

Company ESOP – our company stock is structured as a retirement plan

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

Property Taxes – In the interest of big goals, I’ve dropped our monthly self escrow to $400 as a result of our property tax reduction.

Dog Fund – To cover our 3 boston terrier’s care and expenses. I’ve started feeding them this very pricey food…

Misc Fund – used for irregular or unexpected expenses, September is an expensive month with car registration and 3 close family birthdays so I’m trying to build this fund up

Care Credit Arbitrage – the care credit balance is 0% till the end of the year but the interest earned on arbitrage right now is minimal. I emptied this fund to pay off a chunk of the balance.

ROTH IRA –I have decided I’d like to invest my Roth in index funds through Vanguard. I’ve moved the balance over to retirement funds.

House Fund – I drained the cash portion of the house fund, I still have a $2500 CD earmarked for the same purpose. Next month I’ll start adding to this fund in order to fix the plumbing and other house issues.

3 Month Fund – this fund is part of my plan to smooth out Mr. M’s irregular income. We’ve had to dip into this fund as work has been slow. Fortunately Mr M should have some money coming in soon, before we run through the last of these savings.

Mr. M Tax Fund – we’re setting money aside to pay taxes on Mr M’s independent contractor earnings. Most of his recent jobs have been W-2 employment so I haven’t needed to set much aside.

Wedding Fund – hoping for fall 2010, depending on finances

Care Credit – I paid off a piece of the balance with arbitrage funds. Will soon be paid off completely.

Chase Credit Balance – this debt is gone!!

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A thick band of smoke has blanketed our house for days. Fortunately we are far from the front lines, mere spectators in the macabre spectacle. Yesterday I had to travel towards the fire for some shopping. From the freeway I could see the huge walls of flames 40 feet high tearing through the forest. It’s a terrifying sight visible from the heart of the city. Many people do not realize that while Los Angeles sprawls in every direction, mountainous wilderness rings the area. You only have to drive a few miles to reach nature, unfortunately one of our favorite areas to visit is currently in flames.

Confession - I spend more on groceries than I have to

It’s not the result of buying overpriced junk food or for being brand loyal at all cost. I’m willing to buy generic in order to save money. But much of the cost of groceries depends on the place you choose to shop and I know that I’m not choosing the lowest cost option.

There is a huge spectrum of stores that sell groceries, from the 99 cent store all the way to high end chains like Bristol Farms or Whole Foods. Many of them stock the exact same items, but with a huge variation in price. After all, the nickname Whole Paycheck had to come from somewhere.

Not All Stores are Created Equal

There is more to shopping than price, stores know that the shopping experience is important too. High end retailers aim for luxury, they want the customer to feel pampered. Warehouse stores fall at the other end of the spectrum, charmless and drab, but with impressive scale. Each caters to a different market and their prices reflect the overhead it costs to create each environment.

The area where we live offers another choice - ethnic markets. There are both Hispanic and Asian markets in the immediate neighborhood, go a little farther and you can find Middle Eastern, Indian and Jewish stores. They have the special spices and ingredients you need for exotic dishes for much less than a Kroger or Whole Foods. Produce and staples are usually cheaper too.

Price Versus Location

The places I choose to shop fall somewhere in the middle of that spectrum. I can’t justify the price of shopping at a high end grocer even though I appreciate the atmosphere. I also don’t enjoy the ambience of the cut rate grocers like Food 4 Less, despite the savings.

Instead I alternate between Trader Joes, Fresh and Easy, and Ralphs (Kroger). The stores are in a nearby town, a much nicer area than where we live. I wonder if that affects prices even within a single chain? Even though shopping there costs me more, I’m not willing to change. I have the luxury of choice and I’m comfortable shopping at these stores. If our circumstances change or we decide to cut back on expenses, I know an easy place to turn to. There are lower priced options when it comes to groceries and I’m choosing not to use them.


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Credit cards are a wonderful tool that can help manage your cash flow, track your spending and earn you rewards. They are also a trap for those unable to resist temptation and who spend more than they earn. Today’s question – after paying off that debt, should you cut up the cards? Can yesterday’s debtor become a savvy credit consumer without falling back into the trap?

Yes and No

There is no one answer to this question – don’t you love that cop out. It really depends on the person and whether they’ve truly kicked the debt habit. Personally, I kept my credit cards even after racking up over $20,000 of debt on them. I’ve learned my lesson and changed my ways, I pay off the balance each month and don’t spend money that I don’t have. I feel confident that I can continue to use this tool without abusing it. But I get the feeling I am in the minority.

Debt tends to be cyclical, you pay it down only to spend it back up. If you can’t get off the debt treadmill, keeping credit cards is simply asking for trouble. You are like a recovering alcoholic that can never have another drink, for fear it will get out of control. Cut them up, throw them away and live with debit cards and cash. Use a high interest checking account if you want rewards. Here are two signs it’s time to ditch the cards:

1 – You were debt free and now carry a balance month to month
2 – You are trying to payoff debt, but getting nowhere

If these describe you, it’s time to cut up the cards. I will continue to use mine until I see these warning signs in myself. I think I’ve conquered my debt demons, but I’m naïve to think temptation won’t appear. What is your take? Ditch the cards or give it a second chance? Can a debt-aholic change their ways?


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Pets are a luxury, and often an expensive one. First you have the food and the toys and the vet bills. Then you have the silly snowflake sweaters and humiliating costumes for Halloween (yep, guilty as charged). The following story illustrates how pet ownership can cost you in some unexpected ways.

The other day I received a call at work from Mr. M, trouble on the home front. A 2-liter bottle of diet coke had fallen from its place on top of the fridge. In its bid, err fall, for freedom, it landed on the spot where we feed D. D’s bowl broke the bottle’s fall, shattering in a million pieces in the process. D apparently witnessed the destruction of his food bowl and was distraught over its demise. Was he worried he won’t get fed now? I was instructed by Mr. M to not come home until I had bought a new bowl with which to console D. The things we do for dogs!

After a long day at work I headed to Target, when I really just wanted to go home and put up my feet. Mr. M had made the executive decision that we needed 4 new dog bowls, a complete set of spares for when they are dirty or get broken. I don’t buy special bowls designed for doggies, the ones designed for humans work just fine at half the price. Obviously choose a wide, low style with steep sides. Deep and narrow is just cruel!

4 bowls, and $35 later, I was on my home. It’s impossible to enter Target and just buy one thing! Of course being late, cranky and hungry, I stopped and picked up fast food to take home. D was delighted with his new bowl, or maybe it was the hamburger I filled it with. It’s funny what we will do to make them happy. Never underestimate the emotional pull of your pet and its effect on your pocketbook.


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We’ve committed ourselves to our goal of early retirement and laid out the milestones we need to reach to make that a reality. So where do we stand and how far do we have to go to realize our dream?

Each milestone has a dollar amount attached, either money we need to have in savings or debt that must be paid off. I’ve taken our current assets and assigned each to one of those milestones, for example our Sharebuilder account goes towards the taxable investing goal. Knowing that we have started, at least in a small way, towards each goal makes me feel that this dream is achievable. We may have a long way to go, but at least we have started down that road. So how many miles are there left to go?

Retirement Savings

Goal - $1,000,000
Current - $37,835
Percent Complete – 3.8%

This is one of those moments where you kick yourself for not starting your retirement saving earlier (20-somethings are you listening). I didn’t start saving for retirement until I hit 30. Actually, I did have a 401k before then, but I cashed it out. Now we’re playing catch up and the clock is ticking. My plan is to stick with my current employer as long as possible, employees are given a large portion of company stock and the program is setup as a retirement plan. That money, roughly $25,000 per year, plus maxing out my 401k and adding a ROTH have the potential to get us to one million by age 50.


2 Houses Paid Off

House 1 - $340,000
Mortgage Balance - $322,250
Percent Complete – 5.2%

House 2 - $120,000 downpayment
Current Savings - $10,715
Percent Complete – 8.9%

Paying off two houses by age 50 is going to be tough, really tough. I’ve separated our savings into two camps, one for a downpayment and the other as regular savings. I used $5000 of the downpayment money to pay off the credit card last month, now I’m trying to replace that money before the end of the year. To reach this goal we must accelerate our mortgage(s), either by refinancing to a shorter term or paying extra principal each month. Unfortunately our budget doesn’t allow for that just yet, instead I am focusing on saving up that downpayment.

Taxable Investing

Goal - $500,000
Current - $21,500
Percent Complete – 4.3%

The milestones I laid out were a first crack at determining our needs and what it would take to meet them. I’ve already increased our taxable investing goal by $100,000 to provide a little more income and I may have to increase it again, depending on the state of the world. Our budget going forward is designed to meet this goal, I’ve already increased our automatic investments with T Rowe Price starting next month!

Cash Savings

Goal - $100,000
Current – $3,745
Percent Complete – 3.7%

This goal is relatively easy to meet, compared to some of the other ones. In reality we have more savings than this, but I’ve decided a portion should be dedicated to a downpayment instead. We hope to never touch these savings, except in case of emergency. Like our taxable investing, I’ve been able to adjust our budget to meet this goal.

Retirement Boat

Goal - $300,000
Current - $1,245
Percent Complete – 0.4%

I think this goal makes me the happiest, even though it’s the furthest behind. Simply having some savings devoted to the boat is enough for me. I’ve decided our bonds and Lending Club investments will be used to buy a boat, it’s a strange mixture of the completely safe (bonds) and the extremely risky (P2P lending).

Net Worth

These goals will put us somewhere around $2.7 million net worth at retirement. That is probably low by some people’s standards, but still a huge amount of money to save. Considering our current net worth is on the order of $70,000, we have a really long way to go on this journey.


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Mr. M and I are in downsizing mode. I think it must be all the retirement planning we’ve been doing. When we finally escape the rat race our plan is to live and travel on a boat, a rather small boat. Our 700 sq ft house is spacious in comparison to the space we will be moving to and that means leaving a lot of stuff behind. So why wait, let the purge begin!

I have hundreds of books packed in boxes from the last time I moved – over 4 years ago! They are simply taking up space in the closet and the basement and will probably never see the light of day again. There really is no point to holding on to them until retirement. Thankfully there is a marketplace to match unwanted books with willing buyers – half.com.

Half.com is an offshoot of ebay geared specifically to selling books and media like DVDs and CDs. The site uses your existing ebay account and password. There are no listing fees and adding your items to sell is extremely quick and easy – good for listing dozens of books or DVDs. You select the condition of the book you are listing, add any comments and set a price. By browsing the existing listings you can get a feel for the market price of your book, CD etc. I was surprised how cheap many of my hardcover books were listed for, under a dollar, while one paperback turned out to be worth at least $15. It’s another interesting look at supply and demand economics.

Half.com differs significantly from ebay in one major area – shipping. Instead of setting your shipping rate the site works on a flat reimbursement. The site will charge the buyer based on their shipping choice – regular or priority. You are then paid a shipping allowance and expected to pack and ship your book for that amount – or eat the difference. The site explains that you should raise the price for items that will be more expensive to ship, but obviously price is driven by the marketplace and you don’t always have that option. The basic shipping is “media mail,” a service of the post office meant just for books, DVDs and the type of media that half.com deals in. The price is a bit cheaper than their other shipping options and a must if you are trying to save on shipping fees.

Half.com will send you an email when an item sells. You then have several days to ship your book out. The fee is charged only when an item sells, your account will be credited with the sales price plus shipping reimbursement, minus their fee. I believe payouts are quarterly, so you might have to wait a few months for your money. In the meantime you are out the cost to package and ship your stuff. It’s not a way to raise cash quickly.

I listed my first batch of books a week ago and so far three have sold. Two were cheap paperbacks only worth a dollar a piece, the third is the $15 soft cover. I’m pretty pleased with my experience, I didn’t expect they would sell so quickly. I probably should have listed the price a little bit higher!

Everyone has books, DVDs and CDs laying around that they never intend to read, watch or listen to again. They simply take up space. You can donate them to charity or hold a garage sale, half.com is another choice to give these items a second life. Plus you get some money back in exchange, more than you would get from a garage sale. Unfortunately it means dealing with the post office.


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There are a lot of online survey companies, but only some of them are worth your precious time. For many the only compensation is an entry in a prize drawing. I don't know about you but I really don’t have the spare time to give them my opinion for free. I prefer the program offered by Global Test Market – every survey is paid. You are given points based on the length of the survey, even screener surveys give you 5 points. Once you get to 1000 points, you can cash out for a $50 check. I’m getting close to that level now and I’m looking forward to that check. The screener surveys only take 1 minute, do 200 of them and receive $50. That works out to $15/hr, not bad. I get several survey offers a week, so there are enough to earn a check or two a year. If you want to earn a little extra spending cash, give them a try.

This week’s carnivals:

-Money Hacks Carnival hosted by Studenomics: Money Time Frames
-J Money of Budgets are Sexy hosted this week’s Carnival of Personal Finance: Jingle Mail Pays off For One Person
-Carnival of Financial Planning at Free Money Finance: We’re Short $1500 per Month
-The Carnival of Money Stories hosted by Almost Frugal: What’s Worse than Being Underwater?

Who hasn’t been seduced by the gleaming curves and comforting purr of the perfect driving machine. Cars are part of the American psyche, they define who we are or who we hope to be. They represent the freedom and irrepressible spirit of America. Or at least that’s what the ads want you to believe.

I’ve fallen into the trap myself. When I bought my last car I was looking for one that says “I’ve Arrived”. After driving a rather humble car for 10 years I wanted something showier, a car that made me feel like a success. Like many Americans I was defining myself through my wheels, as if my own worth were somehow expressed in steel and rubber. I ended up buying the most expensive car I looked at, committing myself to a high monthly payment for years to come.

My Mistakes

Five years ago I was not the financially savvy, fiscally prudent person who stands before you now. To me, credit was a way of life. Who cares if you can’t afford it – isn’t that what loans are for? I had great credit, ironically, because I used so much of it. I always paid my bills on time (hence the great credit score) but I was a debt slave. A large portion of my monthly income went to pay off the past. The new car was no different.

I didn’t have a dime saved when I bought the new car, in fact I was unemployed! I had a new job lined up, but it didn’t start for a few more weeks. I financed 100% of the purchase price, in fact more than 100%. The sales tax (nearly 10% in California) plus the license and registration fees were tacked onto the bill. The grand total - over $28,000. But boy was it pretty and shiny. It also depreciated a few thousand dollars the minute I drove it off the lot.

The Lessons I Learned

A car is a means of transportation, not a personal statement of who I am. It should be reliable and get me to my destination, but it also needs to be affordable. What is the point of looking like money - when you don’t have any? There are plenty of ‘cool’ cars that meet those criteria, no need to stretch the budget.

The ongoing costs to keep a car are significant – gas, insurance and maintenance add up every month. Now lump on a $500 car payment. Suddenly you are paying a quarter of your paycheck just to transportation. How are you going to get out of debt and save a nest egg when your bills are that high? Buying too much car is a strain on the budget, holding you back from better things.

In the future I will:

Consider a decent used car – I keep cars for many years (10+), so the new versus used argument is less important. But I should still consider the new car depreciation, why not let someone else pay it? There are quality used vehicles to be found.

Save up and pay cash – this would definitely be possible with a used car, but a bit of a stretch for a new one. It’s awfully painful to part with $20,000 at a time. But maybe buying a car should be painful.

Don’t Stretch the Budget – never tie yourself to high expenses. Your car will be enough of a drain on budget, don’t add to the pain with a huge payment. A loss of income is always just a recession away.

A Sweet Ride

There are a lot of priorities in life and daily transportation is one of them. Somehow we have become trapped in the idea that we must have a fancy car. I often read stories of families where the kids are going hungry so the parents can sport a nice ride. I myself have bought more car than I could afford from a misguided sense that I deserved it. Yet another one of my money mistakes


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I’m not getting enough at home. I long for deep conversations on money and investing. I want someone to bounce ideas off of on budgeting and financial planning. But Mr. M couldn’t care less, as long as there is money in the bank he is happy. He trusts me to man the financial helm and steer us safely into port - it’s a lot of responsibility.

People can be financial opposites in more ways than one – you have the classic saver marrying a spender. But there are other forms too, one partner tracks every penny while the other hasn’t balanced a check book - ever. One partner is a financial worrier while the other simply trusts that everything will be OK. Managing money as a couple is tough, having different financial habits makes it even harder. So what can you, the financially savvy partner, do when your other half simply doesn’t care about money?

You Are Still a Team

Even if one partner cedes financial control to the other, that doesn’t change the fact that you are still a team. You need to develop goals as a couple, set a budget that works for both of you and agree on your financial framework. Your partner doesn’t have to be involved in the day to day management, but they can’t plead total ignorance either.

Set aside time to update your partner on your financial progress based on their interest level. Mr. M’s eyes glaze over at the merest mention of money but if I leave our budget and net worth spreadsheets open on the computer, I’ll catch him looking them over. Some people do presentations, others just leave it for their partner to digest on their own terms.

Seek Out Advice

The strongest aspect of a partnership is the ability to share ideas - two minds are better than one. When your partner doesn’t want to be that sounding board, you have to find it elsewhere. This blog is my place to bounce ideas around. By distilling my thoughts into words and getting independent feedback on our plans, I’m able to better manage our finances.

Look beyond your partner to like minded friends or even a professional financial advisor to get that second opinion. We’re often blind to the problems in our finances and a fresh view can reveal the short comings that you don’t see. If you can’t seem to save money, let someone look over your budget. They are certain to find “luxuries” that you consider necessities and hopefully help you see your budget from a new perspective.

Step up to the Plate

Someone needs to handle your finances and if your partner won’t, the job falls to you. Many couple’s finances fail because neither is willing to deal with their financial problems or manage their money. Ideally both of you will be involved in charting the course to your financial goals, but one driver is better than none. I’m proud that I can be our family’s CFO, it’s an important task that I have a natural inclination for.


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I don’t normally rant about government incompetence, isn’t that what talk radio is for? But a visit to the post office is one of the most aggravating experiences you can have in this country and my blood pressure hasn’t come down yet. This will be cathartic.

I offered to stop by the post office for Mr. M, who wasn’t feeling well. His Ebay success continues and he didn’t want to delay in sending out his packages. Since there are two post offices near my work I figured it would be an easy errand for my lunch break – yeah what was I thinking. I always go to the “secret” location that very few people know about, tucked in the far corner of an underground concourse. It’s also the place that the post office sticks their most rude and incompetent employees, I guess they figure no one will notice.

The postal service has been running ads touting their new “Flat Rate” priority mail service. Whatever fits in the box, however big it is and however far it is going, all for the same low fee. Mr. M charged the buyer’s shipping costs based on this great new service and demanded that I use it.

When I got to the post office I searched high and low looking for the supply of these new, special boxes. They were nowhere to be seen, so I hopped in line. When I got to the front I asked for a flat rate box, “we don’t carry them” was the curt reply. She hands me this huge box instead and waves me away from her window to go put it together. Wait I said, will this be the same price as the flat rate service? Her answer – it depends!

I go to the side to fill out the forms and put my package in the big box when I realize, it’s not self adhesive. I need packing tape and there is none to be found. Back in line I go, when I get to the front and ask for tape she tells me, they don’t provide it. I’m supposed to use their special handy dandy box that they don’t even carry and the replacement box they gave me requires tape that they won’t provide. I could buy tape she tells me, but they’re out! I went back to my office.

I decided to check out the shiny, nice post office a block away. It’s well stocked but the line will cause you to lose your sanity. There, organized neatly on a kiosk, were the mythical Flat Rate boxes. I grabbed a small one and ran. Of course it was self adhesive and I had already gone out and bought packing tape. Errr.

Finally with the right box I headed back to the dungeon where they keep the old dragons they can’t get rid of. I wait in line for the third time and when I get to the counter I put down my flat rate box in triumph. Success at last. She rings up the total – twice what I expected. Isn’t the small flat rate box only $5 I ask? Oh, she says, I didn’t even notice the box. We don’t carry them.

Really, you don’t say.


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There is an easy way to save money each and every day – take care of the things you already have. Simple right, but how many times have we carelessly thrown away money by not doing routine maintenance? Or forgotten a tool out in the rain, allowing it to rust? There are a lot of ways to take better care of your stuff to better save money.

Car Maintenance

It’s tempting to put off routine maintenance, money is tight and there is always the threat of an unscrupulous mechanic. But this short-sighted view actually costs more money. In my own case, a simple problem that went unfixed on my car lead to further damage. It would have been cheaper if I had gone in for the routine service called for in the owner’s manual.
Keep up with the oil changes and scheduled service to keep your car running trouble free. Regular washing and waxing will keep it looking great, which will help when it comes time to sell. Wax actually serves as a barrier helping to protect your paint and keeping the color crisp. A clean looking, smooth running car will command a higher sales price than the same car that’s been beat into the ground.

Laundry

I’m sure you’ve committed one of the cardinal laundry sins before – thrown dry clean only clothes in the washer, turned an entire load of laundry pink or shrunk a sweater. Everyone has done it at some point. But there are other laundry habits that cause your clothes to wear out quickly.

First, don’t overload your washer. As clothes rub against each other in the wash they get worn and faded. Also, don’t use too much soap! It simply wastes money and causes fading. Wash your jeans inside out to prolong their life, and try to go more than one wear between washes. Wash on the coldest temperature and don’t over dry your clothes. Heat wears out fabric, especially synthetics and elastic. Delicate under garments are best hand washed and hung to dry. Mechanical machines aren’t very kind to lace and such, but you can use a laundry bag or pillow cases to protect them in the washer.

An expensive pair of shoes can be repaired, it’s certainly cheaper than replacing them. Loose heals can be fixed and new soles put on. Be sure to have repairs done at the first sign of damage. If you have pets – put those shoes away! I lost more than a few pairs to puppy teeth, but I only had myself to blame. If I kept my shoes safely out of the dog’s reach, I would still have them today. Keep your precious items out of reach of kids, dogs, and any other destructive force in your life.

Tools and Appliances

I have ruined more garden tools than I care to admit. Often after a long day in the yard I’ll forget a trowel in the dirt or pruners under a bush. Found months later they’ll be rusty or ruined. Lesson learned – make a sweep of the garden after a day of working in the yard. Pick up and put away your tools, wipe off any dirt and store them some place dry. Keep the lawn mower oiled and clean, like any motor it will need the occasional tune up to run smoothly. All these simple tasks will keep your investment lasting year after year.

Appliances need maintenance too. Vacuum the coils on your fridge to remove the dust and pet hair that accumulates. Keep the seals clean and replace them when they begin to crack. Keep your stove and oven clean, baked on spills can be impossible to remove. Parts, like the igniter on our stove, will wear out. Replacing the broken part is a lot cheaper than replacing the whole machine. If your dishwasher has a filter, periodically check and clean it. The interior can be cleaned with an empty run using only baking soda. Keeping appliances clean and maintained will help them last for years.

The best way to save money is to not spend money you don’t have to. By taking good care of your stuff it will last for years and years, saving you the cost of replacement. I've only covered a few everyday items in this post, but the same ideas apply to all the stuff in your life. Caring for your things is a simple and effective way to save money every day.


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A few weeks ago I wrote a piece of advice to all the 20-somethings out there – you don’t have to be perfect, just try not to screw up your finances too much. One commenter wondered, what about those who didn’t heed that advice. Is it too late for them?

There’s one main message behind my story – you can recover from earlier mistakes. I made a mess of my finances in my twenties, now in my early thirties I’ve managed to climb out of “most” of those holes. I started this blog mainly to give hope to those drowning in debt that it is possible to change, recover and move on. For those who haven’t started saving, that now is the time to do it.

I don’t have the huge net worth that some pf bloggers have attained. Many of them started by doing everything right in their 20’s, staying out of debt and saving for the future. I did the opposite - lived paycheck to paycheck and charged it all to credit. I didn’t want to save for purchases in advance, I felt I worked hard and deserved whatever I wanted right now. I had no idea how far I was living beyond my means.

Of course that life was unsustainable, eventually I realized I had to dig out of debt and get serious about my financial life. I changed from a spender to a saver, embraced a simpler life and paid off the debt. I’m finally at the point where I can start saving loads of money towards my goals – it’s a liberating feeling. In just a few short years I've gone from a negative net worth to nearly $70,000 in savings and investments. It is possible to make up for past mistakes.

It’s never too late to start over. In your 20’s, 30’s, 40’s or beyond, there is no time like the present to change. It will only get harder in the future, the debt bigger and the years before retirement dwindling. When it comes to finance, time is both your friend and your enemy. The best time to get your finances straight is your 20’s, the second best time is right now. If debt is your demon, check out Deliverance from Debt for a step by step look at debt reduction. If you need to start saving for the future – read Investing with Little Money for places you can get your feet wet without a lot of cash. Whatever you do, don’t delay. The time to start remaking your financial future is now.


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Mr. M needs $500 to pay off that speeding ticket he got on the way to my grandmother’s funeral. To raise the funds he’s turned to Ebay and started unloading the stuff that he hasn’t used in years – video games, a high speed RC car and other assorted items. The car auction hasn’t ended but already the bidding is past $200, for a used RC car! There are obviously a lot of guys who want a little car that goes very fast. But despite the price tag, Mr. M will have spent more on the car than he is getting back. As with most things in life, the car has depreciated with time. But can objects increase in value?

One object he sold was an installed but never used network adapter for the old style PS2 console. The console stopped working a few years ago and we replaced it with a newer one. Mr. M went ahead and listed the adapter on Ebay for a few dollars. He bought it new perhaps 5 years ago, at the time it was about $20. It ended up selling for over $40! Apparently there is a market for the old cards, demand for PS2s is still high and the old cards aren’t made anymore. Classic supply and demand’s effect on prices, I wish we had a few more sitting around!

Here are this week’s carnivals:

-Almost Frugal hosts the Carnival of Personal Finance: Early Retirement – My Milestones
-Carnival of Money Stories at Budgets are Sexy: Suddenly Feeling Vulnerable


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My uncle chose voluntary foreclosure, AKA Jingle Mail, a few months ago on a house in California. He lost his job and had to relocate to another state. At first he tried to sell the house, but the California real estate market has been hard hit and it would be impossible to sell for what he owed. Tired of the stress, he mailed in the keys. Now he is in escrow on a place in Arizona. So how does someone with a foreclosure on their record buy a new house?

Arizona Real Estate

The area he moved to has been equally hard hit by the real estate crisis. His new house is only $100,000, so he is paying cash. Since he doesn’t need a loan, no one cares that his credit is trashed. The crisis in a way worked out for him by lowering the price of homes so significantly he didn’t need a loan. His mortgage in California is non-recourse, meaning the lender can’t come after him for their loss. He is free and clear.

Jingle Mail – A Growing Tide?

In non-recourse states, the lender’s only option is to foreclose on the house. If the foreclosed house sells for less than is owed, the bank is out of luck. They cannot pursue other assets like bank accounts to make up the difference. However, other states do allow lenders to pursue their loss. Anyone considering Jingle Mail needs to understand their local laws before they end up in an even bigger mess.

I imagine my uncle is not alone, there must be other homeowners contemplating the same scenario. Let the overpriced house go into foreclosure and buy a cheaper one. If you are older, a baby boomer like my uncle, you probably have enough cash and assets to buy one outright. In that case, the consequences of the foreclosure are minimal. For many people it will only make economic sense to mail back the keys.

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See Part 1 for the story of how our Boston Terrier “B” was diagnosed with epilepsy

There are no clear cut answers when it comes to coping with canine epilepsy. There is no cure, the best you can hope for is control of the seizures to reduce their severity and frequency. As an owner, the most important thing to remember is - do your homework and choose a course of action that you are comfortable with. There are many schools of thought when it comes to epilepsy treatment and I have had to defend my decisions regarding B’s care to family, friends and even veterinarians.

What is Epilepsy?

Epilepsy is a disorder where the patient, canine or human, experiences seizures but doctors can find no underlying cause. There are many things that can cause seizures other than epilepsy - diabetes, liver disorders, poisoning or brain tumors. You can’t test for epilepsy, instead you must rule out all other causes. The typical age for onset in dogs is around 1 years old, for example B had his first seizure a month after his 1st birthday. Epilepsy onset may come as late as age 5, but above that age most likely there is another cause for the seizures.

To Treat, or Not to Treat

In mild cases of epilepsy often the vet or owner will choose to do nothing. Mild and even moderate seizures are rarely life threatening. Large seizures or back to back seizures (called cluster seizures) are more dangerous and could be fatal. There are of course potential side effects to any medication that need to be weighed against the benefits. Also, even on seizure medication a dog with epilepsy will still have the occasional seizure - complete control is unlikely.

There is also a school of thought that suggests taking control of the seizures early, even in mild cases. First, there is always a risk of brain damage with any seizure. Second, there is the theory of kindling.

What is Kindling?

Kindling is a theory that basically says:

seizures beget seizures

Each time there is a seizure, the brain learns how to do it better. This makes future seizures more likely and more severe. Those who think kindling exists believe in controlling and limiting the number of seizures from an early age. Seizures typically become more frequent and more severe as time goes on. By limiting the total number of seizures in a dog’s life, you would be less likely to experience the large, devastating seizures later in life.

Seizure Care and the Postictal Phase

Don’t try to help or move your dog during a seizure unless they are going to hurt themselves (ie fall down the stairs or fall into the pool). Definitely don’t try to restrain your pet, you could get bit or hurt yourself as your dog has no control over their own movements. Each dog’s seizures are different, not all are your Hollywood style, thrashing on the floor variety. There are “absence” seizures which don’t usually involve muscle movement, instead your dog is awake but unresponsive. There are “fly bite” seizures, where your dog will bite the air as if catching an imaginary fly. There are small seizures – petit mal – and big seizures – grand mal. It’s good to know your own dog’s typical seizure behavior.

Cluster seizures are life threatening, if your dog is having back to back seizures or a seizure that lasts more than a few minutes you need to get to the vet immediately. They can administer valium, which will help to break the seizure. If your dog has a history of cluster seizures, ask your vet for valium suppositories that you can administer at home. It may save your dog’s life.

After a seizure (the postictal phase) your dog will probably exhibit strange behavior, which may last for minutes or even days. Their senses, sight and hearing for example, may be impaired. They may have poor motor control and be unable to walk or stand. Eventually your old dog should return, give it time. B is often “gone” for a day or two before he returns to normal.

Some things you can do to help post seizure:

1) Check body temperature and cool down your dog if overheated. Seizures are like running a marathon and overheating is a complication.
2) Give sugar, I’ve heard that plain vanilla ice cream is best and we always keep a little cup in the freezer for B. This helps with the blood sugar crash after running that marathon.
3) Keep your dog calm and comfortable. They are likely confused and disoriented, try to reassure them. You may need to separate him or her from other household canines, who don’t understand the epi dog’s unusual behavior.

Available Medicines

First: Never suddenly stop or skip doses of any anti-seizure medicine! Stopping anti-seizure medicine is certain to cause a seizure even in dogs without epilepsy (and people for that matter). Instead you must slowly wean them off the medicine over a period of months.

Potassium Bromide and Sodium Bromide

These drugs were originally used to control seizures in humans 100 years ago, they’ve never actually been approved to control canine epilepsy. However, they are a popular choice because they have relatively few side effects, do not cause long term liver damage and are pretty cheap. Also, they remain in the bloodstream for a long time so it’s less critical to give doses at the exact same time every day. Extreme lethargy is the most common side effect when starting either type of bromide, but this usually goes away after a few months of use. If you use bromide make sure your dog’s salt intake is the same day to day, no super salty snacks. Salt will displace bromide in the body, lowering the level of the drug.

Phenobarbital

Phenobarbital, or pheno, tends to have better seizure control compared to bromides. But there are some drawbacks, first pheno must be given at the same time every day. Miss a dose and you can trigger a seizure. Second, liver damage is common with long term use. If you choose to use Phenobarbital you MUST do blood work every 6 months to check for liver damage. Caught early, liver damage is reversible. I know of one boston terrier who just had to come off pheno for this reason, hopefully the damage was caught early and he will heal. Don’t cheap out on regular check up.

Newer Drugs

Phenobarbital and potassium bromide are the most common canine epilepsy drugs, but there are a few newer ones on the market like keppra. I have no experience with them and can’t give much advice. There is a clinical trial right now for a new seizure drug but it is only open to dogs not currently on medication. It could be a good opportunity to get some free vet care for your dog’s epilepsy.

Further Reading

Canine Epi Angels is a wonderful resource for anyone coping with canine epilepsy. They have a wealth of information on the site and you can connect with others who are facing the same struggle.

Our Choice

Based on my research I have chosen to put my dog on anti-seizure medication. B takes Potassium Bromide (KBr) once a day. We have increased his dosage once since starting the medication because his seizures were still too common. We now average around 1 seizure every 3 months, a number I can live with. I choose KBr because it has fewer side effects than pheno and practically no chance of liver damage. I once had a substitute vet question my choice, which caused me great upset, but I stand by my decision. You must make your own choice based on your own situation and research.

Keeping Down the Cost

Canine epilepsy is a heart breaking diagnosis. It is very difficult to watch a beloved pet in the throes of a seizure and diagnosis and treatment can be costly. I have been able to keep down the cost in several ways, first I talked with my vet about a plan of action. Since KBr has a low risk of causing organ damage we only do blood work once a year, that still comes to $500 for a complete blood panel and a test to check the level of KBr in his bloodstream! The Canine Epi Angels site has resources for low cost testing at a fraction of what my vet charges. The first pharmacy I used charged $2 per day for his medication, but by shopping around I found a better price. I now order through Drs Foster and Smith at a cost of only $0.10 per day! KBr is available in both tablet and liquid form, the liquid is much, much cheaper. We simply squirt it into his food, extra seasoning!

It’s Harder on You

Believe it or not, I think epilepsy is harder on you than it is on your pup. They don’t realize there is something wrong with them, but they can pick up on your stress and fear over their condition. In general, dogs with epilepsy live a normal life. They can live a normal life span. Look at your options for seizure control and don’t allow epilepsy to control you or your dog’s life.


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I’ve laid out our early retirement goals and projected the growth of our investments over time to see how much we need to set aside each month to meet our timeline. Unfortunately, we can’t meet our goals on our current income in our current time frame. We’re shy around $1500 per month depending on the economy and the future returns of the market. So what are our choices?

Work Longer

This is the first piece of advice financial experts give when it comes to a secure retirement – work longer. Each year you are contributing to your retirement savings is another year of growth and one less year of living on those savings. If we push out our timeline just a few more years to say, retire by 55, we can meet our milestones without needing more income. Just giving our money a few more years to grow will take care of most of the shortfall. But it’s a hard alternative to stomach when the stress of my job is giving me ulcers.

Scale Back our Plans

This is the choice that most people hate, who wants to scale back their dream? If we can survive on less money then we don’t need to income of two rental houses. The cost to acquire, payoff and maintain two houses is a huge part of our shortfall. Houses in LA don’t come cheap, if we’re lucky the next home we buy (to raise a family in) won’t cost more than $400,000. That is for a modest home in a middle class town, certainly not high style living!

The biggest hole in my plan is the cash needed to refinance our current place and for a down payment on the next. These are goals that must be met soon to make our timeline, buying a new house in our 40’s will make it impossible to retire by 50. But it will be very difficult to come up with enough cash in a short time, we won’t have the magic of compounding or market gains to help. For now I’m sticking with our original plan until I get a better idea, and saving as much money as we can.

Earn More Money, Invest it More Wisely

The final solution is to earn enough money to make up the shortfall. To have $1500 to invest we would need to earn at least $2000 more per month, not exactly pocket change! I have the opportunity to work overtime at my current assignment and I’m taking every hour I can get. But this is only a temporary solution, once this project ends it is unlikely that my next job will be as generous.

Mr. M currently earns very little money, but there are problems to growing his income. We want to start a family in a few years and given our respective careers and earning power, he will most likely move into the role of stay at home dad. Daycare in Los Angeles runs around $15,000 per year for one child, it will be hard for him to earn enough to justify working. Instead we are looking into part time work that will allow him to also do childcare duty in the future. I don’t think his income will ever be enough to fill that gap.

The last option is for both of us to earn some side income, which we’re already working on. The money from surveys, rebates and rewards will help to fill some of the gap. Maybe some day this blog will earn a little to help as well. For now we will work towards earning every extra dime we can since all of it goes to our ultimate goal. Who knows what the future holds, I would still be in debt if I hadn’t landed my current job. I can only hope that similar opportunities will appear and lift us across that finish line.


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Answer - Being underwater on a house that is falling apart!

As if being tens of thousands, maybe even hundreds of thousands of dollars underwater isn’t bad enough, my house happens to be falling apart at the same time. I love old houses, I don’t love the maintenance needs of this old house. This neighborhood has always been respectable, but of lower income. Many repairs that should have been done by earlier owners have been left to pile up for us. We’re approaching the point of no choice, the house will decide for us. There are repairs that we can’t put off any longer.

Last weekend while moving some boxes in the basement we discovered a drip, an old piece of corroded pipe is on its last legs. It’s not quite an emergency, but we can’t put off fixing the plumbing any longer. While some of it was replaced a few years ago, much of it is at least 50 years old. When we return from vacation we have to run the tap for a few minutes to get clear water. The pipes are so rusty they turn the water a burnt orange color when it sits. I knew this day was coming. Fortunately it’s a small house with partial copper plumbing, it won’t cost a fortune. Unfortunately, the plumbing isn’t the only issue.

The electrical system needs a complete overhaul. It’s not original, thank goodness, but still approaching 50 years old. It wasn’t built to handle today’s power loads and we constantly trip breakers running routine appliances. I hope it doesn’t have to be fully brought up to code, I don’t mind replacing the entire system but adding the now required number of outlets would rip apart half the house. Cutting holes in plaster walls is a sacrilege to me. Again a small house keeps the cost down, but I expect it will cost a few grand. And that’s not all…

A tree root has badly damaged one of our main retaining walls - living on a hillside has its perils. The house doesn’t seem to have shifted, well more than it already has. Through 80 years of earthquakes and with 1920’s hillside non-engineering behind it, this house isn’t exactly square anymore. Add this to the must-do-soon list of repairs and you have tens of thousands of dollars of home maintenance. None of it is as sexy as a remodel or even paint jobs, plumbing and electrical are hidden from sight. Perhaps they are more vital than new kitchen cabinets but definitely not as fun.

We’ve started looking at how to fund this work and who to hire, the house next door required several weeks worth of work to become livable and we have the contractor’s cards. This cost would be more bearable if we had equity in the house, being heavily underwater makes it worse. I hate to pour more money into this house, but we need a place to live and can’t walk away.


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Would you gamble with the money you need to live on tomorrow? Do you keep your nest egg stashed under the mattress? There is an appropriate place to keep each type of savings, depending on when you will need the money. Where do you keep the money you are saving for a house or for retirement? Should you keep both pots of money in the same place? The money you need to buy that new house next year should not be invested in the market and the money you need for retirement should not be languishing in a bank account. Different strategies are needed that mirror your timeline.

Bank for Tomorrow

The money you need in the next few years can’t be invested in something as uncertain as the stock market. You don’t have enough time to recover any losses from a down economy, but you do still have choices on where to keep your money in the meantime. Online savings accounts are a great alternative to your local mega-bank’s account. You get similar flexibility but with a higher interest rate. There are also money market accounts (MMAs) that offer a slightly higher return with minimal risk. If you can do without instant access to that money, you can look at Certificate of Deposits (CDs). They offer risk free return in exchange for a fixed period of time, there will be penalties and loss of interest if you withdraw the money early. Say you want to buy a house in 3 years, a 3 year CD matches perfectly with your time horizon. But one note – now is a terrible time to take out a CD. Rates are very low, you are better off putting the money in a high yield online savings account until rates rebound, which will probably happen well before that low rate CD matures.

Look beyond your local big bank as well. Not only do online banks offer better rates on checking, savings and CDs, your local credit union may as well. There are many online resources like bankrate.com to help you shop rates and products.

Invest for the Future

The answer is fairly obvious for the long term dreams like retirement, the money should be invested in the market. Not all of it necessarily, you should add in bonds and perhaps some cash to balance out the risk. But provided your horizon is 15 years away, your choice is clear. With 15 years to recover from any losses, the balance tips in favor of risk. Why not aim for a return that will put your money to work, beat inflation, and get you to your goals? But this approach is a disaster when you only have a few years to that goal, a downturn could completely wipe you off course. You can start investing with very little money in taxable or retirement accounts. In this case, time is on your side.

The Dilemma of In-Between

To me, the hardest decision to make is what to do with the in-between years, goals that are 5 to 15 years away. It’s too close to risk losing it all in the market, yet far enough away that you need the market’s high returns. My own approach is a blended one, some mutual funds along with more bonds and cash. But I tend towards riskier investments, you might be more comfortable sticking to long term CDs or bonds. This dilemma, risk when you have an intermediate time frame, makes for tricky money management.

An Amateur Mistake

One of the top mistakes amateur investors make is choosing the wrong investment for their time frame. They’ll put their emergency fund in emerging market funds or let fear rule and put retirement money in a MMA. Neither strategy is sound, there are better ways to match your investments to your time horizon. Risk is best left to long term goals, when you’ll have time to recover from any major losses. Cash is king when it comes to immediate needs, but its value gets eroded over time due to inflation. Matching your money management to your time horizon allows you to more safely invest in the market while preserving your savings when you need them.


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In my never ending quest to keep up with our tomato plants I made some salsa the other day. We have a habanera pepper plant as well, which I hadn’t tried yet. Before using the 5 peppers I picked, I decided to try a bite. I really had no idea if they were hot or not, so I chopped one up and took a teeny tiny piece. Oh my god was it hot, I decided one pepper was more than enough for my salsa. My hands were burning for the rest of the night from the one little pepper, those things are powerful.

Here is a rough recipe of the salsa that I made, just toss all of the ingredients together in a bowl. It’s best to let the salsa sit for a bit before serving to let the flavors come together.

-1 small red onion diced
-Juice of ½ lemon
-1 fresh ear of corn, kernels sliced off
-2 large tomatoes diced
-1 chili pepper diced (more for the adventurous)
-Chopped Cilantro
-Salt to taste

This Week’s Carnivals:

-First thanks to MSN Smart Spending for featuring my story Cash as a Wedding Gift – Tacky or No? It is always nice to reach a new audience.

-Festival of Frugality at Modern Tightwad: Fresh and Easy Cares About Good Customer Service

-Carnival of Money Stories was hosted by Funny about Money: Retire by 50

-Carnival of Personal Finance at Christian Personal Finance: Cash as Wedding Gift – Tacky or No?

-Carnival of Debt Reduction at Ask Mr. Credit Card: The Credit Card is Paid Off (cleverly built carnival with the various article woven into the post)


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How do you achieve early retirement without leaving yourself vulnerable? I’ve laid out a series of goals that I hope will equal adequate income and security for our retirement. It’s difficult to balance our need for cash flow, inflation protection and a high net worth to handle the unexpected. Of course setting goals is easy, achieving them is a whole other challenge!

Retirement Savings

Minimum $1,000,000

I don’t want to leave the workforce with less than a million dollars combined in retirement accounts. This includes Roth IRAs, 401ks and my company’s ESOP plan, which happens to be a retirement fund. We won’t touch that money hopefully for 20 years or more, allowing it to grow further while we enjoy early retirement. I don’t plan on any rule 72T to tap those funds penalty free. Rather that money will be for later retirement and how we plan to spend that time is to be decided - later.

Income

2 Houses Rented Out

Our current house can’t be sold, except for way less than we paid for it. Instead we will hold on to it, pay it off and rent it out. The rental market is strong in the neighborhood and it is an attractive house. But this house isn’t meant for a family with children, by that stage in our lives we will be looking to move up and out. For now I am saving up cash for two purposes – down payment on our next house and cash to refinance the current mortgage.

I don’t know how the California real estate market is going to play out, if it rebounds then that helps us with being underwater on the current house. We won’t need as much cash to refinance, but that also means the 2nd house will cost more. If prices continue to drop we can get our next house for a great price, but it will be hard to refinance this one. All I can do is save as much cash as possible and wait for a chance to refi. Ideally we will have a 15 year mortgage at that point, to put us on track to paying off the house(s). Our retirement plans have us living on a boat, so we are free to rent them out.

Part Time/Side Income

I don’t plan to be completely unemployed, I think I’d go crazy. Either writing, blogging, maybe consulting as an engineer… It has to be something I can do remotely since we plan to live on a boat exploring the world. Another possibility was hinted at by Funny about Money, take tourists around as a charter business. I am a pretty good cook!

Emergency Cash

$100,000

Everyone needs at least a little cash on hand. My retirement goal is $100,000 in cash and equivalents like CDs or money market accounts. We don’t plan to spend that cash but rather save it for the unexpected. Of course depending on inflation over the next few years, I may need to increase that amount. $100,000 in today’s funds will be nothing in 20 years – that’s why I want to get to retirement sooner than that!

Taxable Investments

$400,000

These are the funds we will tap if needed to supplement our side and rental income. I expect to spend the principal down as the years go on, obviously it won’t all be invested in stocks by retirement! As we reach full retirement age we will have our retirement savings to carry us forward, so I’m not worried about keeping this money for later.

The Boat

$300,000

All of our many homes will be paid for before we retire, including the one that floats on water. The key to our retirement plan is to keep expenses low, this means no debt to pay off each month. I’m not entirely sure what form our retirement adventure will take so I’m saving enough for my “dream boat”. We want to be comfortable, it is retirement after all!

Naturally Frugal

Early retirement is easier to achieve when your needs are minimal. We’re already fairly frugal on land, living on a boat is simply the next step. It’s definitely a form of forced frugality, there isn’t any space for stuff. With our debts all paid off our main costs will be insurance and living expenses like food and fuel. Our reward will be the richness of our experience. With the main expense taken care of – the vessel – we are free to spend our time traveling in comfort and on the cheap.

Of course these goals may change as time goes on, depending on inflation, the world economy and our own fortunes. At least setting goals now gives us something to work towards to make our dream happen. The future is in our hands, it’s time to get to work.


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This is a detour from our usual topics, but with financial implications. No pet owner expects to be confronted by a chronic disease, which can include a lifetime of medical bills. This is our story.

We adopted B from a local shelter back in 2006, when he was 8 months old. He had been given up by his first owners, who told the shelter that money was tight and they couldn’t keep him. We took him and D to the meet and greet area of the shelter, a large play yard enclosed with a 10’ tall fence. As soon as B was free, he made a break for it. Fence be dammed, he would go straight through it. He hit the fence face first at full speed and knocked himself senseless. His face was split open and bleeding as he stumbled around in a daze. We can’t leave him here, says Mr. M. Next thing I knew we had a strange dog in the back seat as we slowly crawled home through rush hour traffic.

We had been looking to adopt a brother for our first boston terrier D when B appeared on Petfinder. I rarely looked at the site because we were already working with a rescue group, but that day I happened to stop by. I was shocked to see a boston listed in a shelter about 30 minutes east of Los Angeles .There was no picture and little description -8 month old neutered male boston, very cute, very scared. I quickly picked up the phone. After a few tries I reached a shelter worker and asked if he was still available. In fact he just became available that morning, I think my enthusiasm shone through. She took my application over the phone and they held him for us until the afternoon, the soonest we could get there. It was fate somehow.

He came with paperwork showing the owners had paid $800 for this purebred puppy just 6 months earlier. In those 6 months it is clear he lived outside, most likely on a concrete patio. He wasn’t socialized, was terrified of people and household noises. But he was very sweet and desperate for love. Other than the brief adjustment period, life was calm. That was until one evening in August, when B had his first seizure. Mr. M and I weren’t sure what was happening, B couldn’t walk, couldn’t focus and simply wasn’t with it. We rushed off to the emergency vet.

By the time we saw the vet, B was coming around. The vet told us it was most likely a seizure, nothing they could do now. They took blood to test for a cause and said unless he has another, don’t worry. Young dogs often have unexplained seizures she said. The blood work came back fine and life returned to normal, at least for a few months. In October B had a grand mal seizure in the yard, it took days before he returned to normal. The vets couldn’t find a cause, it wasn’t poisoning or toxicity. It wasn’t diabetes or a liver problem. There was nothing wrong with him. It was the first time I heard the word – epilepsy. Seizures without an underlying cause are called epilepsy. Without a cause there is no cure, only management of the seizures. Except for certain severe cases, most dogs with epilepsy will lead a normal lifespan. The disease is simply a part of life.

This is Part 1 - Next week in Part 2 I’ll delve into the treatment side, along with how we’ve managed to save a few dollars while still seeing to B’s medical needs.


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I’ve been pretty smug throughout this recession. When you still have a job and still have money, a poor economy isn’t so bad. It’s the unemployed, the job seekers, who are feeling the pain. I felt secure in my current job and my ability to quickly land a new one. But a couple of things lately have caused me to doubt my self confidence.

I work on a project that should soon start winding down. In theory I then move on to my “home” office in a nearby town, but only if they have work for me. A boss from that office was visiting the other day and he made a remark to the effect that they haven’t figured out what to do with me. For the last few years I’ve done a very narrow specialty because that is what they needed from me, even though my background is more general. I hope I haven’t pigeon holed myself. Time to start reminding them I am more than just X, I can also do Y and Z. But I’ve always had a few back up plans.

Another company has been recruiting me for years, the ace in my back pocket. I don’t particularly want to work for them, but there are worse things in life. That was until yesterday. My assistant happens to work for this other company and yesterday was his annual review, he found out they are putting him on salary. This is bad, very bad. Every hour I am at work is billed to a client, if the job requires 10 hours a day I am paid for 10 hours. How will it work in a salary situation? While certainly you only get paid your salary, are they still charging for the actual amount of work done? It seems someone got clever on how to milk additional profits in our thin margin business. Of course I’m never going there now!

My other plan, starting my own business, is still there in the background. We are in talks with another team, only one of two known to be in the running. I’ve worked with them before and would be happy to do so again. Maybe that will pan out, but I know the capricious nature of my industry and nothing is certain until you receive payment. Either option doesn’t feel as cushy as the job I already have, too bad nothing is certain in this recession.


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I admit I don’t understand the American love affair with big houses. My own tiny house, at 750 sq ft, suits us just fine. I do want more space when we finally start a family, but my ideal home would be around 1500 sq ft. Anything larger is simply too much house for us - too much to maintain, heat and keep clean. But I certainly didn’t inherit my love of small houses from my parents.

This weekend I had lunch with my mom and we had a chance to catch up on her financial plans. Since our discussion about investing together on a rental property her circumstances have changed, her house in Virginia finally sold and she now wants to buy a place in California to call home. We talked about her plans, what she wants out of her next house and her requirements as to location, style etc. I figured she was looking near to her apartment, an area that she loves and that suits her lifestyle. But the only thing she could afford would be a condo or townhouse, something small and modest because it is a more affluent area. Nope, small won’t do, even in the nicest part of town. Instead she is looking at the far flung suburbs for a 4 bedroom, 2500 sq ft house with a pool! Huh?

She lives alone with two geriatric dogs, why does she need a 4 bedroom house? She works in Los Angeles, why would she choose a 2 hour commute when she hates traffic? She can’t be out in the sun due to skin cancer, what good is a big yard and pool to her? She is looking for a house to retire in, but the suburbs are a terrible place for a senior citizen! The only reason I can figure is the size of the house. In the heart of the city homes are older and smaller, you have to travel to the edges to see the big house craze in action. She kept insisting that she wants a house that will make her “happy” and from our conversation I took that only to mean BIG.

A house and neighborhood should fit your family, lifestyle and finances. I don’t see how my mother’s plans fit either her family or her lifestyle, a single person does not need a huge house with many bedrooms. She enjoys going to the theater and eating in little locally owned restaurants, both are absent in the chain restaurant filled, big box retailer town she is looking at. I encouraged her to keep looking in her current area, prices have not fallen as much (yet) compared to the suburbs, but history shows that eventually all of Southern California should experience the same percentage decline. Unfortunately she refuses to wait, instead she has decided she must have a new house this year. A great, big house.

I don’t know where some of my values came from, I certainly didn’t inherit them from my parents. The thought of a person living by alone in an oversized house makes me ill. It’s a waste of resources and money, she will be paying month after month to heat and cool bedrooms that will never be used. A large house will cost more in maintenance, you are locked forever into high fixed expenses.

I can’t change my mother’s mind, we have different values and priorities. I also don’t know what other motivations are behind her plans, perhaps she is trying to hold on to her pre-divorce lifestyle. My parents had an even larger house back east, but large houses are the norm for the area. California, in contrast, is known for its smaller homes. Americans often attach too much value to the size of their dwelling, at the expense of other considerations. But the rest of us know, size isn’t the only thing that matters.


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July was a busy month. We started making big plans and paid off a chunk of debt to get there. Since the money to pay off the debt came from savings, it was a zero sum transaction. The debt is gone, but so is a portion of our savings. Losing those savings makes me feel vulnerable and I will be rushing to replace those funds. It’s liberating to not have the debt hanging over our heads, onward and upward from here. The stock market had a great month, I’ve enjoyed watching the big gains in our account balances. Of course I’m a bit cynical, I’m tired of bubbles and would honestly prefer a slow steady climb. These big gains make me nervous, though not nervous enough to bail! Here are the numbers.

Savings – We still have the bulk of our money in a FNBO savings account. I’ve been looking at alternatives like Smarty Pig but haven’t made a move yet. I removed $5000 from savings last month to pay off the credit card.

Bonds – I have stopped contributing to our snowflake bonds but I will start again soon. Now that our debt is paid off any extra money that comes in will be set aside for one of our retirement goals – a boat.

Sharebuilder – No trades.

T Rowe Price – We invest $300 per month, in September I plan to increase it to $500 per month as part of our retirement goals.

Lending Club – We have a small amount invested with Lending Club and I’ve decided to start adding more to the account on a monthly basis. This is just another small part of our retirement planning.

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

Wells Fargo 401k – I save 8% of my salary and plan to increase that as soon as the Care Credit balance is paid off towards the end of the year.

Company ESOP – our company stock is structured as a retirement plan

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

Property Taxes – In the interest of big goals, I’ve dropped our monthly self escrow to $400 as a result of our property tax reduction.

Dog Fund – To cover our 3 boston terrier’s care and expenses. I’ve started feeding them this very pricey food…

Misc Fund – used for irregular or unexpected expenses, September is an expensive month with car registration and 3 close family birthdays so I’m trying to build this fund up

Care Credit Arbitrage – the care credit balance is 0% till the end of the year.

ROTH IRA –I have decided I’d like to invest my Roth in index funds through Vanguard. Unfortunately I don’t have the $3000 minimum investment yet, so I plan to use their star fund (non index fund, $1000 minimum) as a temporary home so I’m not missing any recovery. I’ll use the Star Fund to help build an index fund portfolio over time.

House Fund – I drained the cash portion of the house fund, I still have a $2500 CD earmarked for the same purpose.

3 Month Fund – this fund is part of my plan to smooth out Mr. M’s irregular income. I will be tapping the fund this week since work has been non-existent. We’ll be fine for several more months and I’m so happy I set this fund up to carry us through.

Mr. M Tax Fund – we’re setting money aside to pay taxes on Mr M’s independent contractor earnings. Most of his recent jobs have been W-2 employment so I haven’t needed to set much aside.

Wedding Fund – most of the $2700 was just spent on an engagement ring! But alas no proposal yet…

Care Credit – the balance bounced back up with D’s hospital visit last month. This total does not reflect the money I’ve saved in arbitrage so the balance is actually lower and I’ve adjusted our budget to still pay off the entire balance this year.

Chase Credit Balance – this debt is gone!!

I love these kinds of months, after a winter of heartache I’m enjoying the positive trends. Of course we save a large portion of our income, so our net worth should climb. But we can use all the help a healthy economy and market provide.

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What do you do with 40 pounds of tomatoes? Why eat them of course. We’re still eating our way through the tomato harvest, but the rest of the garden is a bust. We are having various issues with nutrients and disease, better luck next year. I’m certain we’ll reach 50 pounds of tomatoes this year, 60 would be a stretch. This will put us at least break even for our costs, even though the rest of the garden is a failure. That makes me feel a little better about the poor returns, and perhaps some of the plants will still turn around. The great part about gardening in southern California is the long growing season, we should be harvesting into November. Here are our latest totals:

Tomatoes – 40.5 lbs
Hot Peppers – 1 oz (yep, tiny)
Sweet Peppers – 0.5 lb
Eggplant – 1.8 lbs (all Japanese variety, there are several large ones growing on the black beauty)
Zucchini – 1.3 lbs
Yellow Squash – 2.0 lbs
Onions – 2 oz
Cucumbers – 0.9 lbs (the plants are now dead, this is it)
Beans – 3.0 lbs
Peaches – 2.5 lbs
Grapes – not likely to have any worth eating
Kumquats – in bloom

This weeks carnivals:

-Carnival of Money Hacks at My Life Return on Investment: A Great Mental Trick Look at Annual Cost
-Carnival of Personal Finance hosted by Good Financial Cents: The Hidden Cost of Homeownership – Repairs


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