M is for Money

I like being a contrarian. If the herd is running one way, you’ll generally find me headed someplace else. But sometimes the herd is going in the same direction I want to go, like with the latest recession fad – frugality.

I’m certainly not going to give up my frugal lifestyle simply because other people are following it. For me frugality is a philosophy for everyday life, not just hard times. But there are plenty of reasons why I want other Americans to get back to their free spending ways.

The Second Hand Market

Frugal people still need many of the material trappings of life, they just don’t want to pay full price for them. Someone needs to buy all the new cars and new clothes for there to be a second hand market for frugalists. Every new car sold is someone else’s future used car purchase. Thrift shops and resale stores rely on primary consumers to supply the secondary market.

Our Consumer Driven Economy

One reason I am frugal (among many) is to have more money to save and invest. Of course investment returns are based on economic activity and for most American companies, consumer spending is the fuel running that economic engine. There have been several warnings that America will not climb out of this recession if Americans continue to embrace frugality. To see my investments grow, I need the rest of you to spend.

I Want You to be Happy

I know most of you don’t enjoy pinching pennies and wearing someone else’s cast offs. You find frugality boring and beneath you. You enjoy the thrill of shiny new things. That’s fine, embrace your spendy side! I’m pretty sure you’ll give up on frugality soon anyway, why be miserable in the meanwhile.

Yes, You Should be Frugal

My reasoning is selfish of course. You should choose to be frugal for your own economic security. You should choose to be frugal for your own environmental security. But I know human nature and the current frugality fad will end. For those of us willing to continue living with less, that is fine. I don’t want you to be frugal anyway.


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Many years ago, facing both unemployment and uncertainty, I cashed out my 401k. At the time I had very little in savings and felt it was worth any negative consequences. Of course looking back I now realize how this decision continues to affect my goals years later.

Someone in a similar situation recently asked, why was cashing out the retirement fund a mistake? After all, it was only a few thousand dollars and you needed the money at the time. So what are all of the consequences of cashing out a retirement account?

Penalties and Taxes

The first and most obvious drawback to cashing out a 401k is the taxes and penalties you pay to the IRS. Since the money was invested pre-tax, taxes are due at the time you cash out. They also hit you with a 10% penalty meant to discourage early withdrawals. The $5000 in your account will only add $3750 to your wallet (assuming a 15% tax bracket). You don’t get the full benefit of that money.

Lost Future Gains

$5000 doesn’t sound like a lot of money, but what would that balance look like after 40 years of investing? At 7% annual return, that $5000 would grow to nearly $70,000! I didn’t take $5000 from my 20-something self, I took $70,000 from my 60-something self. Look at it in terms of the future value of the account, not the balance there is today. You are losing out on many years of tax-free gains when you cash out a 401k.

You Cannot Make it Up Later

The government limits the amount of money you can put in tax-favored retirement accounts each year. You cannot go back in time and replace the money you have taken out and you cannot add more than the yearly maximum to make up for earlier withdrawals. That is not all, a few years delay in saving will make a big difference in the amount you have at retirement. Let’s say you replace the $5000 three years later, with the same 7% return. Unless you also push back retirement by 3 years, you would have $13,000 less at the same age. You invested the same amount of money, but time has a major effect on the outcome.

A short time without retirement investments, even early in your career, will follow you in the form of fewer savings. In the future you will have to save more, just to get back to the same point you were before. The effects of cashing out a 401k aren’t limited to taxes and penalties, you will have lost benefits that cannot be reclaimed. What seems like a trivial amount of cash could grow to a tidy nest egg, if only you left it alone.


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It’s time to take a final tally of this year’s gardening efforts. Actually, this is Los Angeles and a few plants are still producing. If it stays warm enough, they will go on through winter. Tomatoes, peppers and one eggplant remain. But the bulk of the harvest has passed and as we get to this point, I’ve found that we lose interest in measuring and weighing each little item we gather. Unfortunately, it was a rather lackluster year.

While the tomatoes rocked it out, other plants were a total bust. Usually summer squashes are abundant producers, but ours fruited little for the amount of flowers they were carrying. The cucumbers met the same fate. The peach tree had been jinxed early in the year, a warm spell last winter caused it to flower prematurely. Fewer peaches developed and I discovered that many of the remaining ones were devoured by a hungry boston terrier. Apparently he is smarter than he looks - he learned to bump the tree to knock off the ripe peaches. He is indeed a strange one, he loves his fruits and veggies and peaches are the perfect sweet treat. I’m not sure how I’ll keep him away next year!

Our garden space is small and many of the plants were raised in pots. This limits their productivity somewhat, though oversized pots and the appropriate fertilizers would help. In addition to the pots we have three raised beds, each approximately 4’ by 4’. For next year we plan to add another layer and deepen the beds, along with improving the soil this will hopefully give us bigger stronger plants in the future. We’re also planning to swap to larger pots, the tomatoes were grown in 2 ½ gallon pots. This is way too small for them, most people don’t attempt to grow tomatoes in anything less than a half barrel. Yet we’ve always had decent luck with the smallish pots, we’ll see next year whether bigger really is better.

First this year’s totals:

Tomatoes – 71.4 lbs (not a typo!)
Peppers – 6.0 lbs
Eggplant – 8.4 lbs
Zucchini – 2.3 lbs
Yellow Squash – 2.0 lbs
Onions – 1.0 lb
Cucumbers – 1.1 lbs
Beans – 5.6 lbs
Peaches – 2.7 lbs

Then there is the issue of the cost/benefit analysis. I didn’t keep an accurate tally of costs, but it was somewhere around $110. We bought plants (rather than seeds), some soil and fertilizers. Most of the equipment, pots, cages and a drip system, we already own. There is a high initial cost with a vegetable garden, but many items can be used year after year. At this point we can more than recoup our cost even after a poor year. I based my produce value on regular supermarket prices, even though it would qualify as organic. I’d estimate the 100 pounds of produce from our garden would cost us at least $180 in the store. It’s not a great return on investment, but it’s not terrible either. Here’s to hoping for a better yield next year.


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Look at the people around you, do you share similar goals and aspirations? Do you see them as successful people that you want to emulate? Or are they headed down the wrong path – and pulling you with them. Our peer group has a profound effect on us, sometimes in ways we never expect.

Positive Motivation

Friends can be positive role models in our lives, especially successful friends. They are a source of inspiration, seeing their success helps you realize that you too have that opportunity. They are also a vital source of information on what it takes to be successful and can help guide you along the proper path. You are able to collaborate and share in ways that benefit you both.

The Chance for Opportunities

Some part of life is luck, but that doesn’t mean life is beyond your control. Success depends on putting yourself in the way of opportunity and being prepared to act when opportunity appears. Surrounded by a circle of successful friends, you are more likely to experience positive opportunities – the inside track to a great job or valuable money making advice.

Negative Motivation

When I first met Mr. M he was hanging around with a bad crowd, they were either in rehab, on parole or dead. They thought of nothing more than beer, cigarettes and the next party. They didn’t much care for me, they mocked anyone with a head on their shoulders or who worked good job. They saw success as a lottery and they were the losers. They had no part in their own failure, it was all someone else’s fault. With this sort of negative thinking it is impossible to realize a better future can be had through hard work and perseverance. Collectively they brought each other down.

Poor Role Models

What happens when everyone around you is a loser? Suddenly you are the most successful guy in the room, even if you are not that successful. There is little motivation to climb higher when you are already at the top of the perceived ladder. In this case your perception is warped by the peer group around you.

Surround Yourself with Successful People

If you are not the success you want to be, look at the people surrounding you. Are they a positive influence or a negative one? I think people sometimes choose to hang out with those less successful than themselves, simply to feel better about their own situation. Surround yourself with successful motivated people who will inspire you to always do better and to strive for more.


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Many people dream of working for themselves as a freelancer. Everyone wants to be their own boss and working freelance gives you that opportunity without the expense and hassle of employees. You can set your own hours and reap the rewards of your hard work. But in the US there are a lot of risks to going it alone, employers provide many basic services like health insurance and retirement plans. Enter the Freelancers Union, an organization which provides advocacy and benefits to freelance workers.

I didn’t realize that such a group existed until they plastered their advertising all over buses in LA. It sounds like a wonderful idea, benefits work best when you have a large group to spread the risk and cost. But freelancers are typically alone, without the power of the group. By banding together they have a voice and a large enough number to set up insurance plans at group rates. But is it more hype than promise and what are the costs to join?

Membership in the Freelancer’s Union

First, anyone can join the Freelancer’s Union. They will only review your eligibility if you want to take advantage of their insurance products. For insurance, eligibility is limited to freelancers (independent consultant, contract, self employed etc) who are US residents and work in certain industries (like the arts). You will have to prove you have earnings in your field, so wannabes need not apply.

Insurance Plans

I’m covered by my employer’s insurance, so I have no need for the Freelancer’s Union’s services. I can only go off the information on their site, not actual experience. Depending on where you live (31 states are covered), they offer health, dental, life and disability insurance. There are no fees to join the freelancer’s union, but they do have application and annual fees for their insurance programs. It also appears that you will be subject to many of the same limitations you experience when shopping for an individual health insurance plan – a review of your medical history, exclusion of pre-existing conditions and a final rate higher than the initial quote. As with any health insurance, you must read through pages and pages of information to understand how the program works and to decide if it is right for you.

Retirement Plans

The Freelancer’s Union also offers members access to a 401(k) type plan funded via automatic monthly transfer or twice yearly check. Unfortunately, the fees associated with their program make it a bad deal. There is a $40 application fee, $11 monthly fee and a 3% administration fee. This is in addition to the management expenses associated with all mutual funds. You can set up an individual IRA fee free at many investment houses like Vanguard or T Rowe Price. Exorbitant fees sink many small investors.

Advocacy and Community

The last big benefit of the Freelancer’s Union is being part of a larger community. The site includes tools for networking, advertising and searching for jobs. As a group, they can take up causes of concern to their members. Obviously many issues from employment law to healthcare affect freelancers, whose voice can get lost among the larger and more powerful interests. By adding your name to their ranks, the group can better represent their constituency. For the 20 states not currently covered by their health plan, all that is needed are enough members residing in that state. Employers experience the same problems when looking for healthcare, without enough employees they are certain to pay a high price. The Freelancer’s Union has a long way to go before it can offer the same level of benefits to freelancers that employees enjoy. But all great efforts must start someplace and the Freelancers Union certainly has the right idea.


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You want to hear a surprising statistic about Halloween - it’s the second biggest holiday for retailers after Christmas. Apparently all those costumes and decorations and candy add up to big bucks in company’s pockets. I had no idea, we rarely spend much money on the holiday. We each have a few inexpensive costumes to pull out if we’re going to a party, but we don’t decorate the house. I buy a bag or two of candy to give out to the neighborhood kids, there are some benefits to living on top of a hill. Most kids are too lazy to walk uphill so we only get visited by the children who live on our street, I know people who literally spend $100 on candy for the hordes of children who visit their house. I did make one mistake with the candy this year, we bought it too soon. Mr. M and I already polished off the two bags that I bought, I’m waiting till the actual holiday to buy any more so that doesn’t happen again! So what does your Halloween look like?

Whenever we talk about customer service it is usually to relate a negative story, incidences of bad customer service. But there are plenty of stories of good customer service too, they just don’t get told as often. Lately we’ve been trying to give credit where credit is due and highlight experiences that show, some stores do still care about their customers. The following is Mr. M’s account of a recent trip to Petco.

Ms. M and I have three Boston Terriers, one of whom is a picky eater. In fact, lately he won’t eat our HOMEMADE dogfood (which is better quality than the slop I ate in college). It was time to get some high-quality kibble so my picky pup could get his crunch on.

There is a PetSmart near our house but they don’t carry the brand I was looking for, so I drove out to Pasadena to the PetCo for some kibble. I noticed the food I wanted was on sale so I purchased 3 bags!

I drove home and was feeling good about a frugal purchase when disaster happened! I took the bags out of the car but one of them had mysteriously opened – ON THE BOTTOM!!! When I picked up the bag the food poured out all over the car and around my feet on the street… I felt like a six-year-old whose ice-cream fell off the cone and landed on the ground. I even pouted my bottom lip.

I called PetCo and talked to the manager who offered to replace the bag, free of charge, if I brought back both receipt and bag. I only collected as much of the spilled food as I could and set out to PetCo. When I arrived the manager greeted me, having helped me earlier she recognized me. She quickly replaced my bag, removed my pout and ensured that I will continue to drive across town to PetCo for kibble.


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Our wedding will not be the one I would chose to do in the absence of family and societal pressures. There are a host of expectations attached to weddings, what you should wear and who you should invite. What does it say about your social standing when you have a buffet instead of a seated meal, etc etc. If the wedding were just about us, and just financed by us, it would look very different from what I am now planning.

A Wedding for Us

I don’t enjoy being the center of attention nor do I enjoy throwing big parties. I find both unnecessarily stressful. I also don’t enjoy my family, I tolerate them. My ideal wedding would involve Mr. M and I – and no one else. We would run off on a nice vacation and get married somewhere along the way. I’d pull two strangers off the street to be witnesses. There would be no photos and no flowers, maybe a nice dress and Mr. M would hopefully wear a clean shirt. I would totally do it – except my parents would be crushed. After spending a lifetime trying to not disappoint them, why start now?

A Wedding for the Family

Every wedding I have attended has been as much about the couple’s extended family as it has been about the couple getting married. Every friend has had guests in attendance whom they have never met before, old friends of the family and so forth. As much as people like to say a wedding is about the couple getting married – it’s often not. It’s also about the social and financial standing of the families involved and my family would rather hide in shame than see their daughter have a “poor” wedding. I am an only child, my parents don’t have a fallback kid. All their hopes and expectations are pinned on me. I’m the last of the line on my father’s side and the only woman on my mother’s side. Apparently my grandmother thought a wedding was so important that she made my mother promise it would happen, and gave money to see it through.

The money I am getting comes with strict rules on who must be invited in exchange, including the uncles and cousins I’d rather disown. This is one of the trade-offs you get when you ask for help. When you take money from your family, the day is no longer your own. It becomes about them and their hopes and dreams as well. I’m OK with that. The fact is - we can’t afford a wedding with guests in LA. Maybe in the Midwest or the South, but not here. Even a small, simple ceremony, without a reception or food or alcohol, will be 5 figures. If we were not getting help from my parents, we would run off and elope – and leave them out of it.

I don’t see this wedding as just “our day,” it is for my parents as well. In that context, I feel no shame in taking their money. Besides, I’ll be paying way more for the grandkids they’re demanding!


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I don’t have much experience asking for money, I’ve been pretty independent since becoming an adult. But there are a few times where it is acceptable and appropriate to ask, like when you’re getting married.

Both of my parents have, in the past, offered to help pay for any future nuptials. After 7 years of dating Mr. M, the subject has come up before. Usually the conversation starts with them asking “Are you ever getting married?” In this case it is acceptable to ask if they still plan to help and how much. With my mom I was straightforward; I needed to develop a budget to start scouting locations. She had said there was money set aside for our wedding, so I asked her how much. She floored me, the total was way more than I expected. Thanks mom! Apparently there was some money left after my grandmother passed away and she had, at some point in the past, asked my mom to use a portion for our wedding. Thanks grandma!

It’s dicey to ask your parents to chip in if they have never offered before (including past conversations) or seem disinterested. My dad falls into the latter category. As recently as last year he said he wanted to pay for the whole affair. He said it was what dads do. But since announcing our engagement he hasn’t said a word about helping, financially or otherwise. He has mentioned how much alimony he is paying to my mom, of course I reminded him that he agreed to those terms (without a lawyer’s help I might add). So today I took a different approach. I sent him an email with a few things I need from him in order to plan – first a list of days he is unavailable. He travels a lot for work and will be gone for months at a time, so this is a big consideration. Second, a list of family and family friends that he thinks should be invited. Last, how much is he willing to help?

I told him mom had made a commitment, I didn’t say how much. I don’t expect him to give anywhere near that amount, in fact I’ve already realized he may offer nothing. His hobbies and fun are way more important to him, but he may surprise me. He could certainly afford to offer a few grand, he probably spends that much a year on bank fees and bounced check charges. Smart man, 6 figure salary and no financial sense whatsoever. It’s only been a few hours, I haven’t received a response yet.

There is no easy way to ask for money. In this case, past promises made it acceptable to at least ask what help is coming. I don’t expect help, but will be grateful for what comes. For me this wedding is as much about my parents and family as it is about us. I’m the only descendent of an entire family branch, I can’t imagine eloping and leaving my family out of it. Since the wedding is as much for them, as it is for us, I don’t feel bad about asking for money to help cover the cost.


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It’s that time of the year again, open enrollment time. It’s the one time of the year you are allowed to switch insurance plans or add a new benefit, including the introduction of new benefits your employer offers. Our window doesn’t open until November, but management released a memo detailing the upcoming changes. One new benefit looks interesting - group legal.

The memo is short on details, but for less than $200 per year you get a variety of legal services. My question – does this cover all associated legal fees or only a percentage? I’ve had the unhappy misfortune of needing a lawyer, it’s a story I’m saving for another time. And from that experience I know $200 wouldn’t even cover an hour’s worth of a lawyer’s time. Mine cost the princely sum of $350 an hour, the case ran over $8000, which I had to pay upfront. It was worth it, and in fact I still needed his services. But at that point I wasn’t sure I’d recoup his cost, so I let him go. I’m curious if I can still go after the money I am owed.

The memo says it covers debt matters (hope I never need it), defense of civil lawsuits (sadly the most likely possibility in our sue happy land), and document preparation like wills, trusts and estate planning. The wills and trusts will definitely come in handy in the next few years as we get married and start a family. On the surface this seems like a pretty good deal - you probably won’t need legal help every year, but even occasional legal support is expensive. Or it might be a waste of money.

It appears similar to any other insurance plan, where you hope for the best but prepare for the worst. Litigation is always a threat to your financial security and in America, people will look for a way to sue you. Perhaps protecting yourself with “legal insurance” is a smart idea. Anyone have a similar workplace benefit? What is your experience, is it worth it?


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B broke another nail this week, fortunately not bad enough to warrant a trip to the vet. After four years of scrapes and injuries we have a large collection of first aid supplies, so I treated his foot and wrapped it up. If it doesn’t heal on its own, I’ll make him a vet appointment this coming week. But running to the vet for every little thing gets expensive with three dogs. Anyone with a pet should learn some basic pet first aid, it could save their life and save your wallet.

The Red Cross offers a Pet First Aid course, which I have taken. In addition to learning how to pick up an injured dog without being bitten, you learn how to take your pet’s vital signs and treat minor injuries. They also give you a first aid book to keep, good reference material for later. You should check with your local Red Cross Chapter to see if they offer this course, since not all do. You can still pick up a copy of the manual from Amazon or other booksellers.

The Pet First Aid Kit

A first aid kit is essential to have around the house, for both people and pets. We have a wide selection of bandages and ointments to dress most minor wounds. The self adhesive stretch wrap is a lifesaver, it will keep the injured area safe without falling off. Always be careful not to wrap a limb too tightly and check underneath several times a day to make sure the wound is healing properly. I try to let a wound breathe and only wrap it up when it will get injured or dirty. I plan to unwrap B’s foot for the night, but protect it during the day when it could get damaged further or infected. A basic pet first aid kit should include:

-gauze (both pads and rolled)
-non-stick sterile gauze pads
-surgical tape
-self adhesive stretch wrap
-small scissors
-nail clippers
-benedryl (for allergic reactions or hives)
-hydrogen peroxide (can be used to induce vomiting too)
-rubbing alcohol
-antibiotic ointment
-styptic powder (ask at pharmacy)
-pediatric rectal thermometer
-water based lubricant
-saline eye wash
-plastic eye dropper


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While grocery shopping this weekend at Trader Joes we came upon something I had never seen before, the fairytale pumpkin. Larger than your average supermarket pumpkin, they exude a certain rustic charm. They certainly would look fitting in a fairy tale garden, and are apparently good to eat as well. So we picked one up. But eat it, or look at it, I haven’t decided. The damn thing weighs at least 25 pounds! I think it would take a chain saw to cut it up.

I rely on prepared foods to get me through the week. As much as I enjoy cooking, when I get home from work the only heavy lifting I want to do is put fork to mouth. But neither our budget nor our waistlines could support a life of eating out. We can eat healthier food for a fraction of the price by cooking at home, so I look for ways to make meals at home quicker and easier.

The Cost of Convenience

One benefit of our modern lifestyle – we can trade money for convenience. Or vice versa, save money by doing it ourselves. We all have our price point where we’d rather pay someone else. But rarely is it an either/or decision. There are levels of convenience we can pick and when it comes to food:

Least Convenient = Least Expensive
Most Convenient = Most Expensive

In ascending order:

1) Least Expensive – Cook only with food you grow yourself (takes time and labor)
2) Less Expensive – Cook at home with raw ingredients you purchase (saves the farm labor at least)
3) Sort of Expensive – Cook at home with packaged foods you purchase (minimal labor)
4) Expensive – Pick up fast food on the way home (really expensive if you count the health consequences)
5) Really Expensive –Sit down to eat at a restaurant (where you don’t even have to carry a plate)

As you can see, there are some in between choices you can make, like picking up packaged food at the grocery store. It is usually more expensive, but yet far cheaper than buying food from a restaurant. Given how much fat and calories are hidden in those restaurant meals, even a frozen lasagna is probably better for you. Another choice is to make your own packaged meals when you have the time, like on a weekend. This gives you convenience at a great price, plus you can control the contents. Most restaurant meals are laden with calories and salt, no wonder we’re all fat.

The Oversized Sunday Dinner

I like to make a big Sunday dinner, the leftovers can supply a few lunches or dinners during the coming week. Or I’ll spend a weekend afternoon making a meal to freeze for later. By making enough for multiple meals, I build up a pretty good variety after a few weeks.

Casseroles

Casseroles are great to make ahead and freeze. Most can be frozen with little to no cooking beforehand, making them quick and easy to prep. They will cook the rest of the way when you reheat in the oven. To cut down on cooking time, move the casserole to the fridge on your way out in the morning. Frozen casseroles will take too long when you’re starving.

Frozen Pizza

Par-bake a pizza crust from homemade dough, cool it and then top with your favorite fixings. Wrap tightly in saran wrap and freeze – voila, homemade frozen pizza. It’s ready to pop in the oven whenever you are too tired to make a meal. This is another great weekend project, make several at a time.

A Slow Cooker

Throw in dinner to cook while you’re at work. Slow cookers are great for tougher (read cheaper)cuts of meat. Once you throw in some veggies and a potato or two and you’ve got a meal ready as soon as you get home. That’s quicker than stopping for fast food, though you will still have to do the dishes.

Fight Fatigue, Save Your Budget

A lot of budgets are ruined by hungry tummies. I can’t even function when I’m famished, all I know is I need something to eat right NOW. It’s inevitable we’re going to get hungry and when it happens, we’ll pay a high price to quickly drive it away. Convenience stores are never a frugal option for shopping, they rely on customers needing a quick, easy solution to their problem. You can head off the inevitable fast food run by having food ready to eat at home. Whether it’s prepared foods from the grocery store, or your own creation, you’ll have a healthy and frugal option waiting for you.


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There are happy surprises in life. Just when I spent the last of the 3-month expense fund paying for our mortgage, we got a windfall. Now I’m wondering if I should rebuild that cushion, or redirect the money.

I set up the 3-month expense fund because Mr. M’s freelance gig means an unsteady paycheck. The fund was to help carry us through the lean months while still meeting our goals. I base our budget on what he typically brings in, but it’s a feast or famine cycle. The $3000 I set aside was enough to keep our budget going for three months with only a (tiny) unemployment check coming in on his side. At least he gets unemployment.

Hollywood is a strange place to work, in more ways than one! The studio days are long gone, when the stylists and costumers and set decorators all worked a typical 9-5 job on the back lot. Job security is non-existent now, you must always hustle for the next project. The hours are brutal, he once pulled 36 hours straight on a commercial. But you take it because there is no guarantee of when, if ever, you will work again. Sometimes he is paid as a regular wage earner, other times as an independent contractor. Only the W-2 work counts towards unemployment, so he doesn’t receive much. For the past year the amount actually dropped to $160 a week. In LA, that doesn’t go very far. But I guess he had one good quarter last year.

We were shocked to automatically receive a notice of new award as his claim came to an end. An efficient government -I must be dreaming. Even better, the new weekly benefit is $429! I hadn’t kept track of last year’s earnings, by earning over $10,000 in one quarter he had a huge jump in benefits. Suddenly we can have a budget without the need for the 3-month fund. Work seems to be picking up, maybe I can safely put that money to use instead. The house needs repairs, Mr. M needs a retirement fund. There is always the wedding to pay for. It seems silly to keep a few thousand dollars idle. Should I rebuild the fund, extra savings never hurt, or put that money to use?


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I want to lose a few pounds before the wedding. Like a lot of 30-somethings I’m carrying around some spares that I’ve been meaning to lose. But dieting, like saving money or getting out of debt, requires motivation and motivation was something I lacked. Until now - with the threat of wedding dress fittings and photos that will follow me for a lifetime, I’m finally getting serious about losing the weight. But how much should I aim to lose?

As with any journey, you can’t decide how to get there until you know where you are going. Goals are those destinations – losing 10 pounds, saving a $1000 or paying off a credit card, each are the finish lines we want to cross. But should we set small goals, ones that are easy to accomplish, or harder ones that require more work?

I want to lose at least 10 pounds but I feel I should set the bar higher. If I try for 10 pounds, I’ll probably only make it to 8. To lose the weight I want, I feel I should aim for 15 pounds. If I make the higher goal, then great, and even if I fail, I’m still likely to cross the 10 pound mark. It’s a trick of the mind, like so many others we use to get us through our daily lives.

In money terms, should you set a goal of saving $1500 when $1000 will do? Or to pay off your credit card in 1 year, when 2 is more realistic? Will setting goals that are out of reach motivate you to work harder, or simply make you feel like a failure? I’m grappling with these questions myself as I undertake the dreaded D word – Diet.


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In life, nothing is equal. Everyone knows that some fields of study will lead to better career prospects and higher salaries than others and your choice of major should always include some contemplation of what you will do with your degree once you graduate. But should colleges charge you more for a degree in a well paid field?

The University of California system is proposing to do just that, charge engineering and business majors more than their fellow English or chemistry majors. Their reasoning is two fold, one those professors are more expensive to have on staff. The university has to compete for talent with the private sector and pay private sector salaries. The second reason is the graduate’s salary potential, in general engineers make more than their English major counterparts. Does that mean engineering majors should pay more?

I see this as a bad precedent, for a few reasons:

Does that Mean my Degree is Free?

There are fields of study which have academic interest, but are not economically useful. Universities are focused on the preservation and dissemination of knowledge, even if no one will ever make a dime off of that knowledge. If we are basing the price of a degree on its economic usefulness, will someone studying an obscure field with little practical application get their degree for free? What about degrees that fall somewhere in the middle, will they get half priced tuition? And what does this mean for the future of universities, will they start pushing the pricey degrees at the expense of other, less lucrative ones?

Discouraging Critical Skills

The US has a shortage of high tech workers, including engineers. Engineering is not seen as a glamorous or exciting career path. Not to mention that most American students loathe the years of math that are required. Yet the US needs more engineers to face the challenges of globalization and an increasingly tech driven world. Discouraging students from engineering is the last thing we should be doing, charging them more is certain to drive students away. In fact I would argue we should be subsidizing those students more, not charging them more. It is an example of short term pain, for long term gain. Compare 4 years of college to the 40+ years you spend as a taxpayer and worker.

A Degree Does not Equal a Job

There was a recent case of a college graduate suing her college because she could not get a job in her chosen field. Such a suit is ludicrous; a degree does not guarantee you’ll get a job let alone a job in your particular field. Often graduates will take a different career path after college, either their interests have changed or they took the only opportunity they could find. If we base the price of that degree on potential starting salary, will we refund those fees when the career does not materialize?

Perhaps I’m Biased

For the record, I’m an engineer and perhaps I’m taking this proposal a little too personally. Maybe to others this idea makes perfect sense. But if this policy existed back when I was in college, there would be one less engineer in the world today. Like most young people I wasn’t certain what I wanted in life or who I wanted to be. I took a gamble when I chose my course of study, I know I would have chosen something else if choosing engineering meant choosing higher tuition. I see this plan as shortsighted, sure it helps with revenue in the immediate future. But at what price to our technological skills and to the value our universities provide as repositories of knowledge.


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Back in 2005, when I was shopping for my first house, the LA real estate market was a volcano bubbling over. Friends and co-workers would entertain me with stories of bidding wars over houses, as buyers frantically tried to grab a piece of the action. Buy now, or be priced out forever. It seemed like a good idea at the time, but what did I know? I didn’t understand the housing market or the risk I was taking. I was caught up in the excitement around me, willing to stretch myself just to have a home of my own. It was a frenzy that fed upon itself. So did we learn anything?

Based on what I see around me – I would say no. The bidding wars that were the trademark of the bubble years can still be found. Look at the evidence.

1) The LA Land Blog – sadly this blog is a shadow of its former self. I can’t say whether it is a victim of budget cuts and the general malaise affecting newspapers or a victim of its own success. There are many who did not appreciate its brutally honest look at the bubble and ensuing crash. But still, comments allow for some in the trenches reporting. It seems that desirable, mid-market houses are still hot. Bidding wars are especially common on bank repos, which people perceive as being bargains. But there are other, more reliable sources.

2) My mom – my mom put in several offers on places in the Pasadena area without any luck. Despite offering above the asking price, she didn’t receive so much as a response. Her agent said there were too many competing offers, she would have to break her $500,000 ceiling to have a chance. She is not alone.

3) My co-worker – one of my co-workers patiently sat out the housing bubble. He saw prices climb beyond his reach and he wasn’t willing to hang himself for a mortgage. Instead he rented, and saved money. Now would seem a great time for him to buy, he has a downpayment and a good income. But he wants to live in his hometown, where modest 3+2 ranches can cost over $500,000. He has put in offers on some lower-priced houses, only to be outbid. One house had 13 offers, the price was bid up $150,000 above asking. He has decided to once again sit on the sidelines, waiting until sanity returns to the housing market.

Certainly many parts of LA are still distressed, with houses languishing on the market for want of a buyer. Yet other areas are once again experiencing bubble madness. Did no one pay attention to the last few years? Has everyone forgotten that the final chapters of this recession have yet to be written? Reading the comments and hearing the real life experience of people I know, I can’t avoid the sense of déjà-vu.


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To outsiders it seems like Los Angeles lives in one season, a perpetual cross between spring and summer. But you have to look more closely. The changes are more subtle than the riotous color and early snow of a Norman Rockwell painting, but I can tell you that fall has definitely arrived in sunny Southern California. The mornings are less inviting and even the warm air carries a tendril chill.

We haven’t turned on the heat yet, but I’m a wimp and it’s certain to happen soon. It’s time to break out the blankets and sweaters, the soup recipes and the holiday traditions. It’s time to look into ways of combating the high price of winter, the heating bills and endless string of holidays. It’s time to enjoy the year that has passed and contemplate the year to come. But first let’s look back at the past week.

This week’s carnivals:

-Carnival of Personal Finance at Studenomics: Recession Lessons – Be Secure by 50
-Festival of Frugality at Improve the Quality: Our Transportation Costs
-Money Hacks Carnival at The Dough Roller: 10 Simple Ways to Better Finances Today

Finally a big congratulations to Shtinkykat who is credit card debt free for the first time since 1995! Anyone needing inspiration as they deal with their own debt problem should read her story.


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Don’t get me wrong, I want to get married and I want to have a wedding. But I don’t really want to plan a wedding with the inevitable hassle and stress. I’d rather spend my time planning for after the wedding – the honeymoon! First, I’ve planned plenty of vacations, it’s not very hard to do. Second, a vacation is way more fun than entertaining the relatives that you wish you weren’t related to. Already I’ve had to convince Mr. M that I can’t invite the one uncle he likes and leave off the one uncle he doesn’t like. They are all family and like it or not, they are about to become his family too!

I’ve started indulging in wedding fantasies, aided by a few bridal magazines. Damn those things, they are like crack to crazy brides. But alas, whatever budget I have I know it won’t be much. My mom has been telling me for years that she has money set aside for our wedding, but I have no idea how much. She’s been working out of town since the night we got engaged so we haven’t had a chance to talk numbers. Then there is my dad. My dad in past (pre engagement) discussions insisted on paying for the whole affair, cause “that is what dads do”. But since announcing our engagement I haven’t heard a mention of money. Instead he kept hinting that his finances are stretched (all due to his own ineptness I might add).

That leaves us.

It’s hard for me to imagine blowing a fortune on a single day. There is a set amount I’m willing to spend, plus there is that honeymoon to consider. If there is enough money with my parents help we could throw a modest wedding in town with friends and family. If there isn’t enough, then I think we’ll just run off and elope. We could always throw a party when we return. But for now my plans are in limbo cause I have no budget! I’m like a fish out of water, I can’t function. But I can plan what we are completely paying for – the honeymoon. Now where do we want to go?

Photo: Spankmeeehard


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I bank with Bank of America and I’m generally a happy customer, but a recent radio ad of theirs left me fuming. Simply stated the ad says that saving money is hard and Bank of America is here to help make it “easier”. Differential calculus and quantum physics are hard, saving money is so easy even a child can do it. Why do they reinforce such negative thinking?

I realize that advertising has to connect with the listener, telling people that their failure is not their fault is one such way. Unfortunately they are simply reflecting the modern American mindset, blame something else for your problems. It’s easier to believe that the simple act of saving money is difficult. It’s easier to believe that your debt is not your fault.

Saving money is not difficult, whip out your budget. Don’t have a budget, then you need to get one! I’ll only excuse the fiscally fit from having to budget, the rest of you have no excuse. Add a line – Savings. Add a number next to that line, novices can start low, $100 a month. Treat that line like a bill, pay that bill every month or if you can’t handle it, set up an automatic deposit into savings. Wow, was that so hard? You pay the electric bill and the rent every month, why not pay yourself as well?

Bank of America is in the business of making money, they don’t really care about your financial situation unless it affects their bottom line. They are happy to flatter you and soothe your feelings of inadequacy in the interest of a dollar. But they aren’t doing their customers any favors with this line of advertising. If saving money were truly hard, very few people would be able to do it. Yet a five year old child is able to grasp the concept of saving their allowance to buy something bigger and better later. I find it ironic that a bank built by the savings of the people would say that saving money is hard. Saving money is not hard.


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I can’t believe it, has it been an entire year since I started this journey? The time has gone by so quickly, I feel like I’m just getting warmed up. But in fact it has been 1 year and 370 articles since I launched this site. I did it for the chance to share my finances, the lessons I’ve learned and the journey that I am taking. I wasn’t taught about money as a kid or in school, my education has been life. Oh, and I’ve made plenty of mistakes along the way. Sharing those stories has allowed me to process my own issues with money and come to understand what is important to me. The openness helps to keep me honest, sharing my goals with the world helps motivate me to meet them.

Already wedding plans are infecting my head. I was never one of those girls who dreamed about their wedding day, I have no idea what I want! I need to decide soon cause certain decisions need to be made well in advance and I want to be married by this time next year.

The law of unintended consequences – when the unexpected derails your best laid plans.

I recently returned to my natural hair color after a decade of masquerading as a blond. Amongst other reasons, I figured the change would save me some money. Maintaining such a drastic difference isn’t cheap, not to mention the serious damage it does to my hair. But there were a few hidden expenses I had not counted on.

Uh Oh – Nothing Works Anymore

As I sat in the stylist’s chair I already spotted a problem, the lipstick I was wearing looked terrible with my new color. I was going to need new makeup, or at least some new lipstick. But that wasn’t the only color clash. When I was getting ready for work on Monday I looked in the mirror and was horrified at what I saw, I looked downright dowdy despite the stylish new cut. The clothes that had looked edgy against the shock of platinum blond hair now looked drab with the darker hue. I was going to need some new clothes too, at least some new shirts in a more flattering color. I hadn’t counted on the way the new hair color was going to look with my old wardrobe, in my case they didn’t work well together!

Unexpected Expenses

I only thought of the money I’d save by going brunette. I haven’t seen my natural color since somewhere around age 13, I guess I forgot what it looks like. Over time I’ve assembled a wardrobe and adapted my beauty routine to a different look. Changing my hair was enough to require an entire overhaul with how I present myself to the world. So far I’ve bought a new lipstick and a few inexpensive shirts, maybe $50 in all. I’ll need a few more just to make through an entire work week without looking dull. It certainly won’t break the bank and I could use some new clothes, but it’s not a cost I considered when I thought about changing my hair color.

What about you? Have you had a frugal idea backfire and end up costing you more?


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Yep, after nearly 7 years together Mr. M finally popped the question! It wasn’t a total surprise since we had budgeted and saved up for the ring over the summer. But I hadn’t seen the ring until the proposal – a three stone asscher cut. I wanted the asscher cut stones, Mr. M wanted the three stone style, so together the ring represents each of our desires.

The following is a guest post I originally wrote for Wide Open Wallet. Enjoy!

"You can get loans to pay for college but no one will lend you money for retirement"

Many parents struggle to balance saving for the future and providing for their children. Saving enough for retirement is difficult even without the added expense of kids and most people are woefully unprepared. But a college degree is the new high school diploma, a must to land a decent paying job. Any well meaning parent wants their kids to have the best possible start in life, a basic education. That leaves many parents with a difficult choice, should they take care of themselves or their children?

The opening quote is an often repeated piece of financial advice, advocating that parents should take care of retirement since there are alternative ways to pay for school. Many parents risk their own financial security so that their kids can have a better future. They put off saving for retirement so that little Susie or Johnny can attend the college of their choice. Since there is no substitute for retirement savings, they have instead jeopardized their own future.

Unfortunately there is a flaw with this advice, our system assumes that parents will help with college costs even if they do not. Most colleges use the Free Application for Federal Student Aid (FAFSA) to determine financial aid eligibility. This form collects information on the parent’s income and assets and is used determine the family’s share of the cost. The government and school will then help fill the gap with a combination of grants and loans.

Assets like retirement accounts and the family home are not included in the calculation, but any other savings and investments are expected to be used. Even if you have no assets, you will still be expected to contribute based on income. A family without assets, a taxable income of $60,000 per year, both parents working and two children would be expected to provide $4000 per year towards college. This is a simplified estimate based on the 2007-2008 guidelines. Assets or only one parent working would increase the amount that parents are expected to contribute.

If your family is expected to come up with $4000 per year for college and you don’t provide it, where will your child get that money? The college won’t reconsider aid because of a family’s unwillingness to help. From the FAFSA website – "Under Federal law your family is primarily responsible - to the extent they are able - for paying for your college expenses." Your child will have to take out additional loans, most likely private loans at a higher interest rate, to cover your portion as well. Currently those loans are hard to find, college aid is drying up. What happens then?

I don’t think that parents should put off saving for retirement to pay for college. The money in your retirement accounts won’t be considered when they calculate your child’s financial need. In fact, maximizing your retirement savings will shield more of your assets and make your child eligible for more aid. But unless your income is very low you will still be expected to cover some of your child’s college expenses. It’s important to know how much your family’s contribution will be based on your finances and be prepared to provide that amount. There are online calculators that will walk you through the steps and give you the current expected family contribution.

I know many parents count on their kid receiving scholarships to cover the gap, but this is poor financial planning. What happens if the expected scholarships don’t materialize? By planning ahead for college you can cover your share of the costs without jeopardizing your retirement or your child’s education. Huge student loans are a burden on young adults, I know most parents want to help as much as possible. While covering the entire cost of a college education may be unrealistic, parents can be prepared for their expected share.


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Net worth updates are fun! Of course I’m only saying that cause it was another awesome month. Our progress has been nothing but onward and upward, with a little help from the stock market. In fact some months our net worth has increased more than I take home thanks to our investments. That certainly makes me feel better about not panicking back in March when everything looked so bleak.

With most of our debts behind us we’ve started to save more and invest more. I can’t wait to see where we are a year from now, I think we’re finally on the right path and it feels great. Here are the gory details (notice the oddly even net worth):

Savings – I decided to pay our 6 month car insurance policy upfront, which meant taking money out of savings. It will get replaced, but for now our net worth drops. 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. A little here, a little there.

Sharebuilder – No trades.

T Rowe Price – As promised I just increased our monthly investment to $500.

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

Roth IRA – I finally opened my Roth IRA at Vanguard

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, it’s been hovering near zero for much of the year. Once I’ve paid off the last of their medical debt I’ll be able to build this fund back up.

Misc Fund – used for irregular or unexpected expenses, September was an expensive month with car registration and 3 close family birthdays so we’re wiped out. Three paycheck October will restore this fund to a healthy balance.

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 so I’m just trying to pay the balance off.

ROTH IRA –I finally opened the Roth at Vanguard and this is now counted under assets.

House Fund – It’s time to get serious about fixing up the house so I’ve started saving money for repairs. We’re hoping to do the plumbing and electrical later this fall.

3 Month Fund – this fund is part of my plan to smooth out Mr. M’s irregular income. We’re down to the last bit and waiting for money to come in, I may have to take out the remainder to pay a few bills.

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 – This will be paid off in November

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