M is for Money

I don’t know how much I’ve written about Mr. M’s mom, after all in our seven years together I’ve never met the woman. He severed the relationship a few years before we started dating, and if you need any explanation why, check out my story From Riches to Rags. She has done some pretty awful things to him. Even worse in my mind, she’s never tried to repair the relationship or make contact. We’re not hard to find and she has the means to search. It’s been years and years of silence, until a few weeks ago.

Out of the blue Mr. M’s mom wrote him a message via, of all things, Facebook. Who says old folks aren’t hip to new technology! It took him a few days to even open the message, his immediate reaction was “I don’t care what she has to say”. Of course I was curious, but wasn’t about to go spying. Eventually he read it, it was nothing groundbreaking or earth shattering. Simply I have some news for you about your grandparents (we’re guessing they’ve passed away), are you still living in Los Angeles and I hope you are doing well. He managed a reply that was only slightly snarky, telling her we’re getting married in a few months and if she wants to come she needs to pony up for some of the expense!

Normally this would be a huge etiquette breach, but given their awful relationship and how she’s treated him, I don’t think it matters. She doesn’t deserve to be treated with the respect that normal people are given. She’s made a living, successfully I might add, as a gold digger. It’s a role I can’t understand. She didn’t earn the wealth and privilege she enjoys, she attaches herself to others. First it was Mr. M’s dad, later a wealthy woman with a family fortune. I guess it helps to be a gold digger who swings both ways!

I don’t know what is going to happen from here, perhaps we’ll never hear from her again. I rather like the idea of not having in-laws, it certainly makes my life easier. Or maybe they can begin rebuilding their relationship, though I’m not holding my breath! One thing we can be proud of, we’re building a secure financial future on our own and have absolutely no need for her or her money. I am sure Mr. M finds it liberating to be able to tell his millionaire mommy to go shove it!

Last Friday’s luncheon/interview wasn’t what I expected. It didn’t go poorly per se, but I wouldn’t say it went well either. I was expecting to meet with P to get additional information on the job and particularly compensation, since that would be my primary motivation to leave my current position. Instead there was another person thrown into the mix, whose purpose was not immediately clear.

I’ve known P for many years and throughout that period, she worked for herself. She has a long record of success and is one of the highest paid people at my current project. But it seems she is looking to close up shop and go back to being an employee, working for the mystery man’s company. Apparently his employer is looking to break into the LA market and is recruiting local talent to bolster their credentials. Rather than being presented details, I listened to an hour of fluff about building a new corporate culture and being able to direct the future of this company. I have zero interest in climbing the company ladder and Mr. Mystery’s tale of innovation in the area of annual reviews felt like a dark corporate comedy.

When it comes to job offers I want facts and figures, but more importantly I want to hear about the money. I hate corporate BS but I’m willing to put up with it for a price. I had planned to stay at my current company until I was ready to strike out on my own. The scant details presented were mostly a turnoff for me and I don’t think my suitors understood the heart of the matter – that I am a mercenary.

I have made a successful career out of selling my services to the highest bidder. Within my niche I am the best in town and I have the reputation to back it up. I turn down job offers on a regular basis (poaching is a popular past time in my industry). My first job out of college taught me that company loyalty is a waste, after all the company has no loyalty to me. I work for those who are willing to give me the greatest compensation. My biggest goal is early retirement, not a lasting career, and making the most money possible is crucial to my plans.

P and mystery man’s attempt to make me feel warm and fuzzy inside backfired. While their offer may have appealed to someone else, it did not work for me. I knew my current job would be a nightmare when I took it, yet that didn’t hold me back. This job has helped to right my financial ship and any career move I make going forward will be focused on improving my financial situation. Their pitch may have worked, but only if it satisfied my mercenary side as well. So far I haven’t heard anything worth leaving a comfortable, profitable position.

I didn’t get a speck of wedding planning done this weekend because we were too busy planting our garden for another summer season. After last year’s lackluster yields we decided to take action and improve the situation outside. Over the winter we added another layer to our raised beds, doubling their depth. Then we topped them off with bags of potting soil, compost and manure. Finally we covered the beds with a thick layer of mulch and let them rest until spring. But our bed space is limited, so we rely on containers to grow many of our plants. We acquired some larger pots to try this year, though last year our tomatoes had no problem churning out a hundred pounds of produce in the small ones. I doubt we’ll repeat that feat only because this year we’ve gone – heirloom.

This past weekend was the big tomato sale at the Fullerton Arboretum, so we made the trek down Saturday morning to stock up on some rare varieties. We bought tomatoes we’ve never heard of with names like green giant and yellow ping pong. Hey they sounded good and at $3 per plant, it was hard to contain ourselves. We left with a dozen tomato plants in tow along with a handful of pepper plants. After a few obligatory runs to the local gardening center for additional plants, cages, soil and such, we got down to planting this year’s crop. In addition to tomatoes and peppers we planted onions, shallots, eggplant and yellow squash. I still need to trellis and plant peas and beans as well. I’m not sure yet how this year’s garden will turn out, but hopefully our improvements will pay off in a bigger, more bountiful harvest.

What are you planning to plant in 2010?

Story – noun


a narrative, either true or fictitious, in prose or verse, designed to interest, amuse, or instruct the hearer or reader


What compels us to take experience and craft it into story? The need is nothing new, historians are quite certain that story telling evolved alongside the earliest development of language. The drive to share our wisdom and knowledge, even the minutiae of our daily lives must have propelled humans to invent this new means of expression. We have many purposes when we write stories.



Some stories serve to amuse us: Village Idiots at Our Table, Pallets Under Our Bed



Other stories reveal our vices: Gambling on Personal Finance



Stories illuminate our inner decision making process: Paying Down a Chunk of Student Loans



Stories show how we prepare for bad times: What Would We Do If We Lose a Job?



The best stories are riveting: Buying Our First Home: The Search


Stories are a way to break down taboos: A Thrifty Momma Comes Clean


Stories remind us of advice passed down through the ages: Don’t Count Your Money Until It’s “There”




Stories inspire us to rise above: How To Get a Raise in the Worst of Times


Stories show us where to find financial wisdom in daily life: A Financial Lesson from Starcraft


Stories highlight financial lessons in action: How My Emergency Fund Saved My Honeymoon from Total Disaster


Sometimes a story can give you a new perspective: How Much Do You Take For Granted?


Stories show how we handle desire: Always Have a Wish List Handy


Stories started as a way to educate the younger generation: Our Conversation With Our Kids About Money


Stories allow us to learn from the experience of older generations: Medicare Part D: Another Adventure in Wonderland


Prosperity stories are always popular: Are You an Opportunity Seizer or an Excuse Maker?


Stories remind us that we are all vulnerable: How One Homeless Person Lives: Coping With Homelessness


Stories dispense with valuable advice: Double Check Your Tax Return


Stories remind us that sometimes caution is warranted: Online Bill Pay and Automatic Deductions: What to Watch Out For


Stories reveal our fetishes: My Inner Imelda Marcos


We share stories in hopes that others will benefit from the knowledge: Get Affordable Auto Insurance Quotes with GEICO




Stories can give a new perspective on a financial tool: Using Credit Cards to Create A Debt Repayment Plan




Stories document the times we are living in: Would You Walk Away from Your Home?


Stories can help bridge cultural boundaries and invite us to explore beyond our narrow worlds: The Best Customer Service I Ever Received



Thanks for reading this edition of the Carnival of Money Stories, next week's edition will be hosted by Suburban Dollar

PS - Carnivals are a great way to promote your blog, but they depend on hosts volunteering their time. Please help keep this carnival alive by signing up at the Carnival of Money Stories to host an upcoming edition.



Photo: Muffet

I got hit with another case of the stupid tax. I was parked on the street at a meter, always a dangerous place to be with the overzealous LA parking police. I was careful to align myself with the curb, not sticking out too far and paid for more time than I would need. Imagine my surprise, and anger, when I return to see a ticket on my window!

The ticket read “No evidence of current registration.” That’s absurd I thought, of course my car registered. I got out to look at my license plate and that’s when I realized, while yes I had paid the registration, I hadn’t stuck the little sticker on the plate yet. It was sitting at home on the coffee table under a pile of mail. How stupid to get hit with a $25 fine for not sticking on a sticker, I feel like an idiot. Plus I love how they invent infractions to ticket you for, notice I wasn’t accused of having an expired registration, just lacking the evidence it was current. A real police officer couldn’t have ticketed me for this, but the parking police can. Needless to say, as soon as I got home I grabbed the sticker and attached it to my plate. I don’t need to be hit with the stupid tax again!

What little mistake have you made that ended up costing you money?

Just as soon as I publish a post about how staying with my current employer makes the most financial sense, along comes a job offer to throw it all in doubt. The offer was a complete surprise and not a path I previously considered.

It all started with a call from a former co-worker, his company has won a piece of the next phase of my current project. He was looking for information which isn’t mine to provide, so I walked over to our client for advice on how to handle his request. The conversation went something like this:

Me: Hey P, remember S from a few projects ago? He is on one of the teams that won Phase B and is looking for info, what do I do?

P: Speaking of Phase B, what are your plans?

Me: I don’t have any, my company didn’t win and I’m not interested in working for the ones that did.

P: Would you be interested in working for us (the client)?

Me: Well there are financial reasons for not leaving my current company, I have a lot of unvested stock to consider.

P: We could find ways to make that up to you, signing bonuses, better pay etc. What do you make now?

Me: $X an hour.

P: You’re underpaid and underappreciated, let’s meet and see what it would take to have you come work for us.

So we’re going to get together in the next week or two to discuss terms and what would be involved. I wouldn’t start for a few months because as the client, they also have an interest in me finishing up the current job first. One drawback I see is the job itself, I would serve as a coordinator and overseer rather than an engineer. I happen to like the design and production side of the business, I find management rather dull.

As for the unvested money I would lose, provided it is made up for by the new job I would probably come out ahead. One problem with an ESOP is that money is tied to the company, if the company fails that money disappears. With the way our plan is set up, I cannot remove my money until I reach retirement age, which is 30 years away. Having $50,000 in money I can control is better than $50,000 in funds that I cannot move or touch. I will let you guys know how the meeting goes and whether I will be leaving for Greener (ha ha) pastures.

There is one very strong tie that binds me to my company, the Employee Stock Ownership Program. Since the company is employee owned, everyone receives shares in the company in addition to salary and benefits. The main limitation is the vesting schedule, you have to complete 6 years with the firm in order to be fully vested in your shares. Leave before then and your unvested shares get redistributed to everyone who remains.

At this point I am only 40% vested in my company ownership, but it still amounts to a sizeable chunk of change. My current vested share, the amount which is mine no matter what happens, is now over $32,000. That’s an increase of over $22,000 compared to last year’s total. Also, that is a lot of money to leave on the table, consider there is another $50,000 in unvested shares I would lose if I leave. Since the program is set up as a retirement plan, working for the company is helping to make up for all the years I didn’t save in an IRA or a 401k. Three years ago we had less than $5000 in retirement money, with this updated total we’re now above $70,000. I think staying put is one of the best financial decisions I can make, despite some other tempting offers.

Last week I came across another bit of misinformation on MSN Money, unfortunately the author corrected the article before I finished this post. Of course there is no editorial note acknowledging the change! Since it’s still a good topic to cover I’ve decided to go forward anyway. First, let me bring up the article which prompted it all.

I don’t consider myself a financial expert but is seems I know as much as many of the MSN Money writers. Today’s tidbit of misinformation comes courtesy of Jim Jubak, who does a grave disservice to I-Bonds in his article on where to stash your cash right now.

In the article, Mr. Jubak first covers various safe havens like bonds and CD’s, which of course have many drawbacks in today’s low rate environment. But one of Mr. Jubak’s reasons to not buy I-bonds is simply untrue. This quote is taken from the first version of Mr. Jubak’s article, which no longer exists:

“Series I bonds, savings bonds that pay an interest rate that combines a fixed component, currently 0.3%, with an inflation-adjusted variable rate, currently 3.06%, offer a higher yield, but you still don't get protection from interest rates, and you have to lock up your money for 30 years."

I happen to like I-bonds and hence know a little bit about them. When you buy your bond you are tying up your money for some time, but it’s only for one year. For the first year you cannot sell or redeem your bond, no matter what. That’s a whole lot less time than 30 years! After that, there is a penalty for cashing in bonds that are less than five years old. Cash in an I-Bond in the first five years and you will forfeit 3 months worth of interest in exchange. Bank CD’s often carry similar type restrictions, it’s not like your money is untouchable, there are simply disincentives to cashing it out.

After 5 years, you are free to redeem your I-Bond penalty free. You can either cash in your bond at that time, say the fixed rate has increased, or hold it until it reaches 30 years of age. Bonds stop earning interest after 30 years, so there is no reason to hold one for longer. I-Bonds do have some restrictions on when you can redeem them, but counter to what Mr Jubak says you don’t have to hold one for 30 years.

I Bond Holding Restrictions

-Cannot redeem in the first year
-Can be cashed in between years 1 – 5 with a penalty (3 months interest)
-Can be cashed in for full value after 5 years
-Stop earning interest after 30 years

Like many bloggers hitting the 18 month mark, I find myself wondering where to go from here. Definitely my interest has waned over time, I find it hard to come up with subjects and thus many days I fall back on the easy to write personal anecdotes. At the same time, I’m not ready to quit. I think the blog has been instrumental in our financial progress over the last 18 months. It keeps me accountable, it makes me think about our finances and what we are doing to achieve our goals. But I do think it is time to scale back, I don’t have the time to write interesting and insightful articles day after day. My plan is to post 3 days a week, down from the former 6 days a week I held myself to. I hope with less pressure, and more time, I can continue with this journey.

This weekend I finally broke down and went wedding dress shopping. I went to a small, locally owned boutique that had dresses in a range of prices and styles. I managed to find a few dresses that I liked and that fit my budget, in fact my favorite was the cheapest. Afterward the consultant wrote down the name, style and price for my top picks.

When I got home I looked up the dresses online, partly to refresh my memory about each, but also to comparison shop. I found the dresses for a range of prices, all below what the small, local store quoted. Some sites were obviously peddling knock-offs, judging by the bargain basement price. But other sites seemed to be legitimate retailers offering the same dress for $100 to $200 less.

It would make sense that an online shop could offer the same dress for less, they don’t have the overhead associated with a retail storefront. But there are of course risks when ordering through one, customer support if there is an issue for example. Anyone ever ordered a wedding dress online? Also, the local dress shop took the time to help me find a gown and created an enjoyable experience. I took advantage of the service they offer. Do you think it’s better to support a local business even if it costs a little more?

Sometimes I get discouraged in the face of our financial goals, after all it’s not easy to amass a few million dollars. I feel like whatever we have now, it’s not enough. But on the other hand, I am amazed at how far we’ve come. Let’s take a look back into the not so distant past.

Three years ago our financial life was approaching train wreck proportions. We had some savings, but it was dwarfed by our debts. We owed over $20,000 to credit cards alone, not to mention the car loan, student loan and of course the mortgage. Each month it felt like we were digging a deeper hole and I started to accept extreme debt as a way of life. I didn’t have a clue how to fix our problems and couldn’t even dream of a future where we were financially secure. But somehow we were able to change our ways.

We stopped living beyond our means, buckled down and tackled our debts. We embraced our frugal side and started to see the beauty in simplicity. We stopped seeing a credit card balance as a normal part of life. We paid off those toxic debts and moved on to building a nest egg. It may be small relative to our age and income, but it’s still a beautiful thing.

Three years ago we had approximately $5,000 in retirement savings, today that total stands just over $50,000. Three years ago our net worth was negative despite having both savings and investments. This month our net worth should crack the $100,000 mark. A $100k net worth is not all that impressive, except in the context of where we stood not so long ago.

To many, including now ourselves, the amount we have saved seems insignificant. Hanging around the pf blog world is a sure way to make your nest egg feel inadequate. But I have to remember where we started from and how we have changed not just our financial outlook, but our financial mindset as well. Three years ago it was inconceivable we would be out of debt and on our way to bigger things. I know there is still a long way to go and the task ahead is daunting, but if we can change our entire financial outlook in three short years, our goals are not impossible. For those still struggling to turn it around, keep the faith and know that change is possible. After all, look at how far we’ve come.

Did you know that your 401k contributions can be limited to less than the federal maximum? From reading the MSN Money Forums, apparently some people are not aware of a rule that limits 401k contributions for certain people – highly compensated employees.

I ran into this myself a few years ago when I was (erroneously) categorized as an HCE. My company stepped in and reduced my 401k contributions to 6%, their maximum for HCE’s. At the time the company’s HCE threshold was $100,000 in regular income, which I was below. A rather large, one time signing bonus, had pushed me into HCE territory. They quickly straightened out the error and I became aware of a rule that very few people actually encounter.

401k’s provide a great way to save for retirement while sheltering your income from taxes. The government knows this tax break is very tempting, especially to those with large incomes they need to shelter. The fear is that company management, those with the high incomes, would create 401k plans that only benefit them and not the regular worker on the factory floor. To prevent that, companies must work to make their 401k plans equitable to all. If highly paid employees are getting the bulk of the benefits, companies must step in to limit their contributions. Conversely, if lower paid workers participate in large numbers, they don’t have to limit the contributions of anyone. Each year companies with 401k plans must check for their compliance on several criteria to make sure their plans aren’t becoming “top-heavy”.

In general, to be a highly compensated employee you must both make over a certain threshold (I believe it was $110,000 in 2009) AND be in the top 20% of earners in the company. That means even if you are the highest paid guy at the firm, if you only made $100,000 you can’t be classified as an HCE.

For the person on the forum, it appears the problem is that many employees stopped contributing last year. This changed the balance of program. He obviously met the requirements to be considered highly compensated, and when the plan became top heavy the company had to step in and restrict his contributions. He can still save for retirement, he just can’t get the tax incentives of a 401k.

I don’t know if my company’s 401k is actually top heavy, my understanding is that we have additional limitations on our plan because our ESOP (employee stock ownership) is also classified as a retirement plan and those stock allotments are based on income. Highly paid employees already receive a lot of company stock, so the company always limits 401k contributions from that group to keep out of trouble.

Not many people encounter this rule, you have to both meet the definition of a highly compensated employee and work for a company whose 401k is top heavy. If you do run into this cap, it’s not the end of the world. You can still save for retirement, either through a ROTH IRA or taxable investing, you just don’t get the tax benefits of a 401k.

Being frugal isn’t as fun when everyone else jumps on the frugal bandwagon. One example – the age old advice to bring your lunch to work rather than buy it.

I’ve been a brown-bagger my entire life. I like to eat out, but I don’t like what it does to my wallet and my waistline. I typically bring in leftovers or a frozen meal cause I prefer hot lunches over soggy sandwiches. At most places I have worked, I am the exception, not the rule. It seems most of my co-workers prefer to eat out and competition for the lunch room is usually low. But lately, everyone has been bringing their lunch!

That means there is no room in the refrigerator and a long line for the microwave come lunch time. One reason I like to bring my lunch is the time savings, I hate losing some of my precious lunch hour to go out and buy my meal somewhere. It takes a few minutes just to get in and out of the building. Eating in saves time, except when I have to wait just to heat up my meal. I’ve tried waiting until later in the lunch hour, but even then there is always one or two people ahead of me. I figured it was a fluke, a statistical anomaly, and soon everyone would go back to eating out. But it’s been a few months without any sign of stopping. So please people, stop bringing your lunch. You know you’d rather eat out and the committed brown baggers like me really want the microwave back!

February was a good month financially. We were able to set some more money aside and the stock market behaved enough to eek out some gains. There were no major money disasters so we were able to do two steps forward without the one step back part. I really hope the rest of the year goes this way! Here are the numbers:

Savings – Our savings are starting to bounce back a little after last year’s big home repair bill. Unfortunately it will take a few years to get back to where we were. We still have the bulk of our money in a FNBO savings account, rates are generally low across the board and I haven’t found the motivation to move it.