Week 88: Falling Off the Financial Wagon

Monday, 23 October 2017

When I find myself somewhat tumbling off the financial wagon and not staying focused, I need something to motivate me to get back onto the wagon.  It helps to re-read Dave Ramsey’s classic, The Total Money Makeover, but it is also important to read other authors – other issues, other perspectives, other ideas.  So, I’ve been re-reading Lauren Greutman’s book, The Recovering Spender.

I can relate a lot to Lauren – especially when I was younger.  I spent money to feel good – for a few minutes.  Then the realizations and guilt hit.  The truth that I had spent money wasn’t as awful as feeling as if I were a failure in my family’s eyes, especially my mother’s.

I was the “bad” child and that applied to money especially.  There were criticisms, some realistic and some unrealistic, about how much I spent on things, such as clothing or eye glasses.  My mother’s concepts of the cost of things were caught up in the prices of the 1930s through the 1950s.  She forgot that time moves on, and prices of things increase.  Rather than ask questions, she would just make comments that didn’t help at all.  In later years, once I left home, she could be generous, so I think a lot of her complaints were because she was surrounded by oodles of children she had to raise.

Moving forward, it took awhile to realize that my spending was an addiction, and it was necessary to break that cycle.  Part of it came with better income.  Part of it came with just being done with the misery of debt and realizing the pain of debt was not worth it.  Both my husband and I were in that same addictive cycle, and not good at all in facing our issue as we both tend to avoid confrontation – and thus avoid problem solving.  I tend to be more decisive and action-oriented than Mr. 182, so I started making decisions about how we spend our money and what we do with it.  He came along unwillingly, but now is much more on board as he sees our progress.

We both see we are in a better place financially than 18 months ago.  Our debt ratio has gone down, and our net worth has increased.  We have also come to discuss how we value our money – what we want to do with it.  Mostly, we want to be done with debt, but we also value saving and spending it on things we enjoy – primarily, our hobbies.  For Mr. 182, it is mostly for brewing, but also for rocketry.  I vary in what I do, and while I was involved in photography a lot over the past 10 years, I am now returning to watercolor painting and drawing.  There is outlay for both hobbies, varying in season as well as how supplies are running.  We need to buy things like hops and grain, film, paper, and paint, to name a few.  However, while all need to be renewed, the renewal rate varies, and is seldom very expensive all at once.  We seldom travel, but those costs are saved for as well.

Leading a satisfying life is largely dependent on what you choose.  By this I mean that you must make conscious choices and think about what you value.  We value our time to be able to do what we enjoy, and thus we need to plan for those expenses.  For example, we have $200 allocated to a grain purchase in November.  When I returned to watercolor, I needed to inventory supplies.  These were determined as October hobby expenses.  Old paints needed replacing, some new brushes purchased, paper, and other small supplies,  Once these big expenses are cleared, the replacements will come later, as big cost purchases once or twice a year, or slow ones, such as a tube of paint needing to be replaced if it gets used up.

As Greutman points out in her book, choosing your values and aligning them with your spending makes sense, and it makes you feel much better.  It helps prioritize decisions.  It returns the locus of control from the external to the internal:  “I can’t control myself!” moves to “I can do this!”

Self-control is a form of self-denial, but it doesn’t have a punitive feeling to it.  It is freeing emotionally, and given that money is emotional, positive emotions are much more pleasant than unpleasant ones, such as the voice of an angry parent.  You are now your own parent.  YOU are in charge.

 

 

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Week 89: Social Security Preparations

Monday, 16 October 2017

This past week has been busy – birthday time!  Cake, breakfast, cake, pie, pad thai, dinner, cake, and birthday party.  Considering all the festivities, I only gained 2 pounds.  It’s been so much fun!  And, after talking with a family member during a party, I came to the realization that some of us are in total avoidance about our futures, even more than I realized.

I was always the person who, like Scarlett O’Hara, always said, “Tomorrow is another day.”  It’s true – tomorrow is always another day.  But tomorrow needs to be acknowledged and planned for.  There are some things we can control – like how much we spend and on what – and there are other things we can prepare for – such as natural disasters and old age.  Natural disasters can occur any time, but old age follows a logical sequence, like 1, 2, 3.  It’s the “tomorrow” syndrome that catches up with us.

In the US, one makes an appointment, or does it online, for Medicare.  There are multiple stages for Medicare.  The first one to sign up for, if you are still working, is Part A, which is hospitalization.  It’s completely free.  If you are still working, then it works in conjunction with your hospital coverage and your private insurance (if you have it).  Later, when you know when you plan to retire, you apply for Part B, for which there is a co-pay.  This is for office visits and, I think, prescriptions.  In order to get it after 66, without a 10% penalty, you must show evidence of employer-based insurance.  For me, this means through my job, or through my husband’s job.  It is not through retirement-sponsored healthcare.

My understanding is that you must apply for Medicare Part A three months on either side of your 65th birthday.  I made an appointment on August 18th at the local Social Security office, and by mid-September, my card arrived.  A 30-minute appointment.  I got a print out of everything, and now it is in a file drawer.  (Aside, I probably should digitize it.)

At my birthday party this weekend, I found out that another family member, also just 65 in July, did not apply for Medicare Part A.  Not at all . . . why?  That is the big question.  What is it that kept him from doing this?  Denial?  A dislike of the government?  Avoidance?  Eventually his wife made him do it online, I think within the required time frame, but he never got a card . . . so what happened?  Too late?  Digital issues?

Regardless, this was a serious issue in my eyes.  The irresponsibility of it all is what I see.  And from that, I had to look inward.  We have been irresponsible in many ways, but are on the road to fixing that through efforts that seem like the labors of Hercules at times.  It is this sense of being young forever that keeps many of us in denial.  I also think it is a feeling of helplessness and hopelessness, too – a sense of having no control.

Being frugal means thinking ahead, giving up the present to work for the future.  Our parents can lay a foundation, or not lay a foundation.  It is us – me – the individual – who has to make the choice to be frugal and debt-free.  Being married to a frugal partner helps, but not having one creates challenges financially and personally.  Many marriages suffer because of money.  Ours certainly did – and at times still does – but the big picture is showing payoff as we move along the time line of working off our debts.  Our net worth has increased, our debt has decreased.  At times we feel like we are in limbo.  But we still move forward on our journey – not evenly – but steadily.

Now that I am closer to retirement, in hindsight, I wish I had done more planning.  Like my family member, I was in denial.  If I hadn’t taken the reins awhile ago, we would be in worse shape, always waiting for tomorrow, planning to do it tomorrow.  Tomorrow is now today.  Luckily, I am not in as bad as shape as others.

 

Week 91: Reflections

Monday, 2 October 2017

I am getting less patient with my job and more impatient to retire.  Medicare Part A began yesterday for me.  I pretty much know what I am going to take home for my Social Security if I were to start it next year.  I am thinking . . . do I quit at the end of next year and take my pension as well, or do take my Social Security and continue to work.  Questions to be answered next year.  I still need to schedule an appointment to discuss my pension, what to expect, and the health benefit options available, or should I go on my husband’s insurance?

The big issue is really just an unknown:  what will my income be if I were to retire at the end of 2018 from pension and Social Security?  How much debt will we have paid off?

If I were to collect my Social Security and continue to work until June 2019, as originally planned, that could really bring our debt down to where I want it.  I am not really where I would like to see us – in part us, in part because of life, in part because of the payroll fiasco last June.

On January of this year, I created a spread sheet to track our progress.  I didn’t do a good job of tracking things in June and July, but when I look at our net worth, it has increased by $106,239.00 from January to the end of September.  This is from home equity, 401K, pension equity, and IRAs.

I am still unsure as to what I should do.  I know what I would like to do – just quit my job! – but that is not a viable option today or tomorrow (but soon!).  I need to collect numbers and then ponder . . . taking time for these decisions is a good thing, and knowing in advance allows me to consider many possibilities before taking the plunge.

 

 

Week 92: The Cost of Gluttony

I spent a part of this weekend organizing my art supplies.  Because I cycle through hobbies, it’s easy to forget what I have and where it is located.  I knew where my watercolors were – so I took them out, inventoried them, and then went online to replace some old colors and pick up some new.  Ten new colors.

The next step of the inventory control was to go rummage through things like portfolios, art totes for on site work, and   . . .  that’s when I found more tubes of paint, including usable, duplicate tubes of what I had just purchased.

And that’s when the light bulb really went off.

It is so easy to just pick up this or that, one little thing, a tube of paint, a ball of yarn, a book, a T-shirt.  So, so easy.  And then, before you know it, you have a garage full of stuff that you aren’t using and probably don’t have enough time in your life to ever use up.  I wonder how much I have spent on this or that little thing a million times.

Hoarding?  I wonder. To me, a hoarder can never throw anything out.  We do throw things out.  I think we need to start throwing things out or donating them again.  My mother once said, “You don’t own a house – it owns you.”  The same may be said of possessions.  Maybe they do possess you!  That sounds pretty creepy.  

Decision-making is not a quick process when it comes to what to keep, what to get rid of.  It is far easier to make an impulse purchase.  I think I need to refocus on the cleaning up of my life as far as material goods.  I won’t embarrass myself by telling you how many of this and that I have, but I will start thinking very carefully about what I want to keep and get rid of.  However, a big decision is how I want to get rid of some things.

Ebay?  Garage sale?  Goodwill?  That is actually the hardest decision of all to make.  Ebay requires a bit of work – ongoing work.  A garage sale needs organization and advertisement.  Goodwill means stacking up the truck and driving down the road a few miles.

Help!  We’re drowning in too much stuff!

Week 93: Medical Care & Costs

Medical care is important for all of us, and luckily both Mr. 182 and I have good healthcare programs.  Medicare Part A starts for me on October 1 and will be part of my overall hospital coverage.  I don’t need Part B or others until later, when I retire and then choose to go onto Mr. 182’s plan or get onto a plan from my pension.

As you may remember, in July, my employer messed up the paychecks of numerous people by adding hours into a month already credited with hours from the preceding month, thus making my income look awesome (it wasn’t) and I was taxed accordingly at 47%.  We chose to put off a medical procedure because of the fact our income was not what we anticipated, and losing that income pushed us into a corner a bit.  We could have chosen to put the copays for the procedure on a credit card, but as we were told the procedure could safely wait until September, we opted for that.

In getting ready for this medical event, we had to do a number of things.  We had to pre-pay for anaesthesia.  We also pre-paid the copay for the out-patient hospital stay, knowing we would get a 20% discount if we did this; this saved us $161.00 and change.  We will most likely get the $350 back for the anaesthesia as well, about 30 days after it is billed.

Once more, the evidence of frugality and good choices have helped us out financially.  We have the cash, something we would have scrounged for only 3 years ago.  Having good health insurance made it easy for us to say “yes” to a procedure and not worry about out-of-pocket costs – for a $9000.00 procedure, we are paying 10% or less.

Before the ACA (“Obamacare”) we were still well-insured compared to many people.  We didn’t have pre-existing conditions (except that I am female, which is pre-existing condition in this country) nor high deductibles.  My deductible is only $450 / year, and then 90/10 if I use healthcare providers with contracts with my insurance.  Mr. 182 has about a $1200 / year deductible.  I was stunned to meet people with $10,000 out of pocket deductibles and so on.

Now, again, healthcare is on the chopping block.  The powers in Washington are doing what they can to destroy what Obama put in place – healthcare that has changed the lives of many.  Along with that, many services for women and the poor are being removed because of the witch hunt aimed at Planned Parenthood.

Prevention reduces future costs in healthcare.  I always wonder what people from countries with socialized medicine think about the for-profit approach to American healthcare.  To me, it seems barbaric that a country like ours fails to care for so many of its citizens.

Week 95: Rice Pudding from Leftovers!

Monday, 11 September 2017

Leftovers sometimes are not really exciting to eat.  Rice can be one of those things.  You can stick it into burritos or make fried rice, but you do need other ingredients to go along with those dishes.  An easy use of leftover rice is rice pudding – if you happen to like rice pudding.

Rice Pudding

  • 2 c. leftover rice
  • 2 c. milk (or a combination of whole milk, half and half, and so on)
  • 3 T – 4 T white sugar

Combine above ingredients in a sauce pan; bring to simmer and cook until thick.  Watch and stir – easy for the pudding to boil over or scorch.  I brought mine to a boil and then dropped it to the lowest heat.  It took about 20 minutes for the pudding to thicken.

Extras for Pudding

You can flavor your pudding as you like.  I added the following after the pudding was done:

  • 1 tsp. fresh cardamom, freshly ground
  • 1 tsp. vanilla
  • 1/2 c. raisins

Others might like to add chopped almonds, chopped apricots, and so on.   Sour cherries are also good.  Some might like candied fruit and rosewater, or a beaten egg.  Cinnamon is also a classic flavoring.  Your call!  Serve warm or cold.

Leftovers need to be eaten!  Americans waste approximately 50% of the food produced.  Here, food is relatively cheap, and so we are wasteful.

As a family, the 182s are not immune to wasting food – sometimes it spoils before being used because of poor packaging, sometimes life gets in the way, such as work or being ill.  Still, we try to focus on eating up our food before it goes, and generally do a good job.  I try to shop only once a week, but have no problem with running to the market if we need something.  As we cook mostly from scratch, we might be out of this or that.

Being conscientious about food helps us focus on a major part of our daily life, and that, in turns, reminds us to be conscientious on our larger life goals as well.