WONKESS

PF Book List...

I've never gotten hooked into the PF book market, though I think about personal finance quite a bit.  I'm not sure why this is - I may have a general aversion towards self-help books, and much of the investment advice in PF books seem unsophisticated and, ultimately, fairly common-sensical. 

I thought this was a pretty good list though, so I'm linking to it here for posterity's sake.

In particular, I'm gonna try to get these out of the library over the next few months:

Getting Things Done (God knows I need to get things done.)
Your Money or Your Life
Never Eat Alone (For the introvert in me)
Raising Financially Fit Kids

Frugal Gambling...

This is brilliant.  From the WSJ:

But psychologists have long known that people tend to overestimate the odds of rare events. Applying that behavioral insight, finance professor Peter Tufano of Harvard Business School has devised a clever program called "Save to Win." Launched earlier this year for members of eight credit unions in Michigan, it is a cross between a certificate of deposit and a raffle ticket. Members who put $25 or more into a Save to Win one-year CD are entered into a monthly "savings raffle" for prizes up to $400, plus one annual drawing for a $100,000 jackpot. Only Michigan residents are eligible to participate.

This unusual CD is federally guaranteed by the National Credit Union Administration and pays between 1% and 1.5% annual interest, a bit lower than conventional rates. In 25 weeks, the program has attracted about $3.1 million in new deposits, often from people who have never been able to set money aside.

Takisha Turner, 33 years old, is a dispatcher for the valet-parking department at Greektown Casino in Detroit. Ms. Turner doesn't gamble, but she has always struggled to save. She had only about $10 in her savings account at Communicating Arts Credit Union when she walked in a few weeks ago and heard about Save to Win.

"The teller said somebody else she told about it won," says Ms. Turner, "so I said, 'Well, you must be good luck then.' I thought it was a good idea, because earning interest means you win anyway. So I put down the minimum, $25." This past week, Ms. Turner won $400. She plowed the $400 back into her Save to Win account, getting a second shot at winning the $100,000 grand prize.

On some level, state and multi-state lotteries are already using a form of this theory to boost their available spending funds (here is how Oregon spends its lottery funds).  So in so far as the lotteries substitute for tax revenue, it is extra money in people's pockets.  However, like a sales tax, the current lottery scheme is regressive in so far as it tends to be those in the bottom of the socio-economic scale that spend a larger percentage of their income on lottery tickets.  But the social services that they end up funding are more broad based. 

The WSJ proposed scheme uses a lower return rate to fund the lottery winnings.  Another scheme would be a general lottery funded by the lottery receipt itself, where the winnings are smaller than the existing lotteries (and thus more winners) and the winnings distributed as CDs or bonds that don't mature for a certain number of years). 

Men are Absurd...

and women are not much better.

True story.  When I was in high school, I had an absurd crush on an "older" man.  He was two years older of me, the love was perfectly unrequited.  So, of course, when it came time to decide what college to go to, rather than going the route of my life-long dream (air force academy), I chose instead to go to snotty liberal arts college, because that is where L had gone.  Long story short, believe it or not, L and I started dating after I visited him for the pre-freshman days, we dated for like 3 months, and then broke-up right before I started my freshman year.  Way to make a gigantic life decision based on pretty damn stupid reasons.

A lot of my financial strategies are based on J's logic.  I know I talk an awful lot about economics, but I'm a complete doofus when it comes to my own financial well being.  It's partly because I didn't have much growing up, and partly because I took a pretty unconventional path (meaning, not lucrative) for the decade right after college, so I never had too much in terms of assets to worry about growing and protecting.  Luckily, I've also been imbued with a strong "living-within-my-means" ethic, so I've rarely had any consumer loans, and I managed to pay off my college loans in under a decade (and I hope to similarly pay down my law school loans on an accelerated timeline).

J, on the other hand, is a man obsessed.  It drives him nuts how much general disregard I have for money.  For example, I'm more likely than not to throw any extra dollars I have into a conventional bank CD and then have it roll over, year after year, with nary a thought about how I might be able to maximize its earnings.  I also had like 20 shares of a company I worked for back in the early 90s that I lost for like 10 years, before it rediscovered me because the landlord at my old address decided one day to send me years of old mail (I know, so sweet, right?)

Anyways, the point being, J's convinced that we are facing financial apocalypse.  We are literally frozen in our financial options, because even if there was anything he wanted to purchase, he doesn't trust any bank or brokerage or financial institution not to dissolve, and even if those institutions happen to be guaranteed by the FDIC or the SIPC, J doesn't trust the US government not to dissolve.  Yes, my husband is a gem of a man.  (Oh, and add the fact that I'm an attorney to the mix, and need to go through a complex conflicts check whenever we want to purchase or sell any securities and... let's just say frozen in place is almost euphemistic).

The interesting point being that this weekend, I wanted J to convince me that we would be able to survive on his salary alone (given that the untimely demise of my career is visibly on the horizon) and, in extension, what exactly TF should we do should his financial apocalypse come to pass.  It was then that I discovered, to my great amusement, that although J apparently has no faith in the ability of our national government to survive, he hasno problem believing that his itty-bitty college would be able to weather the storm without having to resort to cutting professors (assuming tenure).

Wow, talk about men being supremely confident of their own... what, judgment? abilities? even in the face of global catastrophe. 

Honey, I Shrunk Our Money...

One of the biggest problems with government is the fact that one size can never fit all, especially in a country as large and diverse as ours.  The federalist system does a better-than-anything-else job at managing differences, but it's not perfect. 

It always (always) grates on me when I hear either politican party default to the perceived resident evils in others (established anecdotally, of course) as justification for taking one particular side or another.  The Republican favorites: welfare creates irresponsibility, personified by the cadillac driving welfare queen (or, her contemporary, Octo-mom), higher taxes deters entrepreneurship, or motivation to work, public health care creates an incentive for people to abuse the system.  The Democratic favorites: all rich people are evil, all corporations are evil, without regulation, no one would do the right thing.

This Good Morning America feature (h/t Escape Brooklyn, who, btw, seems very close to Escaping Brooklyn - you go, girl!) really demonstrates to me how very wrong we can get it sometimes.

For the first 45 years of Ken Karpman's life, everything was close to perfect.

He graduated from UCLA with a bachelor's degree and M.B.A., then got a high-paying job as an institutional equity sales trader. He married his dream girl, had two children and traveled the world on expensive vacations.

Over the span of Karpman's impressive 20-year career as a trader, he climbed the company ladder, reaching a salary of $750,000 a year.

Karpman was so confident in his good fortune and the strong economy that he left his job in 2005 to start his own hedge fund. To pay for the new business and their standard of living, Karpman quickly burned through $500,000 in savings and, like so many Americans, took a line of credit against his house.

But in the reversal of fortune that followed, Karpman was unable to attract investors and was forced to dissolve his hedge fund. He found himself jobless in a job market that had collapsed.

[After being unemployed for two years, Karpman finally took a job delivering pizzas.]  Karpman's salary plummeted from six figures to $7.29 an hour -- plus tips -- but it's money that he's grateful to earn, even when it means delivering to neighbors or his old office building.

I can already tell you what the haters out there are saying.  For the amount of money he made, he should have saved more.  He should never have bought the McMansion, or taken the loans he did in order to buy it.  He was irresponsible with his money.  His current situation was of his own creation.

And I would say that anyone with this kind of attitude is engaging in just a bit of unseemly Schadenfreude. 

Was he irresponsible?  On an absolute level, sure.  But for heaven's sake, when you have earned over six figures for years, and reached the point where you're making 3/4 of a million dollars a year (and amassed $500,000 of savings too), should you really still be forbidden from enjoying what you've earned?  Are we supposed to live each day as if the Armeggedon is just around the corner?  Really?

And if that is so, if that is what the "truly responsible" do, then how can we ever expect entrepreneurship to flourish in this country.  There is so much blather out there about how America will be saved by small businesses and entrepreneurs.  But there is almost no recognition that the flip side to entrepreneurship is the fact that failure rates are extraordinarily high.  That far more entrepreneurs end up bankrupt (which, under the bankruptcy scheme - though less so since the 2005 changes - is a kind of bailout by creditors) than end up rich, or even helping the economy.  Being an entrepreneur is inherently irresponsible.

And that is what this family is finding out.  Sure, the fact that they had an extravagant life meant that the collapse came far faster, but in the end, what really brought them to this point is the fact that Karpman decided to strike it out on his own.  And it didn't pan out.

The economic situation we are facing is nuanced, complex, and so sad.  We need to stop wasting our time blaming and spend a bit more time unraveling.  Maybe we can then arrive at a real solution, rather than the recent haphazard approach of slapping a band-aid on the wrong wound.

Git Your Sandwiches Here...

MSN has an article about adults starting to face the reality that they may have to financially support their parent's retirement:

Many boomers didn't save much for retirement, assuming they had a few years to catch up. According to Boston College researchers, 40% of baby boomers are at risk of not being able to afford their current lifestyles in retirement. Perhaps more worrisome, a 2006 survey of 2,500 boomers found that 59% of the respondents had done no formal retirement planning.

Is it ever too early to meddle in your parents' financial affairs? Is it your responsibility to plan to care for people who are still working and able to save and invest on their own behalf? What if their financial needs compromise your lifestyle or your security? And what if your folks should have known better than to leave retirement to chance -- and yet have?

My mom is a smart cookie, and she's completely financially secure in her future despite having been widowed relatively early in life and having to raise and educate two children by herself.  Some of the things that she's done that have ensured her financial security include: (1) as soon as she saw the stock markets moving downwards (pre-Lehman), she moved all her equities into fixed income.  Rather than anguish about her losses (just under 10%) and having unrealistic expectations of market recovery, she moved immediately to preserve.  And (2) She is in her mid-70s and she is still working full time.  As far as I know, she doesn't expect to quit anytime soon.

On the other hand, my mother, being very traditionally Chinese, has a very multi-generational approach towards family.  She has always made it clear that my family is welcome to live in her home, free of charge, whenever we like (thus, she hasn't yet downsized, despite it being nearly 20 years since my sister and I left home), which I took advantage of my first year out of college.  It is her unconditional offer to help my family that makes her such a central part of my ultimate emergency plan.

The problem thus lies in J's family.  Namely, J's mother.  She is an absolute financial wreck-in-waiting. 

On the one hand, she has some rather weird frugal habits: she keeps things forever, and does things like reusing gift cards and wrapping paper.  Yet, this is a woman who was divorced 30 years ago, got a very minimal spousal support settlement (which I don't believe she is receiving anymore), worked for 10 years as a school administrator, and has been retired, at this point, for the last 15 years.  The only money she has is the money she saved in her 10 years of working (which was apparently significant, given her low salary), some inherited money, and whatever she gets from the government. 

And if that wasn't bad enough, a good amount of her savings were in equities.  And unlike my mother, she was/is/will probably always be unable to give up on the amounts lost.  So she continues to hold her equities, hoping for a magical market rebound.

Srsly, a friggin' tragedy in the making.

I cannot stand my MIL.  As far as I'm concerned, she is the model that the mythical succubus was based upon.  And the feeling is absolutely mutual.  Unfortunately, I also love my husband, and I know that he feels a great deal of responsibility for making sure his mother is cared for.  So I have no doubt that at some point down the road, I'll have to bite the bullet and agree (unenthusiastically) when she comes asking to live with us.  I just hope that by that time, we'll have enough resources to not only have a house qua house, but one that might also have some sort of a nice separate guest cottage on the other side of... maybe a nice duck pond?  Or an ocean perhaps?

Flight to Safety...

I was scanning the NYT this morning, and I saw that these were the top 6 articles being emailed today:

1. Your Money: Doing the Right Thing by Paying the Nanny Tax
2. Your Money: Preparing Your Budget for Disaster
3. Home Insurance: What You Need to Know
4. Estate Planning: What You Need to Know
5. Annuities: What You Need to Know
6. Cost of Living: Bankruptcy as a Step to Solvency

#1, clearly being triggered by recent bruhaha and rumours surrounding Geithner and Kennedy, but then after that, one after another, articles dealing with preparing yourself for a financial crisis.

I was particularly intrigued by the article on Preparing Your Budged for Disaster.  As I've discussed in this blog before, my family is in crisis mode, partly because as we were entering into this recession, we were heavy on the debt (all student, and all mine) and light on the savings.  And with an almost countdown like deadline for when crisis is likely to strike for us (J's contract renewal, which will be determined by April of this year, and which is not looking good due to the college's plunging endowment; and my law firm's ongoing layoffs, less than a dozen attorneys at this point, but more inevitably on the horizon), I've spent the last 6 months doing what in my mind is emergency preparedness, the financial edition.

We've managed to save about 6 months of bare-bone expenses now in our emergency fund through our reduction in our 401(k), cutting costs (including cutting back childcare costs), and selling off some extraneous things we had in storage from our life in bfv (not to mention the elimination of storage cost itself).

But to the artice:

CONSIDER BORROWING NEXT Mr. McKinley’s [the financial planner consulted for the article] most radical notion is to use the drill to assess your borrowing capacity. You do that in anticipation of taking out loans before spending much savings. “You borrow money when you can get it, then pay it back out of assets as slowly as possible,” he said.

The logic here is that available credit, whether it’s a home equity line or credit cards, can disappear at any moment. It’s vanishing, in fact, with increasing frequency for all sorts of people who are still employed. So if it’s clear that your financial situation is dire, the theory goes, tap the credit while you can.

For instance, if you have a $2,000 car repair, Mr. McKinley might suggest that you put that on a credit card rather than take the money out of savings. “You can still pay that off more slowly and then, when you’re back on your feet, pay the full balance,” he said. “Meanwhile, you still have the $2,000 in the bank, and a working vehicle.”

[Or] if you have a working spouse, you could borrow twice as much money from the spouse’s 401(k) as you think you’ll need for living expenses. Pay it back slowly, as you would with the credit card. Then, if at some point your spouse is out of work, too, at least you have the money you need in addition to money left over to pay taxes and penalties you may be assessed if your spouse’s employer demands immediate loan repayment and you can’t comply. Once your spouse lost the job, you probably wouldn’t be able to borrow against the 401(k) anymore.

These sorts of moves assume a couple of things. First, that you have savings in the first place with which to repay the loans. Second, that you’ll find a new job soon that will allow you to pay back the debt quickly.

Our decision to move away from retirement investing and putting that money into our emergency fund is a bit like the plan recommended above.  Except rather than actually borrowing from a 401(k), we've just gone and redirected those amounts towards our savings.  We had done this to avoid the penalties and taxes that are mentioned above.  For J and I, we decided that whatever market gains we might be foregoing by not contributing now is far outweighed by what we'd have to put our family through if we had to go a significant amount of time without generating income. When (and if) we get our emergency fund up to our comfort level (1 1/2 years of expenses), we will start contributing again. 

I really hope people reading the article paid particular attention to the highlighted portion above, though.  The whole "borrow now instead of using your savings" approach only works if you already have savings at least equal to the amoung you are borrowing.  The idea being that the interest payments on the borrowings is less onerous than what it would take to come up with the money to carry you through a no-income period.  I would also point out that this approach should only be used in times like right now, when there is a reasonable likelihood of unemployment.

The financial planner also had this to say about IRAs.

Mr. McKinley notes that a Roth I.R.A. is a good account to tap, because you can generally withdraw your initial contributions (though not your earnings) before retirement without taxes and penalties.

I didn't know this!  I don't know the exact rules about contributing to IRAs, but I know that I wasn't allowed to contribute to an IRA while I was fully contributing to my 401(k).  I wonder if that is still true now that I'm not fully contributing to my 401(k).  If we're allowed to do this, I suppose I could take some of our emergency fund and ensconse it in an IRA, with the expectation that we'd tap it in an emergency.

Personal Finance 2009: Don't Buy Cr@p You Can't Afford...

Clusterstock reminded me of this oldie but goodie.

Note: of course, this plan is unavailable to the US government, which has promised to keep buying stuff it cannot afford.

It's Beginning to Look a lot Like the Time for Planning for Christmas...

Yeah, I know, catchy title, right?

Boston Gal had an good post up this weekend about her Christmas planning.  I'm a pretty big admirer of her panache for personal finance planning, and this entry was no exception.  Planning for Christmas BEFORE Thanksgiving?!  FTW, BG.

The commenters on her site had pretty great anecdotes too: families with secret santas, giving to charities, etc...  Sigh, if only things were so easy in my familia.

Here is my (unusual) situation, showing once again, why planning and politics don't mix.  First, my family, the Chinese one.  Well, it's simple.  We're Buddhist, we don't officially celebrate Christmas.  We did when my sister and I were little, but that ended sometime in HS, and we no longer get or give anything to one another for Christmas.  Once in a while, my sis and I will get something extra special for our mom (we got her a trip on a cruise one year), but those are more in celebration of momentous years than anything else.  It doesn't help that sis is in China, so she's only occasionally around for the winter holidays.  It's gotten so bad that my family doesn't even get gifts for Loo and Kali.  Not bad as in they deserve presents, but there had once been a tradition in our family to give gifts to little ones.  But we've gotten lazy.  Oops.

So my family is easy peasy, great, right?  Well, that is until you get to my husband's side of the family.  That is a wicked trouble pot.

So there is J's father, with his second family (which includes two college age kids), J's brother (and now his wife), and J's mother (psycho MIL).  This is a family that celebrates Christmas big time.  Like you've never seen a home decorated up for Christmas until you've seen their homes.  We're talking Christmas towels, 2 Christmas trees, thousands of ornaments, Christmas coasters, Christmas clothes for the decorations, OMFG!  And because of his parent's divorce, there is a lot of brute competitiveness along the lines of who does the better Christmas.  For as long as I've been w/ J (20 years) we've done Christmas roughly along the lines of spending Christmas Eve with his dad and Christmas Day with his mom.  Which involves food, present exchange and grilling about who got who what. 

The only way we've managed to balance this is by being relatively extravagant with J's two half-siblings (which gives J's father the warm fuzzies) but modest with J's father and step-mother, and then very extravagant w/ J's mother.  Of course, this would even be easy-peasy, except the fact that psycho MIL is ridiculously passive aggressive (remember, she hates my guts).  She has repeatedly told us that she doesn't need anymore stuff from her children, and she acts rather distant when opening her presents.  But you can always see her subversively looking at the brand and doing that calculation in her head of exactly how much we've spent on her.  And she has famously accused J of not caring about her because he neglected to purchase her a present for Mother's Day one year when we were in Asia.

Then there is J's brother, who is apparently a born-again Buddhist private equity manager (I know, the irony) who scorns the Yuppie world's attachment to material goods.  Unfortunately, the one year where we attempted to do the whole "contribution to *** given on your behalf," he threw the card in J's face and yelled at J for "supporting the competitor" (sorry can't be more specific, but needless to say, it was not something hugely obvious to anyone except J's brother).

And the end to this family saga is the role played by J and I.  J is (as far as I'm concerned) irrationally nostalgic, and I have a stone-cold dead heart.  J believes in the "magic of Christmas" and strives for that Currier and Ives picture of familial contentment in front of a warm hearth fire every year.  So we Christmas budget each year according to how much money it will take to fix the particular cataclysmic event that happened that year.  This year is pretty average. I'm expecting to spend about $400-500 on his family, though I have no idea on what (oh, did I mention that I've been doing J's Christmas shopping for him since the year we met?  No?  Yeah?) 

For J and I as to our own family, we've turned the focus to our daughters.  And this is where I come in.

I loved Christmas as a child.  Loved, loved, loved it.  We were pretty poor as children, since my family immigrated to the US when I was young, and my father had a few bouts with unemployment.  But my parents always made sure to make a big deal out of Christmas, I guess as a way to hide the cracks in our own walls (which they did an amazing job of, since I never realized how financially challenged we were until college).  But there was always a weird cultural gap in my family between the parents and the children when it came to Christmas.  First, we'd get lots of needed clothes.  Which made sense, because it made the gift giving seem a much bigger deal than it really was.  But we also got toys that were really, well, outdated from the kids' perspective.  Or just plain weird.  But we'd always spend a portion of Christmas day with our (much wealthier, and actually Christian) uncle's family.  And they would just ply us with the good stuff (because we had older cousins who "knew" things about toys). 

So being forever tarnished by Christmases past, I've made it a point to give only gifts to the girls that I think they will actually like for their birthdays and Christmas (in other words, no clothing).  We're pretty stingy about buying toys for them in between those days, which is, of course, an excuse for me to be extravagant on those days. I'm expecting to spend about $100 on each of the girls for Christmas.  This is actually cutting back from what I used to spend on Loo alone for Christmas and will include toys for the girls to give to Toys for Tots.

Then, there is everyone else: Loo's pre-school teachers, my secretary, my nanny, our doorman, etc... This recession is going to be bad.  I know everyone is cutting back.  J and I are lucky to both be (still) employed with a reasonably great combined salary.  This is not a place I'm going to be stingy (I know, I'm seriously sucking on the PF front) because these are folks who help me out a ton, and they really need anything extra they can get.  I've already gotten ten Target gift cards, $50 each, to give out at Christmas.  I've been in that position, of living paycheck to paycheck, and besides money, there really is nothing better than a gift card (well, except cold, hard cash) to a store that carries the essentials.

Finally, charitable donations.  This is the time of the year that J and I give to the Nature Conservancy, our favorite charity, and to our respective colleges/grad schools.  Our total year end donations will probably come to between $800-$1000.  We might have to revisit this number a bit, because I gave a ton to President-elect Obama during the Presidential election, which I know doesn't count as a charitable deduction, but for us it came out of the same budget as the general charitable donations.

What's your Christmas planning?  Are you doing things differently this Christmas?

Break In Case of Emergency...

My favorite Personal Finance (PF) bloggers have all recently done segments about what everyone should be doing right now to prepare for the recession (that we are absolutely in, frak what some number watchers might be saying).  The advice has been pretty consistent, and good, namely:

(1) Don't pull your money out of retirement accounts if you have a longer than 10 year timeline and keep investing IF YOU CAN so as to take advantage of dollar cost averaging.  However, see (5) in the second list below.
(2) Pay off any debt (except mortgage debt) that is costing you more than 3-4% in interest.
(3) Build up a 8 month - 1 year emergency fund.  Keep that liquid, in a bank that is FDIC insured.
(4) Cut spending.

These are great suggestions if you can keep your job (or for dual income families, if both of you can keep your jobs) or, at the very least, see no more than a 30% decrease in earnings.  But what do you do if you are afraid that you might be down-sized out of your job(s)?  J and I have begun to plan for that possibility, seeing how his contract is up at the end of this academic year, and the law rag, Above the Law, keeps reporting stealth layoffs at law firms (with 2006 year associates being prime targets).

(1) First, I have been keeping track of every penny we've spent for the past six months.  (Yes, I'm due to report my September spending, but whereby I am religious in keeping track of the spending, I'm not so good with entering things into Quicken and making my monthly charts.)  That has allowed me to figure out how much of my spending can be done away with if J and I both lose our jobs.  Right off the bat, childcare and commuting costs zero out.   It has also given me a good sense of the bare minimum we need to survive.  For our family of four, we can make it on about $3000/month (w/o health coverage) if we BOTH lose our jobs (see #2).  From my experiences with Cobra, we would have to add an extra $800/month to be on Cobra.  What scares me here is that Cobra expires after 6 months, and I have no experience with what health insurance costs when you are buying it yourself.  Having 2 kids, having health insurance is non-negotiable.

(2) As I mentioned in my last post, J and I have been certain that this economic shit-storm was coming.  We had actually projected that it wouldn't hit for another 3-5 years, which sux for us because we were counting on that time to build up our net worth, but we predicted that it would start with real estate and would accelerate because of leverage.  This is the reason that despite my very good salary, we have been renting instead of buying.  We have also held off on pretty much any sort of furniture, home improvement, etc.. purchasing in order to save and keep ourselves mobile (my daughters sleep on mattresses on the floor... srsly).  So, the second part of our contingency plan, which will be much harder to swallow for some than others, is that we will move in with my mom, who lives in NY.  We have already talked about it with her, and she's completely in agreement.  There are several reasons that this makes sense for us: her home is paid for in full, she is near retirement and will be able to provide some amount of free childcare, she would love to have us near, it is near a major (though now bad) job market, and we would be able to consolidate a lot of our expenses.  It also gives us some time to ride out the real estate market, so that we can buy when prices hit rock bottom.

(3) Third, we have been diversifying for the changing economic environment.  J has some assets (which are not "mine" b/c of our prenup - I know, TMI, but it is why it doesn't count toward my net worth) that he inherited from his grandparents.  It's not much, but it is our emergency/college backup fund (see, we're crazy, we have backups on our backups).  In other words, it's not our emergency fund (nor our college fund), b/c it is not as liquid as our emergency fund, but it is what we will fall back on if our emergency fund runs out.  It used to be all in Fortune 500 stock, but J got out of half of that before things got really bad (back when the Dow was still above 10,000.  He's converted it to: physical gold, Japanese currency, Australian currency, Canadian currency, and Swiss currency (don't know how to do this?  Go to etrade or whatever brokerage you use and look for currency funds).  These have not been great choices, because gold has been erratic, and the dollar has gotten stronger, and Australia is falling apart.  (We're good at seeing big macro trends, not so good with micro trends or directing our money to the right investments,  For J, this makes him the perfect academic.)  Of course, these are NOT investments for growth, they are hedges for in case the dollar collapses.

(4) I know this will sound stupid, but I throw all my change and an occasional $20 bill into a large jar + coin purse that I keep in our room.  When the jar gets full, I throw all of that money into a separate bank account.  I've been doing this for about 5 years.  The account at this point has over $4000 in it.  This is our "garden" fund.  If one of us gets laid off, we will have the time (and money) to convert some piece of land (either a community plot here, or my mom's own garden in NY) into a vegetable producing garden.  Neither of us have had any experience at this, which is what makes this a kinda stupid idea, but you never know until you try.

(5) Both J and I reduced our retirement fund contributions over the summer.  J is now just at matching (5%) and since my firm does not match at all, I'm down to 3% from 5%.  We're ignoring the additional net income that this has brought, the extra amount goes straight to our emergency fund.  The reason for this is simple - we decided that we need the emergency fund more badly than we need to save for retirement right now.  We are still woefully behind in our emergency fund, and have nowhere near the 8 months of salary that I would like.  But we have now a few months of expenses (per #1) saved up, and J's job is guaranteed at least until next June, so we still have some time to save.

(6) Finally, we have cut some our fixed expenses.  I've let all but 2 of my magazines expire, I'm finally out from under my 2 year gym commitment which I've cancelled, I've lowered my netflix subscription, I've changed my cell phone plan, and I've changed our cable/internet plan.  All told, I believe this adds up to a $200 monthly saving.  We are also not entering into any longterm commitments that either require payment upfront or have penalties to exit (like classes for the girls).  We are trying to be as flexible as possible.

Does anyone else have an Emergency Plan in place?  If you do, please let me know in the comments!

Link of the day: Prime Rate explained (cool)

My Skinny Wallet (August Edition)...

Here are our August numbers:

TOTAL INCOME         8253.70

Auto                             60.96
Charity                        150.00
Childcare                  2,570.00
Children's Clothing         41.98
Children's Gifts              10.83
Children's Misc.              73.67
Credit Card Payment    140.32
Debt                          1190.53
Dining                          327.37
Entertainment                36.90
Gifts                            124.00
Groceries                     473.14
Health & Fitness             44.75
Mass Transit                   47.00
Misc.                            260.49
News and Magazines        21.74
Rent                           2,200.00
Travel                           674.64
Utilities                         145.46
OVERALL TOTAL         8,593.78

We were over, but probably not really.  I just didn't have the energy to keep track of my spending in Denver when I was at the DNC, so I guesstimated my spending, and I was probably a little on the high side.  I also got reimbursed for a portion of my expenses, but that won't come in until next month.  Also, under "gift" is actually a "loan" to my stoopid sister.  She maxed out her credit card and called me in a panic asking to use mine to buy something on Ebay.  Srsly.  She'd better friggin' pay me back.  Dining out was extraordinarily high this month because hubs was in charge of things for a couple of weekends and for the time I was in Denver, and he don't cook.  And he likes to buy expensive food.  Unfortunately, the only way to cure him of that habit is to cook more.  And I'm too GD lazy on the weekend.  I've also added J's credit card bill, which is the last missing piece of the budget puzzle.

AAAARGHHH!  We're moving apartments in like 10 days.  Shouldn't be difficult, but wouldn't you know it, hubs is getting called away for a work thing that weekend.  The landlord hasn't rented our unit out yet, so he's not being a hardass on when we have to be out, but he said that he would like to repaint the unit, so the sooner the better.  I'm going to force J to do some moving before he heads to South Carolina.

This better be the easiest move I've ever done or I'm throwing in the towel... on everything.  Srsly.