Saying NO to Santa...

Four days before Christmas it was proposed at work (by the new boss who announced in May that there would be no Christmas bonus this year, a prophecy that has come to pass) that we have a Secret Santa.  Himself included.

Spending limit?  $25 to $30.

I declined to participate and was called out on it.

"I can't afford it," I said.  "I'm not spending that much on myself this year.  I'm having a cheap and cheerful Christmas."

Whether the last minute scheme will actually go through, I don't know. 

What I do know is this:  it never hurts to be true to yourself when you can't afford something.  Even if it means saying NO to Santa.

Penny Pincher

Tidings of Joy - 2014

As I sit at my desk, I hear the strains of a live steel band in the distance as revelers join a street march through town, part of our annual Christmas carnival.  It's a festive happy time and the music makes me smile.

In my house, it's a less is more, cheap and cheerful Christmas.  Rather than deck the halls to a faretheewell, I went for a more limited approach.  At Thanksgiving I got out vintage Christmas linens, velvet chair covers, assorted candle holders that parade on my step cabinet and a few clear plastic snowflake ornaments for my outdoor Norfolk pine (2 years ago it was a 6 inch seedling in a tiny pot, now it's over 3 feet tall and too heavy to move). The table is set with Christmas china.  Except for one new to me ornament - a $1.00 charity shop purchase - everything is from Christmases past.

Through the years my Christmas gift list has dwindled to none.  So I've become Santa to myself.  Last year a new car - and a blissful year of worry free driving.  This year, in keeping with 1/2 pay and reducing my expenses to fit my income, Santa spending is substantially less.  Food treats and trinkets.  Charity shop treasures: a set of 6 matching stoneware ramekins for $5.00; a set of 3 never used vintage biscuit cutters (original price label still attached) for $2.00.   Everything has gone into my Santa sack to be savored Christmas morning. 

The best gift to myself was NOT spending and maintaining a healthy bank account.  It warms me like a comforter on a chilly winter night.

However you celebrate the holidays, may it bring you joy; and to all, a New Year of peace and prosperity.

Penny Pincher

Giving Thanks - 2014

'tis, once again, the season for being thankful.   This year I'm thankful for:

1. Good physical and mental health.   Without it, nothing else matters.  A brisk walk every day helps.

2. The job that (even at half-pay) keeps my ship afloat.

3. The 485 square feet I call home.  Where I wake up happy every morning.

4. The Green Machine.  Wonderful car, a year of worry-free driving.  Worth every penny.

5. Staying debt free.

6. Continuing to build my savings.   The cushion that lets me sleep well at night.

Penny Pincher

No One Died and Made Me Suze Orman...

Lately I've been seeing a lot of Stupid Spending going on around me:

- A woman who spends on e-cigs and accessories and various juices, but whose credit card is so close to the limit she can't afford the change fee on an airline ticket she booked for the wrong date, and will miss a family event she's been anticipating for months.

- A woman who spends on a Barbie-sized washing machine (wash, no dry) to avoid going to the laundromat, but can't/won't get her car fixed so her son can get his driver's license and apply for a much-needed job.

- A woman who is out of touch with her finances to the point of overpaying some bills and not paying others, but won't consider using financial software because she won't remember to make the entries to keep it current.

As much as I am sorely tempted to open my mouth and engage in financial smackdowns, shout "approved" or "denied" when I hear of more Stupid Spending, I am reminded of one thing:

When in doubt, STFU.

Penny Pincher

Thank you, FDR...

This week I've been watching Ken Burns "The Roosevelts, an Intimate History" on PBS.   It reminded me that I have FDR to thank for two programs that have secured my financial life - FDIC and Social Security.

Because of the FDIC (created in 1933 during FDR's first presidential term), I keep my precious acorns in an FDIC insured bank.  Safer than a mattress or an uninsured brokerage account.   Because of the FDIC - and my belief in it - I feel my $$ is safe.  Thank you, FDR.

Social Security (another first term program created in 1935), means a retirement free from worry about becoming a bag lady.  Thank you, FDR.

RIP FDR.  Because of you, I will sleep well tonight.  Thank you.

Penny Pincher

Bare Bones Living

I've been looking at my finances under a microscope to make sure I haven't missed anything in my transition from full pay to half pay, here's what I've found:

My expenses fall into two categories: essentials (fixed) and non-essentials (variable):

-- FIXED MONTHLY EXPENSES - necessities of life

FULL PAY

Shelter  -  21%  

Food/gas etc. - 21%  

Health Ins. - 11%   

Sub-total - 53%                          

HALF PAY

Shelter - 36%  (no change in $ amount allocated)

Food/gas etc - 36%  (no change in $ amount allocated)

Health Ins. - 18% (no change in $ amount allocated)

Sub-total - 90%

-- VARIABLE EXPENSES - nice but non-essential

FULL PAY 

Broadband/cell phone - 4%  

Treats - 6%    

Saving - 37%     

Sub-total - 47%   

HALF PAY

Broadband/cell phone - 6% (no change in $ amount)

Treats - 4% ($ amount cut in half)

Saving - 0% (eliminated)

Sub-total - 10%

FULL PAY - essentials 53% + variable expenses 47% = 100%

HALF PAY - essentials 90% + variable expenses 10% = 100%

The key to successful skinny living is knowing how much of your monthly budget goes where, what you can squeeze and what you can't.    My housing costs are fixed, what changes is the percentage of my net income devoted to meeting those expenses.  The same goes for food/gas and health insurance costs.   All are necessities.  The dollar amounts won't change, but the percentage of my income allocated to meeting those expenses grows, leaving less for variable expenses.   More allocated for necessities, less available for other things. When you reach 100%, there is no more to be spent.  

Under variable expenses, the frugalista in me rules.  My cell phone (the only phone I have, I haven't had a land line since 1988) is a bare bones go-phone that costs less than $10 a month, with rollover minutes.  I don't text, use it to go online, and it doesn't have a camera.   Broadband is a variable that feels like a necessity.   Free wifi isn't widely available, and less time at work means less use of company internet.  I'll sacrifice to pay my $2 a day broadband bill.   I cut my treat allowance in half.  That'll keep me away from the "buy now" button on ebay.  Also eliminated is additional saving, there's not much gravy on 1/2 pay.  But, this is my income from work.  I'm still saving 100% of my monthly social security benefit.  

I don't feel deprived, I feel empowered.   Knowing where your money goes, and living within your means,  IS power.

Penny Pincher

When the Ax Falls...

I could say I didn't see it coming....but, in truth, I did.  I just didn't think the ax would hit ME.

This week I was informed by new management that my working hours -- and my resulting paycheck -- were being cut in half due to a slow season and cash flow problems.  I've held my present full-time job for 10 years and have never missed a paycheck.  Two longer term employees were recently eased into "early retirement" and now my hours/wages are cut.  I asked if any other employees were having hour/wage cuts.  No, just me.  For now.  I felt like a sacrificial lamb.

I drove home from work with my stomach in knots.  But when I sat down with my calculator and financial spreadsheet, I began to relax.  Being a debt-free frugalista has its benefits.  I own my condo and car free and clear, there's no credit card debt.  I have money stashed in my cookie jar and other save-for-a-rainy-day accounts.  My 50% paycheck will cover my monthly no-frills living expenses (with $5 to spare, it's that close) - what will be eliminated from my budget is treat money and additional saving out of my paycheck.  I can live on what I will be bringing home with little change in my lifestyle (all the basics are covered, I can put food on my table and gas in my car; but I won't be going away on vacation or eating out or splurging on Ebay).  In the past year I got rid of two expenses -- storage and Netflix -- that would have put me underwater on my 1/2 pay.  My monthly social security deposit will continue to be socked away in its entirety into savings.  I'm grateful that I can survive and keep my savings intact.

I will still have paid holidays, sick leave, I'll be paid for vacation time I accrued last year and haven't used yet, and I'll continue to receive a company contribution to my health insurance.

Now I'll have every afternoon free to play.

Who knows?  Semi-retirement may agree with me.

Penny Pincher

The Bitcoin Wake Up Call

The Mt. Gox Bitcoin fiasco this week was a financial wake up call.

I'm  not going to discuss Bitcoin as monetary unit; I view it as a variation of Monopoly money that won't buy me a loaf of bread at the corner grocery.   As an investment it falls into my "if you don't understand it, don't buy it" category.  Until last week Bitcoin had no presence in my life other than a curiosity.

The wake up call came when I saw a photo of a man holding a sign:  "Mt Gox - Where is Our Money?"

Where is our money?  How many times have we heard that before?

Enron - where is our money?

Madoff - where is our money?

Stanford - where is our money?

Need I say more?

That sign -- "Where is Our Money? -- got me thinking about my money.  Where is it?   And -- more important -- how secure is it?   I know WHERE it is... some in a bank and some in a well-respected brokerage.  It's the brokerage money that has me concerned.  Like a Mt Gox Bitcoin investor, I have no safety net, no insurance if the bottom falls out of the money market where I have my money stashed for safekeeping.

I decided it was time to secure my brokerage funds under the comforting blanket of the FDIC.  I opened a savings account at my FDIC insured bank and will be transferring my brokerage funds.

Better safe than holding a sorry "where is my money?" sign and wondering what happened.

Penny Pincher