Spending more than the deal

On Monday purchased a deal through Groupon: pay $20 for $40 worth of merchandise at the Body Shop. And there was an additional incentive: redeem by April 2nd & deal is worth $45.

Well, of course, this evening, March 31st, I go shopping at a local Body Shop. Within a minute of arriving an employee hands me a flyer which says buy 3 get 2 free or buy 2 get 1 free.
Of course I pounced on this additional deal.

And of course I spent more than $45
– I spent an extra $34. Besides the four items I got for free, I was given a free gift.

I’m a happy shopper!

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Temptation Abounds at Costco

This evening I made a visit to Costco.  Had a list of things I needed to get.  But of course, when one walks into Costco, there are other things that one did not have on the list but one is tempted to buy.

I had a “fixed amount” that I could spend so I was determined not to make any impulse purchases.  Surprisingly there was no products shouting “buy me.”  I was not tempted.

Hmmm, maybe because I had my heart set on a gardening product that was offered in the Spring of 2008 & 2009 but is not being offered this year.  Darn!

No, tonight temptation was not the driving force.  Instead, it was disappointment. 😦

Insolvency Looming – Social Security Disability Fund

There’s plenty of discussion, hand-wringing about the Social Security retirement fund.  You’ve likely watched news reports, read articles or listened to reporting about the impending bankruptcy of Social Security.  Occasionally there’s discussion about the looming crisis with Medicare. 

What NO ONE is talking about is the Social Security Disability Fund.

Luckily, the WSJ is shining a light on this topic.

In the Tuesday,22 March 2011 issue, on the front page of the newspaper, was an article entitled Insolvency Looms as States Drain U.S. Disability Fund by Damian Paletta.  The first three paragraphs of the article state,

CAGUAS, Puerto Rico-This mountainside town is home to a picturesque cathedral, a tobacco museum and a Wal-Mart Supercenter.  Another defining feature: Caguas’s 00725 zip code has more people who receive a disability check than any other in the U.S.

Puerto Rico has emerged in recent years as one of the easiest places in the U.S. to get payments from the Social Security Disability Insurance program, created during the Eisenhower administration to help people who can’t work because of a health problem.  In 2010, 63% of applicants there won approval, four percentage points higher than New Jersey and Wyoming, the  most-generous U.S. states.  In fact, nine of the top 10 U.S. zip codes for disabled workers receiving benefits can be found in Puerto Rico.

The SSDI is set to soon become the first big federal benefit program to run out of cash-and one of the main reasons is U.S. states and territories have a large say in who qualifies for the federally funded program.  Without changes, the Social Security retirement fund can survive intact through about 2040 and Medicare through 2029.  The disability fund, however, will run dry in four to seven years without federal intervention, government auditors say.

Yikes!  The American taxpayer HAS BAILED OUT“the too-big-to-fail banks,” AIG, two of the “Big Three” car companies in Detroit, Fannie Mae & Freddie Mac.  How are we going to pay for the Social Security Disability Insurance Fund too?

So why does Puerto Rico have such a high rate of disability claims?  In the article Damian Paletta suggest the following:

Puerto Rico has long had an outsize reliance on disability benefits.  The island has had a double-digit jobless rate for most of the past 30 years, settling at 15.7% at the end of December.  Doctors here say as people find it harder to get a job, they apply for disability benefits.

Now, that ticks me off.  As “abortion” should not be a substitute for “contraception,”  “applying for disability” should not be a substitute for “being unemployed.”  But this trend is not evident just in Puerto Rico.

The [SSDI] program has been a feature in agricultural, manufacturing and urban communities across the U.S., particularly where unemployment rates are high.  As a percentage of total population, more SSDI money flows to West Virginia than anywhere else, according to government data.  Experts attribute high concentrations there to unemployment and health problems related to manual labor.

Still, West Virginia has one of the highest rejection rates of applicants anywhere in the country, with just 36.7% of applicants making it into the programs on their initial applications last year, compared to a national average of 46.9%.

So, back to Puerto Rico.  Why such a high approval rate?

Administrative law judges in Puerto Rico, who make decisions in cases that are initially rejected or need further review, approved full or partial benefits in 80% of the cases they reviewed in fiscal 2010, according to data reviewed by The Wall Street Journal.  One judge in San Juan, Manuel del Valle, approved 98% of the cases brought to him during that span, according to data reviewed by The Wall Street Journal.  Mr. del Valle, through a Social Security spokesperson, declined to comment.

Obviously the Social Security Disability Income Fund is a ticking time bomb.  And, you’ve likely heard statistics such as you are 5 or 6 times more likely to be disabled before 65 years of age than dying before 65 years of age.  So the prospect of being disabled during one’s working life time is not a joke.

So, what should you do?  BUY disability insurance.  If you can, check with your HR department and ask if there is a group policy through your job.  The policy is much cheaper.  If you have to get an individual policy, the premiums are much higher. 

If you want a lower premium, select a waiting period of at least 90 days (meaning you won’t begin receiving a disability check until 90 days after you apply.  And what’s your source of income during those 90 days as you wait for your disability check?  Well, of course, your emergency fund!).  Because the shorter the waiting period (30 days versus 90 days), the higher the premium.

Yes, here’s something else you must fund.  Presumably you have car insurance (if you own a vehicle), homeowner’s or renter’s insurance, health insurance.  Well, add disability insurance to the list.  It is TRULY VITAL. 

You want your own disability insurance policy because you don’t want to depend on receiving benefits from the government  (the average SSDI payment in 2009 was $1,064/month), especially if you live in West Virginia.  Hey, but if you live in Puerto Rico, well, why bother 🙂

What YOU can learn from VCU

Okay, not everyone is watching the NCAA men’s basketball tournament.  VCU stands for Virginia Commonwealth University. 

Two weeks ago, when the Selection Committee announced VCU as one of the schools invited to The Big Dance, many analysts were OUTRAGED!  Jay Bilas, Dick Vitale and others – Virginia Tech and Colorado DESERVE to play in The Big Dance, but not VCU.

So what did VCU do?  First, let me state that VCU didn’t bother to watch “Selection Sunday” believing they would not be selected.

Okay, so once selected, what did VCU do?  They took ADVANTAGE OF THE OPPORTUNITY to play in The Big Dance.  As an 11th seeded team, VCU won each game, making it to the Final Four.  Their most impressive win was yesterday, when they beat the last #1 seed, Kansas, 71 – 61.  And VCU had a much tougher road than George Mason, the last 11th seeded team to make it to the Final Four.  VCU had to win five games to make it to the Final Four, whereas George Mason had to win four games.

So, how does VCU relate to personal finance? 

YOU must have confidence in yourself.  YOU must be focused on your personal finance goals, whether it is saving money for retirement, paying off credit card debt, saving for a car, saving for a child’s college education, building an emergency fund, etc.

Maybe, for support, you “declare” your financial goals to friends and family.   And those close to you may be like the analysts who were outraged that VCU was selected for The Big Dance.  These friends/family may poke fun at you, call you weird, tease you about lacking commitment, etc.  Don’t let those opinions drag you down.  In fact, use those non-supportive comments to motivate you.  Write those non-supportive comments on a piece of paper and post them on the refrigerator or the mirror in the bedroom or bathroom.  You want to see those non-supportive comments daily.  You want to prove your friends/family wrong.

Whether VCU beats Butler on Saturday or not, VCU is an inspiration for so many.  Don’t quit.  Keep plugging away.  And you will succeed!

Really Late News

Not sure how I missed this (well, I know because I didn’t watch the program) but Inside Job won the Oscar for Best Documentary.

In at least one previous post I encouraged you to watch this documentary.

I’ll repeat myself:  PLEASE WATCH THIS DOCUMENTARY.

In his Oscar acceptance speech, Charles Ferguson (the director) noted, I believe, that not one Wall Street Executive has been jailed for the fraud he has committed.  There are still fundamental problems with the American financial system and many of these matters have not been addressed. 

Don’t believe.  See Inside Job and decide for yourself.

Go on step further (like I will) and BUY the DVD.

Fitness & Money, Part II

Why did I ever think running is an inexpensive activity?   I’m learning it’s not.

I’ve registered for the Zooma 10K in Annapolis – cost $45 + fee  = $49.

I’ve registered for the Baltimore Marathon – cost $85 + fee = $88.

I e-mailed a friend who registered for the Baltimore Marathon (and who has competed before) and asked if she plans to stay overnight or depart early the morning of the race.  She replied, you need to be in town the night before.  She staying at a friend’s place.

My sister competed in Zooma 10K in Annapolis the previous year.  She departed early in the morning and drove to Annapolis.  I started thinking – maybe it’s smarter to make hotel reservations.

I called The Westin in Annapolis, the official hotel for the Zooma 10K.  All rooms set aside for the race have been booked (and the race is not til June 5th!).  So I asked if there are discounts available for USAA or AAA members or federal government employees.  No other discounts permitted.  I then asked what’s the regular rate.  It was over $200.  I made it clear, too rich for my blood.  But luckily there’s another hotel nearby, Sheraton Annapolis.  With my federal government id, the rate is $114 for one night + tax + car fee.  So, I estimate the cost of a one night stay in Annapolis will be about $150.

I then checked the website for the Baltimore Marathon, found the list of hotels, and called the Holiday Inn Inner Harbor.  I gave the receptionist the “code” for the Baltimore Marathon, expecting a decent discount for the room.  The price she quoted me, $175.  Hello.  I then inquired about discounts for USAA membership, AAA membership or federal government employee.  The cheapest rate available – $144 + tax (plus fee for parking car) for one night.  I may be paying $175 for the one night stay.

Hmmm, maybe registering for non local races wasn’t so bright of an idea after all.

Meanwhile a friend told me about Galloway training program (to prepare for a marathon).  She sent me the link.  When I saw the price – $159 – my initial reaction – NO WAY.  Plus, I thought, I don’t have time to run with a group except on the weekend and I don’t want to drive a great distance to meet the group.  My friend sent a follow-up e-mail saying the group meets just on Saturday.

Should I do this?  Maybe I should just purchase a marathon “app” for $2.00.  I decided to ask another friend.  Turns out she joined the Galloway training program in the past and talked about how great it is.

This friend’s enthusiasm was enough to convince me to go to the free information session on April 9th. 

So far I’ve spent = $137 to register for two races.  Reservations for one-night stays in Annapolis and Baltimore would cost approximately $325.  Then the Galloway training is $159 (hopefully there are no extra fees).  I need to purchase a good pair of running shoes, projected cost = $125.  Additional running tops, bottoms & socks, projected cost = $150 – $200.

Total projected cost between $896 – $946.  No, running is not cheap.

Maybe too much March Madness

Last Saturday, March 19th, I received the following text from AT&T at 8:17 a.m.

You’ve used 65% of your data plan.  Any overage bills@ $10/1GB.  Tip: Data is unlimited over Wifi.  Learn more at att.com/dataplans.

Same day at 2:41 p.m., AT&T sent the following text:

You’ve used 90% of your data plan allowance.  Any overage bills @ $10/1GB.  Tip: Data is unlimited over Wifi.  Learn more at att.com/dataplans.

During the wee hours the next morning, March 20th, at 4:33 a.m., AT&T sent the following text:

You’ve used 100% of your data plan allowance.  You are being billed $10 for an additional 1G.  For tips on managing usage visit att.com/dataplans.

I’ll admit I was tuned to NCAA basketball on Thursday, March 17th & Friday, March 18th.  Wasn’t thinking about how I was receiving the data.  Just happy to receive it.

Well, an extra $10 is worth it.  Money definitely well spent.  

And since I pay more than the monthly amount owed each month, this extra $10 charge will not disrupt my budget.

The risk of renting (a landlord’s perspective)

I’ve rented my condo since May 2005.  I’ve been fortunate.  I have had four good to excellent tenants.  The most important fact – the tenants have ALWAYS PAID THE RENT.

My mother, on the other hand, has been rather unlucky with the property she is now renting.  After the first two months of paying the rent on time, the tenants were late paying the rent last month.  For this month my mother received a telephone call from the bank stating the tenants’ check has bounced.

Landlords are small businessmen and businesswomen.  We make an effort to provide a nice, comfortable place for individuals to live.  We do our part through upkeep & maintenance.  The tenants must do their part by paying the rent on time. 

What really irritates me about my mother’s tenants was their initial grumbling about the house not been cable ready.  The house’s previous occupant was in her late 90s and she didn’t need cable!  But, what pisses me off, why are the tenants so concerned about he cable but lack a strong commitment to paying the rent on time? And shouldn’t having a roof over one’s head – not living on the street – be a priority over cable?

Too many Americans have their priorities screwed up.  Paying you rent should come before ENTERTAINMENT.  Oh, that’s right, that’s an old-fashioned viewpoint. 

My mother’s tenants formerly rented an apartment in Virginia.  They were paying $500 more per month at the location.  One would think, with a significant reduction in rent, they would be able to afford the rent as well as entertainment.

My mother now is pursuing legal action.  Yes, a small businesswoman will now have to incur more expenses because the tenants have not abided by the terms of the lease (sort of like a homeowner who fails to pay the mortgage). 

My mother and I have had two sharply contrasting experiences.  And some people fear my mother’s experience that they decline ever being a landlord.

I’ve advised my mother, once the present tenants are history, to hire a management company to handle the tenants.  There will be less money for my mother but also less headaches for her.  And that lack of stress is PRICELESS.

No consequences from “walking away” from mortgages

On the front page of last Friday (March 11, 2011) edition of the WSJ was an article entitled Families Slice Debt to Lowest in 6 Years.  A very encouraging title until you read the article.  The first paragraph states

U.S. families – by defaulting on their loans and scrimping on expenses – shouldered a smaller debt burden in 2010 than at any point in the previous six years, putting them in position to start spending more.

Then the article profiles a couple who defaulted on multiple mortgages.

Morari Shah, a 59-year-old Miami entrepreneur and real-estate investor, is among those taking a radical approach to reducing debts.

Since late 2008, he and his wife have slashed their total debt from nearly $1 million to zero by walking away from the mortgages on four rental properties and paying off two others, all of which lost about half their value in the housing bust.  He’s no longer taking up to $4,000 from his monthly income to pay mortgage interest that the rental income didn’t cover.

Instead, he and his wife are fulfilling their goal of building a new $350,000, four-bedroom home in the Dallas suburb of Lewisville, where they plan to retire.  “It’s a big relief,” said Mr. Shah.  “We went through some rough times, but now I’m comfortable and don’t have to worry about my retirement.”

Emphasis added.

Maybe if the Shahs weren’t SO GREEDY and buying EVERYTHING ON CREDIT, they would not have been burdened with $ 1 million in mortgage debt.  And, who wouldn’t want to be relieved from mortgage debt and be able to save more for their retirement?

Apparently the Shahs have NO SHAME.  I would have declined to be interviewed for the article.  But they’re, in essence, bragging about how they shaved their debt from $1 million to zero.  And, of course, they can NOW afford to have a “dream home” built.

Personally, people like the Shahs are revolting to me.   And, from my perspective, they are not suffering the consequences of “living high on the hog.”

When paying extra on utility bills REALLY pays off

I’ve discussed in previous posts how I pay extra on utility bills, as a goal toward living beyond paycheck to paycheck.  Let me explain some tangible benefits from this strategy.

I have an 11 year, 7 month old beagle (just under 22 lbs).  He has a physical ailment plus chronic bronchitis (yes, my dog has this condition).  The chronic bronchitis was so severe lately that I made an appointment with the vet.

I took him to Friendship Hospital for Animals (primarily because they offer appointments on Sunday since this “hospital” is open 24 hours/day).  Of course the veterinarian recommended an X-ray to detect any abnormality.  The total cost of the visit was $325 (the X-ray alone cost $199).  I paid for the bill with my credit card.  But in the back of my mind I thought, I don’t have $325 .  I had some extra money but used it two weeks ago when I had to take my dog to the emergency room at Friendship Hospital for Animals after he fell down a flight of stairs.

When I got home Sunday, I pondered – where would I find that $325?  Luckily my most recent gas bill was $0.  So that $175 allocated for the gas bill was re-directed to cover the vet expense.  But I was still short by $150.  I needed to find that amount.  Well, I’ve been setting aside $40/pay period for my alternative medicine herbs (Ayurveda).  I had $120 worth set aside so I applied that to the vet bill.  The remaining $30 I pulled from money set aside for my dog’s vet expenses.

The saga of my dog’s medical needs hasn’t ended.

I received a call from Friendship on Tuesday.  Although my dog’s heart is fine, a specialist looked at the X-ray (part of the reason for the $199 fee) and noticed my dog’s liver is a little enlarged and recommended a blood workup to determine if something was wrong.  Hmmm, can’t afford that right now.  I will have to defer that til sometime in mid April.

And, it’s time for my dog’s teeth to be cleaned.  Because of his chronic bronchitis (plus his heart murmur), anesthesia is out of the question.  A holistic vet in Bethesda, Maryland provides a service where your pet’s teeth can be cleaned without anesthesia.  The cost is $230.  The appointment is scheduled for March 31st.   Of course, I fretted, where will I find the money?

Today, in the mail, received a check from PEPCO (electric company), a overpayment refund, in the amount of $138.91.   Thank you, Lord.  That overpayment refund is my savior (from debt).  I will now scrape together the remaining balance. 

In case some of you are thinking, well, if you have an emergency fund, you could pay for these expenses without any heartache, let me say I have cashed CDs in the past to cover my dog’s vet expenses.  Yes, a very expensive dog.  But very adorable.  If I could find him a gig where he could earn some money, then I wouldn’t fret over funding his vet expenses.

But don’t forget the moral of this story – paying extra on those monthly bills can pay off in a pinch!

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