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Whipsawed, but in a good way

November 1st, 2008 at 08:21 am

I hardly know where to begin. A few weeks ago, I was actually in tears because of money worries and now I'm trying to figure out how to divvy up a 45% increase in our cash flow. I just found out that my boss really went to bat for me, and got approval for me to go full-time with benefits! Not only is it more hours and free insurance, but also an increase in my hourly rate. Things sure can change fast, down or up.

I've been very worried about how we'd cope when DH's Cobra coverage ran out. That's a big part of the reason I went ahead and sold the rest of the ETFs I had in my IRA. I didn't want to raid the IRA to pay for health insurance, but I wanted to have the option if it came to that. If the stock market kept tanking, I couldn't be sure of how much I'd have available.

I've been trying really hard, running around to to buy things on sale, using coupons and rebates again, and had our freezer pretty well filled up.

One night DH got out some pizza and left the door open about an inch. In the morning, I heard it running like mad and discovered it. That's when I finally broke down and cried, fearing that all the food was ruined and money wasted. (We've been using the food up as fast as we can, with no ill effects so far.)

DH started looking for work, and finally signed up with a rather cheesy temp agency out of desperation. You can read about them here, and either be forewarned or just see how the bottom half lives:

http://www.motherjones.com/news/feature/2002/03/street_inc.h...

I even went so far as to tell my mother I couldn't chip in the tip anymore when she took us out for a meal. It was really embarrassing, but felt I had to do it.

She likes to get out to restaurants, but is housebound now and needs one of us to drive her. She pays for the meal, and we've been paying the tips. But what with gas prices, I didn't feel I could keep shelling out more money on tips than we could have made the whole meal for at home.

Now, amazingly, the tide seems to have turned. Instead of feeling stunned and unsure because of all the bad economic news, I'm now feeling stunned and unsure about how to handle this good fortune.

I really, really, don't want to blow it.




I-bonds vs. the stock market

October 12th, 2008 at 12:48 pm

Thought this might be a good time to post a link to this chart, being that the stock market has been so choppy lately. Note that the chart is updated to October 1st--and the I-bonds were already ahead before the worst of the stock market's descent. Might be good for anybody else who's feeling rather chicken right now.

http://www.savings-bond-advisor.com/i-bonds-versus-the-stock...

I've been thinking about these for a long time as part of our Emergency Fund, but never seem to have enough money to spare. They can't be bought in IRA's, where the bulk of our already-accumulated money is, so I'd have to find new money.

I know you can buy them in small amounts, but I guess I'm embarrassed to put a bank through the paperwork for a $50 bond. (I'd rather do the paper ones, as it would be a help to DH in an emergency.) But maybe I will start, once I know the new rate as of November 1. They are supposed to announce the new rate this week.

Asset allocation--any ideas?

October 5th, 2008 at 11:54 am

Hi, and hugs to everyone who left a comment for me last week.

SCFR mentioned how some older folks may be in trouble because they never changed their asset allocation as their situation changed:
http://scfr.savingadvice.com/2008/10/02/still-around_43742/

I think that hits the nail on the head for me, also. When we had two incomes, a higher total income, and cheaper health insurance, it wouldn't have been so painful to see the balance in my IRA drop over $800 in one day. I could have just saved harder for a couple of months and made up the loss. But the way things are right now, it could take me a year or more of scrimping to make it up, if it's possible to do at all.

Maybe it isn't just fear that makes me want to lessen my exposure to stocks, but good common sense. I've heard you shouldn't invest what you can't afford to lose--and right now I don't feel like we can afford to lose ANY of it.

Here's our asset allocation right now,
roughly:

Cash 46%
Bonds 36%
Stocks 17%

Only $6487 is easily accessible, i.e., cash and not in IRAs. Most of the bonds are non-IRA, but it's not like I can count on the values holding up if I needed to sell them. I have a GMAC thing that's lost 2/3 of its original value, although it's still paying me interest.

Honestly, I think I could sleep a lot better at night if I cashed it all in and just paid off our house!

Even if I sold the rest of the stock, it still wouldn't be accessible because it's all in my IRA. But at least I'd know for sure how much I had. I did sell my S&P 500 index fund last week, and I don't regret it. It only went down from where I sold it, and then I read that more S&P 500 companies cut their dividends in Sept. than ever before. That doesn't bode well.

Any thoughts?

Back because I'm scared

September 27th, 2008 at 04:13 pm

I feel like I need to huddle around the virtual campfire at Saving Advice again, safe from the cold, cruel world with some people who have their heads on straight. Smile

I'm trying not to be a Nervous Nellie, but all this upheaval in the economy is starting to get to me. It's not just what I'm hearing on the news--it's real life.

WAMU-we have our one credit card with them. Things should be business as usual, but it feels strange to have a 2nd credit card provider go belly up on me. (I had a NextBank card years ago.)

Wachovia-I have a brokerage account with them, DMom has two brokerage accounts plus she owns a pretty significant chunk of Wachovia stock which is already showing a loss. I'm hoping they don't do a WAMU and that she doesn't lose it all.

The housing market-My mother, at 91, has finally put her "extra" house up for sale, seemingly at the worst possible time in recent memory. There have only been two showings in about 3 weeks. If it goes on too many months, we may need to help her get it ready to rent out.

It's been a year, and DH still isn't working. In a lot of ways it's been a help, but we could sure use some extra money.

Especially since we are still paying $660 a month for his COBRA health insurance, which runs out in March. The prospects for me getting full-time at my present job don't look good, and the cost of an individual (non-COBRA) policy will be even higher.

Our emergency fund is below the $1000 minimum that I feel comfortable with, and I'm going to have to work hard to get it built up again. I'm unavoidably spending $200 a month on gas now (because of driving my mother), and our car insurance just went up $35 a month.

Somehow I'm going to have to get back to frugal ways, but I don't have time to fiddle around with Quicken like I used to.

Hope things are going a little more smoothly with everyone else.

More on pennies...

May 6th, 2006 at 07:56 am

Maybe all the discussions lately about pennies, Nickel and Dimed, and change jars filling with found money, made this jump out at me as I was reading through Commerce Bank's annual report:

In 2005, their Penny Arcade coin machines counted a total of $350 million. That's a lot of coins--who says they don't add up!

They make it fun to take in your coins. Not only is there no fee, but you get a freebie if you've guessed the total of your coins close enough. This week I got a coin purse in the shape of their big red C logo. Previously I've gotten jelly beans in a red egg, an opener to undo CD wrappers, and a big red C spring-type paper clip. Also, the coin bank I use at home was a freebie from them, in the shape of a giant red C.

It's nice doing business with a bank who gives little goodies to existing customers, as well as new ones.

Yes, I'm a shameless shill for Commerce. Try them if you can; I'm sure you'll be happy and you'll help my stock go up, too. Wink

Stocks!

January 24th, 2006 at 07:34 am

I haven't thought much about the stock market or investments for a long time, as I've been preoccupied with budgeting and just getting by. So there's been quite a large chunk of cash sitting in my IRA brokerage account. It wasn't just because I was ignoring the whole subject, though. I'd thought I wanted to move the whole account to Scottrade for lower fees. But then Scottrade had some kind of security breach, and I changed my mind. Also, being kind of worried about money I was leaving it in cash "just in case," even though the last thing I want to have to do is take money out of the IRA.

Anyway, this morning I rebalanced things in a method I read about years ago in a book called America's Finest Companies by Bill Staton. He had you invest equal amounts in high quality companies, in different kinds of businesses. (I actually did index funds to diversify). Every year or so you buy more in all of them, but you buy less of the ones that have done really well, and more of the current laggards. The idea is that different industries do well at different times--you are putting more money into a company when it's a bargain, and not putting too much money into it when it's overpriced. You try to end up with equal positions in each company again. I like following a mechanical system like that because it keeps me from getting carried away.

So I did that this morning, and had a pleasant surprise. Schwab is now only charging $19.95 per trade rather than the $29.95 they did before. And I got a letter awhile back saying they weren't charging an annual fee anymore. So I guess I'm content to stay with them. Sometimes procrastination is a good thing. Wink