Oh To Be Average

A conversation with my roommate about recession -- whether we were in one -- prompted me to look up the definition on the Federal Reserve Bank's website. As I was searching for it, I came across this chart:

I was stunned. The chart is too old to show what news organizations have recently reported -- that we now have a NEGATIVE savings rate. 

What had turned us into a nation of spenders instead of savers?

The Federal Reserve pointed to studies that show the dip was due to wealthy families saving less of their income because their stock holdings soared in the 1990s. 

I found this to be even more distressing. So I am to assume that relatively poor folks like me typically save next to nothing? Ugh.

I can't wait to be the exception. Although I would be happy if many of my economic kindred bucked the trend with me as well.

Pause

Well, my debt reduction plan is having a bout of hick ups.

I took one of my dogs to the vet for annual shots. I also had to buy a year's supply of this combo flea and heart worm prevention medicine. Cost -- about $240.

Then there is the going away party I agreed to throw for a dear friend and colleague. 

To get rid of the budding flea population in my house and clean a few stains from my sofa, I rented a steam cleaner and bought the requisite supplies. Total cost -- about $40. 

Okay, these expenses can all be justified. 

I did, however, allow myself an indulgence this weekend. I broke down and replaced my living room chair. 

My dogs slowly destroyed it by doing that canine thing where they dig, then circle, before lying down. Over time, they have torn right through the upholstery. I flipped the cushion to prolong its life. After this side met the same fate, I put a used sheet over it. Then another one, to hide the deepening holes in the cushion itself.

So as I cleaned my house the weekend to prepare for the going away party, I took a hard look at my ratty heap of a chair and decided to replace it. 

I did set a limit -- $100. And I lucked out. My favorite used-furniture store had slashed its prices by half to make room for new inventory. I found a lovely white vinyl, mid-century piece that hopefully will be immune to puppy claws. 

As a result, this month my only payment to my credit card will be the $1000 I threw at it last week.

In a perfect world, I would have been able to slice another $500 chunk off the debt mound in a week. 

I shouldn't complain too much, though. Other people have true financial woes befall them -- such as a blown transmission or worse.

Here's hoping a few baby sitting gigs come my way this month, at least enough to cover the chair. 

I think it is time to put the banjo up for sale on Craig's List.

Score

This is the day that makes the battle to spend ever fewer pennies worth it. 

My pay check hit my account at the stroke of midnight. As soon as I woke up, I lobbed another sack of change at my credit card. It was particularly sweet today, because the sum was $1000.

If friends had told me a year ago I could pay that amount -- from one pay check -- towards my debt, I would have looked at them as if they were cross-eyed. 

It helps that I have no insurance payments for my car and motorcycle this month. Still, I haven't lived this frugal since college. I realize that my budget has room for a little more expense paring, but I feel it is an accomplishment nonetheless.

Nevertheless, the excitement is tinged with a bit of regret. While I have reduced paid nearly $10,000 towards principal and interest in 6 months, I can't help but think of my misspent years. 

I take solace in having saved at least saving some money towards retirement. I am staring down 40, though, and wish I had wised up a little sooner.

Puff puff

It is day nine for me -- quitting cigarettes, that is.

I wish I could say I did it save the $125 or so per month I was spending on them -- or annualized, about $1,500. At a pack a day, the habit was pricey. But no, I did it because my company was going to charge me an additional $100 per month, on top of my regular health insurance premiums, for being a smoker.

That was just too insane to continue -- $2,700 a year for a stinky vice? Um, no.

I have to take solace in my savings, because I am still fighting murderous impulses from the withdrawals. 

The money I did not spend on cigarette these past nine days, about $36, was enough to cover my grocery bill this week. Woo hoo! Take that, Marlboro Man.

Next, but not this month, will be my afternoon addiction of diet soda and chicken nuggets. There is only so much a girl can do at one time.

The drive to rid myself of debt is actually doing what no amount of health advisories could accomplish -- making me shed my poor food habits. Granted, I do eat really well for all other meals. No fast food or processed items. Breakfast, lunch and dinner are all made from scratch. 

Still, I do have my predilections. 

Black beans, please

After six months on a debt-reduction diet, I have mastered the cooking of black beans. 

This week the tasty legumes will again be my primary means of nutrition for lunch, along with some decent whole wheat tortillas. I am so thankful for cumin and limes. Without them, I could not regularly eat the penny-pinching staple for five-day stretches at a time. 

The task of winnowing my expenses to ever smaller amounts has grown easier with time -- for the most part. 

I did keep three luxuries -- a cell phone plan with lots of minutes, basic cable and high-speed internet access. I felt the cell phone was somewhat justifiable, since I have no land line. My roommate splits the cost of cable and internet, so that bill is not quite so onerous.

As for my gym membership? Gone. Subscriptions to the New York Times and Wall Street Journal? History. And my hair? Cut only once since July. I turned the visit into a reward for cutting my credit card debt in half.

I also have learned to do without other amenities. The large-screen TV I inherited from a friend broke in November. A repair or replacement is waiting until the debt is gone. For now, I am watching the 12-inch set in my bedroom. My personal laptop no longer has a functioning CD/DVD player. That, too, must wait.

I did allow myself to buy new running shoes with Christmas money I received. Now that I have quit smoking, I do not want to become a gordita. Vanity still occupies at least a small place in my life.

If only I could tame the most vexing of habitual expenditures of all -- the afternoon snack. I crave a Diet Coke from the vending machine as if it were oxygen and I an emphysemic. Cost -- $1.35. Equally pernicious are the chicken nuggets from the company cafeteria.  Those set me back $2.00. At least I can limit the chicken treats to once a week. The soda is another story. I drink it daily. Perhaps I should just buy a 12-pack, store it in a desk drawer and be done with it. 

It may seem like a petty battle, but the coke habit alone costs me more than $300 a year. I think I can beat the chicken nuggets. The soda, however, looks like trench warfare.

Maiden posting

I have never cared much about money. So realizing I had become a slave to the dollar was a bit of a shock.

My awakening came in June. Ten percent of my colleagues decided to leave the company in exchange for generous severance packages. Yet another upheval in an industry experiencing perpetual tremors from tanking revenues. Many had worked there for decades, so they left with a year's worth of salary. As someone hired three years ago, I knew I would not be so lucky should a quake hit directly under my feet.

I looked over my finances with the worst case scenario in mind -- a most unpleasant task. I owed more than $26,000: to bank for credit card purchases, to the federal government for my graduate degree, and to my father who bailed me out of a dog-related financial emergency. Meanwhile, a meager $500 sat in my savings account.

If anything happened to my job, the most I would receive from my company would be six weeks of salary, assuming the same severance packages were offered. This would give me little time to find another position in my field. My immediate options would be either grabing a tin can and standing on the corner or taking whatever work was available to pay bills. My career could easily disappear as I struggled to meet my debt obligations and feed my two little dogs.

Fortunately, abject fear is an excellent motivator. So is anger. I had let myself become enslaved to lenders, and I was pissed.

Thankfully, my father recently had given me an excellent book -- Dave Ramsey's Total Money Makeover. So I also had a plan. Now I am pursuing it with a vengance.

Since July 1, I have reduced my credit card balance to $2,800. I should have it paid off next month. Then, I will attack my student loans, which now stand at $11,600. Last will be the loan to my father. By the end of the year, I expect to be debt free. Next comes the goal of increasing my emergency fund from $1,000 to $10,000.

As I slog my way through debt reduction, I seem to have developed an obsession with money. I don't want to accumulate it so I can buy things. I actually have grown even less materialistic since I started this trek.

What I want is a decent mound of cash to ensure my freedom. I would like enough savings to say 'fuck you' -- to my company, should the need arise, or to my industry, should it continue to flail -- and not end up homeless. Then there are the dreams I still hope to pursue, such as motorcycling around the world. And also there is the fate I wish to avoid -- eating Alpo in my senior years because I managed my finances poorly.

Since endlessly talking about money can be a bore to friends, I decided to start a blog instead. Even if no one reads my postings, I think writing them will help me stay motivated and focused. It also can serve as fidget release for my new, non-smoking life, that I started on New Year's Day. Oh, how I wish cigarettes were free.