Friday, December 31, 2010

Sign up for Mint.com

Before going out to your News Years Party tonight, sign up with Mint.com and put a few of your financial accounts in. When 2011 begins, you'll be all set to watch your finances more closely, and get a better handle on where your money is actually going.

I got a free copy of Quicken Basic recently, and I test driving it. I'll let you know how it compares in a future post, but it supposed to do the same as Mint. It's even published by the same company, Intuit. I imagine it's better, since it's a paid product. Regardless of what you use, Mint, Intuit, pen and paper, it's impossible to save money if you don't know how it's being spent.

Signed up now? Good. Now go party!

Thursday, December 30, 2010

What I got for xmas

Here's a list of what I got for xmas and how it conforms or detracts from my Minimalism, and let's see if I can take my own advice!

Odd-size measuring cups - I don't need these to bake, but they're make some recipes go quicker because I won't have to measure twice.
Books to read with Viola - Books are great! And when Viola moves up in age, we can give them to her younger cousins to enjoy.
Blocks to play with Viola - I'm a sucker for blocks. Now Viola and I can build temples and play gods and smite the infidels. My favorite game.
Wine - Consumable. Not a bad gift.
Mazipan - I eat sweets so rarely, but I have a soft spot for this almond sweet.
Coffee - Also consumable. And organic!
Weather Station - Completely anti-Minimalist and extraneous--and currently non-functional. Grrrr!)
Lots of shatter proof dishes and plates - Viola likes to throw her dishes (sometimes on accident, often on purpose). These are practical.

All of this stuff came in packaging which I had to either recycle or throw away. Even in our household of three we only need trash pickup every other week, but at xmas we start looking like every other American. Our trash can was full the Monday after xmas, as was the recycling bin (to be fair, most of the waste came from the packaging from the new dish washer, purchased at the last minute because the old one died right before our house guests arrived. Grrr.)

One way we reduce on our waste is that for years we've been reusing our xmas wrapping. We have several sizes of draw-string bags that at the end of xmas we re-distribute and save for next year. Advantages abound, but the obvious reduction in waste, wrapping time, and paper recycling is enough.

To make room for all of this, I'm going to have to sell some stuff on craigslist and give other stuff away to Goodwill. This is way more efficient than paying for public storage. Next week I plan to go through our cabinets and see what utensils and gadgets have lain fallow for several seasons. Uncluttering is a process, not a goal. Earlier this year I got rid of a set of plates that was taking up precious storage space and were never used; there's no reason to think I can't do that to more stuff.

Wednesday, December 29, 2010

Food and clutter

Your New Years Resolution (if that's the sort of thing you do) should be to eat in more, eat out less. Refer back to my post on Pizza. By doing this, you'll bank more money, eat better, and thereby be healthier in body and finance.

The only thing that eating in is more expensive than is eating fast food. Fast food is ridiculously cheap and subsidized by my taxes (grr, thanks a lot Farm Subsidies!) If you eat a lot of fast food, reduce it to four times a year (or zero). That stuff is bad for you. The average US household burns about 7% of their income on eating in. The French, in contrast, are at 14%. Salaries are lower in France, so it might be hard to push the US average up to 14%, but if you're closer to 7%, try to push it up to 10%.

What's that? The Minimalist is advocating spending more money? No, I'm advocating reapportioning the slices of your income pie. Spending more on food does mean that something else will have to give, but that could be driving less (biking or walking more or telecommuting), turning down your heater or hot-water heater, buying fewer new clothes and more thift store items (you'll look trendier :-), and the big underline of all Minimalist advice--live within your means. Emphasis on live. You won't have much fun with Type II diabetes, heart disease, and hypertension, no matter how much money you've saved. And since Americans also tend to spend what they've got (our national savings rate is terrible), we're eating bad food and buying useless unused crap to clutter our garages.

More food, less junk. You can do it! I even found that once I started eating better, it made me want to even more delicious food. And the more stuff I give away, the more I want to unclutter my life.

Tuesday, December 28, 2010

Reduce your junk mail

You can reduce the amount of catalogs and direct mail that you get in the mail (in the U.S.) by registering with dmachoice.org and catalogchoice.org. I opted out of insurance of and credit card offers. The next time I get a catalog, I'm going to use the site to get off the list.

Why do this?

Well, catalogs are wasteful. If you're reading this, you're "wired". Chances are you buy, sell, and trade online, with ebay or craigslist, or from an e-retailer. Snail mail belongs to another century.

Still, why?

Paper is wasteful, especially if it just goes into the recycle bin. Minimalism isn't just minimizing one's financial footprint, it's your eco footprint as well. In other words, don't kill trees for no reason. Kill bits instead :-)

Monday, December 27, 2010

Buy it on craigslist

After sorting through the donations and what you can convert to cash, you still didn't get the gift you want? Buy it on craiglist or another online vendor! Somebody out there got electric socks and doesn't want them, and now's your chance to get them on sale, nearly new, and local, too!

Sunday, December 26, 2010

Sell it on craigslist

You left some stuff out of the Goodwill bag, didn't you? Well, you have a second chance. That waffle iron is pretty cool, but the old one works really well. Somebody out there really wants that item, and it's the day after xmas. Take advantage of it. Post it. Sell it. Pocket the dough for something really important (like a new smartphone, gosh I'm guilty of conspicious consumption this year!)

How to sell on Craigslist:
1) Take a digital photo of the item
2) post it and ask for more than it's worth
3) wait for someone to lowball you
4) graciously accept the offer, on your terms
5) when the buyer flakes, sell it to the next guy who wants it. Never wait more than 5 minutes for a buyer. If they flake on you, they lost the item.
6) feel free to over commit to more than one buyer at a time. First one to show up gets the item. I don't care if it's your best friend who promised to buy it, sell early, sell often and don't wait for slow pokes.

Saturday, December 25, 2010

Give it away

It's December 25th. You've opened all your presents, and drank all your nog, now what?

Give all your presents away.

Say what?

Well, give most of them away. You won't need most of that stuff anyway (except the pocket soduku and the warm socks, mmmmm, warm socks), and you're running out of time for charitable deductions for 2010. Assuming they're true gifts (i.e. you didn't buy them), they're pure gold in your itemized 2010 Schedule A. As long as your donations don't exceed $166,800 ($83,400 if you are married filing separately), then there's no reason not to itemize.

While you're at it, look through your cramp living quarters for other non-essential goods. Tammy and I give to Goodwill every other month. There's stuff lying about that you don't want, much less need. (Easy candidates include anything you tripped over to get to the computer to read this post). Free up your life. Free up your home. Live free!

Tuesday, December 14, 2010

The Twelve Days of the Minimalist

The day after xmas The Minimalist will begin a contiguous twelve day series on Minimalism, culminating in the celebration of Twelfth Night.

The first day of xmas is December 25th. Stay tuned!

Monday, November 22, 2010

Federal Income Taxes: don't underpay!

Due to an error on our part, we weren't withholding enough federal taxes this year. What happened is this: Last year when Tammy went on maternity leave for six months, we changed our withholdings on her W-4 to reflect the fact that she'd only be working part of the year. When 2010 began, we didn't change it back, and thus we only withdrew enough taxes per pay period as though she were making half as much as she does.

This is not good. This used to be not too terrible. If we'd underpaid prior to 2008, then on April 15th, we could write a check to the US Treasury for the difference, and all would be well. This changed in tax year 2008. Now if we underpay by more than %10, the IRS can extract a penalty. (There are exceptions to this penalty, but it's reading legalese, and requires a small business, if interested, see this link).

I know the IRS has their W-4 withholdings estimate (for W-2 wage earners), but it's never quite that simple. I'd like something more accurate, so I do the following:

Total Income - Deductions = Adjusted Income

Simple, right?

Total Income is how much you're going to make in 2010. For example, let's say it's $100,000 (not our actual income). This includes interest and dividend income that I might make from investments.

Deductions are 401(k) and IRA contributions, as well as mortgage interest and donations made to charities, healthcare, and property taxes. If you're not itemizing your deductions, use the standard deduction.

I owe federal taxes on the Adjusted Income.

In our example, let's say we have $20,000 in deductions and we're itemizing. That means that our Adjusted income is $80,000 (not our actual AGI).

To figure out federal taxes owed on your adjusted income, I determine your filing status (married filed jointly, married filed separately, or single), then look up my tax per bracket.

I'm married filing jointly. Then according to the tax table, we owe:
10% bracket - $1675.00 (Taxes on income between 0 and $16,750.00)
15% bracket - $7687.50 (Taxes on income between $16750.00 and $68,000.00)
25% bracket - $3000.00(Taxes on income between $68,000.00 and $80,000)

Subtotal: $12362.50

We have a child, so the tax credit for one child is $1000.00. Thus, the total tax becomes: $11,362.50

Make sure that you're within %10 of that number on December 31, 2010, and you (probably) won't get penalized. Of course, it would have been better if we'd gotten it right the first time. This flow chart scares me and I'm hoping TurboTax 2010 will help me through it.

If you buy, sell, and trade stocks, this math gets harder, as proceeds from stock sales are taxed differently than regular income, and I'm not going to cover that here because it makes my head hurt to estimate that stuff.

Thursday, November 4, 2010

Kill your TV

Let's keep this one short and simple. Kill your TV. If you're like me, you'll physically drag it to the dumpster (or better yet, to the SMART Station and drop it off as e-waste).

True-ish story. The last thing I watched on live broadcast on my television were the tragic events of September 11th, 2001. My TV was on the fritz anyway, so it ended up dumped soon there after. Yes, don't kill the messenger, I know, but the messenger was hobbling and needed to be put out of my misery.

The time I spend not watching television is amply made up with reading books, writing books, writing blog posts, reading blog posts, and watching Hulu and Youtube.

We still have our Netflix account, and at < $10 a month, it's much cheaper than cable or any of the television packages available. AND I only pay for the shows I want to watch.

My library card is free.

Monday, September 27, 2010

How to get married

This is going to strike at the heart of many of my readers, but there's a right way to get married and a less than ideal way, at least according to The Minimalist. Let me first and foremost state that I have the privilege of presiding over three marriage ceremonies, and am thankful for each experience. So the first lesson is:

1.) Don't get married in a church, by a priest.

Why? Lots of reasons. Most importantly, marriage is a secular institution perpetuated by states. I find it weird that many people let someone they've never met teach them the rhythm method of birth control as a prerequisite to get married in front of a statue of a 1 CE execution. This secular paganist thinks that's just plain off the bizarro chart.

Also, it's really, really cheap.

2.) Get married by your friend or local magistrate.

City Hall rocks. Show up, raise your right hand, and boom, you're ready to move on to nuptials. Just put your name on the roster and the next available slot is yours. Really, do you need months to plan out flowers and decorations and cummerbunds for the friggin' chairs (!!!) just to say that yes, this other person is pretty cool and I can live with a legal contract that binds our fortunes and descendants (should we have any) together in a rather trite way, then sure, by all means, blow it on Mission San Diego with a get-away with a ballpark stop-over to watch the Angels lose and spend way to much on alcohol you don't even like. By the way, the wedding hasn't even begun.

I think I was off on a normal there, hang on, yes, ah, I see where we're at now. Friends are nice, too. They're fully capable of reciting lines, and may even provide quaint anecdotes. Plus, they're super cheap. My rate to be deputized for a day (less relevant county expenses): one dinner at a nice restaurant; the wine should be red. And I'm retired, so don't ask.

3.) The Wedding Industry hates you.

It has to be said. There's no way around it. David's Bridal personally hates you, the bride. The Men's Warehouse personally hates you, the groom. The are, however, in love with your credit card, and will graciously put you into high interest debt if you let them anywhere near said card. They want your money, not your happiness. It's an insane waste of money just to rent a tux.

4.) It's an insane waste of money, and your friends won't forgive you.

Talk to anyone whose had a "BIG WEDDING" and they will tell you how hard it was to keep their mother happy, their maid-of-honor happy, their groom happy, their in-laws happy (for non-white American weddings, add family lineages for which we have no adequate translation in English). F that. $50,000 in debt so you can feel bad about yourself? No way. I've paid off student loans bigger than that that didn't belong to me and at least I didn't feel like a cheap date.

Here's the financial run-down of a wedding done right. The rates are for Santa Clara County (where I live) and are a bit high relative to other counties. It includes a nice dinner after getting married at the couple's favorite fancy restaurant. Invitee's to the ceremony include close relatives (parents, siblings). After the ceremony, proceed to a nice park for pictures, then to the restaurant. Send the family home, and start the party at the couple's place of residence.

New suit $300.00
New dress $500.00
Marriage license $79.00
Marriage ceremony $80.00
Fancy post-nuptial dinner $100.00
Pictures by a competent relative $0.00 (Digital age is so cool)
Evite for party $0.00
Beer and wine for party $200.00
Food for party $100.00
Excederin $2.00
Total $1,361.00

That's the upper bound. Feel free to be even cheaper on whatever you want to skimp on. $1,300 vs $50,000.00 plus the loss of your best friend (for abusing her as the maid of honor). Your choice.

Friday, September 24, 2010

Interest rate change

Thanks to Mint, I was notified of an interest rate change on my ING Direct Electronic Orange Savings Account. Their rate dropped from 3.30% to 1.10%. This sucks, but there's nothing I can do about it.

Their 1 year CDs only get 1.25%, so there's not much point moving it there. My CD I currently have with them is coming up to maturation in December, and it's at 1.75%. Shopping around though, I can't find much with higher interest. If I'm willing to lock in for 4 years, then I can find over 2%, but that's not a commitment I'm willing to make yet.

There's no lesson today, just that it can pay to be diligent, and sometimes it doesn't.

Sunday, September 5, 2010

Online Banking

If you're not using your bank's online banking, you're missing out. I do my online banking through Bank of America (that is the bank that holds the bulk of my accounts, including my small business accounts). I have a credit union, too, and I keep money with them, but their online banking and their entire online banking experience feels like GeoCities 1996. BofA, for as much as I hate their otherwise odious business practices, have an excellent online banking interface. Props were props are due. Well done.

The pros far outweight the cons.

1. Free online bill pay. Stick it to the post office, forever stamps be damned.

2. Immediate account access. I catch fraud this way, often before my bank does. As much as I'd love to buy a pool table (no space, no cash for it), I didn't buy it and I called the bank right away and the charge was reversed and new cards were issued.+

3. Account transfers. Loves this. I move my proceeds from my small business to my regular checking seamlessly without having to step into a bank or step up to an ATM.

4. Automatic Bill Pay. I used to never use this feature, but now that I have Mint monitoring my accounts, I feel safer setting up a few auto bill pays, like my DSL (It's fixed at $34 a month) and my credit cards. I'm still working out my comfort level with this one, but as long as I know what I'm paying and it comes within my pre-set Mint budgets, I'm doing OK.

5. Email statements. So much fewer paperwork to file. I set up my email to filter on the bank statements and file them away appropriately, usually never to be looked at again unless there's a dispute. (Or for my business checking, I print out the yearly statement and punch all that into TurboTax).

There are a couple of downsides:

1. False sense of security. It's still the banks. They can still screw you out of your money. Diligence and Rule Zero.

2. Inattentiveness. If I take a few weeks off from Banking (vacation, sickness, just sick of it), then I run the risk of missing something important or blowing a budget or overdrafting. True, this is a risk with paper accounting too, but I think the "out of sight, out of mind" factor runs higher in the tubes.

If your Bank or CU offers online banking, set it up and see what, if any, of the above features are right for you.

+ The bank still screwed this up, so BofA lost a couple of points for penalizing my credit for this fraud. It took three calls to the bank to figure out what was going on. Always Rule Zero: Banks are not your friends.

Sunday, August 29, 2010

How to vacate

If you've managed to save a lot or even a little, you're probably in a position to take a vacation. I'm currently constrained to the kind of vacations that one can take with a one year old, so my needs are much different than a single male or a couple vacationing without children in tow.

I only recommend vacations once you're out of debt.

Reminder: debt is defined by high interest luxury expenditures: car loans, credit cards, HELOCs, and any money you owe Vito. Mortgages and student loans are still technically debt, but they'll be with you for a long time and can be safely considered monthly expenditures.

The kind of vacation is up to you. And your budget. If you've got a ton of cash to burn, exotic locations and beach resorts are probably OK. But if once you buy your airfare and hotel, you're looking like you won't be able to eat or even rent a snorkel, it's time to think like a Minimalist.

1. Eat in. Always eat in, even if you're a billionaire. When Tammy and I took our babymoon in Kauai, our condo had a kitchen. We even got the discount card for the local grocery chain.

2. Off season is cheaper and more fun. Sure, it's hurricane season in Mexico, but the airfare was cheap, as were the hotels. Sure, an actual hurricane hit, but now I can say I weathered a hurricane. The most memorable experiences never happen in tourist towns during peak season.

3. Find appropriate lodging. Make sure it has a kitchen. On Tammy and mine's recent roadtrip down to Socal and back, we lodged only at the houses of our family. They have nice kitchens, of course, and you can repay your kind hosts with meals and chores. Or you can reciprocate when they come to the area. Good friends are also nice for accommodations, but I find that they have to be really, really good friends or I feel bad about imposing.

4. Don't buy trinkets. As a kid I remember loving to buy a cheap souvenir at all the places we visited. But it was totally unnecessary. They just wound up as bookends and are probably in the land fill right now. Souvenirs can be as simple as a jar of sand or pretty rock or a shell (I like the beach, can you tell?), or a picture, or a memory. Practical clothing is OK, and I still remember my trip to Buenos Aires whenever I wear my El Cid shirt.

5. Think short and simple. This is especially important for travelling with children. While the rappelling adventure through la selva Costa Rica sounds neat, getting your toddler to Costa Rica, much less the grueling, long, and very scary bus ride to the summit isn't worth it. Wait til they're older, then drop them with Grandma and go without them.

6. Avoid packaged tours. They'll only take you to the tourist destinations and the tourist restaurants and the well-beaten path. Stay in hostels and make new friends (even possible for folks travelling with kids). Get to the museum at opening time on free admission day and not only will you beat the crowds, you'll have money left over to splurge at the grocery store.

7. When travelling with young children, think local. Just like our produce comes from farms within 100 miles, so too can our weekend getaways. For instance, we're going to rent a cabin in the woods near a beach town. We can get there in under an hour and still feel like we're in a whole new country.

Plan your vacation in advance, even if it's just a sort-a kind-a gonna start in Costa Rica and finish in México two months later. For the young and unattached, a brief outline will do, and a good travel book (Lonely Planet is the publisher we use). For the attached and/or travelling with wee ones, specific destinations with naps timed to flights and car travel are a must. And most important, plan for the unplanned. Be prepared mentally and budgetarially to spent an extra night in any destination to a) recover from a stomach bug (Arles, France), b) not expose your newborn niece to your daughter's stomach bug (San Luis Obispo, CA), c) rest up from sheer exhaustion from an aborted trekking expidition through the Pyrenees (Girona, Spain), or d) escape a hurricane (Mérida, Mexico).

Travelling through Central America for two months with a backpack seemed hard, until I tried a one-week roadtrip with a one-year-old child. The latter was so much harder. We could always just stop in a town for a few nights to recharge, but with Viola we have to always be "on" and the entertainment options have to be geared towards duck ponds and swings and slides. My point is, know what you can handle--that means budget, distance, comfort, and amenities. If you need A/C in Léon Nicaragua because you can't take nights where it doesn't go below 90°F, then well, so be it, make sure you've got that in the budget somewhere ($40 vs $10 cada noche en 2002, FYI). If you need a toddler bed, that's going to cost more (which is why we have more family-oriented vacations right now).

Next time, I'm going to talk serious again, specifically about online banking. Why should you use it, and how to (again) make sure the banks don't screw you.

Sunday, August 22, 2010

Overdraft fees

The minimalist has been quiet for a while, and I apologize. I promised a post on taking cheap vacations, and since I'm still recovering from the one we took, it's taking a lot to sacrifice a nap and post this.

Recently the banks rules changed and they have to ask your permission now if you want overdraft protection (imagine that, the nerve). Every bank is handling it in a slightly different way, like dropping overdraft fees or sending letters explicitly asking its customers to opt in.

What this means for you you is that if you have overdraft protection, make sure you're not paying for it! Remember, fees to the bank, for what ever reason, are bad (they already have your money).

If you don't know already, overdraft protection is what happens when you accidentally drain your checking account below $0.00. Two things can happen. The bank can loan you the difference, or the difference can be pulled from a different account (savings, say).

If it's the second case, make sure they're not charging you. Loans always cost money, so in the former, you might have to eat the fee. In the best of all possible worlds, you never strain your checking account to the breaking point, and you'll never have to worry about a fee.

Still though, if you opt in (no reason not to, I opted in), make sure that you won't get an overdraft fee if the account is linked to your savings. If it is, complain, and find a new bank.

Monday, July 19, 2010

Book Review: Possum Living

Possum Living: How to Live Well Without a Job and with (Almost) No Money, by Dolly Freed

'Possum' means in Latin 'I can'. In Spanish it becomes 'Puedo,' in French 'Je peux', in Italian 'Posso'. Possum, in its Romance sense, is the subtext of this manifesto, and yet Freed asks us to think of the animal properly known as the opossum. I think 'I can' is a better description of her advice, as I don't want to meet my end as roadkill.

This book is Do-It-Yourself manual on how to escape the money economy, even if it means occasionally behaving like an opossum, like dumpster-diving. It talks about subverting property law, how to make moonshine, raising rabbits for food, and never buying new clothes again.

This is a seminal work in Minimalism. It's blog-like instructions on how to live large on almost no money. It's quirky, full of bad recipes and bad tax advice (much like this blog), and a few good ideas (unlike this blog), like how to raise rabbits and get others to do your business for you (Hello Amway!).

And Freed did all this in 1976! And it was published almost underground. The first blog. The first blow against the Traditional Media. To that, I toast a glass of homebrew, and wish I had I the audacity to publish my own thoughts on the failure of mod life in 1995, but alas, Nirvana beat me to it.

To bring the reader up to speed, Freed's parents abandoned a successful candle-making business to buy a house in rural Pennsylvania. Her mother grew tired of living off the grid and left Freed and her father to fend for themselves with just the house (she took Freed's little brother and the car in the divorce).

Freed's first lesson is to not be like the "welfare chiselers" who breed like flies (Who knew that Reagan pulled his welfare queen myth out of the pages of a teenage homestead hooligan's manifesto?). That' very audacious admonition from someone who's not even eighteen and had yet to do more than just leech off the money economy. Her possum living was premised on three things: wealth, naivetée, and property. If you've got 'em, you're ready to live the leisure life off the grid in rural 1970s PA.

First: Wealth. While 'Real America' was trying to figure out a way to afford food and buy gasoline, Freed didn't own a car--so much the better for her--though she didn't get out that much. Freed didn't know it, but she was lucky--very lucky--to not be born poor. Her baseline was a good place to start going off the grid.

Second, naiveté: She seldom admits that she couldn't live off of $5000 a year if it wasn't for their homestead, but without it, she and her father were nothing. She goes on to advocate tax fraud and using intimidation instead of lawyers to settle debts. The Minimalist advocates living within ones means and paying one's taxes (afterall, I love the Internet, which was invented by Al Gore and paid for by the government). Dolly Freed of 1976 was actually living an unsustainable lifestyle and would have been reduced to true poverty in a few more years if she'd kept it up. However, hers is a lesson in how long one can push the bliss envelope. Longer than I thought, apparently.

Third: Property. Nice homestead, bought and paid for with the money economy. While I applaud her effort to show others how to scrimp and save enough to buy their own arable land, it's impractical now as it was in 1976.

I don't think I can suggest repeating this experiment in the 2010s. Homegrown food is more expensive to cultivate and it's much, much cheaper to buy mass produced imported goods and edibles. If you aren't already Amish, you're going to find it difficult to build a house even if you have the carpentry knowledge and an arable plot to build it next to. Nixon made food so cheap that the poor are the fat ones in America, not the rich.

The Afterward: This is the best part of the book. We learn that Freed went on to work for NASA, a government organization that relies on a populace paying it fare share of federal taxes. She learned to love the taxpayer afterall! Yippee! Also, she currently lives in Houston. With A/C. That is the antithesis of Possum Living. So much for sustainability.

The Minimalist is left with a dilemma. I don't know whether to canonize Freed or burn her (both?). Her advice on cooking and slaughtering is the opposite of what I love. Her advice on used clothing shopping is spot on. She did both and lived well. More people should grow, raise, kill, and cook. More people should stop buying new clothes.

I don't eat meat because I won't kill an animal and I don't like the environmental impact it takes to raise chattel to consumption status. Freed points if you didn't kill it, don't eat it. So far, so good. But then she goes Godwin on page 121: if vegetarian is supposed to about living placidly, how do we explain Hitler, a vegetarian? You know what else Hitler was? He was white, a German, a painter, a Christian, and had only one testicle. Which of those things, in any combination, make one capable of genocide? As a vegetarian, the only populations I've wiped out are that of cockroaches and squirrels, and they mock me when they come back with a vengeance. More simply put, to note false correlations between eating habits and maniacs is an exercise best left for right-wing bloggers, be in 1976 or 2010. She likes meat, so what? But vegetarians aren't Hitler and it's too bad this stupid passage made it into print.

That said, she got a lot right, and these are the points I think come out strongest and are most important to The Minimalist:

1) Your personal fortune is not a measure of your success. If you've got three kids, a condo, and you don't hate your job, congrats, you've arrived. If the Jones make you jealous, you're petty.

2) You can live with less. You don't need broadcast TV. Even PBS is selling you Elmo. The television--contrary to it's inventor's intentions--is made to make people feel bad about themselves in the guise of adverts, dramas, documentaries, or infomercials, thus necessitating perpetuation of the consumption culture. You're only freed when you learn to genuinely like living without stuff.

3) You can live with (almost) nothing. While I'll never condone the killing of rabbit, the qualities you need to thrive are smaller than you think. The Magnetic Fields nailed it: Love, Music, Wine, and Revolution. Mrs. Freed at eighteen had it all, and she lived in bliss. The joy of living Off the Grid is under-rated, and Mrs. Freed did it for a few years without gods or guns.

The Minimalist is all about reducing one's dependence on modernity, specifically, modern American consumptive culture. Possum Living is the same goal, but Freed is taking a different path.

Early on in the book we're treated to Diogenes, an Athenian who lived at time of Alexander the Great. He lived in a barrel and shunned material wealth. He's the patron saint of Possum Living. When offered fortunes, he turns them aside in favor of a nice spot to tan.

The Minimalist's Athenian patron is Socrates. The philosopher went about questioning and challenging his society's basic assumptions on such trivialities as what is takes to be happy. The Minimalist asks these kinds of questions of too.

Both paths are about discovering the joy of living with less so that we can enjoy more. But Freed and I diverge because I think Diogenes was a free-loader and a crank. He lived in a barrel, saw only Athens, ate only Athenian food, shat in Athens gutters, and died in Athens's streets. He gave up absolutely nothing and only had a nice nice suntan to show for it. Socrates, on the other hand, started off with more, and ended up throwing out the stuff that impeded his happiness. He had less, but enjoyed it more.

Freed is a Diogenes when she wrote this--a welfare chiseler like the ones she loathes, doing nothing for her own self-betterment, and leeching off the free society that gives some of its citizens that choice. Later, she learns a little more and becomes a Socrates. Civilization exists because those who came before us wanted to make life better, and the least we can do is better ourselves, and hopefully better our world for the next generation. Life is for learning, not sitting like a pickle in a barrel.

I'm glad Freed came out of her shell. It happens first as she wrote the book. Then sought out a publisher, then went to school, got a job, and took her formative life lessons with her. It's funny that she considered herself lazy, but she was anything but. She was as industrious as the money economy folks she abhorred, she just literally made bread instead.

Freed doesn't live in a barter economy anymore. We need cash to buy things we cannot make. I try to buy only what I need, and like Freed, I'm always looking for things I don't need. In a way, I have it worse than her, as I have the option to downgrade, where it was foisted upon her. But with the money I not spend on plastic crap, or gas driers, or entertainment centers, I build my reserve capital.

The Minimalist thinks that we should spend our capital and feel good about it, not out of guilt or piousness or because we think because we work hard that we're owed (a theme that comes up often in the book). I personally like vacations. And hats. Freed's vice seems to be refrigerator magnets. To each their own.

Thursday, July 1, 2010

Spend less, own less

The best way to save money is not to buy anything. If you can, move under a rock, eat moss, and bathe in the river. While probably fun for an afternoon (or if you're a toddler, that's called livin'), it just won't fly. Sometimes I want a side of rice to go with my lichen.

But after all the basics are out of the way (to recap, the basics are: food, shelter, and entertainment), how does one minimalize?

Here are some examples of things that I don't buy, don't own, and don't need. Some of them make me think I should rename this blog The Luddite, but remember, I have high-speed Internet, a mobile phone, and a laptop that will smoke yours!

1) Microwave: Completely extraneous. Food heats up wonderfully on the stove, and while quick is nice, the therms burned on your stove to reheat your leftovers (remember to always have leftovers! See previous post) cost less in energy and micropennies than the nukerwave oven. Also, some foods just don't microwave well. Lastly, you've just cleaned space on your counter for a KitchenAid Mixer, a much more worthy appliance.

2) Cable television. Ten-thousand channels and nothing on. Between Netflix and Hulu, there is nothing I can't watch. And I just discovered ESPN online, so I can watch World Cup Live too! Our television is old, donated, and the picture lousy. The DVD player is much the same shape. But it fits nicely in our fireplace, so it's out of the way and fills the brick void endemic to 1950's suburban architecture.

3) A fireplace. Put a TV in it. None in our burbs were designed to actually heat the house. They leak most of their energy to the garage or to the aether. Seal it or re-purpose it. Don't put wood or gas in it in the hopes that it will add ambiance or somehow heat your home (This doesn't apply if you have a real fireplace. If you don't know what I'm talking about, then you don't have a real fireplace.)

4) Kitchen gadgets. Simpler is better. You don't need a Slap n' Chop taking up space when a good sharp knife will do. Every extra tool sold as an infomericial or looks like a candidate for one is out of bounds. You don't need it if it's made of plastic. It's probably dull, and if it isn't will dull before you decide you don't need it. Own one or two sharp knives, an electric mixer, and some nice mixing spoons. Justify everything else to your Id.

5) New clothing. I buy everything I need used or on sale. I'm so good at this I just had to clean out my closet because I had too much (and I lost weight).

6) Processed food. I lose more weight and feel better about myself by eating high fat and high protein food that I've made myself. The price difference is worth it even if the health benefits don't appeal to you. Regardless, eat less sugar, and you're save on gas (less meat to haul around).

7) Meat. Eat a lot less of it. Veggies are cheaper and healthier. This pretty much goes without saying, but the meat lobby has been very successful convincing everyone that chicken tastes good (it's disgusting) and that pork and beef should be at every meal (this correlates with the rise of heart disease in this country). Cut back even if you're not a vegetarian. It's burning a hole inyour pocketbook as well as your gut.

8) Books. As an avid reader, I used to buy all my books. But the library has so many more than I could possibly ever collect. Checking books out saves me lots of money and I get to read the same amount and discover more just browsing the stacks!

9) Gasoline. Driving less means less money spent on fuel. Viola and I enjoy many activities that are within walking distance of the house (the backyard, the park, Mitch's house with the chickens, etc.) When we drive, we try to stay local. Also, working from home (i.e. taking care of Viola) has saved me lots and lots of money just because I don't have to commute to San Mateo everyday anymore (conversely, it's offset by the lack of income).

10) Tools. Make friends with people who have what you're missing. I might have a drill press, but Mitch doesn't. But if he needs one, it's here. Mitch has the miter saw, which comes in very handy. I don't need all the tools, and now that I have a carpenter friend, I don't think I'll be buying a new tool for a while (thanks Tim!)

Next up, how to vacation with all that money you've been socking away!

Sunday, May 30, 2010

DIY interlude: ghee

Two years ago I was turned on to the excellent cooking properties of ghee, sometimes called clarified butter (though there is an argument that they are different which we'll leave aside for now). Suffice to say, it's excellent for frying eggs, it's an essential ingredient in Indian pastry, and it can pretty much be used anywhere vegetable oil is called for. It's a natural product (made from cow's milk), unlike vegetable oil which is made from the laborious chemical extraction of the inedible parts of corn and soy, and it tolerates high heat very well without smoking.

However, it's not that cheap to purchase. Here's a table of various outlets and their prices.
Organic ghee at King Arthur Flour $14.95/13oz
Organic ghee at Country Sun Palo Alto $22.99/16oz
Non-organic ghee at Vic's Berkeley $5.99/14oz

I can buy organic unsalted butter at Trader Joes for $4.79/16oz. In one hour and fifteen minutes, I can convert that to 13oz of ghee using the instructions at this YouTube video by David Bruce Hughes.

Since one hour and fifteen minutes fits just inside Viola's afternoon nap schedule, I made ghee the other day from 48oz of butter. It resulted it 40oz of ghee, and the leftover 8oz of milk solids are great additions to any soup where fat is called for (pork fat, duck fat, baby fat, no j/k on the last one, I hope). Freeze the milk solids, don't refrigerate. Learned that one by experience. Ghee can be refrigerated indefinitely.

And it's easy! If you don't have time to watch the video (it's a funny video, a topless white fat man with vedic bling making ghee in Santiago, Chile. He's great!), here's the run down:

Need:
16-N oz. of organic unsalted butter
Two pots, each large enough to hold your butter
laddle
wooden spoon with a flat edge
sieve
enough mason jars to hold your ghee and solids

Do:
1) Put your unsalted organic butter in a pot and slowly melt it over low/medium heat, stirring occasionally.
2) Once it's melted, turn the heat up to medium so that butter simmers (don't let it rapid boil! Slow boil OK). White bits will start coming out of solution and float to the top. When enough collect, skim them with a laddle and put them in their own jar. These are the solids.
3) Eventually, very few solids will come out of solution, and the butter will start to clear up (it happens quite quickly, but if the heat is low enough, you won't burn the butter if you miss it). Lower the heat and transfer the butter through the sieve into the second pot. The sieve will collect a few of the larger solids.
4) Put the the second pot on medium heat. While it comes up to temperature, quickly clean the first pot and the sieve. Dry them well, and keep them at the ready.
5) The butter will start to "boil". That is, the water in the butter evaporates off. You want to get all the water out. You'll know when the water is all gone when a) the butter starts to smell like burnt nuts, and b) when you dip your wooden spoon in, it boils and the butter does not.
6) Before you burn the butter, quickly pour it back through the sieve into the first pot. Wash and dry the sieve one more time, then pour the ghee through the sieve into the clean jars.
7) Do not refrigerate until the ghee solidifies. It will be liquid on your counter for some time, even when it feels cool to the touch.
8) Refrigerate the ghee. If you're like me, you've just made 40oz of the stuff and that will last me many months. If you're not going to bake with the solids right away, put them in the freezer.

As a bonus, your kitchen will smell yummy for a couple of hours :-)

Thursday, May 27, 2010

Banks: not your friend

Way back in my third post I spoke of the the zeroeth law of banks: they are not your friends. Maybe at one time in the mythical past, banks were trustworthy institutions that gave out lollipops and kept your doubloons secure in an airtight vault. No longer. Many banks are now borderline evil.

Then there are things our grandmothers wouldn't recognize as banks. CitiGroup, Bank of America, Goldman Sachs, Lehman Brothers, Washington Mutual. These mighty financial institutions appear to operate like banks. Make deposits, earn interest, withdrawal funds and apply for loans, but banks they are not. They are extra-legal cartels whose sole function is to steal your money--legally, ha--and convert your tax dollars not into supertrains but into more creative ways to steal your money.

Competition is cannibalistic. Our Treasury Secretary used to work at Goldman, so of course they got tons of TARP money. But Lehmans and WaMu were given the shaft, and put in the feeding pool so the other sharks could devour them.

It's a scam. It's legal. And they're in charge, regardless of which political party is in power. e.g. our current Vice President (while a Senator) wrote the new bankruptcy law that was supposed to make it harder for regular Janes to file for bankruptcy. It backfired spectacularly, and now people just walk away from their debt (houses, credit cards, etc. They can't confiscate what they already own, hehehe). So the banks again went crying to Uncle Sam to give them relief, and the Bush administration gave them shittons of money because they got their fee-fees hurt. Waa.

Where does that leave us? We're not born into banking, or have Ivy League degrees (Trivia! can you name the last President not to graduate from an Ivy League school?) We were born into the class of people who do all the work and pay their taxes so that maybe our kids can go to a decent public school if there's money left after the bank bailouts and B-52 bombers.

The banks are not your friend. Don't treat them like one, and you won't be disappointed when they try to steal your money.

1) Bank local. Find a credit union. Smaller is better. You don't have to keep all your money with your CU, but don't hesitate to use their checking and savings for keeping a lot of your money safe. Their rates are better, and when you call them up on the phone with a problem, you're talking to your neighbor, not a call center in Georgia. Obviously, FDIC insured banks only. If you can't join a credit union, marry someone who can.

I follow a blog that watches what banks get 'eated' by the FDIC on Friday (and it's always on a Friday). Credit Unions come up rarely. Regional banks come up often and never the big banks. For a great story of how the FDIC takes over a bank, I recommend act two of this This American Life episode.

2) No fees. Ever. You do not need to pay your bank for the privilege of keeping your money safe. If any account requires a fee, don't open it. Interest should acrue, even at a low value. They should pay you for the privilege of being able to squander your money on high-risk mortgage derivative products.

3) Do not let them sucker you into buying identity theft protection. They are required by law to do it anyway, so don't give them $12.99/mo. to do what they already have to do. When fraud is found against your account, call them, explain the fraud, tell them to reverse the charges, and when they say "would you like fraud protection insurance so this doesn't happen again?", tell them, "no, you authorized a transaction in my name without verification, that's your problem, not mine."

4) CDs can be fun! But in today's market, interest rates are so low you might need to take out a one year CD to make it work your while. If you can sock $1k away (or more) for a year, try a CD. I've pulled money out early from a CD, and the penalty was about half of my interest, so I didn't lose any money, and it was readily available when I needed it.

I don't want to endorse any specific bank, but I like how ING Direct handles their CDs. Interest is paid into my regular savings account and is available for immediate withdrawal. For balance, let me say that their rates used to be better, and I've found CDs at Bank of America with competitive, shorter terms rates. However, at Bank of America the whole sum was locked up tight until the CD matures. My CU has lousy rates right now (and too many fees) so I'm sticking to the bigger banks until my CU wises up.

5) Money market rates are in the toilet right now. I'm barely earning any interest on mine. I should move it to a CD.

6) I've always found the best car loan rates at my CU. It doesn't come up often, but don't take out a loan where there are penalties for early payments. That's just stupid and I have no idea how it's legal to tell people that they can't pay off their debts ahead of schedule. If you have a little extra to pay off your loans, do it. Every time I've bought a car, I've taken out a four year loan and repaid it in half that time.

7) Bank online if you bank supports it. Stop paying for stamps and don't feel bad for the post office, as other than my local carrier, I despise USPS personnel. I DO NOT WANT STAMPS OR 2-DAY DELIVERY! WEREN'T YOU LISTENING?! JUST MAIL THE FRIGGIN' PACKAGE. NO, I STILL DON'T WANT STAMPS! ARGH! Breathe, Vincent, breathe...

Sign up for as many ebills as your utilities allow to reduce the amount of paper that you later have to recycle. Seriously, unless there is a dispute, are you going to read the bill? Online is archived forever. Banking can be green. Kill bits, not trees.

8) Dispute all fees. As with credit cards, the fee or finance charge should be fought to the bitter end. This came up recently with a discussion with a friend of mine. It can be time consuming to fight every fee (I'm going to wall over $15. You'd think I had better things to do with my time). But every time you let a bank charge you, a fairy loses its wings. And is then eaten by a banker. If the bank won't reverse the charge, tell them to liquidate the account immediately, send the check to you, and then you can go open up a new account at your local CU.

Now that we've saved all this money, what to do with it? Save it! Next up: How to buy less stuff!

Friday, May 7, 2010

Advanced budgeting

My first post was on budgeting, but how far have you really gone to get a handle on your budget since then? It's not enough to decide how much to spend on rent, food, entertainment, and miscellany, though those are a good start. There's a few major targets that I've identified for better budgeting.

1.) Taxes
We pay property taxes twice a year, and as an independent contractor, I have to pay estimated federal income taxes four times a year. These are six potentially budget-busting expenditures and I don't want to have to dip into my savings to pay them.

Fortunately, I discovered on Mint.com that they have a budget feature that lets me budget an expense that is paid once. I've added a budget called "Property Tax" put in the total amount due in November, and now Mint is setting aside a bit each month.

2.) Emergency Funds
This is synonymous with your savings. I'm reminded of Allison's first post at We the Savers. When her husband was laid of, her scant emergency savings was wiped out pretty quickly. She's having to take on more jobs just to make ends meet (and put her husband through college!). I empathize, as I put Tammy through Stanford while our company was implementing austerity measures.

If I hadn't started augmenting our savings really aggressively many years ago, we'd still be dipping into our savings right now. And when I got laid off (November 8th, 2008) that buffer was all the more important, especially because I abhor using my CC as an instant loan machine (as should you). Tammy took six months off from work to be with the baby, and is only working 4/5th time right now. Hence the urgent need to spend less when I only get sporadic contract work right now.

While we had to dip into our savings during her maternity leave, we've returned to to 2008 levels. We're not growing like we did before (Tree, why did thee need a trim?!), but savings are rising, thanks to our own austerity measures like eating in most of the time and only buying what we absolutely need, used if possible. (While you may not need a hydrometer, a webcam, and gardening sheers, we have immediate uses for all :-)

Few of my current readership are starting out their careers, but for both you, start puting money into savings now. The kind of savings is almost irrelevant, but a savings account at a local credit union with some non-zero interest would do you well. Invest local, accrue interest local. Build up your savings, aka your emergency funds? Why?

3) Unanticipated family expenditures
Tammy and I were not among the fortunate seventy-five percent of the coupled population who conceive easily in the first year. It took us almost four years to have a child, and one of those was spent paying for expensive medical interventions. We were both employed when we needed to pay out (not covered by insurance, not that insurance covers anything anymore), but it was still a budget buster. The operative word here is "unanticipated", which is why emergency savings can be life savers.

4) Vacations
I hate saying it, because I'm not much of a long-term planner, but plan out your vacations, add them to your Mint budget as a long-term expentiture, and try to stay in budget while on vacation. This is a post in itself, but I wanted to get you thinking about it. It's important to live our lives, not just trudge and toil. Vacations are an important part of what fuels our sense of liveliness and purpose.

5) What are you paying for that you don't need?
Cable TV comes to mind. An extreme data plan on your phone. The wine club. I'm not saying to pinch pennies (Later, I promise I'll give you all the tricks). I'm suggesting that you pay for only the things that you need and are using.

6) Plan out your meals
If you have time, sit down Sunday night and make a menu for the week. Reference your existing staples. Then make a grocery list of what you don't have. When Viola and I go shopping on Monday, we buy what's on the list, and I don't have t to think on the fly about family meals. While it's always nice to occasionally be spontaneous, as a tired stay-at-home dad, not having to worry about meal planning while changing diapers or corralling a kid is a big relief.

If you have any budgeting techniques, please share them!

Next up, a topic that has constantly come up here, the banks. I'll be talking about the myriad ways they aren't your friend.

Wednesday, May 5, 2010

Credit cards: got my money back

So sorry for the lack of posts lately. The whole family has been sick, and it's hard to just get out of bed, much less take care of Viola and myself for a whole day.

Good news: I got my $15 interest payment refunded from the CC bank. I had them mail me a copy of my contract with them, and it clearly stated that I had at least a 25 day grace period. Document in hand, I called the bank for a third time and told the rep that they were in error and I'd be expecting my money back.

He agreed that there was a grace period... except when there was a late payment posted to the account, then the grace period reset to 0 for three billing cycles... wait, it wasn't late, there was fraud on the account and I wasn't liable for that payment (you told us that already? Oops, so sorry) they'll post a fix to my account shortly, would I like to sign up for our extended fraud protection for only $12.99 a month? NO, unless it protects me against fraud from my own bank!

For a bank that took $15 billion in TARP funds, you'd think they wouldn't need to grovel for $15. I'm searching for a new credit card. Recommendations welcome.

Tuesday, April 13, 2010

Spend less, have more

Stuff accumulates (this is universal, in the Universe sense). Some forces collect more stuff than others. E.g. growing up, my house was extremely cluttered, there were stacks of unopened mail on the kitchen table, heaps of laundry piled on the couch, and underutilized kitchen gadgets on the counter.

Today, my couch has Viola's stuffed animals, my table has the remnants of lunch, and I don't even own a microwave. It's all part of my habit of living with what I need, and letting the universe sort out the rest. Spending like a drunkin' sailor was fun when I knew how to tie my knots and got paid like a SiVl engineer. But even before I had fewer doubloons in my purse, Tammy and I experimented with The Compact. We pledged to buy nothing new for a whole year. What I learned was an invaluable life lesson: what I want is not necessarily what I need.

What do I need? I need shelter for me and Tammy and Viola. I need good food on our table. I need furniture and clothes. I need entertainment.

The first is my mortgage. We own our tiny one-bath house. Having your bank own your home for the privilege to repay them is quite a burden and deserves its own post. Buy, rent, squat, whatever the right ratio of thick walls to debt to noisy neighbors is right for you.

Food was covered in the previous post. Briefly, buying local and fresh is cheaper and healthier than eating out or eating crappy processed food. I need good food to fuel my brain for these posts.

Toys for the baby, toys for me, dishes in the cupboard, an enormous plastic castle in the backyard, the tables and chairs, clothes for everyone, and even the kitchen appliances, that's the stuff that can clutter your physical life, and when it does that, it spills over into your mental one.

As The Minimalist, I've distilled what I need to survive to pretty much what you see in my house and my yard. Yet I don't live an austere livestyle. I have my books and my kitchen whisks to protect me. What I don't have a McMansion, weird you-saw-it-on-TV gadgets, and plastic crap. My space is filled with the loves of my life: What I want is what I need.

DISCLAIMER: If you own a microwave, a three-story mansion, and tons of electronic crap for your kids...AND...you still come in under-budget ever month, bully for you! Keep rocking the party and don't forget to invite me (You've got my number, I like red wine, no pinot, and beer from the Pacific Northwest.)

But if you want more stuff to gravitate towards you without fear of it eventually being consumed by a larger mass (i.e. the bank, the repo man, etc.), then you need to buy it for less.

Craigslist is a good start. Tammy found Camelot--a Tiny Tikes plastic playset that retails for $400 but used was $65--on Craiglist. While I admit it was a pain in the arse to make two trips to South San Jose to get it, the benefit was enormous: backyard yard playhouse for Viola, entertainment for my father-in-law (who had to re-assemble it), and an under-budget birthday gift. Re-using older goods is good for everyone: the seller rids themselves of unneeded merchandise (and they threw in a tree swing), the buyer gets what they want--and if it's plastic, it's already out-gassed most of it worst toxins--and the dump doesn't get cluttered with yet another non-biodegradable item.

DISCLAIMER PART DEUX: On Craigslist you'll find the best and worst of humanity with little in between. People will flake when you or the item you want to buy isn't as advertised. All that said, Craigslist has rewarded us with a great guest bed, the aforementioned backyard playset, Blue (my Mini Cooper S), and lots of baby stuff (much if it free). And it has also rid of us chests-of-drawers, river rocks, and our own cars. The best advice I can offer for Craigslist : if you make an appointment with a buyer/seller, and they flake by more than 5 minutes, they aren't interested.

Threads, we all wear them (If you're a nudist, get the laptop off your lap! Seriously, bad for the boys). I prefer clothing from used-clothing stores. Why? Usually it was worn once (if at all), it looks like it was worn three years ago, about where my fashion sense gravitates, and I look good in it (ask Tammy). I recommend Crossroads Trading Company in The Castro, but I've had some success in their locations in San Jose and Santa Cruz. Tammy has good luck at Goodwill, as well as Thrift Town in The Mission.

If used-clothes hunting isn't your sport, do you have friends or family about the same size as you? Tammy and her sister have had a long tradition of swapping clothes when one gets bored with an outfit. My sister gave us tons of pregnancy and baby clothes before Viola was born, and now that she's pregnant again we sending some of it back along with new finds we picked up along the way.

Obviously, if you can't find it used and it meets your needs (not just your wants), Do-It-Yourself costs far less than pre-made. Our friends made a play kitchen for their children, and I think it looks better than anything you can find in the store, as well.

Other avenues to explore:

Ebay. We found a matching set of used dishes this way.

Scavenge. Drive around your neighborhood (or richer neighborhoods). People leave free stuff out all the time. I got a new desk for Viola this way in Berkeley.

Garage sales. My city hosts a city-wide garage sale day once a year in the Spring. We've gotten tons of stuff this way. Tools, clothes, utensils to name a few.

There are lots of ways getting stuff, and if you've found other creative ways of doing it on the cheap, let me know! I'm in the market for a computer desk for Viola right now...

Sunday, April 11, 2010

Credit cards: the new scam, same as the old

It seems that my best efforts to be the credit-card company's worst customer has hit a snag. The bank has hit upon a new scam, and it's going to cost me $15 in finance charges this month.

Three things happened. First, my 0% interest on purchases went up to 2.99%. I'm sure they sent me some stupid piece of paper in the mail notifying me of this, and I'm sure you all diligently read them with a magnifying glass, but I just toss them into the recycled paper bin.

Second on Feb 13, a new federal law went into effect: the bank has to disclose it's interest payments on purchases, and separate them out from other interest (balance transfers and cash advances).

Third thing: the bank decided that it's going to start charging interest beginning from the statement date, not the due date. This is written down nowhere that I can find and I think they just made it up. Update: Via Chris Ing on Facebook, I've learned that this is called the Grace Period. My CC bank has altered it with minimal warning (if any). Scum bags.

Then I get hit with a $15 interest payment on a statement that only earned me 20 reward points; I would only make out $5 ahead. Huh? I have my auto pay set up to always pay my cards down on the due date, thinking I was being clever by holding onto my money for as long as I could.

We have a BS from Berkeley, a BA from Berkeley, and an MS from Stanford combined between the two of us, and it still took two calls to the bank to figure out what had happened.

I have obviously changed my auto pay to now pay the balance on the statement date.

I tried shopping around for a card to give me 0% interest again, but they're rare, and the rate is only introductory. According to this web site on Yahoo!, low-interest cards are going to get even rarer, and even then only for businessmen and the wealthy.

Lessons (re)-learned: 0) The bank is not my friend, 1) Always look at your statements, and 2) pay down your balance on the statement date. I had to modify the third to reflect the new reality of an industry that always finds more ways to scrape scum from the bottom of the barrel.

Wednesday, March 31, 2010

The Art of Eating In

How much did you spend the last time you ate out (and that counts your work lunch, too)? If it's over $10, you could have spent less and ate better.

I'm the Bay Area Minimalist, so I know it's hard to be frugal in the gourmet capital of the West Coast. But at the same time, the Chinese take-out in the south Bay is less-than-dwarfstarular. Even if you can afford to eat out (or eat in with take-out), are you really eating well?

I would really like to do a whole series of posts on the joy of just eating good food, but the first objective of this blog is to make sure that my audience understands that saving money is good, and it's good for you, too!

When in doubt, eat in. Make enough food for twice the number of people dining (Cook once, eat twice!) The costs scale logarithmically, and now you have lunch for the next day. When I was on overpaid SiVl engineer, I did this almost everyday. For four days a week, I ate delicious leftovers from the night before instead of spending $8 on lunch. That's $128 saved every month and I ate food that was better than the work cafeteria. (that's $1500 a year! I've bought used cars at that price.)

I got so addicted to good food that when I changed jobs where the lunches were catered, I still packed my own. A colleague confronted me, asking me why I packed a lunch when the food was free, and my reply was, "Not all food is created equal." Since then, I've read Michael Pollan's The Omnivore's Dilemma, and my reply today would be, "I prefer to eat food."

I like following Pollan's mantra: Eat food. Not too much. Mostly plants.

Food is anything--as Pollan says in his Eater's Manifesto--that your great-grandmother would recognize as food. If you can't pronounce an ingredient (and my readership is highly literate and scientific), then it ain't food. If it has more than four ingredients, it's pushing the boundary of food.

Portion control. When you're 80% full, you're done. Put the fork down and sip the wine.

Plants. Lotsa plants. I'm a vegetarian, but my foodie carnivore friends know that a chicken sandwich from a fast-food restaurant is not food, nor, presumably, does it contain much chicken.

Eating well is good for your Pliocene metabolism, but it's also better for our post-industrial wallets. To prove the latter, I'm going to do some math. (Ahhhh, math! don't worry, humans invented it. Just like hammers, it's a tool. Use it with caution.) I'll use the world's most perfect food to illustrate my point, setting the serving size four adults and two toddlers (tonight and tomorrow's lunch).

1) Eat out: $20. Prep-time: 10 min. (driving there and back)
A super delicious large pizza at Giavanni's Sunnyvale (best pizza in SV, sooo good!), after tax and tip, is $20. Good for parties and large groups, but night-to-night is going to get spendy--even at 1 night a week it's $80/mo.

2) Eat in, pre-made: $8. Prep time: 20 min (doesn't include trip to grocery store, but presumably you had to go anyway)
Two pre-made cheese pizzas at Trader Joe's $3.99 each, and are the equivalent of 1 large at Giovanni's--in volume, not flavor. Put them in the oven and bake them. Super easy, but it costs your electricity and gas for something that doesn't taste that great due to the amount of preservatives required to make it able to sit in your freezer for months.

3) Eat in, less pre-made: $6.57. Prep time: 30 minutes
Whole wheat pizza dough from Trader Joe's - $1.29
organic pre-shredded mozzarella cheese - $3.99
pre-measured sauce - $1.29
More work, but I find rolling out pizza dough to be fun, and in the winter having the oven on heats my home and my food, and I can splurge on toppings and still come nowhere near the pizza joint price.

4) Eat in, from scratch: $4.40. Prep time: 1 day
Using Peter Reinhart's pizza dough recipe from The Breadbaker's Apprentice yields two large pizzas, so the price above half of what you see here. I based all the prices on the most expensive, organic version of the ingredient I could find. (Thank you King Arthur Flour and Trader Joe's!).
Dough:
Organic KAF bread flour - $2.00
Sunnyvale fluoridated H20 - $0.000022
TJs Greek kalamata olive oil - $0.25
TJs kosher sea salt - $0.22
KAF instant yeast - $0.04
Sauce (My super simple and delicious no-sugar sauce):
1 lb tomatoes - $1.99 (fresh or from a can, the difference is 10¢
5 cloves garlic - $0.20
tomato paste ($0.89 or from my garden, priceless)
TJs Greek kalamata olive oil (0.22)
Salt and spices - $0.00 (negligable, I use pinches of them)
TJs Fresh Mozzarella balls in brine - $2.99

The preparation time time goes up proportional to the amount of money saved. Time is money, money is time. What do you have more of? While I generally don't have a lot of time to spare, I have even less money. I tend towards 3), but I love, love, love 4).

Here's the art part: Time spent cooking and baking is part of the soul in food. Shun "quick and easy" recipes and especially ready-made meals, as "quick" means microwave, and "easy" means processed. Neither are good for your body. I can't stress this enough, if you can't pronounce it, it's not food. While I used canned food for cooking, anything in the ingredient list beyond water, vegetable, and spices defeats the purpose of canning the food in the first place. Even sugar is excess. Try your recipes with less sugar and enjoy the savory flavors of the spices and the salt.

Food should taste good, but it must nourish the mind as well. The processed-foodlike-substance industry may have perfected the ratio of fat to sugar to salt to sate our Pliocene brains, but it doesn't satiate our hominid creativity. Homemade food always tastes a little bit different than the last time you made it. Spice your food. Make it taste perfect to your taste buds. Every time you re-make a recipe, change something to see what it does and appreciate the variety that home-cooking affords you. Ask--no demand--that your guests tell what they like and dislike.

When I make food myself, I have to share it. Tammy enjoys it. Viola enjoys it. My friends enjoy it. The greatest compliment I ever receive is when my daughter can't get enough of my homemade bread. I don't do drive-thru for lots of reasons, but the most important reason is that we evolved to cook and eat together.

If you don't have time to cook, may I ask what you do with that time that you save by eating out? If you're working an extra job to pay the bills, then that's one thing, but if you're watching TV or surfing the net alone, maybe you need to rethink your relationship with people and your relationship with food.

Eating out is fun, too. The restaurants that I love I really love. They make food I can't make. They have atmosphere that I can't replicate. They have wine I can't afford by the bottle. I save those restaurants like I save my money, it's there waiting for me when I need it. But most nights, I turn on the burner 'cause I'm cooking with fire.

When I practice the art of eating in, I feel more connected to my people. I tell Tammy about Viola's and my day over a savory dinner. Afterwards we do the dishes, a healthy reminder that once again, we ate well.

Our culture is obsessed with having things (kitchen utensils are my pleasure). If you're a kleptocrat, the next post is for you. It's all about how to die with the most amount of things your dollar will get you.

Monday, March 29, 2010

Credit cards: taking my own advice

The next topic is in the works, sorry for the delay. Viola's birthday party consumed most of my time. In fact, I got so distracted I forgot a credit card payment. Mint.com notified me via email of the late fee. That was odd, but I logged in to my accounts and sure enough, I hadn't received my March statement. What happened was that I had just switched over to online statements (good things overall, less paper), but it seems Yahoo! mail didn't white list the email address correctly (typo, my bad) and I instead got a late charge and an interest payment. The white list was easy to fix, but would the bank be as cooperative?

About ten minutes ago, per my own advice, I called up the issuing bank and asked them to reverse the charges. Which they did! It was a quick fix. I find that being cloying on the phone doesn't hurt. I didn't raise my voice. I know the squeaky wheel gets the grease, but the CS reps hear that all day. When I'm nice, I 9 out of 10 times get nice service back.

PS This also applies to when you call you House representative or Senator. Those poor interns get yelled at all day. Say your piece and wish them a great day, too.

PPS Senatrix should be a word. I have two of them.

Monday, March 22, 2010

Credit cards

You've probaby heard that you need credit cards to build credit history. Then you get a credit score, and then you start borrowing sums greater than $20 from your best friend. This wasn't always the case--plastic used to be very expensive to carry. You had to buy a washing machine from Sears and pay it off monthly to generate good faith credit.

But this 2010. Even this Luddite carries plastic in his wallet between gold doubloons. I'd rather build up my credit without having to buy a major appliance every year. But why? What good is good credit?

Credit allows me to borrow money from my bank to buy something I normally can't afford without saving for years, e.g. a used pirate ship. I want to get charged the least interest possible, especially because as a new pirate, I'm learning the ropes and don't want all my hard-earned plunder going to a landlubbing bank.

While banks say they prefer people with good credit, they make less money on honest pirates. The safer the bet, the lower the returns. The entire financial sector demonstrated this sort of roulette thinking with the sub-prime mortgage credit default swaps. They didn't learn their lesson: pirates with good credit still have lower rates of return. They just up the fees on us--because we always pay. Then they spin the wheel, betting on risky lenders.

They'll do all sorts of crazy tricks to get you to part with your loot. Take, for example, all the stupid credit-card checks my bank keeps sending me in the mail. These are terrible. Don't ever use them. They start accruing interest immediately, they have finance charges, and psychologically they look like checks but they're not: they're instant debt!

Rule zero: the bank is not your friend. At its best, your bank is a business partner, but a shady one. He's the guy on the corner selling hot speakers out of the back of his truck. He swears that he acquired them honestly and he's just passing his good fortune onto you. He's lying. Bank will lie to you in the same way, the only difference is since they influence large swathes of government, their lies aren't illegal.

In today's age, it's unfortunate that we have to carry plastic instead of gold-plated latinum, but it's hard to find a Ferengi to trade with. Terrestrial banks need finance charges and ridiculous interest rates on carry-over balances to keep their gluttonous CEOs from jumping off the Empire State Building. But you don't have to contribute to keeping caviar on their plate in order to take out a boat loan. It's even possible for you to legally leech off the system. Here's some tips to keep them from getting yours, and get a tiny crumb of the pie for yourself.

1) Never carry a balance. While paying your minimum will keep your credit report in check, it's handing your money to bank on a silver platter. What did they do to deserve 20%-30% interest? They gave you a piece of plastic. My credit union works harder for car loans in 4% range.

2) As I already said, don't use credit-card checks, or instant cash (if your card has a pin that works at ATMs). Every time you do this, a bank CEO plucks the wings off a fairy.

3) Carry a card that has some sort of rewards program but no fee. Some of my friends like airline miles. I have two cards, one gives me 1% back on all purchases, and the other gives me credit at REI. An aside: My bank has been trying to get me to switch to a "better" card instead of the one with 1% back. It looks like a deal, but the bargains drop off after six months and the rate is less than 1% and it's only valid at certain merchants. When in doubt, rule zero.

4) Don't have more than two cards. More cards work against your credit rating. Two is good in case the magnetic stripe on one doesn't work or there's fraud and you need a working credit card.

5) Never give money to the bank. That's why you don't want a fee, even if the airline miles are so enticing. Fight all finance charges, even if you're in the wrong. Cancel if they disagree. My friend missed his payment by a day. He called them up to have the fee reversed, but they didn't budge, so he canceled the card right then and got a new one from another bank. That's the right thing. A month later, the same thing happened to me with the same card, but the difference was that they reversed the charges immediately. Why? I have other large accounts with that bank, whereas my friend didn't. Sometimes banks play the loyalty card in your favor. Use it.

6) Pay cash at small businesses. That 1% I get back is actually paid for by the merchant. So if I take a little bit out of big-box store's profits and the banks profits, I feel good about it. If I do that to my local Lebanese restaurant, I feel pretty guilty, especially because the banks charge higher rates to smaller stores.

7) Actually look at your credit card statements. I do my banking online, but I take time once a month to make sure everything looks right. I caught a major fraud charge this way two months ago. Don't pay for someone trying to cheat the system. Lehman's and AIG don't appreciate the competition.

If you never carry a balance and never pay finance charges, you're the bank's worst customer. Congratulations! While they still make money off the merchant for the right to take credit card transactions, it's not your dime.

If you can't pay your balance at the end of every billing cycle, you're living beyond your means. Go back to my previous post on budgeting for help figuring out where you're overspending.

There's a few directions we can go from here. What banks are better, or how to spend less, or how to live with less things. But we're going to come back to these important topics later. It's time for a diversion. Next up: The Art of Eating In. UPDATE: Between the two posts is where I suck it up and take my own advice, I called the credit card bank! UPDATE 2: The bank tried to take my money again. Read about it here and here.

Tuesday, March 16, 2010

Budgets

Back in 1999, I used to do monthly budgets using spreadsheet software on my computer. I meticulously kept it updated, putting in each receipt, all the way down to the last penny.

A normal (there are no tangents in my world): Tammy designed the spreadsheet to break out how much we owed based on how much we each took in. I was an overpaid SiVl engineer at the time, so naturally my share was higher. One hot summer day in 2000 I was pouring over the spreadsheet trying to figure out how we'd get Tammy through community college (much less Stanfurd, by Pollux and Castor that was expensive!) and I found a major math error. The details are lost in time, but basically we weren't actually multiplying 2/3 by my income or 1/3 by hers (or whatever the ratio was). Since we overwrote the speadsheet every month, we had no way going back in time. Tammy cried, as she had no idea if she'd being pulling her weight (she could have under or overpaying, we couldn't tell). In the end we merged our finances, we were in this together. Later the same year I proposed to her, but tax shelters are another post.

Time went on, Tammy graduated, we made more money, we bought a house (or our bank did), I updated the spreadsheet less often, and by 2009 I was lucky if I could remember to check in once a year. Keeping it up-to-date took time away from actually living my life, which is kind of the point of saving money, so I can spent it on fun and important things.

Enter Mint.com. I was at first wary putting all my online financial info into it, but I can't live without it now. I've created budgets for our gas and grocery and a bunch of other categories. I still have to put in manually cash purchases, and that's a bit of an annoyance as they haven't really made that interface very smart. (First I have to split the purchase, then afterwards I can date it).

But the automagic stuff is awesome. It pulls in info from most of my banks (my credit union isn't supported yet, grrr), categorizes it, and lets me view from a hundred different angles. For example, We're overbudget this month for restaurants (thanks to a very fun but very expensive trip to Pizzetta 211 with Viola's 2nd cousin). I can compare my spending to previous months, and I can roll over any underspend category into other month.

The big shocker for me was when I realized how much we spend on food. I thought we spent $150 max, but most months we're pushing $500. Since Tammy and I are saving up to one day move to East Bay, it's good to know this. I don't want to stop eating well (more on that in a future post), so with a little math-- (groceries+restaurants)*12/income, I quickly see that this is 10% of our pre-tax expenditures. Not bad, but maybe we can do better.

At this point though, it's pretty simple. DON'T SPEND MORE THAN YOU MAKE. If you do figure out why using a tool like Mint.com or a spreadsheet or Quicken. Otherwise you'll go into credit card debt. And then you're pissing your money away to the banks who have done nothing at all to deserve your hard-earned cash.

Next time, credit cards! Why they suck, and how to use them to your advantage.

The Minimalist

I applied to be a guest blogger for We the Savers, the blog for ING Direct, but a different father, vegetarian, 30-ish white guy got the job instead of me. I look forward to following Matt's posts, but I was kind of looking forward to passing on savings advice to a wider audience--not just the three people who semi-regularly read my blog.

My regular blog has been languishing for a while, as I don't really want to broadcast stuff about my daughter for the whole world to read, so I thought I'd try out something new. I call it "The Minimalist", a phrase coined by my mother-in-law to describe how Tammy and I live. But it's not about austerity. It's about how we thrive on the minimum amount of money possible. It drives everything from how we take vacations, to our delicious homemade dinners, to how we're raising our daughter. And how we do it all sinisterly (i.e. from the left).

For those who don't know me, I'm a thirty-something stay-at-home dad living in the Bay Area. I'm married. My daughter is about to turn one, and I consult occasionally for a Palo Alto startup. I never eat meat, I eat fish rarely, and I love to to cook, but I especially enjoy baking bread.

For my first post, I'll take about budgeting.