Spendthrift Purchase

It turns out this blog is primarily maintained by Sharon. She'd hoped during the remodel that Jeff would also regularly make posts so that is why she switched to writing posts in third person. She reasoned that if different people were writing first person posts, it could become confusing. But, clearly, house blogging is not Jeff's thing. He occasionally writes posts at his recipe or his sustainable living blog, but virtually never here. So, I think I will go ahead and switch the writing back to first person.

More than a decade ago, Jeff and I ran across a china pattern at one of the outlet centers that we loved!! But, due to the substantial price tag, we did not buy any at the time. But I never forgot it. I actually had a search in eBay for years, hoping to come across a bargain. (I never did.)

Well, last month I ran across someone selling the china on craigslist! Though, at the $100 per setting they were asking, it was still pretty spendy. I thought about it for a couple of weeks before I contacted the seller. I ended up buying 8 settings from her.

Then, just a few days later I found someone out-of-state (on craigslist in their state) selling 11-settings plus a bunch of serving pieces for an even better price than the seller here. I rashly wrote them and asked if they would ship. They said they would, and at no extra charge. Then I did something that could have been very stupid, but worked out this time: I sent them a check for the total amount and trusted they would ship the dishes.

As the days passed, I'd thought about what would happen if the dishes didn't arrive, as this person was way too far away to pursue, but luckily, it didn't come to that. The dishes arrived this week, as promised and very well packaged. And now we have plenty of plates and serving dishes and we're all ready to do some entertaining. It must be time to schedule some dinner parties!

Wedgwood Cornucopia china

Wedgwood Cornucopia china

Wedgwood Cornucopia china

It seems very stupid, given our unemployed state, to spend so much money on dishes, but I've been fairly stupid about money lately. The financial crash did not inspire much long-term faith in our economy and "losing" so much money we had saved and invested, despite our frugal behavior, made me a little bit more willing to blow money on luxuries, just because we want them.

Shifting Financial Priorities

I've been musing about how we've been spending our money literally like water in the last six months or so. I guess there is nothing like a major stock market crash to shift your financial priorities. We had paper losses of literally hundreds of thousands of dollars in our funds and individual stocks and got nothing in exchange. We had worked so hard to save that money and were pretty devastated by the losses, temporary as they were.

So, I guess it helped us realize that maybe saving everything possible isn't the best long-term plan for us. We lived well below our means for our entire married life and had a lot less to show for it. What good is saving all those pennies cooking your own meals, washing ziplocs, etc. if you can lose literally tens of thousands in one day! I guess we just decided maybe it would be OK if we spent a bit more enjoying our lives now. We'll surely have to work for more years, but we'll have more life experiences and/or cherished things.

When my old PC died last spring and I couldn't get to Quicken anymore, I didn't run out and buy a replacement computer right away. That is absolutely shocking to me! For so many years, I visited Quicken nearly every day to either enter transactions or to update our stock prices and to keep an eye on our balances. I was proud of our saving efforts and I loved watching that net worth graph go up, up, up!

Well, this spring I wasn't really in the mood to have the losses so clearly delineated for me. Nor was I in the mood for a lot of budgeting. We had moved to California and we were living in an expensive rental and I was sick of feeling broke. I simply stopped paying attention. Luckily, after so many years of saving, we had plenty of cushion and could afford to do that. =)

Well, we finally dealt with our rent problem by moving to my grandmother's old house. Our rent is substantially lower, though we're certainly much more cramped for space. Since we had prepaid a year's rent and we had fewer expenses coming out of Jeff's income, our balance built up in the checking account until we had a too high balance. Well, I guess I'm ready to deal with the money again. We haven't recovered all the losses, but the market is only about 20% below the pre-crash levels, instead of the 40% it was in Spring. We're still down, but we're not knocked out.

Jeff is a saint and continues to go to a job he'd prefer to leave in order to give me time to work on my career. I'm working hard on school, but maybe not hard enough on finding a paid job. Maybe I need to work on that some more... It is a tough market, but I haven't even applied for a paid position lately.

I finally ordered that purple Dell computer last night and now I just need to buy a new version of Quicken; I was using the 2006 version and they'll have stopped supporting it by now. It will probably take me a week to enter a years worth of receipts and statements. I shudder to think of the huge unknown, uncategorized spending transactions I'll have to enter: all those farmer market visits, those fast food visits, etc. I got receipts when I could, but Jeff was a bit more careless of keeping track. Oh well.

Of course, if we had any faith in the United States Government's ability to manage our country's finances, we'd probably switch back into tightwad mode. But I'm not convinced they have any ability or political will to stabilize the currency for the longterm. I spend a couple hours nearly everyday reading housing and financial news and blogs. They debate about whether we're headed into hyper-inflation or into deflation. I don't see that it matters, really. Either way, we're screwed. The U.S. has huge deficits and once our foreign trading partners lose faith in the dollar, they'll stop buying and then we're really in for trouble.

I guess I figure I'd rather own stuff (including, preferably, a nice house) than some piece of paper saying we have some bank balance. At least "stuff" we aren't likely to lose because of the government's careless spending habits.

I still wash the ziplocs, because I don't want to waste money needlessly. Those thrifty habits are pretty ingrained, but I don't sweat the "small stuff" as much as I used to.

Planning for the Future

I've just read an opinion piece titled "There's No Pill for This Kind of Depression," published by the Wall Street Journal which, I think, accurately sums up our situation at the moment: "People are in a kind of suspended alarm, waiting for the future to unspool and not expecting it to unspool happily."

We had a dream of traveling for a year, but with the collapse of our savings and the uncertainty of the economy, that seems a bit irresponsible for our future. In fact, the cost of the RV parks and food is, perhaps, the least of the cost; there will be the steady income of Jeff's job we'd be walking away from as well as the expense of maintaining our medical coverage.

The dream has not died, we still want to travel and we will, I hope, in several years. This timing was tempting because we were still young and at a juncture in our lives with the ability to choose from a variety of roads, but we were obviously premature in thinking we were "done" with the serious work in our life. We've been handed yet more challenges and it's not time for a vacation just yet.

Jeff has a good job he likes here at Apple, and while we were eager to get out of California due to the high cost of living, even a much lower cost of living will wipe you out if you have no income. Apple hasn't started lay-offs yet, so I guess we stay, for now. We're feeling, quoting the article again "There is "a pervasive sense of anxiety, as though everyone feels they're on thin ice.""

As a renter I feel really exposed and am worried about our future. I'm not feeling confident about our ability to take care of ourselves if the economy does, in the end, topple over. The government can only do so much to protect people from their own mistakes.

This quote from the article sums up my belief: "I asked a Wall Street titan what one should do to be safe in the future, he took me aback with the concreteness of his advice, and its bottom-line nature. Everyone should try to own a house, he said, no matter how big or small, but it has to have some land, on which you should learn how to grow things." So, despite the preference to leave California for greener pastures up north in Oregon, we spend a bit of time looking for an excellent deal on a house here in Silicon Valley, though few exist so far, even among the foreclosures and bank owned properties.

I suspect our short-term course will be to move in either with my mother in a small portion of her house, or perhaps we may "rent" my grandmother's house inherited by my father and aunt. At least they probably won't evict us if things get bad! =)

One of the very few nice things about this economy is the reemergence of Thrift as a valued lifestyle; I read more and more articles everyday.

BTW, change of subject, thanks to the referral of a friend, I have an interview tomorrow, for a position with some bookkeeping and event planning responsibilities. I'll try and do well; perhaps I'll finally line up an interesting job.

Thrift as a Lifestyle

While I am sorry for so many's people pain, I have to admit I actually appreciate that living beneath your means is finally coming into fashion. It's wonderful to see articles in so many popular venues about how to make do with less and make the most of what you have. Even today, Yahoo has an article on how you should "Put Savings (and Yourself) First With a Budget." Articles like these were in noticeably short supply even just a year ago.

It wasn't that long ago, in the early stages of this housing crash, when you would read articles lamenting the plight of people who were, by their reduced circumstances, forced to make do with cutting their own kids hair, or, gasp, preparing their own meals at home! Oh my gosh, those poor people! (said with a tone of contempt) How ever did they survive?

We learned long ago, the value of thrift. In our late-20s, we were lucky (and wise) enough to read "Your Money or Your Life" and the "Tightwad Gazette," among others. Though some of the ideas in these books weren't for us, the fundamentals were there and we were able to adopt many good ideas.

Though Jeff and I have had our times where we spent more than we should have on something (like our house in Forest Grove), we have ALWAYS lived beneath our means. While I will admit the means of a high tech worker isn't exactly commensurate with a high school teacher or a steel worker, we always lived on less than we made, even when we were both full-time students. Some years were better than others.

When times got tough, we cut back our spending, we didn't pull out the credit cards or the home equity loan. And when the job got uncertain, we put every last dollar we could spare into paying off our mortgage. We rarely eat out, even now. We occasionally eat out with friends, but that's more of a social visit. And, my hair hasn't been cut by a paid hairstylist in years. And, when I can muster the courage, I cut Jeff's hair. I have many times in the past.

It's really hard right now to feel sorry for folks who "gambled" that the value of their home would rise faster than their pay-option mortgage. Tell me again, why are we helping these people? How, exactly, does it help everybody else? Wouldn't it be better to get them out from under their onerous debts and settled into a sustainable situation? Okay, maybe they don't get to live in that McMansion and have to settle for something more meager, but those prices were like monopoly money. Not real, after all.

I wish the government would just let foreclosures run their course. If you have to, help the people get settled into something that's sustainable given their resources. It's just wrong to help the ones who stretched and gambled at the expense of those who were realistic and saved!

Depressing Financial Discoveries

I have had growing unease about the expense of our grand year-long trip and so this morning I revisited all of our cash, investment and retirement accounts and tallied what we have left after the last devastating six months. And it was bad...real bad.

We sold our house in Forest Grove in April 2006 and walked away with our home equity. At the time it seemed smart to put about half of it in cash (state bond funds and treasuries) and the rest in the stock market. That was clearly a mistake, looking back. I guess we should have known better since we realized we were in a bubble. But there was really no "safe" place to put it and we expected to buy a house by now. I wasn't about to pull it all out of the banks and stick it in our mattress.

Anyway, we have basically lost the money we took away from the Forest Grove house, when you take in to consideration all of our losses, including all the retirement accounts. Oh well. Looks like we'll be working for a lot more years than we had hoped. And with safe savings accounts paying 0%, there's not much chance what we have left of our savings will grow anytime soon. I guess all our years of responsible financial behavior was a mistake. We should have been spending it all, and then some, then the government would be bailing us out right now, so we could keep our McMansion from foreclosure, instead of screwing us over.

Maybe we need to rethink this trip plan.... Luckily, we did stick a fair amount of money in cash, but if we go and blow it on this extravagant vacation then we won't have much of anything left for a house when we're done. And there's no guarantee that we'll be able to find jobs either. (Oregon's job market is crumbling along with the rest of the economy.)

So, now we're debating about what to do, again. Believe or not, we are as tired as all of you of our constantly changing plan. Sigh.