A letter to my son

My dear, darling, Pampers-bottomed son,

I am writing to inform you that whenever you are ready to use the potty, I am ready to help you learn. You are nearly three years old. I can see how much you love and value your independence as you choose your own snacks, select the toys you want to play with, "rearrange" your bedroom, and remove your clothes at will. So imagine how independent and dignified you will feel when you're completely free of those pesky old diapers! No more dampness, no more puffiness, no more stinking up the entire cabin of a 757 passenger jet.

And even though I know you don't care - I'll just mention it in case you have any sympathy for us - I want to point out that a 100-count pack of diapers costs approximately $30. Insane, right? Thirty bucks could buy a whole bucketful of Hot Wheels. Or a big bin of dinosaurs. It would even cover the expense of two Dora the Explorer videos. (Ha - THAT got your attention, didn't it!) Better yet, we could just funnel that money into your college fund.

I won't push you into potty training. I'll wait for you to take the lead. But give it some thought and get back to me.

Note that I am not above offering bribes for your cooperation.

Much love,

Mom

Dumb Financial Choices Part 1: Teeny Tiny Down Payment

Don't let the fact that this is a personal finance blog fool you. Unlike many of the other personal finance bloggers I follow, I still make plenty of monetary mistakes. Plenty. At any given time, Suze Orman or Dave Ramsey could sift through our finances and have a field day. They could invite us onto their shows and yell at us. Then we could parlay the trauma into a book entitled How to Make Dumb Financial Choices (Based on a True Story).

Dumb Financial Choice #1: Purchasing a house without a 20 percent down payment.

Or even a 10 percent down payment.

Or... um... even a five percent down payment.

Actually, it was way less than even five percent. But the bank didn't seem to care, so we figured it was okay.

We purchased our home in April of 2008. Had we waited a few months - until the global financial crisis was hogging the headlines - we probably wouldn't have gotten away with this particular loan. But we managed to make it under the wire. Yay.

Unfortunately, we've come to realize that we don't actually like owning a home (I know, I know... That's so very un-American of us). For our entire married lives (10 years), we've been vagabonds, changing location every one or two or three years. Whereas other people might find such upheaval disconcerting, we enjoy it. New places, new faces, new experiences, new atmospheres, new challenges... We thrive on change. It makes our toes tingle. We've been aware of that fact for a long time. Looking back, I'm not sure why we decided to make such a permanent choice. We'd have been better off buying an RV.

The bottom line is that right now, we are stuck. Stuck with our 6.875% interest rate. Stuck with $150 in PMI every month. We can't sell this place. Housing prices in our area are in decent shape, but at this point, even if we received our theoretical asking price, we couldn't make enough of a profit to cover the Realtor commission, let alone the remaining balance on our home loan. Plus, any savvy buyer would demand less than the advertised price. Any savvy buyer would probably also demand that we cover closing costs and foot the bill for replacing the scruffy carpet and the on-the-fritz refrigerator.

But had we put 20 percent down, we would have been able to afford listing our home if we wanted to. Sure, maybe we would have taken a hit, but that would have been our choice to make. At the very least, we could have refinanced and obtained a lower monthly mortgage payment.

Now we're at the mercy of the housing market. Hopefully, if we wait five years, the market will bounce back. Maybe we'll even make a small profit. It just seems like a long time to wait, especially when I'm stricken with such a chronic case of Wanderlust.

Five frugal and environmentally-friendly product swaps

When I was a little girl visiting my grandmother in Germany, I noticed that Oma, like many of her friends, always took her own well-worn cloth bags with her to the grocery store, drugstore, bakery, and meat market. She never set off to make a purchase without them, and she never bought more than what she could fit into those bags. Thus, she never had to bother with paper or plastic.

Then we’d go back home to America and shop - cloth bag-less - at our own grocery store, where the ratio of plastic to product was approximately 1:1: a plastic bag for the jar of pickles. A plastic bag for the carton of milk. Two plastic bags, doubled up, for a couple liters of soda. We never knew quite what to do with all of those bags after unloading the groceries (this was before most big towns had recycling centers). Throwing them away seemed wasteful, but keeping them was inconvenient. You’d open the pantry door and a tsumani of plastic would tumble onto your head.

For the last year or so, Trent and I have followed Oma’s suit. When we shop, we bring our own cloth bags with us. (Sometimes we even get praised for it. “Thanks for making an effort to be kind to the environment,” said the Whole Foods bagger the other day, and smiled as if we’d saved half the planet from certain destruction.)

Hopefully, cloth bags are just the start of it for us. Over the past year or so, we’ve been re-examining our choices in an effort to save money and live in a more environmentally friendly manner. We started cooking most of our meals from scratch, meaning we eat fewer processed foods and takeout and therefore generate less plastic and cardboard waste. We traded in regular light bulbs for compact fluorescents. And we’ve made a number of other easy product swaps that have eased our spending and lightened the load on the environment, however incrementally:

(Excuse the cell phone-quality picture. A new camera isn't in the budget quite yet.)

1. We ditched the plastic and bought a water filter. I hate to say it, but the tap water in our town tastes like it’s been stewing in a big vat of chlorine. I refuse to drink it straight up, regardless of how safe it’s supposed to be. In the past, I’d buy at least one gallon of water in a plastic container every week. It wasn’t that expensive – about a dollar a gallon at Target – but it generated a lot of waste. A few months ago, we wised up and purchased a pitcher with accompanying water filter for about $22, including the filter. Now I have clean, tasty water on hand all the time, and our recycling bin isn’t cluttered with giant containers.

2. Goodbye, paper towels. Hello…diapers? Last year, I wrote about how we decided to substitute pre-fold diapers for paper towels. Given that we have a three year old, and given that we do cook nearly every night, we deal with grime and goop and spills on a near-constant basis. We were easily going through an entire roll of paper towels every week. So we spent about $20 on a couple packs of basic cloth diapers. They’re much more absorbent than paper towels or regular kitchen rags, and we wash them with whatever else happens to be in the hamper. We use them to mop up the counter, wipe off sticky mac n’ cheese-covered fingers, clean the windows, etc.

3. Take a load off, oven. The toaster’s filling in tonight. We’re a small family and our meals aren’t that large. Sometimes it seems silly to rev up the big oven just to bake a plate of fries or roast some veggies. It's a waste of energy. So when we can, we use our little toaster oven instead. Because it’s small, it heats up quickly and slices a few minutes off of most baking times. We’ve used our toaster oven to cook a variety of foods: chicken, potatoes, pizza, and fish, to name a few.

4. It doesn’t smell as good as other cleaning products, but it works just as well. We’ve replaced most of our household cleaners with two cheap and basic substitutes: vinegar and baking soda. They’re effective, and I don’t worry about using them around my son. These products sell for about a dollar each at the grocery store, and a little of either goes a long way. I cleaned the entire bathroom with them the other day, and although it didn’t exactly smell pretty afterwards, the porcelain and chrome were definitely gleaming.

5. We started purchasing biodegradable laundry powder. The $12 4-pound bags we purchase from a local soap company last about three months. You need only about a quarter of a cup of powder per load of laundry. The powder doesn’t suds up the way many other detergents do, but we’ve used it for more than half a year, and I can say that our clothes always look clean and smell fresh (...at least, no-one's told us otherwise...).

I'm not sure why we didn't make some of these changes sooner, especially when Oma - one of my lifelong role models - served as such a commendable example of a conscientious consumer. Better late than never, I guess. We’ve started to realize that frugality and green living can mesh very well with one another: a wallet-conscious choice is often an Earth-conscious choice, too.

Trying to budget at Whole Foods

Sunday marked the beginning of our second week of selecting groceries according to our new eating guidelines, and our second week of shopping exclusively at Whole Foods. There's no getting around the fact that WF is more expensive than our usual Kroger market and that fewer items are on sale. However, the food is also healthier on the whole. WF carries a plethora of natural, organic, and locally-grown products. That's not to say that it's the picture of healthful perfection: you can find plenty of tempting snacks, sweets, and processed junk at WF, just as you would at most other grocery stores. It's just that WF's junk food is free of artificial dyes, artificial sweeteners, and partially hydrogenated fat. (Related side note: the New Yorker recently published an article about contradictions associated with Whole Foods' history and management. It's an interesting read, especially if you're really into natural foods or skeptical about this company's ability to make a profit while maintaining its integrity. But I digress.)

We planned carefully for our shopping excursion. First, we constructed a menu for the week:

Breakfast: Rice cereal and fruit for Susanne; cereal for Trent; waffles and fruit (or whatever else we can get him to eat) for the kiddo

Lunch: Dinner leftovers for Susanne and Trent; mac and cheese, cheesy toast, or pasta plus fruit for our son

Dinner:

~Sweet potato falafel (we had this on Sunday - it's delicious!)

~Broccoli and quinoa (that was last night's dinner, and it was exceptionally tasty, too)

~Chicken, potatoes, and veggies (Trent's making it right now!)

~Gluten free pizza

~Rice pasta with sauce and veggies

~Soup and salad

~Make-your-own-dinner night (basically, we just eat whatever we can scrounge up from the refrigerator and pantry)

The total bill rang in at $108. That's less than last week (because we didn't purchase as much meat this time), but still more than we would ever spend at Kroger. The organic, free-range chicken cost nearly $8 on its own. I selected a bunch of Bob's Red Mill products (like gluten-free chickpea flour and ground flaxseed) that were each about $5 (but they'll last for at least a couple of months). We also purchased a variety of organic fruits and veggies: apples, bananas, spinach, onions, potatoes, sweet potatoes, celery. We threw in some cheese, butter, and milk that we can use in this week's and following weeks' recipes. Treats included a pack of gluten-free cookies for me and my son and some beer for my husband.

It was an expensive trip, but the bill might be lower next week simply because we're now armed with more basic ingredients. Plus, I don't anticipate that we'll be going out to eat anytime soon. We're finding that it's cheaper, easier, and more satisfying to just cook at home.

Bookstore field trip

Just like last January, my son and I have spent most of the new year so far fighting off illness. Our doctor diagnosed both of us with sinus infections. Phlegm (ewwww), fevers, and unusually cold weather have kept us inside in recent weeks. And if there's something I can't stand - something I absolutely detest - it's being housebound, relegated to watching Oprah and watching the world go by from the front window while I tunnel through boxes of Kleenex. I suspect my offspring feels the same way.

Yesterday, both of us were finally back in business. We decided to go on a field trip to the bookstore. We have a well-honed Borders routine, one that's fun but free. The steps are as follows:

1. Hit up the magazine area and make one or two selections. I usually go for Outside, Money, a sailing magazine, or U.S. News. My son likes the railroad magazines:

2. Take said magazines to the children's section. I find a little chair to sit on and indulge in some recreational reading while my son ooh's and aah's over the Thomas the Train books and plays with the wheelies:

3. After about 45 minutes, we put the books away and replace the magazines on the shelf. Then we go home without buying anything. Cheapskates.

I know Borders isn't a playground, but no-one ever objects to our activities, and we always clean up before we leave. And unlike the library, the noise at the bookstore kind of drowns out preschooler-generated rackets.

Giving to Haiti

More than 16 years ago, my parents let me go on a week-long trip to Leogane, Haiti. Yesterday, as I watched the gut-wrenching earthquake footage on CNN, I couldn't help but wonder how a place I'd spent so little time in so long ago could still have such a hold on me.

At the time of the trip, Haiti was experiencing a period of particular political instability and uncertainty. Now that I have a kid of my own, I can't help but think that my parents must have been either very brave or very clueless when they let their teenage daughter venture into a potentially dangerous situation. But either way, they did, and I'll always be grateful for it. Being able to experience Haiti was a gift in that it ripped apart my limited worldview and reshaped it forever.

Yesterday afternoon, I felt compelled to remember my experiences there. My son and I dug through the stuffed upstairs closet and shuffled through several boxes of my old middle school and high school mementos. The Haiti pictures, taken with an ancient point-and-shoot, were attached to tabs labeled with my 14-year-old handwriting. The picture at the top was labeled "In Bord Mer" (though when I looked at a map this morning, I couldn't find a Bord Mer near Leogane - maybe I had the name wrong, or maybe the village is too small to find its way onto a Google map). The second picture, above, was labeled "Making the thatch."

This picture is labeled "At the clinic." It was taken at the New Missions clinic in Leogane. (The girl in the pink shirt and flowered dress is my best friend. She is now a nurse in a neonatal intensive care unit. She's been back to Haiti numerous times since then, always bringing with her as many medical resources and first aid supplies as she can fit into her luggage.)

According to the New Missions website, the earthquake damaged the clinic "beyond repair."

I labeled the following image "Rich house." It was the nicest home in the area. 

Many of the people we met lived in thatch huts. Some of them lived in smaller cement homes. Leogane isn't that far from Port-au-Prince, and I can't help but wonder what happened to these structures during the earthquake and aftershocks.

Or what happened to the people there. 

Materially, they had nothing. Being young and optimistic and confident and sure in my beliefs, I thought I had something to give to them. Clearly it was the other way around. The people were so kind, so generous, and so genuine that they left an indelible impression on me. 

The children we met are now adults. They probably have their own kids. I wonder where they were when the earthquake struck. I wonder where they are sleeping and what they are eating and if they have water. I wonder if they made it through. 

Haiti's current challenges seem almost insurmountable. The people there need to know that the rest of the world is ready to support them, to lend a hand, to provide the resources they need even more desperately than they did before this disaster occurred. 

We have chosen to donate money to Haiti's Partners in Health organization, which is already on the ground and established in Haiti. The Red Cross is, of course, taking donations as well, as is Doctors Without Borders and numerous other humanitarian organizations. Additionally, some organizations such as the California Nurses Association are asking for medical professional volunteers to aid with disaster relief. 

Right now, Haiti is everywhere you look online and on television. That will probably be the case for the next few weeks. But I hope you will remember Haiti in a month, six months, a year, because the need will be great then, too. 

If you can help, help.

Dilemma: Go Organic or Save Money?

On Saturday night, I found myself staying up way too late to watch the compelling documentary Food, Inc. I could not pull myself away from it. The movie explores the current U.S. food industry, its (often unscrupulous and truly disgusting) practices, its degrading treatment of animals, and its influence on public health. Clearly, the movie had an effect on me, because I marched to the breakfast table on Sunday morning with a new eating manifesto for our household:

*No more high fructose corn syrup. Anything containing HFCS is automatically banned from the pantry and refrigerator. That includes the ketchup. And the wheat thins. And the tomato paste.

*All meat and cheese must be organic. We're not eating anything that contains hormones, antibiotics, etc. Preferably, we'll also purchase organic produce.

*If we go out to eat, we'll go to restaurants that list all of their ingredients in the menu and that purchase much of their food locally.

*We'll plan meals on a weekly basis and go grocery shopping once a week (something we've slacked off on over the last two months). Planning ahead will allow us to use our money wisely and avoid purchasing food we don't need and/or that isn't healthy.

We've always been pretty careful about what we eat. We don't consume many processed foods, and over the last year, we've started eating most of our meals at home. Because I have dietary restrictions related to GERD and food intolerances, we're conscientious  label readers.

However, going organic is taking how we eat to a new and more expensive level. Trent went to Whole Foods today (we're normally Kroger customers) and shopped according to the new rules. We bought some local organic beef for about $8 a pound and some organic chicken for $3.90 a pound. He also bought some nuts, fruit, veggies, broth, and cheese, all organic. The total came out to over $150, which is much more than what we've spent on food in the past.

What's difficult is that food is one area where you can see major savings if you make the effort. By checking the supermarket ads, clipping coupons, and buying products that are on sale in bulk, you can cut costs in a significant way. But the thing is, a lot of the food on sale is also the food that's not particularly healthy: sugary cereals, pre-made meals, salty boxed pastas and rices, and so on.

I figure that spending more for local, organic food is worth it. It's worth the benefits to our health. It's worth the benefits to our environment, which suffers at the hands of factory farming. It's worth the message that it sends to supercorporations that care more about the bottom line than they do about their consumers or the animals and crops they raise.

I realize that not everyone has the luxury of going organic. Sometimes, people just need calories, and purchasing a value meal from a fast food restaurant or eating a packet of Ramen is a lot cheaper than piecing together a complete, healthy, home-cooked meal from a fancy organic grocery store. But if people who do have the option to buy organic do it, then perhaps prices will drop over time and eventually allow everyone, regardless of income level, to buy healthier food.

Two favorite finance sites

I've recently started using two online personal finance tools that I think are worth recommending to others: Mint.com and CreditKarma.com. These are sites that I now refer to on a regular basis as I track our finances, debt reduction progress, and credit scores. Unlike a lot of other personal finance tools, you don't pay for these services. They're free, and they're easy to use.

~Mint.com: This site allows you to view all of your accounts - checking, savings, credit cards, investments, student loans, mortgage, etc. - in one secure place. After enrolling, you search for each account that you want to track, input your username and password for that account, and voila: Mint.com displays your most recent balance for that account every time you log in. It totals your net worth, calculates your average monthly spending in various categories such as restaurants, groceries, gas, and clothing, allows you to create a budget, and gives you a sense of where you might be overspending. 

You can't make transactions on the site; for instance, you can't move money from your checking account to an investment account, or take money from your savings to pay off a credit card, etc. It simply gathers a record of your assets and debts into one basket.

One thing I like about this tool is that Mint.com will send you notifications about your accounts - for instance, when your monthly loan payment is due, or when the interest rate on one of your credit card increases. 

~creditkarma.com: I know I'm not the only person who's ever requested her credit score only to get duped into a pricy monthly credit monitoring service! That's why I like this site: it's free, and it doesn't get all sneaky by roping you into extras that you don't need. Instead, it obtains your credit score from one of the main credit bureaus (keep in mind that the score will often vary depending on the credit reporting agency), provides you with a general interpretation/explanation for that score via a CreditKarma "report card," and allows you to track your credit score over time. 

I've been using it for several months now, and I haven't seen anything shady in CreditKarma's practices. Checking CreditKarma doesn't affect your credit score in any way. You can find more information about how this service operates here. 

Where we went right in 2009

At the beginning of 2009, I was hoping we'd end the year with a nice big chunk of cash in our savings account. That didn't happen, in part because we found ourselves up against a bunch of emergency expenses and in part because we decided to pony up the money for a potpourri of trips (to Destin, Chattanooga, Phoenix, and New Orleans).

That said, I think we made many good financial decisions in 2009. Because we did plump up our savings account early in the year, we were able to pay off our dental work (almost $4K between the two of us), medical bills (for office visits and a trip to the ER), and home repair bills (for a leaking sink, a piping problem in one of our outside walls, and a cranky air conditioning unit) in short order without accruing interest. We paid any balances on our credit cards within 30 days of purchasing (including all travel expenses). We put ~12% of our income into our 401K accounts. We cut back on cable and went out to eat less. We cooked at home more. Perhaps most importantly, we finished paying off our $22K in credit card bills and continued to chip away at our student loans.

2010 may hold some significant changes and challenges for us. It's likely that I will be going back to school in the fall to pursue a graduate degree that will open up more employment opportunities for me (more about that in a future post). I'll be cutting back on my contract work while Trent will be taking on an even more demanding workload than he already has. Our car is turning 10 years old and will soon hit 100K miles, so it's time to start saving for a replacement, just in case. As we make adjustments to our budget, we'll need to make sure we can still meet our other financial obligations, including our mortgage, our monthly bills, our health insurance premiums, and our school loans. My bet is that 2010 is going to be more challenging for us than 2009 from a money standpoint.

As far as personal New Year's resolutions, I try not to go crazy with those. Too much pressure. However, I would like to lose four more pounds (all that's left before I get to my ideal body mass index!), get outside to exercise at least four days a week, continue sailing whenever we get a chance to do so, focus more on the quality of my food (we've been purchasing more organic goods, and I don't regret that at all), and give myself a chance to get creative on a more regular basis. Writing here is a good start!

The Big Easy

I hope everyone had a good holiday season! We just wrapped up a busy month that included a trip to Phoenix to see a friend (for me), a getaway to Chattanooga (for Trent and me), Christmas with my family at our house, and New Years in New Orleans. I can't lie: while these adventures were hardly lavish, they also weren't very frugal. But were they worth it? Yes. Definitely yes. Traveling is my biggest passion.

We saved some money in The Big Easy by renting an apartment with our friends, who also have young children. The apartment was dusty but roomy and affordable; it was located within a block of the Garden District (which consists of gorgeous Southern mansions). We walked a lot. We prepared the majority of our meals at home; in fact, we went out to eat only twice (once to Gordon Biersch near the aquarium, and once to a fantastic Creole-Mexican joint called Juan's Flying Burrito). On New Year's Eve, we stayed in, made dinner, and toasted with a glass of (inexpensive) wine.

I absolutely loved New Orleans, more than I was expecting to. It now ranks with San Francisco, CA and Wilmington, NC as one of my favorite U.S. cities. New Orleans is gritty, artistic, mysterious, a little dangerous, multicultural, magical, and beautifully spooky. I feel like I'd need to visit two or three more times to get the complete NOLA vibe. While we were there, I had the sense that we were in a completely different country. Loved that!