Financially Free

This was the question a friend asked me recently, and I'm not surprised. Every day the media has commentary about the fate of those about to retire or recently retired. The calamitous state of the economy has ruined many a retirement plan and has had a negative impact on the quality of life of many retirees.

Well, I didn't even have to stop and think... my answer was a resounding "NO!!" Then I explained to my friend that my retirement was planned over a long period of time; it wasn't a decision made on the spur of the moment. But I've always believed that even the best-laid retirement plans have to take into account future economic challenges, and it is naive to think that situations like the current recession won't recur again in the future. Retirees have to be prepared for the best of times and the worst of times.

My friend asked what I'd done to help me prepare for retirement, so I shared some strategies that I think played a key role in helping me be ready to retire and that should help me weather fluctuations in the economy after retirement. And, while it is crucial to save money in one's retirement accounts, there is far more that can be done to be solidly prepared. So, what did I do that made possible my goal of early retirement?

1) I live below my means. When I worked, I lived below my means, and now in retirement, I will continue to live below my means. And while it's good to at least live within your means, living below your means will allow you to be more successful saving money. Another benefit of living below your means: you can more easily avoid debt.

2) Saving by "paying myself first" is a habit. Starting at 16 when I got my first job, I saved some money every month. It could be more or less depending on the circumstances, but I have to say that in the last 40+ years, it has been a rare month when I have not been able to save something, even if it was only $20.

3) Saving for retirement was a focused effort. From my early 20s, my savings included "untouchable" money: my retirement accounts. I opened my first IRA at age 22 and saved something for retirement every paycheck. As soon as I could, I would increase the contributions and in later years, it evolved to sheltering the maximum allowed in both my 403b and 457 Plan. And if eligible for a Roth IRA, I would contribute to that as well. (This is "doable" if you have mastered living below your means and do not have to use all your earnings to make ends meet).

4) I try to separate "wants vs. needs." From the time I was 19 and lived on my own, I learned to be a careful shopper and have always tried to avoid impulse purchases. Over the years I've had a few slip-ups, and though guilty of some regrettable impulse buys, I can honestly say these never prevented me from meeting my financial responsibilities (because I had savings...). As I've gotten older and wiser, I've gotten better at asking: "Is this a want or a need?" Other questions I ask when I see something I think I need: "Do I love it? Do I have something like it already?" It keeps me from buying things that I really can do without, like ANOTHER pair of black pants.

5) I educated my children about finances. My two DDs were raised frugally and were taught life lessons about money: people and experiences come before things. It was a necessity because I became a single mom when they were 7 and remained single until they started college. My DDs had no problem wearing hand-me-downs or bargain fashions. Both worked from age 16 on, saved money, and helped pay their college (along with scholarships, some student loans, and what I contributed). One DD has a BS in Nursing, the other a BS in Wildlife Biology. Now as adults, they are financially independent, frugal young women. And why is this important? Well, aside from my obvious pride, my DDs are not a financial burden on me, unlike the adult children of some of my friends.

So, do I regret retiring last August? Absolutely not, but it doesn't mean I don't worry about the economy or that I will not continue to live frugally. I do and I will. In fact, frugality is so ingrained in me that it's become a character trait, one that has helped get me where I am today and one that will help me survive in the current turbulent economy. As a retiree, I will not "live high off the hog," but instead will "live low off the bacon" *smile*... that is, I will live with the help of what I've systematically set aside for this season of my life... and it will be more likely to last because I have planned and prepared. And although I am careful with money, I do not live a deprived existence. On the contrary, my life is rich in terms of pursuing the interests that call to me and in traveling to continue life-long learning and seeking new adventures.

This morning I read a thought-provoking

article that predicts a second Great Depression by 2011. I like to think of myself as a positive person and try not to fixate on doom and gloom. But, I do believe this article addresses some of the issues that are contributing to the general instability of the economy. And, apparently at least 1,665+ people were compelled to comment after reading it. How I hope Paul Farrell is wrong this time.

When I retired, I vowed I would never go to Costco on a Saturday again... it's just too busy and hectic, at least in our city. DH and I always go together but today he was out of town on business, so I decided to go on my own to beat the holiday crowd. I thought this might also result in saving money since we tend to spend more when he's along.

Well, even though I went early, Costco was as busy and crowed as a weekend day... I guess I didn't beat the holiday shoppers after all. I ended up spending $192 after using $10 worth of coupons. It sure doesn't seem as if I saved any less than when DH goes with me. The good news is I won't have to go back for at least a month and I stocked up on:
* organic cereal (2 boxes)
* Propel (2 cases)
* pesto sauce
* ravioli ~ double pack, for 2 dinners and leftovers (coupon item)
* water-packed tuna (12 - for casseroles and sandwiches)
* Pam spray (coupon item)
* Pepper Jack cheese
* Splenda (coupon item)
* fresh asparagus, green beans, romaine, mushrooms, peppers
* 2 bottles BV cabernet
* fresh tilapia (enough for 6 dinners)
* fresh lean pork chops (enough for 6 dinners)
* 3#s raw almonds
* baked pita chips (coupon item)

Some items will last well beyond a month (e.g., tuna, Pam, Splenda, Propel). I'm getting better at sticking to my list, using the coupons, and shopping with menus in mind (I have more than two weeks of dinners if you count the tuna casseroles). I will augment from the freezer and the pantry, so I don't have to buy meat but will go to Lucky's for fresh produce and bread. I also filled up for only $1.99 a gallon, lower than I've paid in a very long while.

Everyone I know, myself included, is doing the happy dance over the falling gas prices. Here in northern CA we are paying ~ $2.15 a gallon, down from the high of at least double that just a few months ago. This is a good thing, right?

Well, not necessarily. This morning I read an article on CNN.com about the

negative impact of falling consumer prices. WT heck??? Yesterday we were worried about inflation and today it's deflation. Consumers are happy, but economists are not. Go figure.

I've posted before that our townhouse complex is being invaded by a flock of wild turkeys. Our unit backs up to a common area frequented by deer, songbirds, and other wildlife, including turkeys. Being a peace-loving and tolerant individual, I'm trying to share my tiny patio with them. Maybe they will go away after Thanksgiving and I can resume sitting under the pergola without fear of being bombarded by... well, let's just leave it at that.


Now they are even roosting on the roof. I will not call the HOA for fear the turkeys will be "relocated" the same way the wild pigs were (to someone's freezer, we think). So, I wait patiently, trying to maintain my sense of humor... Warning: funny turkey story ahead (sent to me via email)


A young man named Victor received a parrot as a gift. The parrot had a bad attitude and an even worse vocabulary. Every word out of the bird's mouth was rude, obnoxious and laced with profanity.

Victor tried and tried to change the bird's attitude by consistently saying only polite words, playing soft music and anything else he could think of to "clean up" the bird's vocabulary.

Finally, Victor was so fed up he yelled at the parrot. The parrot yelled back. Victor shook the parrot and the parrot got angry and even ruder. Victor, in desperation, threw up his hands, grabbed the bird and put him in the freezer.

For a few minutes the parrot squawked, kicked, screamed, and used language as foul as anything Victor had ever heard. Then suddenly there was total quiet. Not a peep was heard for over a minute. Fearing he'd hurt the parrot, Victor quickly opened the freezer door.

The parrot calmly stepped out onto Victor's outstretched arms and said, "I believe I may have offended you with my rude language and actions. I'm sincerely remorseful for my inappropriate transgressions and I fully intend to do everything I can to correct my rude and unforgivable behavior."

Victor was stunned at the change in the bird's attitude. As he was about to ask the parrot what had made such a dramatic change in his behavior, the bird continued, "May I ask what the turkey did?"

And now, compliments of a former student, some "corny" turkey jokes for the kids: *groan*

What did the mama turkey say to her naughty son?
Answer: If your papa could see you now, he'd turn over in his gravy!

What did the turkeys sing on Thanksgiving Day?
Answer: God save the kin.

Why did the turkey cross the road?
Answer: It was the chicken's day off.

Why was the turkey sent to the principal's office?
Answer: He used "fowl" language!

What did the little turkey say to the big turkey?
Answer: "Peck" on someone your own size!

My $20 Challenge goal was to save $2,500 extra by December 31st. Although I am retired, my part-time income has been greater than I expected, something for which I am grateful. Since my last update on October 18, here is my progress:

Balance Forward = $1124.84

Gas Reimbursement - $124.12
November Part-time work income - $673.28
November 1099 Income - $739.12
NSDs (12) and NDDs (10) - $76

New Balance = $2737.36

This morning I was reading an article about a

strategy to prevent impulse buying and I reflected on some of my worst impulse buys over the years. At the top of the list is the $325 Hermes scarf I bought at the airport in Paris, minutes before departing for the US.

I am a scarf lover. Those who know me are used to frequently seeing me in a scarf, almost daily when I worked. Scarves are one of my favorite accessories. But a $325 scarf? It was a stupid, impulsive buy. I made the mistake of going into the duty-free shop and was immediately seduced by this exquisitely crafted scarf. The reality is I can buy a great scarf for less than $50 and wearing a $325 scarf would not make me look any better. And, obviously, it was impossible to return this scarf.

The truly sad thing is that my Hermes scarf has never left its pretty box... I have never ONCE worn it. In the back of my mind, maybe I am thinking I might sell it on eBay, but in the meantime it sits in the cedar chest. What probably will happen when I die is that my DDs will donate it to the Goodwill and some smart and lucky frugal person will buy this great scarf for 50 cents. Hmmm, well, maybe I will wear it one of these days, after all.

It's a small consolation that my impulse buys haven't prevented me from meeting my financial obligations, but I can think of much better ways to spend $325. Had I followed the strategy in the article, I would not have made the purchase. Live and learn.

Yesterday I stocked up on staples and sale items at Lucky's (formerly Albertson's) and spent $99.42. It was reduced to $90.42 after I used $9 of "Lucky's Bucks." The best part is that I got a FREE 14.5 lb. turkey because I spent $99. It was a surprise.

The clerk asked me if I wanted a "turkey breast or a whole turkey." I said, "Oh, that's OK, I don't need anything else." He looked at me as if I had two heads. "Madam, there are no strings attached... you are entitled to a free turkey because you spent $99!" I asked for a whole turkey and he went and brought me back one that was 14.5 pounds @ $1.19 per pound.

We are going to have Thanksgiving with my DS and BIL, and they always cook a HUGE turkey (Birdzilla), so I may end up donating this turkey to the food bank, but it was great to get it free.

Yesterday we invited my DS and BIL to the football game for the team of the university where DH works. The dean had given DH four VIP tickets that gave us access to the pregame social event that included music, food, wine and beer... all free, including the parking that would normally be $20. Plus, we had great seats on the 50-yard line in the VIP section.

Well, our team got shut out, and to make matters worse, in the 4th quarter the sky suddenly opened up and we had a monsoon-like downpour. It was not supposed to rain, but wary of the dark clouds, I had gone prepared with my raincoat and boots. DS had a short rain jacket, but DH and BIL quickly got soaked. When the rain started, the home crowd jumped and dispersed as if they'd been sprayed by a fire hose. All but the diehards started to leave. With only 7 minutes left and the bleak score (21-0), we decided to head home, too.

Once back home, I turned on the gas fireplace because DH and BIL were cold and wet, and DS's pants were wet from the thighs down, and she said she was "freezing." So, we are officially out of the "no-heat" contest. We still saved a lot by participating in it though (thanks for motivating us Fern), and it was fun. We will continue to monitor our use and try to be more frugal than we were last year. The forced air heater has yet to come on, but no doubt it will happen soon with the weather getting colder each day

What a week it's been, especially on the historical front. The election is finally over, and the promise of change for a better America lingers. My wish for President Obama is that he will have the wisdom and the support necessary to lead our nation with distinction in the coming years. Obama's been called a transformational leader, and as such he has the power to make fundamental changes for the better. No one can argue he has inherited a clean up job of unprecedented proportion.

The stock market is back on its erratic track and most of us do not even want to check our accounts... it's too ugly. But life goes on, and the economy will recover, although not likely any time soon. To better monitor my 403b, IRA, and 457 retirement accounts, this week I set up a new spreadsheet that I'm very happy with. It projects growth based on guaranteed values until age 70 1/2, when I have to begin RMD. My 457 Plan administrator came to my house yesterday and we discussed the terms of the account. It's keyed to the S&P and guarantees a whopping 1.95% on 90% of the balance. This is better than the 0% I thought I was getting. We will make some changes in January after the annual interest is posted.

The week has been mostly very quiet and relaxing... I feel as if I'm on vacation. On Monday afternoon, I taught my seminar which I conduct every other Monday. It focuses on topics relevant to the student teachers I supervise and who are required to attend. Tuesday, Wednesday, Thursday (and possibly today) were NSDs and NDDs that I thoroughly enjoyed. One of the delights of being retired is having the freedom to enjoy leisurely days without a set agenda.

The weather has been getting colder and the leaves on most of the deciduous trees in the neighborhood have turned beautiful shades of gold and orange. I've been able to go on daily walks that have been good for my health and just plain fun. So far, DH and I have not turned on the heat but it's cold enough that we need to bundle up with sweaters in the morning. It has gotten as cold as 49 degrees at night, but our home is well-insulated and cozy. Our goal is to hold off turning on the heat until Thanksgiving.

I've had a chance to catch up on some projects I put on the back burner this summer. I pulled out my sewing machine and finished several "dish towel" aprons that I will use as hostess gifts over the holidays. These are easy to make and very inexpensive: Pre-wash two new dishtowels and iron. One is placed horizontally, the other vertically with a fold about 12 inches from the top that serves as a pocket. Stitch together and finish with twill tape. These can be made in about 30 minutes. The cost for one apron:
Dishtowels $2.49
Twill Tape $1.19
D-rings $ .39
Total $4.07 + tax


I also made several other aprons as "just because" gifts for my DDs, DS, and some DFs. These require a pattern and 1 5/8 yard of fabric, but are still easy to make and inexpensive at around $7-$12, depending on the fabric. Needless to say, I buy fabric only when it's on sale. Fabrics are chosen based on the interests of the recipients. For example, DD1 is an equestrian, so she gets a pattern with horses. DD2 is a wildlife biologist who works with fish populations, so she will get a fish pattern. The best part is that these projects are fun to make and are always appreciated by those who receive them.


And finally, a few weeks ago I signed up as a volunteer translator for

Kiva (Spanish to English). Yesterday they sent me their "translating test" which I completed in about 40 minutes (they said it should take about an hour). It was an easy piece and is supposed to be representative of future assignments. This will be a terrific way to volunteer without leaving the house. I also sent Kiva another $25 to invest in a Peruvian retail coop.

Are you ready for Halloween? We are...

Since I am now retired, I will miss the costume parade at school, but we are still getting into the spirit of the day (pun intended).

I am trying to focus on healthier treats, so I bought fruit rolls and popcorn balls for all the little hooligans that will come by tomorrow. The two neighbor children are also getting a $10 gift certificate to a book store. Once a teacher, always a teacher I guess.

Even TC is ready to "Trick or Treat." She loves to wear her ballerina costume I bought for $4.

Hope your Halloween is a safe and fun-filled day.

To me, voting is a privilege and a responsibility. I have not missed an election since becoming a naturalized citizen in my 20s. DH is American by birth, so he has always been able to vote... and he does. For the last few years, we have been voting by absentee ballot and find that it is very convenient. It is easy to complete the ballot in the comfort of your home and then mail it. Voters can also drop off absentee ballots at any polling place on Election Day. In CA, you can apply to be a permanent absentee voter but regulations probably vary in other states.

This morning on CNN, I watched a segment about voter registration fraud, the long voter lines expected in some regions, and a myriad of problems with electronic voting machines. In one case, a woman using an electronic machine voted then saw all her votes jump up a line to the opposing candidates when she completed the process. Weird, but CNN actually showed a machine doing that.

Well, this only reinforces that we are happy to be permanent absentee voters. We mailed in our ballots several weeks ago, so we have done our civic duty. On Election Day, we will not have to deal with the stress of getting to the polls before or after work, or waiting in a long line as we have done in the past. (Well, since I'm retired, going before or after work wouldn't have been a problem for me, but no one likes waiting in line.)

On Saturday, October 19, I went to the Half Moon Bay Pumpkin Festival. For the last 14 years, it's been an annual tradition to go with two friends from graduate school. Our DHs will not go because they can't stand the bumper-to-bumper traffic and the fact that the normal 30-minute drive takes at least 90 minutes. We don't care... we have fun talking on the way there and back. The festival features a pumpkin weigh off, lots of live music, and beautiful crafts. We ate lunch at our favorite Italian restaurant and enjoyed the festivities and the unusually warm weather. This year we broke down and bought the popular pumpkin hats for $21. They're whimsical and warm, and we will definitely wear them next year.



This last Saturday, DH and I went to the

Tech Museum of Innovation for the Leonardo Da Vinci exhibit. It was well worth the $53 it cost for the entrance, IMAX, and special exhibit. If you are ever in San Jose, I recommend the Tech Museum. There are many excellent exhibits and hands-on activities for kids. Regular entrance is only $8 for adults and it includes an IMAX movie.

As I mentioned in an earlier post, I am saving money on groceries by creating menus and shopping from a list. Here are my dinner menus for the coming week. I calculated that I am spending about $5.26 a day for two people:

Sunday: Baked whole rosemary-stuffed chicken, brown rice, Cesar salad, whole wheat French bread

Monday: Chicken curry (from leftovers) over brown rice, tossed green salad, whole wheat French bread

Tuesday: Mushroom penne, steamed asparagus, whole wheat French bread

Wednesday: Grilled tilapia with tequila-lime seasoning, quinoa cooked in vegetable bouillon, tomato/basil/baby cucumber salad

Thursday: Vegetable stir-fry with chicken (leftover) served over brown rice

Friday: Tomato and red pepper soup, leftover mushroom penne pasta, tossed green salad (we're going to a play, so we needed a quick dinner...)

Saturday: Marinated pork chops, quinoa, broccoli sauteed with mushrooms and garlic

For dessert: fresh fruit in season; sometimes we might include a slice of provolone or smoked gouda.


Cost of dinners for the week ~ $36.83 (not including wine):
Whole chicken, 4.75# (from freezer) - 4.70
1# penne pasta - .99
Tilapia (from freezer) - 2.73
Pork chops (from freezer) - 2.99
Fresh vegetables (broccoli, zucchini, asparagus, celery, romaine lettuce, mushrooms, cucumbers, tomatoes) - 12.87
Whole-wheat Artisan French bread - 2.98
Tomato/roasted red pepper soup - Free (gift from DS)
3.25#s Papaya - 3.87
2# Gala apples - 1.96
Uncle Ben's Instant Brown Rice (2/5.00) - 1.75 used
Quinoa (Trader Joe's) - 1.99

Had:
Spices
Fresh herbs (from patio planter)
Lime juice for papaya
Wine of the week: 2003 Scarbolo Merlot 11.99 (not counted in daily meal cost)

We still have not had to turn on the heat, but the month has been unseasonably warm. However, we have had a few cold days but I have resisted turning on the heat. Yesterday I received our PG&E gas/electric bill and was pleasantly surprised:

October (30 days in cycle): 14.90 kWh/day and 0.33 Therms/day
$69.54

September (31 days in cycle): 22.68 kWh/day and 0.35 Therms/day
$130.09

I did learn the power company will no longer allow customers to pay with a CC, so I won't be able to get my miles as I normally do. I will set up this account on auto-pay, though, which will still make paying very convenient.

In my part of the world, October's weather so far has been rather mild: not hot enough for the AC, yet cooler, but not enough to HAVE TO turn on the heat. Thanks to Fern (Wild Blue Yonder) and the "No Heat Contest," I am being far more conscious about the just turning on the thermostat to get comfortable. Now I just go for a sweater or a comforter instead.

No wonder my palm's been itching! I'm finally on a roll with my $20 Challenge. In the past month I have received $35 in rebates (for a new shredder and a flash drive), $739 in 1099 income for 10 hours of consulting, $30 for an insurance overpayment, and $6.85 for recycling our plastic and aluminum. Since August 27, when I last added to the challenge, I have had 11 NSDs ($3 each) and 8 NDDs ($4 each) so that is another $65 to add. I am also adding the free $25 (plus interest) I received for opening my ING account back in January. From now on, I will deposit all challenge $$ into ING which is going to be dedicated to my $20 Challenge funds.

Balance Forward = $222.43

Rebates - $35
1099 Income - $739.12
Recycling $$ - $6.85
NSDs (11) and NDDs (8) - $65
Insurance premium overpayment - $30
ING Balance - $26.44

New Balance = $1124.84

My goal by December 31, 2008: $2,500. I think I might actually make it!

Today I calculated that since retiring in late August, my grocery bill is averaging between $100 and $115 a week, not including household items such as paper towels, soap, etc. It also does not include dining out. Before I retired, our average grocery bill was at around $575-600 a month plus we spent about $200 dining out. While I am definitely spending less than when I worked, I don't know if my spending is high, average, or low for two people.

What have I done differently that has resulted in savings? To start with, in September, I took an inventory of the pantry and freezer. Unfortunately, I had to throw out a few expired cans and some items in the freezer that were freezer burned. I used some food before it expired, so this was a savings, but then I replaced them and stocked up on staples.

Another money saver is that I now make weekly menus. The impact? We are not only saving money, we are also eating healthier. I am buying more fresh vegetables and fruits and have reduced our consumption of red meat. At least once a week, I try to make a hearty soup and this provides leftovers for lunch, too. It helps that I like to cook and have fun creating menus, using some items already in my pantry.

My shopping trips are now far more efficient than when I worked. I go to the store less frequently and I always take a list. So far, I am keeping Costco runs to about once a month and trips to the grocery store to about every 10 days. When I worked, I'd hit the store on the way home and buy things I already had at home (but didn't know it). I also frequently shopped when I was hungry or tired... not a good idea.

When I worked, we ate out about 3 times a week, mostly because I was too tired to cook at the end of a hectic day. It was about convenience. Now we might dine out once a week, if that. Since I have time to cook, and I enjoy it, I am only too happy to do so. Lately, it seems dining out is mostly brunch or lunch on weekends, either before or after we go to the movies or some other activity.

My next challenge is to learn how to get better at using coupons to save money, much like Retire@50 does. I definitely can improve in this area, and I think I can still reduce our grocery bill some. But I am very happy with my savings so far. I am curious... what do you spend on groceries and for how many people?

I stumbled upon this interesting

calculator that lets individuals estimate the impact on their taxes for the next four years, based on the candidates' promised tax plans.

Personally, I do not put much store in political promises and will not be voting based on how much money I can save on my taxes. It is far more important to me to vote for the candidate whose policies I believe will more likely result in saving lives, creating jobs, and enabling Americans to afford the basic necessities (i.e., health care, housing, food, gas, etc.).

Which candidate to choose? Well, here's a quiz to see which candidate you align with philosophically. This is one of MANY candidate quizzes/calculators, something I don't remember from the last election.

On February 17, 2009, most TV stations in the US will stop broadcasting on analog airwaves in favor of

digital. Today I applied for a $40 coupon
toward a converter box for our analog TV at our Idaho house, where we use only a set of "rabbit ears" to get reception. It is not worth it for us to pay for cable or satellite since we are there only a week or two every couple of months, and we do not want to buy a new TV. Fortunately, in CA, our TV is newer and digital so we are OK.

I am surprised at how many people say they are buying a new digital TV. This includes people I know are having financial issues as well as some who already use cable or satellite. It doesn't make sense to me unless the TV genuinely needs replacing. How are you dealing with the transition and if you have installed a converter box, is it an easy process?

Well, I'm back in CA and it is a beautiful, clear autumn day although it was raining yesterday when I arrived. But, I still have not had to turn on the heat!

Now that I am retired, I have time to begin my Christmas shopping earlier than usual. This year, we will be in El Salvador for Christmas, so I have additional family members to shop for and I have decided to begin with this challenging group. I say challenging because, although these are all my first cousins and their families, I really do not know some of them well. The exception is one cousin with whom I am very close and my aunt and uncle who are celebrating their 50th wedding anniversary.

After an hour of searching super-clearance racks at three major department stores at the mall, I spent $20.62, saving $143.68 from the original retail price. Here is what I bought:

- Ladies black short-sleeved blazer, linen-cotton blend... lined and machine washable (original price $49)
- Red blouse, short-sleeve, classic style... polyester micro-fiber that feels like silk (original price $38)
- 2 short-sleeve, classic v-neck tee-shirts, one black and one white in 100% pima cotton (original price $22 each)
- Henley-style short sleeve, woven top, 100% cotton in dusty rose (original price $24)

My perseverance paid off! I got 70% off of the clearance prices at one store and 40% off at another. All items were already drastically reduced, so it seems the retailers are really pushing to clear their summer inventory. The items I bought are good quality, from well-known manufacturers (e.g., Liz & Co., Joneswear, Alfred Dunner), and machine-washable. I like to buy timeless, classic styles in basic colors. The tee shirts are size 4-6, so they will be gifts for some petite family members and the black blazer was on my cousin's "wish list" so I know she will love it. And, since El Salvador is in the tropics, the summer-type fashions are perfect.

Now, I only have 18 more people to shop for, and I have to stay within the baggage limit (the suitcase with gifts must weigh less than 50#s total). I have budgeted $500 (not including DA and DU) and so far, I am well under budget. I will be looking for small, light-weight, good-quality, practical gifts. Any ideas for gifts that have to be packed and carted to another country?

I am here in Idaho, spending a quiet week and celebrating my DDs birthdays (they are twins). I've had time to enjoy the beautiful fall weather and go for long, leisurely walks. As I stroll through our fairly new subdivision, I'm troubled by the increasing number of homes for sale... about 35 to be exact, or 20% of the homes. A few are beginning to show signs of neglect and the HOA says these are foreclosures, but they are working on getting the landscaping up to standard. It goes without saying that property values have dropped dramatically. Apart from the physical evidence of financial misfortune, I am sad for the families that have had to make the decision to give their homes back to the lender.

The dire state of the economy is painfully evident not just in the many vacant homes in local neighborhoods, but also in the many businesses that are closing. Whether I am at a mall in Idaho or California, I see many businesses- big and small- that are now closing or have closed... their doors are locked, windows covered, the shops empty. It's alarming.

On a more positive note, today's local paper says home and retail sales are up for September in the Treasure Valley, although the "economic downturn persists." This was good for me to read because I'm finding that I can too easily get in a blue mood just thinking about the economy. I know I should focus on things I can control, but for me this is easier said than done. If I let myself, I will worry about the depression/recession/downturn or whatever you choose to call this state we're in. The fact that DH and I are financially secure doesn't help much... I still worry about others, especially children and the impact this is having on their lives.

But in my own way, I HAVE TO DO SOMETHING. So, whether it makes sense to anyone else or not, this has helped me to keep positive. In the last few days I've done the following:
~ swept and cleaned my patio, windows, and super-cleaned the house (easy job, considering the house is used infrequently);
~ donated the money I saved on house-cleaning to the local youth ranch;
~ stocked the pantry with non-perishables (dry beans, canned vegetables, soups, pasta, etc.) and bought enough to donate a like quantity to the food bank;
~ donated a box of like-new, unused warm clothing to a women's shelter;
~ watched a great interactive presentation on the Oregon Trail in Idaho (those pioneers do inspire courage and perseverance!);
~ made a list of all the blessings in my life (and there are many).

I'm interested in knowing how others are coping/surviving given the state of the economy. What are you doing to keep going and how do you stay positive?

My cat, TC, is an indoor cat but she loves to go out to our small patio when I water. She is quick to catch bugs, lizards, and other moving critters so I watch her like a hawk. Yesterday she found a very, very large feather, one that made me wonder what type of bird was flying about. TC rejects expensive toys in favor of bottle caps, crumpled paper, or a found feather, so she was definitely pleased with her find. She brought her feather in the house and proceeded to entertain me at length.


Later, I heard TC "chirping" in the office while looking out the window. The mystery was solved... we are being invaded by wild turkeys!


Boy, are those wild turkeys homely!


Our complex is close to a park, and our common areas are a pathway for deer, turkeys, and even wild pigs as they travel from the foothills to the park. The complex residents gladly share the habitat with them, especially since it was theirs first. The exception is the wild pigs. Last year, they destroyed so much landscaping with their rooting that we had to spend thousands of dollars to "relocate" them and also to repair the damage.

Not sure where the pigs were relocated to, but it was done through the Department of Fish and Game. Hopefully, not to someone's freezer. Well, the point of this post that seemingly has nothing to do with finance, is that one does not have to spend large sums to be entertained... just look around you and enjoy the simple things.

The real estate market in my neck of the woods has gone to hell in a hand basket, although realtors like to use less graphic language like "it's a buyer's market" or "we are in a temporary downtrend." Today I looked up the house we downsized from in 2006 on

zillow and was astounded to see that it is currently valued $200,000 less than what we sold it for two years ago. Back then, when we put the house on the market, it sold in less than a week and we had three offers above the asking price. It's sobering... I think the family who bought our old house will be OK, though, since they were solid buyers.

No one's been left unscathed. The townhouse we moved to when we downsized has lost at least $115,000 in value in the last two years. Thankfully, we are not thinking about selling for a while, and we since we bought it in 2003, we actually have some equity. What would be a nightmare is to owe more on your mortgage than your house is worth.

A family I know is in that predicament. They bought their house for $620,000 in 2006 and got 100% financing through a special first-time buyer program for teachers. Believe it or not, their purchase was "entry level" in our area but they had to buy in a nearby town because there was nothing available in their price range in our city (only "dumps" according to them). Today, their house is worth $454,000. Their saving grace is that they are able to make the payments so they are OK for now. When will they have equity again? That remains to be seen, but it could be years.

Well, I am. By "secret blogger" I mean that I have not told anyone about my blog... not family, not friends, not even my DH, DS, or DDs, the closest people in my life. It's not that I've written anything I would be embarrassed for family or friends to read. To me, it's about the freedom in the anonymity of my blog... I can write about anything and everything... I have "blog mates" who understand my interest in finances. By being a "secret blogger," I have no pressure to write every day nor do I have to discuss any of my posts with people who know me. Perhaps someday I'll tell friends or family about my SA blog, but for now I like it this way.

Wall Street gave us a roller coaster ride we won't soon forget and now my bank (WAMU) is faltering! Where will it end... or is this just the beginning of the end? Don't answer that... I really don't want to think about things getting worse right now, especially since I just broke down and checked my stocks, even though I'm trying to get into the habit of checking just once or twice a month (vs. my previous obsession of checking daily). Here's a recap of my battered stock portfolio:

Monday, September 15th - Down 3.72%
Tuesday, September 16th - Up 2.95%
Wednesday, September 17th - Down 4.67%
Thursday, September 18th - Up 3.73%
Friday, September 19th - Up 3.42%

Surprisingly, this week my portfolio fared better than expected considering the havoc in the market. But the bigger picture is bleaker: I'm down 6.1% for the month (from the previous month) and down 14.3% for the year. I'm not too alarmed (yet), but it's definitely disappointing for someone like me who just retired. Well, at least I'm not depending on this money to live on right now, but it sure would be nice for it to be there when I'm 85. I made the decision not to buy long-term care insurance because I thought I had enough assets and we also have good health insurance but I may have to rethink this.

In other money matters, I've been super-busy and this is a good thing because it kept my mind off the stock market. Here's how I've saved money this week:

1) Called my TV satellite company to complain about the high cost of their service. To me keep me as a happy customer, they gave me a credit of $10 a month for a year, gave me the high definition channels free for a year (another $10). I canceled HBO that we rarely watch and saved another $14. Total monthly savings: $34

2) Called the phone company about my landline because I wasn't happy with my rate plan. They reduced my plan to the rate they offer new customers. Monthly savings: $20 and no change to services.

3) Saved $3,000+ by buying airline tickets with miles for a family celebration we're going to in December. See yesterday's post for details.

4) Took an inventory of the pantry and freezer and stocked upon staples to last at least 3-4 months. Spent $192.58 but saved $39.73 by shopping carefully. I stocked up on chicken, ground turkey, pork roast (to be frozen), canned tuna, pasta, marinara sauce, coffee, green tea, 16#s assorted dry beans (red, black, lentils, garbanzos, green peas, and pinto), EV olive oil, salad dressing, canned tomatoes, popcorn, canned corn, cream of mushroom soup (I use it in various recipes), and a large bottle my favorite sake (yes, it's a staple!).

5) Bought a Brita "smart" water pitcher for filtering tap water to use for drinking. (We need to reduce our copious bottled water consumption and be more "green" consumers.) Used a $10 off coupon at BBB and will send for a $4 rebate on the extra filters. Final cost $45 for the large size plus filters for a year. We will also save about $30 a month by not buying as much bottled water. My DD uses a Brita pitcher and they have well water. She says it does a great job filtering.

6) Took a free online defensive driving class sponsored by my employer (my PT job). Not only will my auto insurance company reduce the annual premium by $40, but now I'm also eligible to get reimbursed for my mileage by my employer.

7) I was able to find a solid tenant for the rental that will be available on October 1. Since I leased the house without using a property manager, the monthly savings will be $119.50. I also raised the rent by $45 a month because I was told the previous rent was way under market (I've kept it the same for five years because I had really great tenants). Finding a tenant for this house is a huge load off my mind... a vacancy can suck a reserve account dry in no time.

On top of all this, I worked six hours on on Monday and spent Wednesday in beautiful Monterey at a workshop. My room was paid for, we had excellent meals, and the presenters did a decent job... not the best but better than some I've suffered through. Now, I'm ready to relax for a while. After all, I AM retired!

In December, my dear aunt (mother's youngest sister) is celebrating her 50th wedding anniversary. My DA is the only surviving sibling on my mother's side. If my mother were alive, she would be 92... my DA is a mere 79. DA lives in El Salvador, and although I frequently talk to her by phone, I rarely get to see her. DH and I decided we could not pass up this wonderful event, but when I researched the tickets, the "cheapest" were $1,590 per person for the dates we have to travel. Ouch!! Although we have a travel budget for 2008-09, this trip was not included. So, my mission has been to figure out the best way to plan this trip frugally.

This is where my credit card mileage plan definitely pays off. When shopping with "miles," I always request coach tickets because they cost less. Unfortunately, coach tickets were not available and I was told December is the worst time of year to travel to Central America from our neck of the words. Nonetheless, I had enough miles to secure two business class tickets (same as first class since the plane has only two sections). The total transaction cost for both tickets: $154, including taxes and a booking fee, and of course the miles.

When I use miles to pay for tickets, I try to wait until it results in a substantial savings. For example, going to Idaho costs about $225 for a ticket or 20,000 miles, whereas airfare to El Salvador is at least $1,590 or 35,000 miles (coach). It's definitely a "no-brainer" to use the miles for the really big savings.

A caveat about using a credit card that gives rewards such as miles: use this strategy ONLY if you are able to pay off your balance monthly like I do. Otherwise, you are carrying debt and paying interest, two things that diminish the benefit of any type of "rewards."

This was a question from someone I've known for years. He tends to be very negative and is not someone I'd frequently associate with if it were not for a circumstance of fate: he is the significant other of a good friend but I don't hold that against her. (Have you ever noticed how negative people suck the life out of you?) Well, I explained, yes, I do have a job but it is because I choose to do it. I do not HAVE TO work. So I leave it at that since I know it is useless to try to explain myself to someone who just doesn't "get it."

I choose to work because I've found job that feeds a passion, not my pocketbook. That, to me, is the big difference. In my previous job, if I did not feel like going to work, I could not easily call in sick. There is not such thing as a substitute principal, although we have individuals assigned to carry on while we are off campus. It's just not the same. Our presence is required 99% of the time.

Now, I get to choose the days and times I work. I have tremendous flexibility, with the exception of having to meet seven times between September and December 1st for a two-hour seminar. But then, I was the one who decided on the dates/times, so it's not that bad. On some weeks, I have no scheduled workdays'these are my "free" days. On other weeks, I may work a day or two.

And a bonus: I get paid! I plan to use this extra money to expand our travel plans and increase my contributions to

Heiffer International and Second Harvest Food Bank, two organizations I regularly support. Here's what my job commitment looks like for September:

~ 21 possible workdays (not counting Labor Day)
~ Of these, 11 days are completely free
~ My longest work day: 1 day @ 6 hours
~ On 7 work days, I have scheduled ~3 hours
~ 2 days will require working ~ 2 hours
~ My net pay estimate: ~ $34 an hour (after 33% withheld)

While the money is nice to have, it is not my reason working. My part-time work is a self-imposed experiment because, to confess, I was afraid of having way too much time in retirement. Back in May, when I decided to take the final step into retirement, I had some doubts... about having too much time on my hands, not enough to do, and well...I guess I just needed to be needed somewhere for something. And so, I applied for my PT job at a local university and also accepted a consulting contract with my former employer. When the academic year is over, I may choose to continue working... but then, maybe I won't. Gotta love having choices!

DH does not teach a class on Fridays, so after breakfast we took a leisurely drive over the Santa Cruz Mountains. The day was sunny and clear and the traffic very light. We drove up Hecker Pass Road, stopping at two wineries along the way for some free wine tasting (only me, since DH was the DD). Then we made our way down and over to the tiny town of Corralitos, famous for the

Corralitos Market and Sausage Company that makes the best sausage in the western USA if not the entire country. We come here about twice a year and we always stock up on sausage. We spent $50.25 on:
~ 2 #s of linguica
~ 1 # of Creole
~ 1# of Andouille
~ 1# of Kobasico
~ 1# of Chorizo
~ 1# of Smoked Turkey
~ 1# of Hot Links
~ 1# of Polish

I calculated that we’ll get 18 meals from our purchase, so we are set for about the next 6 months. Best of all, we had a great time… what a luxury to be able to do this on a Friday. It’s definitely one of the perks of being retired!

Yesterday afternoon I took care of September transfers and bills. The way I manage our monthly finances might seem odd to some people, but it works for me. The interesting thing is that I didn’t write a single check and the entire process online took about 30 minutes. September’s budget total is $12,152 and includes:

Payments Scheduled:
• CC1 payment ($4882.27) due 9/10
• CC2 payment ($1266.15) due 9/12

CC1 and CC2 are paid in full each month.
CC1 was higher than usual due to a homeowner’s insurance payment for the ID house and my new laptop.
CC2 included gas and expenses for our Sedona road trip in late July and all groceries.


Transfers Scheduled:
• $500 to CA Household Reserve account
• $500 to ID Household Reserve account
• $100 to Rental Reserve account
• $1,500 to regular savings (cache fund)
• $1,000 to Schwab Account (investment)

The reserve accounts collect funds to be used for periodic expenses as they come up (e.g., taxes, insurance, etc.). Not included here is DH's contribution to his 403b since it is $$ deducted by his employer and I do not have to manage the payments. (I am no longer able to contribute to my 403b/457 since I have retired.)


Other:
Mortgage payment for CA home, water bill, Direct TV, and HOA fees are on auto payment, so I don’t have to schedule payments but these expenses are part of the monthly budget of $12,152 spent. Utilities for the ID house are on auto payment and are taken from the ID Household Reserve account.


Also scheduled but not payable until October:
• utility bill payment for CA house ($99.57) on CC1;
• phone bill payment (Internet, cell, and land-line = $244.08) on CC1 and it includes DH’s iPhone charges.


Extra Deposits to Checking Account to offset expenses:
From household reserve account:
• $543 for HO insurance
• $114 for timeshare dues

From my savings account:
• $2491 for my new laptop

Whew! That's a lot of money to move around… but I love the ease of managing everything online and using the CCs to earn miles. Best of all, the mortgage for the CA house is our only debt.

Retirement income update:
I’m still waiting for the final figures from my defined benefit pension plan, but so far estimates point to a monthly net pension @ ~ 99% of my working net pay. Although I’m pleased, it doesn’t mean I’m getting a huge pension.

When I worked, I lived on a pre-determined (by me) portion of my income. I sheltered the maximum ($41,000 a year in my 403b and 457 accounts) and 8% of my gross income was contributed to the state teachers retirement system as a mandatory deduction. With so much being sheltered, my take home pay was reduced to a level I became accustomed to living on.

When I receive the final adjustment I’ll see how accurate the estimate is, but I’m grateful no matter what. Not surprisingly, I’ve been told it will likely take several months for the state to process the final figures from my employer (final compensation and unused sick leave).

A concern at this point is whether I’m having enough federal and state taxes withheld. I can adjust withholdings if need be, but I’m inclined to wait until my 2008 taxes are figured. Since I had a fairly large amount withheld in the 8 months of 2008 that I worked, and my gross pension is only about 46% of my previous gross pay, I’m counting on having had enough taxes withheld for the year. I guess I’m just too much of a control freak to like paying more in taxes than I have to… and I want my $$ to work for me, not Uncle Sam. To be on the safe side, I’m reserving 33% of any consulting income for taxes.

Thoughts about inflation:
Another concern is the impact of inflation on my retirement income. I think this is an issue commonly overlooked in retirement planning. To illustrate, a hypothetical pension of $4,000 a month will need to be about $5,375 in 10 years to keep up with a 3% inflation rate.

My pension plan provides for a mandated 2% COLA each year, but I am planning for at least 3-4% inflation. If my retirement income cannot keep up with inflation, I’ll look for ways to make up the shortfall.

First line of defense will be to reduce expenses but not to the point of feeling deprived. And, reducing expenses is a challenge I’m planning to undertake, regardless of inflation. Next, I’ll tap my taxable accounts and draw from the tax-sheltered accounts last. Right now my plan is to leave my 403b and 457 funds intact until I am 70½, but it’s reassuring to have these funds as a backup.

Ideas to soften the impact of inflation:
• be more frugal/ reduce expenses
• rethink travel plans (get frugally creative)
• withdraw shortfall from taxable reserves
• increase part-time work

Any other ideas to offset inflation?