When I decided to retire a year ago, I knew we could live more frugally in some ways but I also knew that travel would be a bigger expense, given that we'd have more time for it. And, after years of working hard and looking forward to retirement, it would be disappointing to have to limit travel due to lack of funds. So, to what extent would we be able to afford retirement travel? To figure this out, prior to retiring I analyzed our projected monthly expenses in relation to our retirement income. I included "travel" as a monthly expense.

For us, travel planning begins with reviewing our calendar and discussing where we'd like to go in the coming year. We take into account visits with family, work/volunteer schedules, other financial obligations, and timeshare options. In 2009, our travel plans have included Carmel, San Antonio, an Alaskan cruise, and a trip to Payette Lake in McCall, ID. Once we know when and where, I estimate expenses for airfare, hotels, meals, and excursions. That amount is prorated and I deposit a monthly amount to the savings account that holds travel funds.

Then I challenge myself to reduce the cost of our planned travel as much as possible. For example, our hotels in Carmel, San Antonio, and McCall were reserved through our timeshare, so aside from the annual dues, there was no hotel expense. The airfare for San Antonio was purchased with miles, so we paid only the airport taxes (~$20). The airfare to Seattle (departure port for cruise) was 50% off because I used my mileage card rewards.

For the Alaskan cruise, we received a "military discount" available to anyone who has ever served in the military, no matter when. We were eligible for the discount due to dh's service during the Vietnam War and this saved ~$500. A few days before the final payment was due, I called the cruise line and negotiated an additional savings of $240 plus $100 onboard credit. A few days before departure the cruise line called to see if we were interested in upgrading to a suite for a reasonable price and we did.

The effort to systematically save and reduce travel costs pays off because the travel fund is growing. I usually deposit any "windfalls" into this account. In 2010, we want to go to

Machu Picchu and take a Hawaiian cruise, so I'm starting to plan and save for those already. Retirement travel is possible because we live a simple life with no debt (except for a small mortgage) and we carefully plan and save for each trip. We've always said travel would be a priority in our retirement and we definitely want to make hay while the sun shines.

I'm happy to report that we continue to make good progress on the goal of reducing our

carbon footprint by saving energy. Here is the analysis of our PGE bill (gas and electric) for the last three months compared to last year:

4/2008 $116.63
4/2009 $76.87
~35% less

5/2008 $94.53
5/2009 $80.31
~16% less

6/2008 $84.45
6/2009 $ 36.59
~56% less

The June figures are somewhat skewed because we were gone for several weeks, but I am still pleased that our usage has been lower each month in comparison to the previous year.

I pay the majority of our bills via auto-payments that are easy to manage online and ensure bills get paid on time. One exception is our property taxes. Our Idaho taxes were due in June and I mailed the check well before the due date. When we returned from our vacation, the payment had been returned due to a .02 shortage on the postage. Two cents!! I guess I was in la-la land when postage rates were raised to 44 cents in early May. So, my 2-cent mistake resulted in a $254.49 late fee.

So, I mailed the tax payment again, along with the late fee and included the envelope that showed the original postmark. Then I called the Ada County Treasurer's office to explain the "check was in the mail." To my surprise, they informed me I will not be charged the late fee because the original postmarked envelope proves it had been mailed by the due date. Instead, they will return my check. Lessons learned: 1) Not all government agencies are unreasonable; 2) From now on, I will only buy the "Forever" stamps.

On the news last night, they featured a young SAH mother who routinely cuts coupons and saves 50% on the family grocery bills. She does it by using the

mygrocerydeals.com website. I was intrigued and checked it out... You do have to register but once you do, it searches out all the deals at the stores you select by zip code. I tried it this morning and got a HUGE list of coupons and specials at my closest supermarkets (Lucky's and Trader Joe's). On top of being very convenient, features I like are that you can add an item to your shopping list and also get the nutritional value. This could be helpful saving me time and money. We'll see.

Male readers be warned: you will want to skip this post.

JC Penney had a sale today where everything in the store was 20% off, even if items were already on sale. So, I trekked to the mall and bought two bras, normally $35, on sale for $17.99 minus an additional 20% off. Then I paid for the purchase with the $25 gift card I received from My Points, so the bottom line for me was: $6.44. I love savings like this... more then $50!

But I made up for it with my next purchase, although I still got 20% off. I bought some adorable, girlie clothes for the newest member of the family, a baby girl born Friday to my cousin and his wife who live in El Salvador. This baby is truly a miracle... they have been married for 14 years, and both are 41. They had given up on ever having children even though they wanted them badly. So, as you can see, this baby was a big surprise, and as my cousin said in his email to me, "a gift from God."

Yesterday's local paper had an

article about a 44-year-old man, Peter Lawrence, who retired early from his job as an HP manager... a very good thing. But what is different about this fellow is that he now lives a life of EXTREME minimalism. And I do mean extreme.

His condo is bare, except for a simple folding chair and an ironing board. He sleeps on the floor in a sleeping bag, uses the ironing board as his "desk," and owns very little clothing. His laptop is his photo album, electronic filing cabinet, TV, CD and DVD player. He says he can pack all his worldly possessions in one suitcase.

Lawrence self-published a book called The Happy Minimalist that describes his lifestyle and the philosophy that motivates him to live this way. According to Lawrence, his extreme lifestyle is not at all about frugality, being a cheapskate, or deprivation. It's about making calibrated choices, consuming less, and preserving resources. Lawrence says he lives "well below his means."

I don't know... this would be a very difficult lifestyle for most people, and certainly for me, but to each his own. However, I'd rather see someone living like this extreme (albeit eccentric) minimalist over someone living a life of extreme excess, well above their means. And I certainly know my share of people that fit into the latter category.

April is always a taxing month for us, budget-wise (pun intended, hehe). Our CA property taxes are due, we usually have some additional state or federal income taxes to pay, along with a hefty fee to our accountant, and our annual auto and house homeowner's premiums are due in April. Although no one is happy about paying taxes, at least I don't stress about it because we are ready for these extra expenses.

Each month I set aside a predetermined amount that is deposited in a "reserve" account where the funds earn interest until they are withdrawn. At 1.5%, these funds earn ~$300 in the course of the year. Whenever possible, I put expenses on my rewards credit card first, then pay off the balance when it's due with reserve account funds, further leveraging funds to earn interest a little longer and provide miles used for travel savings.

Some folks let the bank impound tax and insurance payments, but I prefer to earn the interest in exchange for the responsibility of managing it myself. The reserve fund pays bills that are due several times during the year (e.g., taxes, auto/HO insurance, HOA dues, timeshare dues, accountant, etc.). However, it's critical to stay on top of due dates to avoid late penalties.

I'm making very good progress on my goal of reducing our

carbon footprint by saving energy. Here is the analysis of our PGE bill (gas and electric) for the last three months compared to last year:

1/2008 $165.17
1/2009 $154.07
~7% less

2/2008 $186.94
2/2009 $151.70
~19% less

3/2008 $109.03
3/2009 $ 72.77
~33% less

I was pleasantly surprised at the savings in February, especially since I am home more now that I'm retired. But the reduction in March was even better, so my challenge is paying off. Here are a few things we've done or are doing that have helped:

~ Switched out all the incandescent light bulbs to compact fluorescent;
~ Lowered the thermostat on our FA heater;
~ Unplug appliances/computers that are not in use;
~ Grab a sweater when it's chilly instead of turning on the heater.

Yesterday the

Wrap-N-Mats I bought came in the mail. While we're in Guatemala later this year, we'll have to pack a sandwich for lunch to work every day so my motivation to buy them was related to this foreseen need. I like these little contraptions because they're a reusable wrap and also create a "place mat" for eating. They're made of food-safe materials (free of lead, BPA, and Phthalate), have a liner that is easily cleaned, and it stays secure with a small Velcro strap. These will come in handy whenever we travel and pack a picnic lunch. Best of all, we can reduce of use of plastic lunch bags that take over 1,000 years to decompose in landfills!

Today I finally got around to checking out

hulu.com and was pleasantly surprised. If you have the software requirements (e.g., OS X on my computer), you can watch TV programs and movies free on your computer. Now I can watch my favorites TV programs or movies on my computer (using headphones) while dh watches his on the big screen (and vice versa). What will they think of next?!

Today dh and I went to Costco, even though I swore I'd never again go on a weekend once I retired... so I had to eat my words! Actually, we had not been in over a month and our Am Ex rebate check for $294.41 was in the mail yesterday when we got home from a business trip. And, since the frig was pretty bare, we stocked up... now the pantry and freezer are full, and we have cleaning supplies and paper products to last at least 6 months.

Our cart totaled $354.80 but we paid only $60.39. This was on top of getting $38 off for products that had coupons (e.g., Brita filters, Skinny Cow, vitamins, etc.). I found out Costco now automatically deducts the coupon amount when the cashier rings up, so I wasted a lot of time cutting coupons this morning. But I really can't complain... the savings are nice no matter how you get them.

I usually budget ~$200 a month for Costco where I buy our meat, soy milk, organic cereal, cheese, coffee, tea, canned tomatoes, Skinny Cow, pasta, cat litter, vitamins, dried blueberries, Romaine, some fruits/vegetables, and cleaning and paper products (some items are bought every few months). I always pay with the Am Ex card and then pay the balance in full each month. I like the tiered rebates: 3% for gas and restaurants, 2% for travel, and 1% everywhere else... and the card has no fees, other than the Costco membership that is required.

Ever since I was a kid, I've had a piggy bank. I don't know how many adults keep piggy banks of some sort, but I suspect there are others like me out there. On my kitchen counter I have a piggy bank that I use for spare change, and in my bedroom I have a piggy-bank cat that's chock full of quarters... so full I can't get another one into it. In my underwear drawer, I have a red makeup bag that does double duty as a bank (CYA has a literal meaning here). My most prized coins are some I've had since ~1968, a gift from my father. I keep them in a small blue bag in a secret place. I'm not the only one in the family who is involved in this practice. Dh keeps a gallon jar of coins, mostly pennies, in our closet.

Well, it had been a couple of years since I'd forced myself to roll coins, so early this morning I decided it was time to deal with some of these stashes. But since I HATE counting and wrapping coins, I took most of them to the Coinstar machine at Lucky's. I recently learned that by donating the money to one of their non-profit partners or by getting gift cards, there is no fee for using Coinstar. The kitchen piggy and the red bag produced $197.39 that I donated to Feeding America. The piggy-bank cat produced $134.50 that I used for Starbuck's and AMC gift cards.

As far as my little blue bag of old coins, these may be worth more than their face value because they are silver dollars, quarters, and dimes, so they definitely won't get fed to the Coinstar machine... I'm not quite sure how to go about unloading these, but I'll figure it out. And the penny jar... well, it's destined for Coinstar if dh is willing, but not until he can help with it. It's too heavy for me to carry.

Yesterday I was in the vicinity of my favorite Asian market where I find the best selection of produce items I like to occasionally buy. It's not in a convenient location so I don't go very often, but when I do, I always come away with some special treats. I spent $8.86 for 8 blood oranges, 2 large Asian pears, a big bag of taku choy, and ~ 1/4 lb. of winter mushrooms (shitake).

The blood oranges are delicious... wish I'd bought more. Taku choy is similar to bok choy but the stem is thinner and the tops are leafier and darker green. I will use it to make a stir-fry with fresh garlic, winter mushrooms and strips of lean pork, served over brown rice. I also put it in soup. The pears will be chilled, sliced and served for dessert with slices of gouda.

I wish I lived where I could walk to a store for fresh produce several times a week, or even daily. Unfortunately, getting fresh produce entails driving but that is how it is... I live out in the boondocks. But I'm beginning to think the bargain-priced produce I get at Costco is not really a good deal because I inevitably end up throwing half of it away.

In case you've never seen a blood orange, here is what they look like:

My nephew and his wife are the proud new parents of a sweet baby boy who was born in early January. I've received many photos and I can see that my new grandnephew is a beautiful combination of his parents, but I am most definitely biased. Tomorrow I am off to NYC to celebrate the baby's

red egg and ginger party, a custom in his mother's culture. I can't wait to meet my grandnephew and to see my NY family once again.

Dh is staying behind due to his work schedule, but he'll be driving me to the airport, and on the way we'll pick up my niece and her children (my grandniece and other grandnephew). We are all traveling on the same direct flight to NYC, and my DS and BIL will also travel with us. Despite the cold NY weather, we are all excited and looking forward to the trip.

And, because it's off-season, I got some excellent deals on my hotel and airfare. I learned it pays to call the hotel directly and negotiate a discount instead of just booking online. I saved ~$275, and found a nice, smaller "boutique" hotel that offers a complimentary hot breakfast daily and is only two blocks from my nephew's apartment. Another money-saver was to buy two one-way tickets on different airlines instead of a round-trip ticket on one. I chose Virgin America for the trip to NYC and I'm returning to CA on AA, so my total airfare was $279.20 instead of ~$375-$450 for the itinerary I wanted.

For some reason, my cat TC has nails that grow quickly and she needs them trimmed about once a month. She is very playful and has been known to damage the carpet or furniture if her nails get too long. In the past, I've always taken her to the vet to have her nails trimmed because she wiggles too much and I was afraid I'd hurt her. But I invested in a pair of

guillotine trimmers that make the job easier. Practice makes perfect, and I am getting better at the process. The best part is that it avoids a stressful trip to the vet for TC, and the $18 it saves me is also a nice bonus. Here's what works for me:

1. Get the guillotine cutters and hide them near the recliner;
2. Sit in the recliner but ignore the cat;
3. Soon the cat will jump in the recliner with you;
4. Gently push the cat off the recliner;
5. The cat will now really want to get in the recliner;
6. Allow cat to jump up and get comfortable next to you;
7. Read a book or work on your laptop while ignoring the cat;
8. The cat will soon fall asleep;
9. When the cat is very sound asleep, grab the trimmers, then gently squeeze a paw to extend nails and quickly trim, being careful to stay ~ 2 mm. from the quick;
10. After trimming 3-4 nails, the cat will wake up and jump off the recliner;
11. Repeat steps 2-10 until you have cut all nails;
12. Give cat a catnip treat and pour yourself a glass of wine. ;-)

Featured on Oprah today: "One of the thriftiest families in America shares their money-saving secrets with you! Then, slash you grocery bill in half. One mom says she can show you how." I'm planning to watch the show, but if you prefer to get the information online, here is the

link.

I've participated in

My Points program for about a year now. Most of my points have been earned doing surveys or checking out "clickthru" ads that come via email... very easy. So far, I've used the points I've earned to get a $25 B & N gift card and now I have enough to get a $50 GC. I'm thinking about Kohl's.

The most points I've earned at one time was 1,000 to try out Netflix which we really like and were thinking about getting anyway. A few days ago I earned another 1,000 points by buying the 2009 Entertainment Book ($19.50). I've wanted to try it because there are several featured restaurants near us that we already go to. I figured that using coupons twice would recoup the $19.50. Has anyone else tried the entertainment.com book and do you think it's worth the cost?

So far I am on track with the goal to reduce our

carbon footprint by saving energy. Here is the analysis of our PGE bill (gas and electric) for the last two months:

12/2007 $193.68
12/2008 $116.99
~40% less

1/2008 $165.17
1/2009 $154.07
~7% less

I have also been buying more organic foods but haven't determined the cost impact yet. Sometimes the organic produce at the store I shop most frequently looks pretty sad, so I have to pass and go for the non-organic.

Since retiring I have been trying to get better at using coupons to save $$ on groceries. The problem is many of the coupons that come my way or that I find online are for pre-packaged processed food or products I don't use. One of my

health and fitness goals for 2009 is to buy more organic and fresh food and cook healthier meals.

Recently I found Mambo Sprouts, a website that promotes "Free Printable Health, Natural & Organic Grocery Coupons." So far, I like it because it also has recipes, eco house tips, and freebies. I also found some $1 coupons at Organic Valley.

Yesterday, on a lark, I decided to go to Macy's to check out their sales. I was in search of new socks to wear with trousers and jeans, especially in winter. Knowing Macy's can be high-priced, I was not too hopeful, but I have hit some great sales there in the past.

Well, to my surprise, socks were on sale... they had been marked down 50%, then the sale offered another 50% off, and with my coupon, I got an additional 20% off. Bottom line: socks that are normally ~$6.00 a pair, I got for only $1.19! So now I'm set for a while and will recycle my old socks to the rag bin to use for polishing. Amount saved = > $57.

Later, I found a pair of much-needed rain/snow boots @ 50% off at the Bass shoe store. These will come in handy when I go to see my DDs in ID in a few weeks. Amount saved = $38.

TC approves of my new socks.

I previously posted about having to repair our gas fireplace. It cost $122 to have someone come just to "diagnose the problem" which was determined to be a malfunctioning part. So, we paid $122 for the house call plus $33 (10% of the $329 part that had to be ordered).

Well, late Tuesday afternoon the repairman came to install the new part. He removed the old part and replaced it with the new, but the fireplace still didn't work... it would not light. Then he started systematically checking other things and finally got it to work.

What astounded me is that the repairman then told me the original part was working "perfectly well"... that it was not broken. The problem was that the system had to be reset. That was all... a very simple fix. The nice man then showed dh how to reset it in case it happens again (it was not something we would have figured out).

The best part of this story is that the repairman said there would be "no charge" for the visit, that he would take back the part that had been ordered, and the company would refund us the 10% we had paid to order the part. I couldn't believe it!

So, even though the original visit cost $122, we saved $329 on the replacement part and we now have a fireplace that works. We are so grateful that this honest technician told us the truth. He could have replaced the old part, reset the system and charged us... and we would not have been the wiser. His actions have reinforced my faith in the basic honesty of people.

I posted previously we had applied for a refinance based on getting a rate of 4.875%. We finally closed escrow four days after the lock-in period expired due to a delay by our HOA in getting a report to the lender. And this for a loan that was supposed to be "fast-track" or low paperwork. However, Countrywide honored the lock-in and we were able to close with the loan amount covering all closing costs. We even received a "proceeds" check yesterday for $271.09. The best part is that our payment has gone down $225.82 a month. BTW, the thing that got the ball rolling on our refi was a

post by monkeymama, proof of how participating in SA can help our financial well-being.

We have lived in our small condo for almost three years, since downsizing in the spring of 2006. All in all we've been pretty lucky regarding any needed inside repairs until now. The HOA takes care of all the outside repairs. We do, however, pay $240 in monthly HOA fees that cover all outside maintenance, insurance, and garbage collection. The complex has several swimming pools, greenbelts, and common areas, so I don't think our HOA fee is exorbitant. In fact, we have friends who live in a nearby gated complex requiring a 24/7 guard and their fees are three times higher.

Our unit has a gas fireplace we turn on with a switch. We love the way it heats up the room quickly, not to mention the lovely atmosphere it provides. But it suddenly stopped working in early December. I called the power company to see if maybe the pilot light had gone out and I learned that it doesn't even have a pilot. But the service call was free and the technician said the problem was a bad spark ignition module. The next step was to get referrals and call around. Then I scheduled a service call with the longest-established company whose fees were in line with others.

Well, the repairman came early this morning. The company charged $122 to just walk through the door. Then after a 10-minute inspection, we were told the part that needs replacement would cost an additional $329 and it has to be ordered. Thank goodness for the household reserve savings, where we have $$ stashed for this kind of situation. If it takes care of the problem, I will be happy, although I am still surprised at the high cost of the service call.

Not too long ago BA

posted a graphic about savings buckets and it made me think about mine. "Pay myself first" has long been my motto and a deposit to my savings is always the first "bill" to get paid each month. Over the years, to manage my savings, I've experimented with different strategies and eventually settled on keeping separate accounts (buckets) for different purposes. Some people might think it's a lot to keep track of, but it works for me and that's what matters. To eliminate paper clutter, I access my statements online.

Here is the current situation with my savings buckets:

Reserve Account #1: Used for periodic expenses such as taxes, insurance, HOA and timeshare dues, ID home expenses, etc. I deposit a predetermined amount from our income (my pension and dh's job) to this account each month. I use a "moneylink" feature that enables easy transfers to and from my checking account.

Reserve Account #2: Used for rental property expenses. I deposit a small amount to this account monthly in addition to a small but consistent net rental income. The savings account is linked to a dedicated checking account used only for rental expenses. The purpose is to have a reserve to offset any vacancies and to pay for maintenance and repairs.

Emergency Fund: This account contains ~2 years of "no-frills" living expenses, to be used in the unlikely event that a major economic meltdown results in our state teachers' pension funds being frozen, reduced, or eliminated. In this economy, you just can't count on anything being constant, so I believe in being prepared. These funds are in staggered CDs earning 3.75-4.17%.

Tax Sheltered Retirement Accounts: Now that I'm retired I can no longer contribute to these accounts, but dh will contribute to his until he retires in June, 2009. I am not sure when we will draw from these, but we'd like to hold off until the mandatory age of 70 1/2. The financial planner I've used for many years has invested my 403b and IRA funds in various products that preserve the principal and earn a return of 2-5%. I have always opted for a "conservative" approach with my retirement funds, even when we've been in a bull market, something I'm now happy about given the state of the economy.

Personal Savings: Dh and I each have our own personal savings account that is our sole and separate property. Mine is with WAMU/Chase and his is with a credit union. We are free to use these funds as we please. For example, we draw from these accounts when we need to subsidize travel, a new laptop, or anything else. We each deposit equal amounts into these accounts each month, ~15-20% of our income.

My Fun Fund: Dh and I have a goal of traveling more in our retirement. So, I've decided to dedicate my small ING savings account for travel. The money saved in this travel account will include net earnings from consulting or part-time work and other misc. sources (e.g., recycling, rebates, etc.). Travel can be expensive, so having this dedicated account will motivated me to save in small ways that add up over time.

So, not including the retirement accounts, I have two "reserve" accounts, an emergency fund, our two personal savings accounts, and the ING Fun Fund, for a total of SIX accounts. It is a lot to track, but going online for balances and using a spreadsheet fore record-keeping makes the management easy. Especially now that I am retired, my savings gives me peace of mind, not to mention some welcome passive income.

Note: Stock dividends also provide passive income, but it is automatically reinvested. I don't consider the brokerage account as a "savings" account but rather an investment account that is liquid.

Yikes!!! I am shocked at how much I could theoretically buy on credit. Today, out of curiosity after reading monkeymama's post I decided to add up the credit lines on my credit cards, something I've never done before. I recently had a card closed by Cabela's because of non-use, so it also makes me wonder if I should close some accounts before another CC company decides it does not want/need me as a customer.

I only carry cards #1 and #2 with me, the rest are in the safe-deposit box. Since I pay off the cc bills monthly to avoid finance charges, I don't pay attention to the limits. And, I manage bills online, so I do not get any paper statements. Card #1 has a fee, the rest are "free."

I can see why it is so easy for people to sink into CC debt, especially if a financial crisis arises in one's life. Having this much credit could be very dangerous:

CC#1 - Airline Visa $35,000 LOC (most frequently used card, has a fee)
CC#2 - AmEx $27,800 LOC (used for Costco)
CC#3 - MBNA MC -$14,800 LOC (no longer used, opened 25 years ago)
CC#4 - LLB Visa $5,500 LOC (provides free shipping, rarely used)
CC#5 - Amazon Visa $12,500 LOC (provides free shipping, rarely used)
CC#6 - Chase Visa $8,000 LOC (provides gas rebate, rarely used)
CC#7 - Capitol One Visa $20,000 LOC (provides miles, rarely used)
CC#8 - Schwab Visa $20,000 LOC (rarely used, came with the account)
CC#9 - Macy's - Unable to determine LOC limit (rarely used)

I use the Macy's card occasionally when they have an additional 15% off promotion if you use the card (then pay it off when the bill comes). The LL Bean card gives free shipping and monogramming and this is nice at Christmas so I may keep it.

Apparently having all these cards has not hurt my FICO credit score but it still may be time to close some of them. First I have to investigate if there is an disadvantage to closing these accounts vs. keeping them open, even if I am not using them. I am not sure about the impact of closing accounts on your credit score. Does anyone know about this?

BTW, these numbers do not include dh's cards. He has 3 or 4 but only keeps one in his wallet and he uses it regularly for the rewards, but also pays it off each month.

Happy New Year everyone! We arrived home late yesterday afternoon from our trip to El Salvador... I will post highlights and pictures at a later date. While we thoroughly enjoyed our time there, it is great to be back home.

We brought in the new year quietly... just dh and I, and TC the cat who is delighted to have us home. Today has been a day to catch up on the snail mail, email, and my favorites blogs while I recover from a slight case of jet lag.

Later today I will spend some time on finances, particularly on calculating our net worth. One of my financial goals for 2009 is to increase our net worth by 5%. I plan to carefully review the monthly budget to identify some ways to achieve this. More on this later.

My daughter asked me why we would carry a mortgage if we could pay it off. Why not pay off the loan and not have a PI payment at all? Well to start with, my dh and I have different financial positions. While I could come up with my 50% of the loan, it would strain dh's resources to do likewise (it's complicated). So we will continue to have a mortgage on our CA house. And, thanks to a tip from monkeymama, we are now in the process of refinancing to 4.875% and this will save about $225 a month from the current payment. But assuming we could simply pay off the loan, would it be a good idea?

To answer this question using the new 4.875% numbers, I started with a

calculator that weighs various aspects of home ownership including the impact of property taxes, your standard deduction, and your tax rate. I also calculated the interest portion of our payment and what we could reasonably earn if we left the money in the bank. Here are the figures:

Annual payment (interest): $9263
Tax benefit by having a loan (per calculator above): $1936

Amount of interest earned on $190000 invested @ 4% = $7600
Minus 30% in taxes = $2280
Net investment income = $5320

Amount saved if we paid off mortgage: $9263 minus (5320+1936) = $2007

Bottom line: We could save ~$2000 a year we paid off the $190,000 loan, assuming my calculations are not flawed in some way. But we have decided not to for several reasons. Primarily, dh feels contributing his 50% of the payoff would deplete his cash reserves. We plan to live here only 5-6 more years, then we will sell our townhouse or rent it if we cannot sell. By not paying off the loan, we have access to larger cash reserves for future plans that include travel and possibly buying property in a foreign country. So, this compromise works for our situation.

In general, I think it is a good strategy to pay off your mortgage but everyone should assess their individual situation before doing so.

with my 2009 goal to reduce our carbon footprint. Our gas and electric bill came in ~ $10 higher than the previous month. But in comparing October and November 2007 with 2008, I have reduced energy consumption and saved money. We have had some mild fall weather, so this is likely a factor but I'll keep up the effort.

10/07 $87.16
10/08 $69.54
~20% less


11/07 $90.28
11/08 $79.67
~12% less

One of my 2009 goals is to reduce our carbon footprint (see sidebar). There are quite a few calculators on the web, but

the one I like gives me a good grasp on "doable" ways we can reduce our footprint. For our 2-person household, DH and I produce 16.44 tonnes (metric tons) of CO2 emissions. This is below the US average of 20.40 tonnes for a 2-person household. The average for the world's industrial nations is 11 tonnes, so we have lots of room for improvement. The worldwide target to combat climate change is 2 tonnes.

One way to reduce our carbon footprint is to become more efficient with our energy consumption (electricity, natural gas, gasoline). Another of my 2009 goals is connected to my carbon footprint: to reduce our gas/electric bill by 10%. Not only will it save us money, but also will have a positive impact on the environment.

Yesterday my package from

Travelsmith arrived. I like many of their products but they can be expensive, so I watch for specials, promotions, or shop their outlet. I tried on the clothes and was very happy with my purchases. With S & H and tax I paid $75.30 for:

~ pair of "Seam Slimmer" black pants to replace a favorite pair (too loose) - $19.98 (retail $79)
~ white Coolmax 3/4 sleeve tee shirt, great in the tropics - $16.98 (retail $42)
~ pair of compression knee-highs to help leg circulation during air travel - $12.95
~ Purse-size Wonder cloth, chemical-free and great for traveling - $9.50
~ Emergency cell-phone charger - Free (Retail $25)

Oh, and they sent me a coupon for 10% off on my next purchase. There's just one little problem... the coupon expires December 1, 2008 and I received the package on December 4. Useless, but they would probably honor it if I squawked. I just don't have anything else I need to buy right now.

So, I saved over $100 for items I will use during my upcoming trip and for future travel as well. Now, I better go find stuff to donate... gotta follow my ROT #1.

$9.50 seems expensive for a square of cloth that is only 2 X 2 inches but it is chemical-free and will last for years. This one replaces one I forgot in a hotel room last summer... it's great for travel and gently exfoliates.