Quarter End

It's the last day of the first quarter of the year. What a quarter it has been. I think the stock market is down 12% or so. Until later, the full picture remains unknown. Interest rates have been slashed.

Consumer confidence is down. Gas prices are creeping toward $4 at the pump. Foreclosures are evident in most neighborhoods.

We are weeks away from the first of the stimulus rebates.

Tomorrow is a new day and a new quarter. No fooling.

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Countrywide

I have a good friend who works for Countrywide in the mortgage app department. She told me the rules and processes have changed. It is more difficult for certain applications to be approved. There are more "things" she has to check.

She's seeing more FHA loans. These loan apps are simpler to complete so she's reviewing more of them. Lots of extra hours each week.

To me this shows a clamp down - hopefully to help folks from getting in way over their heads buying a home.

I'm old enough to remember saving 20% before looking for a house. We knew by the $ we had to put down what our house had to cost. Nothing creative about those days, just simple math.

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Tools

Power tools!

We are considering a change in our stock holdings and I am accustomed to visiting morningstar.com. They assign stars to stocks and mutual funds
and graph performance against similar holdings, etc.

We have some $ in the large no-load family of funds out of Pennsylvania, Vanguard. I discovered their investigational tools this morning.

They even allow hypothetical scenarios. You put in what you might buy and with $ from what source or fund. They give an analysis of your holdings after the change.

They also give warnings if your "balance" is skewed. Interesting.

There's a watch you can place on a fund or stock and Vanguard will keep your abreast of happenings when you visit the site and log-in.

There are probably other funds and sites which offer such helps on line. So much easier for the personal investor to do research. The internet is a great tool.

I encourage you to be your own investment advisor. Who else could possibly care as much about your $?

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Disturbing

The news has been issued that Medicare will be insolvent in 2019. Insolvent. No $. A complete stop. Broken.

I will be 68 and on Medicare, hopefully with supplemental coverage.

Will I have access to additional coverage?

What will be there for our children and grandchildren?

If it is that broken, why haven't the brains in Washington come up with a fix, a real fix?

The government has set itself up as the end-all. The answer to all of life's problems. Big government will have to become bigger to serve us all in the manner in which we have grown accustomed. Government is the parent and guardian. I would say the over indulgent parent anxious to keep us all dependent.

Is it time for us to grow up and take care of ourselves?

Bob and I will continue to save as much $ as we can to cover our health needs ahead. We, like everyone else, pay in 1.45% to Medicare and 6.2% to Social Security. We are a corporation so we pay in the match as well. That's 15.3% of the earnings from our business toward programs that are broken and quickly headed to bust! $ down a rat hole.

How do we reteach generations of dependent citizens? Is the pioneering self-sufficient spirit attainable? Or only a mirage covered in our history books?

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Simple System

I keep a large plastic envelope near the phone in the kitchen. I have Bob trained to put Visa receipts there for easy reconciliation. The envelope is red.

Last month I placed a large green envelope along side the other. It's marked 2008 and is used to collect tax relevant receipts and documents.

My last pay stub from my seasonal job will go in there along with any charity acknowledgements, IRA contributions, stock sales, real estate tax bills, and the like.

Unfortunately, Bob now has 2 envelopes there and needs to decide which one to use for credit card receipts. He's not color-blind but has to stop and think.

The red one is for expenses and the green for tax deductions and the like. Red is negative and green is positive. When in doubt, the envelopes are the plastic see-through type and a quick peek at the contents helps.

I suggest whatever system works for you. An envelope system or a file folder system or a drawer dedicated to control receipts, invoices, and such.

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FICO

I caught some of Dave Ramsey's show yesterday. He's big on having no debt except a mortgage.

He fielded a call from someone who was >3 years beyond a bankruptcy. She wanted to know how to get a better FICO score so she could purchase a house.

After Dave gave her some help, he went on about FICO scores after a break. It seems he thinks the goal should be to have no FICO score.

To increase a FICO score, one has to "play" the debt game. Play and pay and watch the digits increase.

However, if your home is paid for and you carry no debt including car and credit card loans, you don't have a FICO score. If there's a no score on you, most mortgage companies and banks (nearly 90%) will not consider loaning $ to you.

This doesn't make much sense. If you owe no one, you will have trouble getting a loan. However, if you have debt and are paying debt, your score will be high enough to get more debt.

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Rebates/Stimulus

The latest news is the government will begin wiring out the first of the rebate/stimulus payments May 2. The wired funds (those who filed their 2007 returns with refunds direct deposited into one account) will be completed May 16.

That same day, paper checks will start going out. Oddly, the order of processing is based on the last two digits of the Social Security number of the primary filer.

They state the last of the paper check mailings will be July 11 for those having filed timely (April 15). Those filing on extension after April 15, will fall into line as received.

If you owe Uncle Sam, he will get his cut before any stimulus checks gets to you. It is not recommended that you file with a balance due assuming he will do the math and send you the balance. You will get dinged with late payment and, possibly, interest charges.

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Compassion

Bob was working in California last week and spent some time with the management of a facility in Union City near San Jose. He told me he feels sorry for folks out there regarding real estate.

One person bought their first home 2 years ago. It's a modest home that needs fixing and updating. They paid $900,000 for it.

Now their new home is valued at just $700,000. As interest rates are going down, with their home value below what they owe for it, they can not refinance to take advantage of the new rates. Their only available option is to wait for the adjustment on their ARM (adjusted rate mortgage).

Make those larger payments or loose their home.

Bob and I had several discussions. What's the answer for these folks and others in similar situations? Who's at fault?

It's not fair for the government to bail everyone out. It's probably better in the long run for mortgage carriers to suffer in that they took that "bet." We all remember all those ads for zero down, interest only, and take out all your home equity.

Scenarios like those of the Californian and the foreclosure rumored to be underway in Marny's neighborhood make me think of stories of the Great Depression that my parents and grandparents relayed.

Let's pray for wisdom.

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He Is Alive

My grandfather asked me one day if I had noticed that the crosses in our church were plain. Most of them made of wood.

He went on to explain that we do not depict Jesus dead on the cross like in some churches because the cross is empty.

The cross is empty. The tomb is empty. Death's grip is empty. Jesus overcame its hold. He is alive!

From time to time, especially during Lent, I wear a crucifix as a reminder that the cross is empty because it once held the Christ upon whom my sins were born. The cross is empty because He paid the price and then overcame death and the grave.

Let's celebrate both this Easter morning. He is alive!

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Tax Refund!

Thursday our tax refund appeared in our bank account. We mailed our returns February 22.

We did not e-file but we did request direct deposit. The word is that filing early shortens the wait but also that direct deposit can cut your wait by 2-3 weeks.

Better still would be to owe Uncle Sam a little. The refund was our $ all along. It was withheld over the year so the government had an interest free loan from us. It is not our goal to save $ through taxes.

We will adjust our withholdings in the middle of the year and again in the fall. Why should we have $ not working for us just sitting in the government tills.

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A Bargain!

He paid the ultimate cost for my salvation and then gave it to me for free. There is nothing I can do, no amount of $ I can donate, no good deeds I can do, nothing I can do to earn this free gift.

Nothing except believe. Jesus was the Christ, the son of God, the price paid for my transgressions.

Today we pause to remember. The stock markets are closed. Schools are not in session although they call it anything but Good Friday. We reflect on the night of torture followed by the morning walk to the hill.

The day was darkened and the curtain torn apart as my Lord gave his life for me. He took upon himself the wrongs of the entire world. He was the sacrificial lamb.

Take time to reflect.

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Maundy Thursday

This is the day in Holy Week that we remember what happened in the Upper Room.

As the Teacher and his disciples were enjoying the traditional Passover meal, Jesus took the bread. He broke it and passed it to his men saying, "This is my body."

Later, he took the cup of wine and as he passed it, he said, "This is my blood."

I imagine these phrases were odd to hear that evening. Words that meant more after the crucifixion. Words that mean so much to His followers this side of the cross.

The ultimate gift of His body and His blood offered for us for always. Free for the accepting.

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New Smell

I left the new vehicle at the dealership yesterday for undercoating and fabric treatment. I drove a loaner car - a Civic. It was a good zippy little car but tinny.

When I stepped up to the cashier's window to return the Civic and pay for the treatments, the cashier was busy eating a candy bar and slurping a large slushy drink. It was 4:30pm. I hope that wasn't her lunch.

She was friendly through her chewing until I questioned the amount on the invoice I owed.

I asked if the difference between the quote and this number was sales tax. She said no, it couldn't be.

Slurp.

We found my salesman and he had the original order I signed. Yes, it was sales tax.

Slurp. Chew. Do you want the Visa receipt attached to the paperwork?

I hope she doesn't end up with thighs like mine.

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Hate in Church

How upsetting to hear Senator Obama's pastor rant and rail against the United States and white people.

I know some preachers get emotional from the pulpit as if getting louder will stir people to what? Healing? Closeness to God? To fellow humans? Compassion? A desire to give more $?

I can't help but wonder why and how he could worship there under this pastor in that congregation which would not welcome his mother. More than not welcome her but despise her. How very sad for him to hear such hatred spouted against his mother's race.

It is about race. Obama claims to be a bridge builder and a uniter. And yet, his weekly worship experience likely contained strong hate speech.

I also think this congregation needs to be investigated. There are very strict laws against political opinions coming from the pulpit. Church are not allowed to endorse candidates. They could be at risk of loosing their non-profit status.

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Reflective

"Someone's sitting in the shade today because someone planted a tree a long time ago." - Warren Buffett

Will the life I lead today make a difference in the world? Is this too lofty a goal or concern?

I work with a lady who gave up complaining for Lent. It has had an affect on her family and her demeanor during tax season. She is making a difference in her world which may pay long term benefits.

With Lent ending this week as we celebrate the triumph of our Saviour and King, will Laurie continue her changed attitude?

More important. Can I rein in my own negative expressions? Can a simple change make a difference in my family and my world?

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Scam

He was a nice looking young man about 22 years old. He reminded me of a nephew of mine. He was tall and drove a mid-90's sedan.

"Did you know your hail damage is covered under your insurance?"

Evidently during the night of July 18, there was a hail storm and many homes in the area had damage to their northsides. Some had roof and eave damage as well.

He had a no risk contract. If our insurer did not agree to evident damage, we were not obligated to their services which were residing, roofing, and eave replacement.

With snow still covering the ground along the northside of our big red house, we stood at the curb while he pointed out irregularities in our old oxidized aluminum siding. He convinced us we probably needed to replace our siding.

It didn't sound right to me although Bob was ready to sign. No obligation. I read the small print. There was an obligation if the insurance company agreed that we needed repairs. We were obligated to this company to do all the repairs.

I asked if he had siding samples. I had already checked out some siding companies on line. I knew red was a difficult color to find these days.

We sent this young salesman with stars in his eyes away with the promise we'd be home Saturday. He would come back with red siding for our approval before we would sign.

I spoke with our insurance company. There had been a rash of these door-to-door sales calls last fall. They were back as the weather begins to change.

Our insurance company was there if we had damage. That's why we have the policy; however, would you not want a reputable siding firm to do the work? Did we realize that claims do affect our premiums?

When our Mr. Goodwin returned yesterday afternoon with his red samples, we simply turned him down.

If it doesn't feel right, don't sign. Investigate. This company has not registered with the Better Business Bureau. I had no luck finding them listed on line anywhere in Illinois.

Buyer be ware.

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Coins, coins, coins

We cleaned out the old Explorer this week. We reclaimed many treasures before the big trade-in.

An umbrella. A First Aid kit. Three paperback books. Two pair earrings. One pair of spare eyeglasses. Three atlases and 2 road maps. Garage door opener. Enough coins - entirely silver - to fill two large soup bowls.

The tolls in Chicagoland were $.40 each. That explains all the nickels, quarters, and dimes.

Then we got ourselves a transponder which allows us to fly through the toll plazas. Sure, we have to load our account with $ ahead of time but we save more than just time.

Toll stops now cost $.80 for cash but each one costs our I-pass account just $.40.

We save time and $. Now we need to figure out how to mount the old transponder in our new van. Transferring to a new vehicle was as easy as a phone call.

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Locked Up

With Bob out of town, I went to the dealer and signed all those papers, waded through details, listened to sales pitch for warranties, concentrated while all the dash items were reviewed and the steering wheel adjusted to fit me. Whew!

I called insurance agency and I-pass to transfer to new vehicle description. It's a done deal.

Now it's locked in the garage. With the old red van (1996) in the drive, I'll drive it until it dies, needs major repairs, or we find a home for it.

The new van is for road trips for now. It has XM radio with 3 months of
free service. How wonderful for the road. For now, it's parked with 46 miles on the odometer.

After learning the best rate available through Honda was 5.9% on new car loan, we decided to take $ from mutual fund money market which is paying a little over 3%. That was an easy decision. If rates had been low, we would have left the $ to grow.

Bob will be back tonight. I'm sure he'll take it for a spin over the weekend before he leaves town again.

It's been a full week.

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Ouch!

Unexpected expenses and emergency repairs are difficult to budget for. These are some of the reasons we have to build in 6-months of expenses as a cushion.

Our tree in the front yard has worked its roots into the sewer pipe. Yesterday morning we experienced a toilet backing up into the shower! Standing water on the garage floor.

A day I would have worked 5 or 6 hours became a day I stayed home. The plumber came about 2pm. By 3pm he had called for help. The access to our sewer is in the crawl space and was difficult to open.

The machine snake worked for over 1.5 hours chopping at the roots and clearing the passage. It worked and that was great.

Then the invoice! Ouch! Two plumber for 3 hours plus the first guy for one. Let me just say we could have cut down the tree for half that.

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We Went Inside

After window shopping, we went inside yesterday. "Just go sit in a few and drive one." We started at the Honda dealer where we bought that wonderful Accord back in 1996.

If I had remembered what has happened time after time over the past 33 years of marriage, I would have stopped by the bank and pulled the title from the lock box.

Let's go look at microwaves was his line back in 1983. Let's just stop and see what kinds of vacuums that resale/repair shop has in stock was his famous line back in 1975. OK, we'll stop in Kewanee and see what those rugs cost. (We were headed west on a week's vacation.)

Each time, we bought. Not fully prepared. Caught off guard. And yesterday, without the checkbook, we bought a new vehicle! (They'll put up to $2,000 on credit card.)

This morning, I will be late for work because we are going to the bank to retrieve the '98 Explorer title. [I emailed my boss.] Bob will sign the title before he leaves for the airport. I'll pick up the new van tomorrow!

Please, I'm certainly not complaining. We've put enough $ into repairs on our cars in the past year. None of these cars owe us. It had been 10 years since we've gotten a new car and 6 years since we purchased the used Olds. We had studied reports and visited websites for a few months.

Bob knows what he wants to buy next year to replace his Olds. We've never had a Toyota.

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For Rent

Have you noticed "For Rent" signs? There appears to be many small store-front locations vacant near us. The local paper has an article about a family that lost their savings when a franchise deal fell apart days before their grand opening.

A sign of recession? Consumers consuming less?

Personal budgets eaten up by gas prices? Food costs? Utilities?

Another thing. There are 2 homes in our neighborhood with "For Rent" signs posted in the yards. We know of one house around the corner that is a rental unit now.

Just signs of the time. In the 1930s my grandparents moved from their larger home to their rental home next door which has very tiny. A banker rented the larger home for many years during the great depression which helped my mother's family. My grandfather did odd mechanic jobs. My grandmother took in sewing and laundry as well as growing a huge vegetable garden. She provided food for many in their neighborhood from the riches of her green thumb.

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Dark Morning

Deferring satisfaction is part of budgeting and planning. Working toward a goal often feels like going without.

Then the savings starts growing and becomes a temptation. Sometimes it's hard to keep our eye on the goal.

Each of us here woke up to deferred satisfaction yesterday and this morning it's even harder.

Daylight Savings changes are deferred sunlight. This day is the hardest adjustment for me. I know I'm not alone.

Enjoy the sunlight later starting now. Rather, starting later.

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Dems Win

With the well-advertised endorsement of our junior senator, Bill Foster, a scientist at Fermi Lab, has won the remaining congressional seat vacated by Dennis Hastert.

Like Mr. Obama, Mr. Foster will raise income tax rates and remove our troops from Iraq.

Grab your wallet and pray for our troops.

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Ouch!

Will the market plunge further? Who has a crystal ball?

So many questions and so many talking heads. Where is the truth?

Why? What motivates sell-offs? Are the variables too wide-spread to condense into one answer?

What is the wise move with our equity holdings? Should we pursue value? Large cap? Dividend producers? Sectors like healthcare? Energy? Ag?

I don't believe we should sell our stock holdings now? But how far down will we fall?

I will be listening to Bob Brinker this afternoon. We're thinking of subscribing to his newsletter again. He's the voice that got us out of stocks in early 2000 and back into stocks March 11, 2003. That was the bottom, the exact bottom, per other economists.

I'll let you know if we learn something new.

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More Housing News

For the first time in 60 years, we in the U.S. owe, on average, more than half of the value of our homes.

Most of us started out owing 80% of the cost of our first houses. Well, that was the case a few decades ago. We needed 20% down.

Now, there are or recently were mortgages available for 10% down payments.

Then began the taking of equity moves. Unfortunately, many have taken out more equity than there remains now.

It is a buyer's market. Most home values have declined.

There is a website: zillow.com

Many towns are covered by their service. They give comparables and tell which houses in the 'hood have sold recently or are for sale currently.

I have watched our house peek and decline on this website over the past year. I'm grateful we are not selling now. But I have learned that the house up the block sold for nearly asking price. That's a good thing for all of us in this nearly 40 year old subdivision.

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Bag It

Friday afternoon my boss was telling what a wonderful lunch he had at TGIFridays. Salmon on a salad. It sure sounded great. He said it was only $8.50. Not bad.

If I spent $5 for lunch 5 days a week for 50 weeks that would total $1,250 annually.

I brown bag it. A sandwich, yogurt, diet soda.

The cheap lunch meat from our grocery brand, diet Pepsi (yes I can tell the difference), and no fat yogurt. 85% of the time it is the same lunch.

If I price my bag lunch at $3 (it does not cost that much), I spend $750 a year, a savings of $500.

Too boring for you. If I would eat out twice a week, I would still save $300.

Food for thought.

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New Bank

Our old bank is now completely changed. It was acquired by National City Bank. We were given plenty of notice of the change which happened in early February.

We were assured by the branch we use that our accounts would be grandfathered. So far, no change. Tiny interest income on checking and not much more on our passbook.

Many of the faces at our location are the same. The forms are different. The receipts are different. The website I use to check our accounts is different but the transition was smooth.

The only problem. The receipts. To save paper or maybe because it's easier, the teller gives one receipt for all transactions presented.

This is a problem. I now give the teller one transaction at a time and request a receipt.

Why a problem? Last week when I made a deposit for my work and a deposit into our personal passbook. I expected one receipt as the passbook has always been my receipt.

The receipt for the boss' account had full details of my account, my deposit, and my balance listed right above the company's deposit! I did not check while I was in the bank because I wasn't expecting a problem.

Now, I'm holding off. When the boss' bank statement comes and balances perfectly, I can quit "forgetting" the receipt. That should happen this week.

I will always hand the teller one transaction at a time and get one receipt for each transaction.

My complaints to National City via their website have not been addressed.

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Sales Tax

Chicago is raising their sales tax to over 10%.

Good. Let's hit those rich folks. They can afford to pay more for purchases and services. No problem.

The problem is that the sales tax charges do not care how much $ you have. All purchases and services will cost everyone more.

People who can may relocate across county borders or travel across for regular purchases like groceries and gas. Those without means to do this, will be hit hardest with this sales tax increase.

The victims will be those who can not afford it. Does no one see that this solution is no solution?

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Groceries

Bob does our grocery shopping. He said bread is shockingly expensive. The cheapest he found was $2.50 a loaf at the Jewel.

I'm old enough to remember my mom making special trips to a bakery outlet near the airport. She'd get 5 or 6 loaves per $1 and stock up the freezer.

I have heard the cost of wheat is the biggest reason for the increase in this staple. More farmers are growing corn for ethanol production. While the government subsidizes corn, supply and demand has run up the price of wheat.

Does this sound like inflation to you?

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Six Weeks

There are 6 weeks left to get your 2007 taxes filed and be part of the first wave to receive rebate checks that are now expected to hit mailboxes in early May!

According to The Kiplinger Tax Letter, you will reconcile your rebate on your 2008 tax returns. Technically the rebate will equal the tax credit allowed.

Taxpayers whose credit exceeds their rebate will claim the balance on their 2008 tax returns a year from now. If the rebate was bigger than the credit, you will repay the IRS on your '08 return.

The question still stands if the states will consider these checks as taxable income. In the past, each state made its own decision and a few states taxed the federal rebates.

Keep your notice from the IRS regarding your '08 rebate. You will need the exact amount for next year's tax return. Amounts of the rebate checks decline as income levels go up, fading out completely at $150,000 per couple and $75,000 for singles.

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Midlife Considerations

Midlife can bring some unrest. Midlife crisis, if you will.

About the time you realize you have been doing the same thing or working for the same company for 2 decades, you might ask yourself if you want to keep doing it for the rest of your life.

Questions arise like: Am I happy? Have I advanced as much as I can here? Can I do anything else? Can I afford to walk away?

Some people splurge on a sports car (my dad did in his mid-40s). Some seek out more education or explore business opportunities. Some change jobs and possibly relocate.

I think planning and evaluation are key to this point in life. Spending $ or resigning without careful financial consideration are foolish and can destroy families as well as savings. Counseling or other mental health professionals are very valuable with understanding unrest and unhappiness.

In our case, Bob took the offered early retirement at 55. It had been our plan all along to hold out for his pension package. Now he does work as an independent contractor. He has one major client who sends him all across the Midwest.

He is still in his field and is using much of his education/experiences but he controls his own schedule. We build in time to travel, fish, and relax at home. After 3 decades with the same company, he is quite happy doing his consulting gigs.

No sports car but some updated education and a thoughtful financial plan that we are both committed to. Bob will continue this type of work into his late 60s. He will take less contract jobs as time goes by but he loves getting paid for his knowledge and advice.

He wanted to be a teacher at one time. Now sharing his opinions and suggestions are built into his consulting.

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