Finance Gets Personal

I’ve mentioned before that my husband’s friend makes extra money donating plasma. Well, he was over Friday night for the NCAA tournament, and the topic somehow came up again (could be that $20 referral bonus).

There’s a donation center near our house that pays $20 per donation, or $40 if it’s your second donation that week. So, if my husband and I were each to donate twice per week, that would be $480 per month. Sweet!

However, I’m still not convinced I’m going to try it. I’ve never even given blood because I have a severe phobia of needles (just typing that made me shudder). I’ve nearly passed out from vaccinations, and my ambitions of becoming a veterinarian ended when I shadowed a vet for a day in eighth grade.

Am I being a total wuss? Has anyone else donated plasma before?

Photo Credit: 515 Grams of My Plasma by reinvented, used under Creative Commons licensing

On Thursday, I wrote about my first money memories and how they may have affected the way I handle money today. I found that I was pretty oblivious about money as a child, even though my grandparents distinctly remember me telling them as a 2- or 3-year-old that “Daddy works to buy me gum.”

I had always thought my family was rich because we had a swimming pool, but around eigth grade, I started seeing little signs that my parents might actually be in debt. Here are some of my money memories from eighth grade through high school:

In eighth or ninth grade, I won second place in an Optimist essay contest on “Freedom: A Right or a Privilege?” (I think I said it was a right - after all, I felt entitled to pretty much everything). I needed something to wear to the awards ceremony, so my mom took me to The Jones Store to get a new shirt. She usually steered me in the direction of the sales rack, but on this day, I picked out a $30 long-sleeved ribbed Levi’s shirt with silver buttons. My mom said, “$30 is kind of expensive for a shirt. Are you sure you want it?” Of course, I said I had to have it. But after the awards ceremony, I noticed that it didn’t fit quite right - the sleeves were too long, it was a little too tight, etc., and I didn’t really like it. But I kept wearing it so my mom wouldn’t know. Even today, I have a hard time parting with clothes I spent too much money on. There has been a $140 J. Crew dress hanging in my closet for at least three years that I’ve never worn because it doesn’t fit quite right (it’s going in the garage sale).

For Easter, my sister and I always got a new dress to wear to church. One year, I needed new shoes to wear with my dress, but my mom told me we could only buy them if we got them at Sears. I believe now (and I think realized back then, because I felt really guilty about those shoes) that this was because her other department store cards were maxed out.

My junior year of high school, my mom took me shopping for a prom dress (yes, my mom took me shopping a lot). I chose a long, black velvet dress with an empire waist and a sheer black overlay from Dillards for $120. I remember that when we came back home, my mom hung it up in my closet, took off the price tags and told me that my dad didn’t need to know how much it cost. I took this as a lesson from my mom that men don’t understand how much it costs for women to look good (somewhat true), and that my dad is cheap (he is). At least I recognize now that hiding purchases from your spouse is not a good idea (although it is tempting).

My family hosted a foreign exchange student from France for a month when I was 16. That fall, I got a part-time job at the grocery store and began saving money so I could stay with her family the following summer. I saved enough money to cover everything except the $800 plane ticket, so my parents let me borrow the money. When I returned home, I found out the money I had borrowed actually came from my grandparents - my parents had borrowed it from them. I repaid my grandparents, but I felt guilty about it and surprised that my parents didn’t have $800 in the bank. I never asked to borrow money from my parents again.

I have always wanted to live in Chicago, so my junior year, my mom took me there to visit colleges. We went to the University of Chicago and Northwestern, and I fell in love with Northwestern (I didn’t think the University of Chicago seemed like a very fun place because students were outside studying on a Friday evening - shouldn’t they be drinking beer or something?). My parents had never talked to me about paying for college - I just assumed that if I got good grades and test scores, I could get a full-ride scholarship anywhere I wanted. My bubble was quickly burst when I found out Northwestern cost $30,000 per year and didn’t offer academic scholarships. Needless to say, I ended up going to My State U.

My parents made too much money for me to qualify for need-based scholarships or grants, but I had enough merit-based scholarships to cover my base tuition. When we met with the university’s financial aid department, they said that with my scholarships and my parents’ expected contribution (based on some kind of formula), there was only about an $800 shortage per year, and they suggested that my parents find a way to come up with the extra money instead of taking out a loan. Somehow, I left the financial aid office with the maximum allowable student loan. And that, my friends, is where my journey into debt began.

Photo Credit: 1974-12 by jacdupree, used under Creative Commons licensing

Our current debt snowball (the monthly payment we’re sending to our smallest debt) is $1,439.08. Once we’ve paid off our credit card, student loans and the second mortgage, we’ll be sending a monthly payment of $3,000.29 to the first mortgage.

Our monthly take-home income (after taxes, 401k contributions, insurance and FSA) is $5,422.22, assuming it’s a two pay-period month. So, our debt snowball is currently 27% of our monthly take-home income (or, 19% of our monthly gross income).

Now, this does not include payments toward other debts. If you include all our debts, 55% of our monthly take-home income goes toward debt payments (well, I guess some of it goes toward escrow). Plus, 100% of our bonus income (approx. $10,000 in 2007) goes toward our debt.

Wow, my brain hurts now.

If you’re paying off debt, what percentage of your monthly take-home income is going toward your debt snowball?

We’re on the $4.99/month 2-disc plan from Netflix.

The last movie we rented was I Am Legend, which we watched a few days ago.

Tonight, I went out in the backyard to see if there were any chewed up tampons back there (seriously - my dog steals them from the bathroom trash can), and I saw a CD (well, I thought it was a CD - I was hoping it was one I burned off iTunes). Flipped it over: I Am Legend, all scratched up with two piercing tooth marks. Dammit!

I might just send it back and see if they notice. If they do, I have to pay $20. Why, why, why is my dog such a rere?

Speaking of used mattresses, here’s a great post from the Best of Craigslist:

Zzzzzzz…..King Size Used Sealy Posturpedic Celestial Mattress

For Sale: 1 King Size Used Sealy Posturepedic Celestial mattress.  Just the mattress.  No box springs, frame, or headboard.  $40.  There are two things to consider when buying a new mattress: support and comfort.  These are irrelevant here, this is a used mattress.  For a used mattress, there are four things to consider (the 4 S’s): source, smell, stains, and shape.

Source: My wife and I moved into our house in 2002.  The house was completely empty, except for the king bed.  The bed was gigantic, and envisioning all the kinky stuff we could do, I decided to keep it. (I never got to do any of that stuff. Apparently bed size was not the only barrier my wife had to doing all that kinky stuff.)  I have no idea how long it had been there already, but I will disclose a few tidbits about the previous owners of the house, who lived there since the house was built in 1965.  The man had Alzheimers and the woman was obese (I’ll describe how I know this in the section below entitled “shape”).  The woman died, and the man couldn’t tell me how old the mattress was (I asked the guy’s daughter, who handled the house-sale transaction, but she didn’t know and the man wasn’t lucid).  Oh… I should mention that the woman didn’t die in the bed.  She died when she fell down the steps, which is a little tidbit that my neighbors didn’t tell me until like two years after we had moved in (I bet we have a ghost).  So I have no idea how old the mattress is… I’m not an expert, but I would guess that it is 12-14 years old. But I really have no idea. 12-14 is an honest guess… could be more, could be less.  I have little experience estimating the age of mattresses.

Smell: This one smells great… that is, it doesn’t smell at all. It smells exactly like Iocane powder, a deadly and completely odorless poison.

Stains: None. Really. My wife and I have always used a thick mattress pad/cover on this, and the previous owners must have done the same. Now the fabric has some fading, but it definitely shows no signs of violent murders, incontinence, or lewd acts. No stains.

Shape: I think this is what you need to think about before buying this mattress. I think that one side of the mattress is a little mashed down (maybe by an inch or so - remember the obese woman from above?).  Not a lot… you can’t tell by looking at it. In fact, my wife claims I am imagining it. But I can detect a definite “ridge” in the middle of the bed, between where each person would lie. Again, it is not obvious, as my wife claims that she can’t even tell it is there, and when I bring it up she goes into what she considers a very funny monlogue about “The Princess and the Pea”.  She’s thinks she’s a riot. If slight-to-imperceptible mashing would drive you nuts, find another mattress.  If constant mocking drove me nuts, I’d find another wife.

So that’s the 4 S’s. I am a fairly picky person, and I’ve been sleeping on this thing for the last 3 years without problems, so it is pretty decent. If you are looking for a mattress for your summer sublet, this is it. If you always wanted a king size for extracurriculars (this is craigslist, so I am assuming most of you need room for threesomes and farm animals), this will do nicely. If you are cheap and not terribly picky about what you sleep on, this is great. If you are a college kid who thinks it would be cool to have a gigantic king bed, perfect. Even if you meet one of the above but are very averse to stains and smells, you are still in good shape with this one – no stains, no smells. But if you are trying to decide whether to buy the $4500 Beauty-Double-Comfort-Plushderful-Blissomatic or my $40 who-knows-how-old-it-is mattress, don’t waste your time. If you have chronic back problems, don’t waste your time. And if you are a pain in the ass to perform a simple $40 transaction with, don’t waste my time.

(If you don’t have a car, maybe I’ll deliver it if you are close by for $35 or so. I know that’s a lot, but I really don’t want to deliver it. And when I say deliver it, I mean I will drive it to your place and help YOU get it to your bedroom. King mattresses are big - about 7’ x 7’ - and they weigh too much for me to carry alone. And come to think of it, I’ll only deliver it if you Paypal me the money first, since I REALLY don’t want to drive it to your place just to have you say “Oh, I thought it was brand new” and not buy it.)

To summarize: no smells, no stains, slight-to-imperceptible mashing. Used for the last 3 years by a fairly picky sleeper and neat freak, and used for some number of years before that by an obese woman and a man in the throes of dementia.  No smells, no stains (that’s clearly my selling point).  Possible to arrange delivery.  I’m a nice guy and easy to deal with for this kind of stuff.

The Baglady wrote an interesting post Monday about how childhood memories of money affect your money habits. That post has inspired other personal finance bloggers, including Meg, English Major, and now, me, to think about their childhood money memories.

Here are some of mine:

As a five- or six-year-old, I was a door-to-door salesman. I would pick strawberries from my parents’ garden or make my own books, then go around the neighborhood selling them for ten cents each. I’m not sure how successful I was at this, but I remember thinking my strawberries might be overpriced once I saw how much they cost at the grocery store.

My grandparents gave me a dollar for every A on my report card. I was also usually given a few dollars when I came to visit and told to go buy myself a candy bar. Sometimes they’d give me less than what a candy bar cost though, and I’d think, “When is the last time they bought a candy bar?!?”

When we moved to the country, my sister and I had a lemonade stand. We made elaborate signs and drug a table, chairs and lemonade up to the end of our gravel driveway, which was a few hundred feet from the house. However, we failed to account for the fact that no one was going to stop for lemonade on a country highway with a 55 MPH speed limit, and we went back inside empty-handed. Looking back, it appears that this is where my entrepreneurial streak ended.

In elementary school, I thought we were rich because we had a swimming pool. But I knew we weren’t as rich as my friend Leandra, because she was the first person I knew who had a Nintendo.

In fifth grade, our school took a field trip to “Exchange City,” which is like a fake city where the kids have jobs and learn about money. I applied to be the vice president of the bank, but I ended up being the bookkeeper of the snack shop. I decided that being a bookkeeper is boring, and working in fast food sucks. I envied the kids who worked at the radio station and the newspaper.

In 7th grade, my friend and I were invited to take the PSAT. I was at her house while her dad helped her fill out the application, and when she got to the household income question, he told her they could fill that part out later.I never knew that money was supposed to be “secret” before.

All in all, it seems I was pretty oblivious about money and any financial problems my family might have had up until about 8th grade, when I discovered that having a pool and taking vacations don’t always equate to having money in the bank. But more on that later…

What are your first money memories, and do you notice that they affect the way you handle your money?

Childhood Money Memories Part II

When I started this blog, I promised that I’d give monthly updates of my financial progress, so here it goes.

Net worth as of February 15:  Approx. $54,000
Net worth as of April 1:  Approx. $63,415 (does not include market fluctuation between now and then, but everything else is accounted for)

I’ve put a NetWorth IQ badge in my sidebar so you can track my progress in detail.

Here are this month’s highlights:

• My husband received a year-end bonus of $433 after taxes that we put toward our car loan
• I received my 2007 401k employer contributions (3% guaranteed, plus approx. 10% for profit sharing)
• We paid off our car last Friday with our bi-weekly $690 debt snowball payment
• My husband and I both learned that there are no raises in our immediate future, and that he won’t be getting quarterly bonuses this year
• Almost two years after joining Upromise, we finally reached the $25 minimum for transfers, and $29.08 was transferred to my stepson’s 529 plan

We’ve revised our goals slightly as well.  Instead of aiming to pay off our credit card and half the second mortgage by the end of the year, we are now going to pay off our credit card and both our student loans, saving the $35,000 second mortgage for next year.  Although the credit card and student loans have extremely low interest rates, we think this will give us the momentum to keep going through the long second mortgage payoff process.  Stay tuned!  

I have a nine-year-old stepson who receives an allowance of $9 every two weeks. Out of his $9, $2 goes to savings and $1 goes to the charity of his choice, leaving him $6. So, from his allowance, he is able to save $52 per year - not bad, but at that rate, he’ll be lucky to cover the cost of textbooks for one semester of college.

If you really want your children to get ahead financially and make saving automatic, you’ve got to set savings rules for their largest source of income: cash they receive from relatives. I would estimate that my stepson probably pulls in an amount equal to his allowance in cash gifts from relatives each year.

A few years ago, we started making him save half of this money. And by “save,” I don’t mean “I’m saving for a Game Boy.” It has to be for a long-term goal, such as buying a car or paying for college. Today, he has $583 in the bank.

It was a difficult transition for him at first, but it’s working better than I had hoped. He now voluntarily saves half of all non-allowance money he receives. When I asked him this morning what he plans to buy with his proceeds from our upcoming garage sale, he replied, “Well, I’m going to save half of it, and buy something with the rest.” I was fully expecting him to say “video games.”

We plan to continue this requirement through high school, and also make him save half of any money he earns from part-time jobs.

What are your thoughts on this? Do you think it will make it easier for him to save a large portion of his income as an adult? Or do you think this will backfire and he’ll turn into a spendthrift once we’re not there to “make” him save?

All I know is that I wish my parents had made me do it.

Rather than just give you the obligatory rundown of which carnivals my posts have been included in this week, I’ve decided to take the time and highlight the posts that I particularly enjoyed:

From the Carnival of Personal Finance, which includes my post Debt as a Symptom of Sexual Addiction:

• Just Say ‘No’ to Crap from Squawkfox (crap is whack!)
• Poor Kid Blues from Brip Blap (when I was a kid, I had to beg my mom for Guess? and B.U.M. sweatshirts - I’m tearing up just thinking about it!)

From the Carnival of Debt Reduction, which includes my post Would You Like to Save 49 Cents Today By Opening an Old Navy Card? as an editor’s pick:

• Is It Easier to Lose Weight or Pay Down Debt? from Frugal Dad (I’d have to say paying down debt, because I’m too lazy to try to lose weight.  People used to wonder if I was anorexic, but now they’re more likely to wonder if I’m pregnant.  I’ve been meaning to do something about that, but getting pregnant for real seems easier than exercising.) 
• Should a Gift Keep Costing? Am I a Gift Horse? from Squakfox (Do you give gifts with monthly fees attached?)

From the Festival of Frugality, which includes my post When I’m Debt-Free, I’m Buying the Expensive Toilet Paper!:

• Drugstore vs. Department Store Makeup from Chief Family Officer (I would buy everything at Target if I could figure out what matched my skin and would actually look good!)
• Beware of the Laundy Detergent Cap from No Credit Needed (Personally, I have a hard time putting in only the recommended amount of detergent - maybe I do have OCD)

From the Carnival of Money Stories, which includes my post Confessions of a Former Bank Teller:

• It’s Only Five Cents More from I’ve Paid for this Twice Already… (It’s easy to rationalize five cents, but five cents can add up!)

From the Money Hacker’s Carnival, which includes my post Why Does Dave Ramsey Push Identity Theft Insurance*?

• Rent DVD Movies for $1 With The New Release and Redbox from Prime Time Money (I’ve used Redbox a few times, but I tend to be one of those people who can never get movies back in time, so I have to be careful)

Enjoy!

Shopping at the end of the season can save you big money. Many stores cut prices on holiday merchandise by 50% on the day after the holiday, and keep cutting throughout the week. However, most items are gone within a few days.

With that in mind, it’s time to start thinking about what you’re going to need to buy for Easter next year. Will you need…