Donkee House

Finance Forward

Time for another update on our progress for the  Donkee Do List 2010, folks!  It’s the end of May and we’re well on our way to fulfilling our financial commitments for the year.  Number 3 on the Donkee Do List 2010:

3. Max out both of our IRAs – because we will need to retire…someday.

Thankfully, we were able to knock this one off the list pretty early on in the year for both the husband and me!  Done and DONE!

As far as number 4 on the list:

4. Max out my 401k – see above.

This is on target to be knocked out by the end of the year, at the latest.  Hurray!

Donkee Do List – 2010

photo credit: schillergarcia

I know I’m a little late to the party, but still…I’ve never really been one for New Year’s resolutions.  To me, they are or will become unnecessary pockets of burden and guilt sooner or later.  Well…giving our fragile humanity the benefit of the doubt, I will say…usually, not always.

Resolutions are like promises and promises are made to be broken.  Maybe I’m being a bit negative and faithless here with a bit of humbug, but I hate setting myself up for failure.  It could all be a matter of meaningless semantics in the end, but I’d rather continue to not make any resolutions this new year and definitely no promises.

Instead, I’ll just have a list of things that I really, really, really NEED to do this year.  Or better yet, to psych myself up, there are a list of things that I really, really, really WANT to do this year.  WANT is much better and easier psychologically and kind of tricks the brain into thinking that if you WANT to do something, then it must be FUN.  FUN like putting a tiny dab of clear glue on each of the keys on the keyboard of an unsuspecting co-worker.  FUN like smearing a thin layer of vaseline on the toilet seat.  FUN like covering (and I mean COVERING) your VP’s floor to ceiling windows with multi-colored post-its.  FUN like gooey mac and cheese.  FUN like talking smack to someone who can smack talk back.

So…what FUN things do I WANT to do this year?

1. Make things – nothing fancy here.  I just want to make things.  I’ve made a bunch of zipper bags and a few pins for Christmas presents and they were a hit.  I love to make and create and want to continue doing so this year.

2. Spend less – aside from medical and other necessary expenses, I want to spend less on things that don’t give me a good enough ROI (return on investment).  A new dress for $300 that I will most likely wear two times in a year, then forget about will not yield a great return.  On the other hand, the $4500-$5000 sofa we will be getting this year that I will most likely live on for the next 10 years will yield an awesome return.

3. Max out both of our IRAs – because we will need to retire…someday.

4. Max out my 401k – see above.

5. Visit the folks more in Long Island – really, the folks aren’t that far away.  It takes the same amount of time to go to LI as it does for me to get to work.  I just have this misconception that since Long Island is not a borough, then it’s “too far”.  Shame on me!

6. Work more for myself – I have an entrepreneurial spirit and it needs to DO something.  Feed the beast!

7. Volunteer - no matter how small a job, I want to help a bit.  Library?  Swap meet?

This list is achievable, I think.  I certainly WANT to do all of the above and none seems like a drag that make New Year’s resolutions so historically hard to keep.  I’m thinking of keeping track of each of these seven to-dos and see which of these will actually be achieved and in some cases, how often.  Worthwhile, you think?

What is on your to-do list this brand spanking new year (decade) and how are you psyching yourself up for it all?

2010 Already?

photo credit: Sukanto Debnath

I don’t know about anyone else, but 2009 pretty much flew by for me.  It seems like just last minute that I got used to typing/writing “09″.  I consider myself very lucky for having a wonderful year.  Now, there were some downs as well as ups, but the ups, I feel, outweighed the downs in 2009, for sure.  Maybe this calls for some sort of list?

Downs

• BPV (vertigo) – ugh…that sucked ass BIG time.  Still reeling a bit now (2.5 months later) – so still sucking ass little time.
• Besides vertigo, I got sick more often in 2009.  I washed my hands like crazy (they are so dry now…), but that didn’t seem to help.  Scratch that…I KNOW washing hands help, but perhaps I bathed in some germy, bacterial and viral concoction while sleepwalking and boy, I had or still have to fight the good fight every once in a while.
• Reality TV – I got sucked in and I tried to suck the husband in too because I’m quietly evil that way.  American Idol, So You Think You Can Dance and Hell’s Kitchen.  Adam Lambert gave us chills (in a good way), some dances made the husband cry and who doesn’t love a raving and cursing lunatic?
• We didn’t travel in 2009.  We did go to Florida and North Carolina to visit family, but we so wanted to go back to Aruba or somewhere AWAY.  It WILL happen in 2010.

Ups

• We closed and re-financed our first investment property.  We have a decent amount of equity (25-30%) and making a slight positive cash flow each month.  The re-financing was a harrowing and frustrating procedure, but we finally made it through.  If banks had necks, I would sneak up to one (just one to get my anger out) from behind and choke it with dental floss.
• We re-financed our primary residence – our lovely, but constantly chaotic 2 bedroom co-op.  Chaotic is a mild term, you should see what the heck is going on right now.  You should…but I can’t show you.  If I did, I would then have to sneak up behind you with dental floss.  I’m working on something big (big for me) and have been hard at it for a bit now.  When it’s time to make it public, I will make an announcement right here!  Stay tuned for that, my donkee friends!  That was called a TANGENT…
• We paid off our HUGE tax bill from 2007.  AMT (Alternative Minimum Tax) can kiss our flabby asses!
• I visited my folks in Long Island more often.  I seem a bit less like the ungrateful daughter/sister/aunt that I am.
• I’ve become more tolerant of babies and children in general.  This is a direct result of my nieces, nephew and friends’ lovely children.  They’re just so awesome…
• I’ve finally let go of my bitchy, grouchy and miserable persona courtesy of my previous job.  I hit my one year anniversary in my current job in late 2009 and yes, it did take about one year for me to get over the trauma of the previous torture box.  I’m not all sugar and spice…I can be a bitch, a grouch and wallow in general misery, but only on special qualified occasions and every second week of the month, not 24/7 like before.
• I wake up earlier.  Voluntarily, not dragged out of bed cursing the world, scratching its face and kicking its balls.  Weekdays now is anywhere from 6 – 6:15am.  Weekends anywhere from 7:30 – 10am.  All times are approximate and so totally different from years before.  Weekdays used to be the last possible minute to LATE, like 7-7:30am.  Weekends used to be 2-4pm.  I kid you guys not.  I’m just not as tired as I was before.  I’m much less stressed and much more happy (see above).  There is just SO much more fun stuff to do now!
• I can’t bring myself to buy $500 boots, $300 shoes and $600 coats anymore.  What’s the point?  I’d much rather see that cash in the bank.  It’s a shift in thinking and mindset.  Whereas those $500 boots used to make me feel great, the high was always short-lived and really never provided much substance.  I was never really SATISFIED in all cylinders.  Fashion show-off me would feel great, but financially savvy me would feel really guilty and all around practical me knew that it was all so unnecessary.  Now that I’m shunning those expensive add-ons and parking that cash where it belongs (in the bank or actually, 2009 was paying all those medical bills), everything feels RIGHT.  I don’t miss those damn boots and I really have more than enough of…everything.  Oh, and thrift stores ROCK!
• I’m reading books out of my decades long comfort zone.  I’ve always been a literary snob and have always gravitated toward heavier stuff from back in the days.  I limited myself to (although they still remain favorites because they taught me so much and provoked me into thinking rather than just being entertained) Dostoyevsky, Kundera, Hesse, Steinbeck, Hamsun, etc.  The husband finally broke through my veil of literary snobbiness and convinced me to read other genres and started me on high fantasy and sci-fi.  With a roll of my mocking eyes and a righteous snort, I embarked on my first high fantasy series and I’m telling you…it’s MAGIC!  No, seriously…MAGIC!  Thank you to the husband for opening my eyes (my eyesight was and probably is so limited and narrow, but being the husband, that’s part of your job…to keep introducing me to things), thank you to Ursula Le Guin, to George R.R. Martin, to Scott Lynch, to Robert Jordan (RIP) and to Patrick Rothfuss for sharing your worlds.
• Donkee House was born.  A fledgling blog…still trying to find its identity.  Even though it’s still so very young, it’s already evolving into a more personal log rather than fitting into a certain niche or two.  I hope you guys will continue to ride with me as this space continues to change, evolve and move forward!
• I quit smoking on 2.26.09.

So yeah, 2009 was a pretty good year, right?  2010 started out with a bang…even though I was off work this week, I still was working mighty hard on my new venture that will soon come to fruition.  As for what I was doing on the stroke of midnight on the dawn of this new decade…I was playing Guitar Hero…I was rocking it out, folks!

So…was 2009 a good one or a bad one for you?  With all my might, I sure as hell wish it was a good one or that the good moments really shined for you!

Financial Planning Blog Carnival

Check us out over at Intelligent Speculator:

Carnival of Financial Planning Edition #110 – 10-9-09

FHA Down Payment May Increase to 5%

Current down payment requirement for an FHA (Federal Housing Administration) loan is 3.5%.  However, there is buzz out there that this might soon change to 5.0%.  An additional 1.5% might not sound like much, but if we’ve learned anything at all in the last few years – it’s every penny counts.

In addition, the same bill that proposes the increase in down payment will also disallow closing cost financing.  Currently, FHA borrowers are able to roll their closing costs into their loan.

These changes will require borrowers to pony up a bit more cash for their purchases….which is really not a bad idea for two simples reasons:

1.  5% plus closing costs is still a heck of a lot less cash needed than the standard 20% plus closing costs.

2.  Equity is the name of the game…having a bit more will only work in the borrower’s favor.

Will these changes block the road to homeownership for some folks, if they are passed?  Perhaps.  Is that a bad thing?  Not really.  By forcing folks to save up a bit more, the extra cushion will protect them if they should run into any unforeseeable events (job loss, decreased value, etc.).  Or is 5% not enough?

What do you think?

From The Truth About Mortgage via The Real Deal.

US Lags Behind on Credit Card Tech

photo credit: TheTruthAbout…

Many countries have adopted or are in the process of adopting the chip-and-PIN credit cards rather than continuing with what Americans are most familiar with – the magnetic strip cards.  The reason many countries are changing from the magnetic strip to the chip-and-PIN with an embedded microprocessor chip is because chip-and-PIN helps to reduce fraud and counterfeit.  The chip stores and processes data and rather than require a signature for the purchase, the credit card owner punches in a pin number instead.  After all, signatures are easy to forge and honestly, only a handful of cashiers have ever check my signature against my credit card or license or anything else in all my years of using my credit and debit cards.  I also have a few different signatures depending on how rushed I am or my mood.

Most of Europe has already adopted the chip-and-PIN along with Brazil, Mexico, Canada and Japan.  China, India and most of Latin America are in the process.  As a result, a good amount of merchants will no longer accept magnetic strip cards. This has happened to me in Copenhagen in the supermarket.  So bring cash, folks.

US banks, meanwhile, have not and do not plan to convert to the chip-and-PIN – claiming fraud is not too huge an issue here (really?) and that the expense would be too high (about $5.5 billion).  So travelers – be informed, bring a bit of cash or some traveler’s checks.

Is it too much to ask that in order to fund the conversion, US banks should pay out just a bit less in bonuses?  US banks – think about all the foreign exchange fees you’ll be missing out on if we can’t use your cards abroad!

Read more at The New York Times.

Shopping with Coupons

Browsing through The New York Times today, I came across an article about coupons.  It reminded me of another recent article from Reuters about coupons also.  Basically, more and more households are utilizing coupons for items ranging from everyday groceries to non necessities like apparel.  It seems like a good bunch of us are in a savings state of mind stemming from the current recession.

As for my husband and myself, we too, have been more cognizant about using coupons when we can or when we remember to.  We’re not hardcore and we have yet to try it with groceries.  That’s because our grocery shopping is usually an impromptu exercise on our way home from work or if we are already out doing some other things.

However, we do always look for coupons if we are making online purchases.  My husband purchases a ton of tech stuff online and he’s pretty much an expert on finding the best deals.  I always love to find and use online coupons for apparel and such.  Just this past weekend, I had my eye exam at Cohen’s Fashion Optical and before going, knew I will need to get a pair of glasses.  Their website had a $100 off the 1st pair and free 2nd pair coupon.  I printed it and got myself a pair of glasses and a free pair of sunglasses for $650.  Considering I won’t need new frames for another 5 years or so, it was worth it.

In addition, I also use Upromise and Big Crumbs – pretty effortless ways to save money (I am in no way affiliated with them).

Upromise is a great way to help pay down student loans.  All you have to do is register your credit/debit card(s), then go about doing your usual business like you normally would with participating retailers (there is a ton of them) and you get a percentage of your purchase back.   Online shopping, brick and mortar shopping, restaurants, etc.  Whatever you get back is then transferred as payment to your student loan on a quarterly basis.  Best of all, your friends and family can help you out by registering their cards too.

Big Crumbs has the same premise except they transfer what you earn to your Paypal and the transfers are done monthly. No friends and family, though.

With both of these programs and any other like them, the trick is to shop only when you need to, not because you get a bit of savings – treat it as more of nice surprise rather than a reason to go shopping.

Are you using more coupons too?  If so, where do you go to look for them and what tips can you offer on shopping with coupons?

Image by Fred R. Conrad for the New York Times

Investing in Farms

photo credit: southwestmediacommunications

Investing options are aplenty.  Most of us are familiar with stocks, bonds, funds, CDs, annuities, real estate, etc.  However, a new type of investing is emerging.  Imagine being able to taste and smell your investments.  Think vegetables, fruits, cheese….think agriculture…think farms…

Continue reading…

Roth IRA Rollover for 2010

We’re only a few months away from 2010 – time flies!  If you have a traditional IRA and want to convert to a Roth, now is the time to start planning.  In 2010, income limits for the Roth IRA will be eliminated and any and everyone will be able to convert their traditional IRA into a Roth IRA.  How much taxes will you have to pay after conversion?  Will you have to pay the taxes all in one shot?  What if you change your mind after you convert?  Answer to all these and more over at Kiplinger.  If you’re not sure whether to convert or not, try out this handy calculator which calculates your total net worth at retirement if you convert vs. if you don’t.

20 Percent Down Gets You A Higher Interest Rate

For most homebuyers, a 20% downpayment (especially now) is a requirement when purchasing a property.  There is the belief that having 20% of the purchase price to put down along with having excellent credit (720 or above) means getting the best interest rate available and saving money by not paying private mortgage insurance (PMI).  Not so fast…

Continue reading…