This year has had some serious ups, and some serious lows. We elected a historic President. That’s a good thing. And of course, the market fell out of just about everything. That was bad and getting worse.
Financial Goals in Review
I also had a personal year of ups and downs. Fortunately, they were mostly ups. Before I set new financial goals for 2009, here’s one last look at my financial progress in 2008.
Goal 1: Track my spending for one month. Completed January 31, 2008.
Goal 2: Pay off $40,000 in debt. Completed September 22, 2008.
Goal 3: Boost retirement savings by 3%. Never completed – but is definitely on track for 2009.
Goal 4: Boost our emergency fund. Happened by accident. After we paid off the debt, our cash cushion ballooned. Most of it will be used for taxes and closing costs, but I also have my eye on building a solid cushion in the new year.
Goal 5: Buy a house. Forwarded to 2009. This was not the year to buy, but we definitely have to in early 2009. Not only do I actively loathe my apartment, but we’re getting the dual income, no kids, no mortgage penalty on our taxes.
Personal Finances in Review
Fortunately, we both still have jobs and we both received decent raises this year, although we’re not seeing much of that money due to taxes. Not straight taxes, taxes on the $28,000 in windfalls we received this year. $25,000 of that was used to pay off the debt.
We still have a lot of student debt that won’t be paid off for decades – focusing on it would mean waiting years to buy a house, invest in retirement, or do anything else with our lives. We do still have one student loan at around $4,000 that we’d like to pay off in the next few months. It’s only $78 a month and the interest is low, but it’s annoying.
In addition to the $600 a month we’re saving on debt payments, we tried to cut back in other places. We trimmed the food bill a tad, but not too much because we prefer to spend more for pastured beef and farmer’s market veggies. My food allergies also pad the bill by at least 25%.
We even had enough money to take a relaxing vacation in a foreign country. We went over our trip budget by $300, which isn’t bad. And really, it was only $100, because my husband entered it into our budget at $200 less than my initial estimate of what it would cost. The total trip cost about $3,000 spread across several months. It was money well-spent on our marriage and mental health.
I know 2008 was rough for many people, but it treated us very well and 2009 is looking to be even better. Friday I’ll share my financial goals for the new year. In the meantime, Happy New Year!
Tradition dictates that you must have a glass of bubbly in your hand when the clock strikes midnight on New Year’s Eve. However, that bubbly doesn’t necessarily have to be true champagne. Instead, you can be a friend to your budget and find some affordable options that will still taste good. We’ll start with a brief primer on champagne, then I’ll review some of my favorite alternatives to the French brands.
What Is Champagne?
Champagne is sparkling wine from the Champagne region of France. By law, only sparkling wine from this region may be called Champagne. However, sparkling wines are produced using the “Champagne-method” in regions all over the world, and many can be just as delicate and satisfying as true Champagne.
Alternatives to consider are Prosecco (Italian, sweeter than most Champagnes), Asti (Italian, also sweet), Cava (Spanish), and sparkling white from the U.S. Some U.S. producer even hire French Champagne experts to blend U.S. sparkling wines to the same exacting specifications used in France.
Types of Champagne and Champagne Terms
When you’re standing in the Champagne aisle at the grocery store, you’ll be faced with a dizzying array of options. What does it all mean?
Blanc de Blancs is made from white Chardonnay grapes. It’s a lighter, sweeter wine.
Blanc de Noirs is made from a blend of red grapes. It’s more golden in color and has a fuller taste.
Rose is pink Champagne, and is typically very sweet.
Dry means sweet, Brut means less sweet. Doux means very, very, very sweet. Brut Natural is the least sweet. Most people buy Brut.
Vintage means all of the grapes were harvested in the same year.
Non-vintage means the grapes could be from several harvests.
Affordable Champagne Options
When you’re shopping for a bottle to take to the New Year’s Eve party, you might be tempted to spring for the cheapest version. Don’t do it. Spend at least $6 to get a decent bottle. Avoid Cook’s and Tott’s, but you can find many choices for less than $10. If you want to splurge, you can spend up to $20. Anything beyond that and I think I’d save that bottle for a small celebration with my loved ones, not a midnight sip when no one will really notice the superb flavor of the pricey stuff.
I’ve tried all of these and enjoyed them:
Barefoot Bubbly Brut – $7-8 for a California sparkling wine
Domaine Ste. Michelle – $7-9 for award-winning sparkling wine from Washington state
Freixenet – $8-10 for Spanish Cava
Korbel – $9 and up for a California sparkling wine
Coppola Sofia Blanc de Blancs – $12-13 for a 4-pack of 187 ml cans
Mumm – $12 and up for sparkling wine from Napa
Chandon – $13 and up for sparkling wine from Napa
Roederer – $20 and up. This is a French house that also produces sparkling wines in California, Portugal, and other regions.
If money’s no object, spring for the Dom Perignon. For the rest of us, the above options are a good way to enjoy the flavor of Champagne style sparkling wine without the price of true Champagne. Save even more with these tips for a frugal New Year’s Eve. Happy New Year!
Last Christmas I received several gift cards. It took me a few months to use up the coffee cards, 11 months to use the iTunes cards, and I’m still holding onto my Best Buy cards. So far I haven’t received any additional cards, but I’ve got a different tactic in mind in case I do: spend them promptly, and here’s why.
Stores May Go Out of Business
It’s unlikely that every Coffee Bean or Starbuck’s will close, but it could get a little harder to spend those cards if the one near your office closes. I’d worry more about independent coffee stores that could close without warning.
Best Buy also seems to be doing well in the wake of other closures, but I’m not taking any chances. I’m taking my gift cards and a couple of rebate cards and heading down to buy a Wii. I’ve been thinking about getting one for over a year, so it’s time to put those cards to good use.
Gift Cards May Expire
I was able to hoard my cards because California made it illegal for store gift cards to expire, but many other states do allow them to expire after a year. Gift cards from credit card issuers usually start losing value after a year, so make sure you spend them promptly. If you can’t think of anything you want, use them for groceries and then remember you have that money for another purpose later.
Tastes May Change
Sure, you like that store this year, but what if they change their style in a year and you hate everything? This is especially true of women’s clothing stores. If you have a gift card to a fickle store, spend it now while you still like what they sell.
What if You Can’t Spend Them?
So what if you can’t spend them? What if the store isn’t in your area or you don’t enjoy their specialty? You have a couple of options:
Swap Them. Go on Craigslist, a swapping site, or just poll your friends to match up the gift cards you don’t want with the gift cards you do.
Sell Them. I know people who’ve done this, but I’d worry about getting scammed, so I’d much rather swap them with someone I know.
Give Them. I’ve considered regifting some of those coffee cards I’ve received.
Spend them on someone else. Does anyone have a birthday or wedding coming up? Spend your gift card on a gift for them. That way you’ll have it on hand. Since you’re swapping it from your gift budget, you’ll then have that same amount to spend on yourself.
I’m of mixed feelings about gift cards. They’re certainly easy to give, but a lot of people hate receiving them. I try to only give them to people I know will use them, and to buy them at stores I know they shop at. I also think that I’ll spend them more quickly in the future – no more gift card hoarding for me.
I always feel a bit blue the day after Christmas. The presents are opened, vacation’s almost over, and the eggnog will soon be disappearing from the grocery store. If you also have a bit of the post-holiday blues, here are a few ways to overcome them.
Play a Game with the Family
I have a very competitive family, so we love to play games around the holidays and at family gatherings. We’ve played everything from kid-friendly games to hours long Risk battles. We usually stick to Rummikub or Chickenfoot (a dominoes game.) They can be played by anyone who can count and match colors (although some concept of strategy does help.) I see families on TV talking while playing games, but mine seems to focus on the game with laser-like intensity. Either way works when you’re trying to beat the holiday blues.
Go for a Walk
Bundle up in your heavy coat, hat, mittens, etc., and then go out for a walk in the snow or brisk air. After being inside for so long, the fresh air and sunlight (even if it’s faint) will perk you up.
Take Your Time Undecorating
I take down my decorations as carefully as I put them up. It gives me a chance to recall where I got the ornament or when I picked up the wreath one more time before they disappear until next Christmas. There’s no need to shove everything away on December 26th. Transitioning to your January decorations more slowly to give yourself time to decompress.
Read a Winter Novel
Sit down next to a crackling fire and read a novel set in the winter. It doesn’t have to be a Christmas book, and I’d avoid anything Russian, but you can find other classics and modern novels set in the winter that will entertain you, and possibly scare you a little. (Dean Koontz, anyone?)
Cut Up the Christmas Cards
There are two great uses for Christmas cards: 1. cut out the pictures so your kids can use them for crafts throughout the year, or 2. cut out the photos and add them to your albums so you can watch your friends and relatives change through the years. Like taking your time removing your decorations, looking at the cards one last time will remind you of the warmth of the season and keep it in your heart just a little longer.
Who says baking is reserved for Christmas? Why not make a fresh batch of cookies or bake a loaf of delicious cranberry nut bread to enjoy in January? You can bake anytime of the year. I wouldn’t recommend busting out the Santa cookie cutters, but the snowman and snowflake cutters are still completely appropriate.
Of course, the standard suggestions also apply: make sure you get enough sleep, avoid drinking too much, get at least 15 minutes of sun a day (or take Vitamin D supplements), and don’t let yourself wallow. That’s the most important – don’t let yourself wallow or you might be tempted to try retail therapy to alleviate your blues. Ultimately, that will only make you bluer.
Do you have other tips for handling the post-holiday blues? Share them in the comments.
This year, my cousin used our adopt-a-family donations (about $150 total) to give gifts to twelve people. She was able to give so generously because she planned ahead at the end of the last year and bought most of the items for 75-90% off. Then she simply looked for people who wanted those clothing items and toys on the church donation tree. You can do the same thing to save money on charitable donations as well as gifts for friends and family members throughout the year.
Holiday and Seasonal Close-Outs
If you know someone who collects Christmas items, visit the mall on December 26 to snap up adorable gifts for more than half off. Then just put them in the closet until next year. You can actually repeat this at the end of every season, when retailers need to unload items like sporting goods, travel apparel, or anything other related to a specific season. Keep a list of your friends’ and loved ones’ hobbies so you can snap up deals when you see them.
If you’re a parent, then those birthday parties your children attend can really add up. Again, a little forward planning can save you a ton of money on gifts. Just shop the post-holiday toy sales for always popular gifts, or items that will still be popular for the next year. I doubt Hannah Montana or Harry Potter will be losing popularity before the end of 2009. Again, stash them in the closet for later in the year. You can also use this method to stock up on gifts for your own children. Just make sure you hide them well. Not only will this save you money, but you won’t have to rush out to buy a gift when you receive a last-minute invitation.
Discount Candles and Collectibles
I’ve made this recommendation before, but it’s always a good idea to shop the post-holiday sales for candles and other small gift items that are perfect for hostesses. Keep them wrapped in the closet so you can grab them before you head out the door.
Of course, this does require setting aside some storage space in the garage or closet, but saving at least 50% on your annual gift budget is worth the effort. Once you get into the habit of shopping ahead, you’ll never pay full-price for gifts and charitable donations again. Lest you worry about being cheap, no one will know you got a deal, and charities don’t care how much you paid for a donation item as long as it’s in good condition.
I’m back from vacation and ready to go on another one. This will be the last carnival round-up of the year. Here are my picks:
First, the Festival of Frugality #157, hosted by Miss Thrifty. In addition to my post about cleaning your closet for charity, I also recommend Early Retirement Extremes tips for saving money on the clothes you plan to keep.
Second, the Carnival of Personal Finance #184, hosted by Saving to Invest. In addition to my tongue-in-cheek post about staying sane in this economy, I also recommend 1MansMoney for a look at someone handling a lay-off really well.
That’s it! See you in January!
So it’s almost Christmas and you’ve just realized you need one more gift. Before you brave the mall or bust your budget, go to the pantry and fridge for a cheap, quick, and easy gift: homemade truffles. You can also add them to your arsenal of homemade Christmas gifts with a little advance planning next year.
Once you master the basic truffle recipe, you can change the flavorings to nearly anything. These truffles are orange, but I’ve also made mint, lemon, apple, chili oil, hazelnut/amaretto, Bailey’s Irish cream, and Chambord truffles. The possibilities are endless.
Homemade Truffle Ingredients
7 ounces chocolate
1/2 cup plus 2 tablespoons cream
1 teaspoon vanilla
1.5 teaspoon orange flavoring
powdered sugar or sweetened cocoa powder
You may need to add or remove some of the cream if you change the flavoring. The goal is to have about ½ cup plus 2-3 tablespoons of liquid. At least ½ cup must be cream. When I use liquor for flavoring, I replace 2 tablespoons of cream with 1.5 tablespoons of liquor. I also usually reduce the vanilla to ½ teaspoon. Start with small amount of each flavoring and add more as you go until it reaches the right taste. For these, I used orange flavoring, but you could also use an orange liqueur. If you do, use 1.5 tablespoons.
A Word on Chocolate
You can use cheap chocolate or expensive chocolate. I usually use 3.5 ounces of bittersweet and 3.5 ounces of dark chocolate. You could also use all dark, all bittersweet, all semisweet, or a mix of bittersweet and semisweet. The choice is up to you. I’ve never used milk chocolate or white chocolate, but I imagine those would work well, too. I usually use Trader Joe’s Pound Plus bars, which are $4 each and make several batches of truffles, but you can use any chocolate. The only one I don’t like for truffles is Scharffen Berger. Although it’s delicious on its own, it has a fruity undertone that may compete with the other flavors you’re adding.
Homemade Truffle Instructions
Follow these simple steps to make the truffles. You’ll need about 20-30 minutes of prep time and a few hours of rest time.
Chop the chocolate very fine. I use a flexible cutting mat so I can pour it directly into the bowl without losing any chocolate or messing up my hands.
Heat the cream in a small pot until small bubbles form around the edges.
Pour the cream through a strainer and over the chocolate.
Whisk until smooth and glossy. If it doesn’t melt immediately, you can do one of two things: place the bowl over a pot of steaming water and whisk until smooth (do not let the water touch the bowl of chocolate) or microwave it on 50% power for 15 seconds. Whisk and repeat until all of the chocolate is melted.
Place the bowl in the fridge to chill for 45 minutes to an hour. If you’ve flavored the chocolate with alcohol, it will take closer to an hour. You want it to be soft enough to scoop, but firm enough to hold a basic shape.
Cover a cookie sheet with parchment, then drop small balls of chocolate onto it. I use a cookie scoop, but you can also use two teaspoons. You’ll have 15-18 small balls. Return the sheet to the refrigerator to chill for 10-20 more minutes. Again, alcohol truffles may take longer.
When the truffles are firm, but moldable, it’s time to roll them into rounder balls and apply the coating. These truffles are very rich, so you may also consider cutting them in half. I usually do. With a sharp knife, slice down the middle. Either with bare hands or while wearing latex gloves, roll each truffle or half-truffle into a small ball. It doesn’t have to be perfect. Work quickly because the chocolate will melt.
Roll each ball in the coating. For these, I used powdered sugar. You can also use chopped nuts, sweetened cocoa powder, tempered chocolate, sprinkles, or just about anything else that will taste good with your combination.
Chill the truffles one more time. At least 8 hours is preferable, but one hour is fine. They need to firm up and hold their coating. Once they’re done, transfer them to a tin, small box, or bag. Attach a tag with the flavor and instructions to store in the refrigerator for up to 3 weeks. They’re best when warmed for 20-30 minutes before eating. Then they’ll melt right in your mouth and the flavors will be full on your tongue.
There you have it – a gift that will have your friends pronouncing you a gourmet chef. Only you’ll know that you spent less than half an hour preparing this extravagant gift.
It’s been pretty darn cold for at least the last week, but winter didn’t officially kick-off until December 21. Now that the season is in full swing, here are 13 ways to celebrate it, one for each week.
Look at the Christmas Lights
Every year, my husband and I drive around the neighborhood looking at the Christmas lights on Christmas Eve. I love both the major displays with animated characters and thousands of lights, as well as the simpler strings of pretty colors. If it’s not too cold, you could also walk, but we have a lot to ground to cover, so we drive.
Drink Hot Chocolate or Spiced Cider
What better way to welcome winter than by sipping a warm drink by the fire? Hot chocolate is a traditional choice, but I prefer spiced cider. All you need is a bottle of apple cider, cinnamon sticks, and rum (optional). You can also get fancy by adding orange juice, cloves, or nutmeg. A quick Google search will reveal a treasure trove of spiced cider recipes.
Build a Fire and Read
When the weather is stormy, I love to start a fire and curl up with a good book. It’s so peaceful and quiet – something we often don’t have time for in our busy lives. This winter, take an hour for yourself.
If you live anywhere near snow, sledding is a must. Stop by a sporting goods store for a flippy flyer, then drive to the nearest sledding hill. Even I can go sledding and I live in Los Angeles. If you live in Florida or South Texas, you might have to take a pass, but everyone else should make the effort. It’s worth it.
Go Ice Skating
This one’s doable no matter where you live – nearly every city has an indoor ice skating rink, and many cities set up outdoor rinks in the winter. Check your local community calendar or website for hours and locations. You don’t need to own skates – they’ll rent them to you at the rink.
Drive through the Mountains
If you live near the mountains, take this opportunity to drive through them. There may be snow scattered on the peaks in places where the snow doesn’t make it to the lower elevations. It will also give you a better appreciation for the year-round beauty of nature.
Wait several weeks after the holidays, then make a fresh batch of rich, gooey fudge. It’s a sinful treat in the midst of a dark and gloomy season. You may already have a traditional recipe, or I recommended several in a previous holiday cookies post.
If you haven’t baked bread before, you must try it. The smell of fresh bread baking in the oven is heavenly, as is ripping apart a still-warm loaf and slathering it in butter. No matter how fancy a loaf you buy at the store, it will never taste as good as one you’ve baked fresh in your own oven. Here’s a basic bread recipe from Alton Brown.
Make a Pork Pie
I recommended it for the fall, and now I’m recommending it again. It was a hit at a recent party I attended. Remember, it serves about 12 people, so plan for a large party that night. Invite everyone in to play games, eat pork pie with a nice salad, and enjoy a roaring fire.
Host Open that Bottle Night
The wine critics invented an occasion they call “Open that Bottle Night.” Invite to bring a bottle of wine they’ve been saving but never found the right time to use it. Some of the wines will have gone bad, but some will be delightful. The company and stories are sure to be wonderful. This year the official date is February 28, so it’s also a great way to help winter wind to a close.
Grow a Hyacinth Bulb Indoors
The hyacinth is the first flower of spring, but it’s also the last flower of winter. The traditional growing time is early March. Buy a hyacinth bulb and grow it in a small vase inside your home to help spring hurry along.
Have a Soup or Casserole Party
Ask every couple (or pair of friends if you’re inviting single friends) to bring a pot of soup or a casserole. Ask them also to bring recipe cards to share with everyone else. If you don’t have enough dishes, either ask them to bring those or hit the dollar store to stock up. When it’s cold and stormy outside, there’s nothing like hot soup or a hearty casserole to warm your insides up. Turning it into a party makes it even better.
Try Other Traditional Dishes
You may have grown up with traditional dishes from your culture, but how many dishes from other cultures have you tried? Try as many as you can. Some hearty winter ideas: tamales, empanadas, Yorkshire pudding, perogies, latkes, and borscht.
Once you get through this last, spring will already be upon us. Do you have additional ideas for celebrating winter? Tell me in the comments.
First the bad news: these rules don’t take effect until July, 2010. Under the new rules for the good news: today the Federal Reserve Board issued strict new rules barring the deceptive and punitive practices of many credit card issuers. The policy statement is quite extensive, but these are the rules I think are most important:
The Interest Rate on Existing Balances Can’t Increase
For the most part, the interest rate that applies when you make a charge is the rate that will apply until the day you pay it off. The exception occurs when you’re more than thirty days late on a payment. In that case, credit card issuers can still increase your interest rate.
Extension of Grace Periods
The grace period – typically considered to be the time from the date the bill issued to the date the payment is due – has been shrinking. Some issuers are allowing as little as 15 days. If your bill was late, you were in trouble. Under the new rules they’ll be required to give you at least 21 days to pay the bill.
No Deceptive Credit Card Offers
You’ve probably received offers promising a 6% interest rate, only to receive a rate of 27% after you apply. That will no longer be allowed. Under the new rules the rate they offer initially will have to be close to the rate you finally receive.
No Two-Cycle Billing
I really hate two-cycle billing. Under this policy, you continue to be charged interest over two billing cycles if you carry a balance. For example, we made a partial credit card payment in January, then paid off the bill in full in February, but we were still charged interest through March.
No Universal Default
Currently, some issuers will raise your interest rate to as much as 29% if you have a late or missed payment on a card from another company. The new rules abolish that practice.
Payments Must Be Applied Fairly
If you have different interest rates for different balances, most issuers pay off the lowest interest rate first. The new rules require them to apply payments above the minimum to the highest interest rate balances first.
Payments Due on Weekends Won’t Be Late
Some issuers will consider your payment late if it’s due on Sunday and arrives on Monday. They may also set a due time of noon. Under the new rules the due time must be 5 PM, and bills with weekend due dates must be accepted as paid on time if the payment is received by the next business day.
No Fees for Online or Telephone Payments
These fees are ridiculous, and the Fed agrees. Under the new rules, you can’t be charged for making a payment through their website or by phone.
Zero Interest Is Zero Interest
This is the only one I’m not sure about. Currently, you can receive a rate of 0% until a certain date, but deferred interest accrues at the full rate. If you don’t pay off the balance before the final date, then you will have to pay all of the interest. Deferred interest will no longer be allowed – if they say 0%, it’s 0%. My concern is that this valuable financing option will disappear. As I’ve mentioned before, I use the Goodyear card to take advantage of deferred interest. However, I always pay the bill off before the interest applies. Most people don’t, so I can see why the Fed would ban the practice. The full rate is usually 22% or more.
These rules are a big win for the average consumer. True, they could have gone further, but it’s a place to start. The only downside is the delayed effective date. I’m sure the credit card issuers will take advantage of that time to bilk consumers for as much as they can. Protect yourself by being very careful with your credit for the next 18 months.
I entered what I call “bad news fatigue” a few weeks ago. That means I no longer slap my forehead quite as hard when I see news of more financial idiocy. I just shake my head when I hear news of government screw-ups or rate cuts. If you haven’t yet reached the point where you no longer care about the latest financial news, your 401K balance, or the attempts of our government to fix it, here are some tips to help you get there.
Be Glad You Didn’t Invest with Madoff
If you lost money in the market, you may make it back if the company survives the recession. If you’d invested with Madoff, the money would be gone forever. Fortunately, most readers of this blog haven’t invested with him. If that’s not silver lining enough for you, be glad you’re not the SEC investigator who epically failed to spot this problem at any point during the past ten years. He’s so fired.
Just Stop Looking at the Stock Market
What’s the point, really? It’s up one day, down the next. There’s no rhyme or reason. Just leave your investment strategies in-tact and don’t look at the market unless you need a tax loss. There’s nothing you can do to change the situation anyway.
Remember that at Least Gas is Cheap
I paid $1.75 a gallon this morning. It cost me less than $16 to fill up my car. Just two months ago I was paying around $35 to fill up. That’s quite a savings! I’m not convinced we’ll get back to the $1 gas we enjoyed in 1999, but $1.75 is much cheaper than the nearly $5 I was paying before.
Think “Hey, It’s Just Money”
$700 billion is so large a number that I can’t even wrap my head around it. And they say the total recovery plan is closer to $1 trillion. I can’t even comprehend that figure. But apparently the Fed can, and knows just where to find the money – they’ll print it. I mean, it’s only money, which is really just a piece of paper that signifies some artificial value based on gross domestic product as compared to the gross domestic product of other countries. Does that make your head spin a little? Go with that feeling.
Turn to the Food Network
I was in a bank the other day and noticed that the TVs were showing the Food Network. There is never any bad financial news on the Food Network – unless you attempt to total up the cost of Sandra Lee’s alcohol. Don’t like food? Try the golf channel. No bad news there, either. As long as you never change the channel and don’t turn on the radio, you won’t hear bad news so you can pretend the world is sunny again.
Spin Around in Circles
Remember when you were a kid and you’d spin around so fast you’d feel sick to your stomach? You probably already feel sick to your stomach from all the bad financial news. Why not give yourself a more fun reason to feel sick? Put your arms out and spin. At least the nausea will distract you from the financial reports. Or it will put you in the same place as our government – which seems to be spinning in circles and accomplishing nothing.
None of these will actually fix the situation. We lay people can’t really do anything except go on with our lives. If you let yourself worry constantly, you’ll just get an ulcer. Instead, welcome the “bad news fatigue” into your life so you can turn your focus to more important things, like decorating the tree and determining the exact quantity of brandy you need to add to your egg nog.