After long consideration of the pros and cons of investing vs paying off my mortgage, or buying rental property vs paying it off, I made my decision 3 years ago and have been attacking that motherfucker diligently. If I stick to my plan, I’ll have it paid off 2 years from now exactly.
After 3 years, I can tell you definitively: it’s boring. Not much happens except that I send the same amount to the bank month after month after month.
Every month, I watch my principle go down, and my end date get closer. I get a little thrill, and then….nothing. Until the next month.
So I stick to the plan…and wait.
When I first got my finances in order, there was something exciting all the time.
I made a budget, and then I mastered it. I made a debt repayment plan, and tweaked my budget to squeeze more and more and more. And then my debts were gone, and it felt great!
I calculated how to max out my 401k, and then I figured out how to do the same with my Roth IRA. Heck, even figuring out what a Roth IRA is took some research, and then I had to figure out where to open one and what to do with it once I put some money in it. It was fun!
I saved and bought a car in cash. I learned about and opened an HSA. I built my emergency fund – that was loads of fun, strategizing where to put it, how much I should have in it. I mapped out CD ladders, researched the highest interest savings accounts.
All of this took years. Researching, brainstorming, strategizing, doing, succeeding.
But all of those things are now set and automated. I tweak periodically, but mostly, they just happen. There’s nothing to decide – I’ve already decided.
So now I put send my check to the mortgage every month, and I sit and I wait.
I check my budget to see if I can squeeze any more out of it, and I confirm that I can’t (won’t). I recalculate my mortgage end date and confirm that my previous 3 years of calculations are correct.
It’s so boooring.
Here’s how I motivate myself to stick with it:
1. I read personal finance blogs and I comment on them. It helps to have a conversation with people about things I’ve learned and done. The most helpful and motivating blogs are ones that either describe the poster’s own journey and feelings and viewpoints. Reading what motivates others motivates me. It reminds me of the thrill of discovering that you can get out of debt, you can learn how to invest.
2. I learn. I continue to pick up stock investing books and read about real estate strategies. I experiment with investment methodologies in my Roth IRA. I research rental real estate prices and daydream about how I will go about it once I’ve paid off my mortgage.
3. I find like-minded people to discuss finances with. Mostly my Dad. He’s interested in anything I have to say (poor Dad).
4. I give my dollars a name. When I am tempted to go off track and buy something superfluous, my only option is to dip into the dollars that are named Mortgage. It helps me to remember that that money is not available for anything other than its destiny: the mortgage. (Sounds funny, but it really helps!)
5. I find other interests and hobbies. I need a distraction while the slow, slow process of paying off my mortgage slowly winds its way down. I garden, I go to meet ups, I play board games, I walk. It helps to engage my mind in an activity where I can see more immediate rewards than waiting around for another 2 years for something to happen.
Last week I wrote about why I hate EE Savings Bonds. I hate them because of how people use them – they use them wrong and I explain why here. Objectively, though, I love them. Here’s why:
1. They are totally tax-free when used for education. Kidding, I don’t give a shit about this. I don’t have kids, and I’m not gonna be that mothball-smelling aunt that gives the kid a $50 EE Savings Bond to “contribute to her education”. Fuck that, I’m buying Astronaut Barbie for my niece. If you have kids or are a killjoy, then read up on it here.
Bonus: if you do buy your kid EE Savings Bonds for her college fund, you can totally pay taxes on the interest annually before the bonds mature and/or are cashed in. Your 5 year old kid is probably in the 10% federal income tax bracket, so that’d be a cool way to pay super low taxes on the interest. *Note: there’s a no-backsies rule on this – once you decide to do this, you can’t change your mind. Alternatively, you can let your kid pay the taxes upon its maturity when he’s probably around 18 – fuck him, he needs to learn responsibility at some point, right?
The huge drawback of using EE Savings Bonds as college savings is that you really shouldn’t cash them in in less than 20 years unless in an emergency. So either start buying these when you’re thinking about getting pregnant, or make your kid wait until the bonds mature to face value. Otherwise, look at 529s instead.
2. They are totally state & local tax free. A-ha. Now we’re getting somewhere. While the interest earned on EE Savings Bonds are subject to federal income taxes (with some exceptions like education and disasters), states and local governments – ahem: NYC – cannot touch them. If you live in a high tax state or city *cough NYC cough*, this makes up for the relatively low interest you earn. Californians and New Yorkers, take notice. Floridians & Texans: fuck you with your perpetual sunshine and state tax-free incomes!
3. Guaranteed 3.6-ish% interest rate. Let’s face it: the interest rate on these bonds are shit. It’s 0.10%. That’s crap, you can make more just parking your money in an Ally Savings account. BUT if you hang onto the bond for at least 20 years, you double your money. It doesn’t matter what interest rate you get before then, once the bond hits 20 years old, the US Treasury guarantees to bring up the value of the bond to face value. That’s double. Doubling in 20 years is a 3.6% interest rate.
Tack on whatever you save from your state & local tax exemption (I’m looking at you, Hawaiians), and you’re looking at a pretty decent guaranteed return. That’s almost the same kind of return you get by paying off your mortgage early. Alaskans and Washingtonians: again, fuck you with your state tax-free incomes!
4. They’re tax-deferred. Hey, the whole reason you invest in your 401k is because the taxes are deferred, right? That’s worth something, otherwise you’d just invest in your taxable accounts all the time. But 401ks, and other tax-advantaged accounts like Roth IRAs, have annual limits. When you hit those limits (and my opinion is that you should), the next place to look for tax advantages in your investments can include EE Savings Bonds (and munis, but that’s a conversation for another time).
5. #4 used to be the end of my list, but I ran across this interesting idea of parking your emergency fund in EE Savings Bonds.My initial reaction was noooooooooo! because emergency funds should be liquid, easy to get to. After all, in an emergency, you need your cold, hard cash to get you out of a jam. But the more I thought about it, the more I like it.
And if you do have an emergency, well, then EE Savings Bonds are plenty liquid. As long as you’ve had them for over a year, just cash them in. You lose some interest, but, hey, it’s an emergency, right?
Most people hate EE Savings Bonds. Those people are right.
There are many finance blogs extolling the virtues of these things – they’re totally tax-free when used for college, perfect little baby birthday gifts, they’re guaranteed to double in 20 years (something like 3ish% interest) – but I hate them.
I hate them because most of those baby gift bonds are face value $50 or something stupid. Sorry, grandma, but $50 ain’t even buying a textbook.
I hate them because the only way EE Savings Bonds are useful is if you have a shit ton of them. Let’s face it – if grandma gave you a face value $10,000 bond as a baby gift…..and repeated that each year for 18 years, you’d have plenty of tax-free college funds.
But people don’t do that. They think the bonds are cute, and they feel good about “contributing to your education” instead of just giving you the fucking Lego set you wanted.
EE Savings Bonds are fabulous for the 1%. It’s an excellent way to stuff at least $10k a year into a pretty good tax savings vehicle at a guaranteed 3ish% (if holding onto them for 20 years). And, to be fair, if you’ve maxed out your 401k and your Roth IRA, it’s not a terrible idea to stash away a few grand a year for your retirement.
But again, people don’t use EE Savings Bonds that way. They’re too cute, they’re too low-denomination, they make people feel like they’re doing something good by buying a $50 one, when really what they need to do is stash away piles and piles of them. They let people off the hook.
I got the idea for this bento box from a Weight Watchers app beginner meal suggestion. WW placed these simple ingredients on a platter, but I like putting it in a bento box for one reason: (1) the salad and the roasted peppers seep liquid, making things messy (and ruining the bread). I also put the hummus in a silicone cup to prevent the juice from the pepper from turning it into pepper-hummus soup!
I replaced WW’s suggestion of a hard boiled egg with smoked salmon because it’s prettier and because who doesn’t love smoked salmon! It not only adds a lovely color to the ensemble, but it adds a nice salty, smoky balance to the tanginess of the acidic salad.
I added the roasted peppers to WW’s suggestion because it melds with the flavor of hummus beautifully, plus it adds more vegetables to my day.
1/2 pita wrapped in cling wrap to prevent sogginess
Roasted bell peppers
Middle Eastern salad: 2 tomatoes, 1 cucumber, a bunch of cilantro, juice from 1 lime, salt & pepper
Pro-tip for WW users: the only items in this platter that have points are the hummus and the pita bread!
Money may not buy you love, but it sure helps you to escape when love affairs die.
I once lived with a raging alcoholic. He wasn’t violent or abusive or mean. He was just a regular, pass out on the floor, piss in the bed drunk. He drank six days a week, and spent the seventh day recovering his hangover.
I lasted almost a year. And the only reason I lasted that long is because on that seventh day of sober hangover, he was sweet…and incredibly sexy.
But a single day a week of sweet and sexy, watching TV in bed all day does not a fun relationship make. I spent that year fantasizing the different ways I could leave. My fantasies got pretty detailed – I’d pack up just my necessities and drive away in the middle of the night (or afternoon) while he was laying in a pool of his own piss. I’d drive south toward the warm weather, and park when I got to, say, Louisiana. Maybe New Orleans. I’d find a cozy little studio and not tell anyone where I was (except work). I had my emergency fund, and that would be enough for a first-and-last deposit on an apartment, as well as gas money to get all the way south. It would be easy, really.
That situation eventually resolved itself. But as life does, I continue to have flashes of stress and every once in a while I revive my running-away fantasy. I keep my emergency fund healthy – not just because the personal finance blogs say so, but also for my own secret escape reasons.
Sometimes I stop and let myself fully feel gratitude course though my body: I can escape if I want to. I could have when escape was a more likely outcome. I had and have the money to leave. Leaving would be insanely simple for me. I don’t have kids, no lingering bills to split. I don’t rely on anyone for anything material. A lot of people, a lot of women, aren’t so lucky. For a lot of women, whose partner problems are more dangerous than a mattress soggy with piss, escape is prohibitively expensive. Escape is possible only via shelters, or friends, or family, and even then, that may not be far enough away to escape the problem.
When Thanksgiving rolls around each year, at whoever’s table I am at, when it becomes my turn to say what I’m grateful for, what I say out loud and what I say in my head are two different things. Out loud, I’ll say something earnest, like I’m grateful to be with my host, or I’ll say something funny, like I’m grateful for chocolate. But in my head, I admit what I’m actually grateful for: I am grateful for my ability to earn my own money and support myself, I am grateful for my emergency fund, and my ability to build one, I am grateful for having the money to be fully autonomous. I am grateful for being in my situations because I want to be, not because I need to be.
PS. I’ve known women who have needed to escape dangerous relationships when they didn’t have money. I’m thinking fondly of them today, and providing links for others who might be in that same situation
I got my first credit card in college because I wanted the free coffee mug. I didn’t even drink coffee. And I didn’t want a credit card. But I signed up because it was free, and as a poor college student in a world where nothing is free, free felt good. Also, in my mind, all I was doing was signing a piece of paper. I had no intention of using the card.
Of course, I started using it in short order. A textbook here, a pack of cigarettes there (this was the 90s, sue me).
Fast forward 8 years to me in my first job paying $29k and my first job skirt suits and pumps (again, it was the 90s), my first computer, were all bought on credit. Before I knew it, I was thousands in debt.
Think about this for a second. Credit card companies are sitting on campus, offering literal junk in exchange for teenagers to get their first hit of credit. They know that after that first hit, you’re hooked. And they start you young too, so that as you begin your adulthood financed on credit, you probably won’t know how to live without it. You’ll have never experienced being an adult living on the cash you have.
Credit card companies are pigs. They’re pushers and dealers. They don’t care about you – all you are is a carcass to pick at. They don’t like you, they don’t hate you, they just want your money.
I eventually one day sat down and added up the balances of all my credit cards. Forty thousand dollars.
Forty. Thousand. Dollars.
I was 25 years old. I wasn’t even making thirty thousand. The whole reason I did this was because I was beginning to not be able to handle the minimum payments. I remember feeling a sudden and deep seated anger that on the same day I got paid and paid my bills, I had nothing left. I vividly remember wondering why I looked forward to payday, since after paying my bills, it was just like all my other days – poor.
It struck me in a moment of stark clarity that if I didn’t have to pay these minimum payments, I would actually have money for the things I’d been purchasing on the credit cards….instead of having to put them on the credit cards. See? It’s a fucking cycle: you don’t have money because you’re paying the credit cards, and since you don’t have money, you buy things using the credit cards.
Yeah, it’s true that credit card holders need to take personal responsibility – stop buying things on credit cards. I certainly hold myself responsible….now. But what sticks with me is that figuring out HOW the credit card is a trap, and HOW to get off that merry-go-round was literally a series of A-HA moments. This strikes me as strange – we get conditioned to rely on cards to the point that we barely question it, and not doing that is a learning process. It’s fucking backwards.
I calculated that if I continued to just pay the minimum on each of my cards, I would be done with them at age 42. (I calculated because this was the days before Elizabeth Warren and the law that requires credit card companies to tell you when the principal would be paid – you had to do that shit yourself…..if you even thought to do it, and if you figured out how compounding interest worked). I felt sick. I would never not be broke. I would never be free.
I wallowed in self-pity for a few days, and a funny thing happened: any time I pulled out my card, I thought about the fact that using it would push my end date from age 42 to something older than 42. And it made me mad. I was pissed! Man, that was the kick in the ass I needed. After a few days, I sat down and made my first ever budget. Those credit card companies raped me for years, and I was going to kick their ass. Money sure was tight, but I could scrimp here and there and throw extra dollars and extra pennies towards my debt.
Years later, I would discover that I used the debt snowball method without knowing it was a method or that it had a name. Whatever. It worked. Every time I had an extra $20 or more, I sent a check to the card and tracked it in my spreadsheet. Each time the end date moved from age 42 to earlier and earlier in my life, the better I felt. I treated each dollar like it was a rogue warrior soldier stabbing and kicking my debt with no mercy. I pictured my debt as a living blob thing, getting it’s fucking ass kicked, and I loved it. I could do this! Fuck you debt!!!!! Here! Here’s another dollar! Stick it up your ASS!!! (I was very angry, if you can’t tell).
I honestly don’t remember how long it took me to pay it all off, but I did. Along the way, I got raises (some were substantial) and all of it went to my debt. Again, I didn’t know lifestyle inflation had a name, but in my gut I knew I would rather be free from my rapists than get more square footage living space or whatever – I’d been poor for a long time, what’s another few years when you have some serious asses to kick?
And that was it for credit cards for me for a long time. I went cash only. Sometimes freestyle because I was making plenty of money at the time, sometimes on an envelope system when I wanted to save up for something big. But no plastic. If the dollars were not in my wallet, they weren’t getting spent.
Until about 5 years ago. I stumbled across Frequent Miler, a travel miles & points hacker who basically travels for free by raping the rapists. I discovered the world of fucking the credit card companies by buying everything on credit….and then paying it off in it’s entirety every monthand walking away with the credit card rewards. Whoa!
I’ll leave my credit-card-fucking strategies for another time, but suffice it to say, that that feeling of satisfaction of choking my tormentors that I felt years ago has never left. Every time I redeem my points for a free flight, I give the finger to these fuckers and whisper, in the dark of my living room, by the light of my computer screen….Fuck you, Credit Card Company. Who’s your daddy now, motherfucker? Fuck. You.
I’m not poor now. I have been, but I’m not anymore.
To be clear, I’ve never been poor while trying to raise a family, and while I’ve been food insecure, I’ve never really been in danger of starving. I’ve skipped a few meals unwillingly, but I’ve never gone a full day without eating (unwillingly). I’ve never been responsible for feeding someone other than myself while poor, and while I’ve hustled for my rent, I’ve never been in danger of being evicted.
But I have rummaged in my couch cushions looking for change to buy toothpaste.
I have looked through my neighbor’s garbage cans for bottles to return for enough nickels to buy a stamp to mail my resume for a job (yes, I’m old enough to have performed a job search via the USPS to mail resumes. Suck it).
I’ve poked a new hole in my belt to hold up my loose pants after losing a pants size worth of weight after being consistently food insecure for a brief and temporary 2 month mini-struggle.
Digging deep into my past, I know what it’s like to hold a malfunctioning freezer door shut in fear that the cockroach spray would contaminate the food within for long enough for my mom to come home and fix the situation.
Being poor is a waste of time. I suppose digging through trash to recycle metal cans and glass bottles helps the environment, but while I didn’t resent it at the time (I’d been poor up until then and I was no stranger to this type of low-value activity), from my current vantage point looking back, I can’t help but think of all of the other job searching activities (or, hell, even volunteering) I could’ve been doing that would have been such a much more worthwhile use of my time than cleaning up other people’s recycling. As a child, it would have been more productive for me to study than to physically use my body to hold together a falling-apart refrigerator, by myself for hours at a time, waiting for a grown-up to show up from their (probably second) job. I wouldn’t have been late to work that time I ran around looking for a store to take my pennies in exchange for dollars because the NYC MTA didn’t take pennies for tokens (I’m old, I told you).
There’s a stigma attached to being poor. Even in my neighborhood, where I know for a fact that my neighbor playmate at nine years old pretended she didn’t know it was dinner time when she knocked on my door (then was invited and stayed for dinner), there was a stigma. I burn with shame when I remember teasing a classmate about living in a half burnt-out low-rise. I don’t know why I did it. Maybe to cover up the shame I felt when I asked another classmate if I could have the scraps of lunch she was about to throw into the garbage.
Being poor is a skill. I haven’t been poor in a very long time. My family is longer poor – my mom eventually graduated college, got a good job, my dad eventually became secure in his employment after a shaky start. Everyone my generation and younger are educated and professionals. But I don’t think there is even one of us that doesn’t know that you can brush your teeth with baking soda, clean your counters and floors with vinegar or lemons, I don’t think any one of us doesn’t have some kind of hoarding habit or know exactly where and how to get a payday loan. We are adept at using things for jobs they were not designed for, like sticking a pencil in the carburetor in a 1980s Buick Regal to get it started. We know the value of doing a favor for a neighbor, and ensuring the favor is returned in times of need.
My dad says I have Judy Garland syndrome. I hoard things I don’t need to hoard, like single dollars. I’m not joking – I have a thousand single dollar bills in my safe besides my actual investments. As far as retirement funds, taxable investments, alternative holdings go, I’m normal. But I have a thousand single dollar bills within reach because if there is one lesson I’ve learned, it’s that the money isn’t yours unless it’s in your hands. Literally. I’ve always, ALWAYS kept a current passport – my step-grandmother that had numbers tattooed on the inside of her arm and spoke with an Eastern European accent listed that as a rule that should never be broken – always keep a current passport and always have jewelry. As a child I didn’t know why, but I formed the habit anyway. Now I know why, and I think these are pretty good rules.
Anyway, yeah, poor sucks. I don’t have a solution for Poor, but I’m goddam grateful not to know it anymore.
And when I say “every month”, I mean EV. ER. Y. MONTH.
Banks are like surly, sneaky teenagers who refuse to get their own jobs for their cash.
When I was a kid, I would periodically go through every single purse in my aunt’s closet and collect the stray singles and handfuls of dimes. My haul was usually somewhere around $20 (and this was in the 80s – plenty for the food court at the mall with my friends). Banks are like my teenage self: if you don’t pay attention, they cipher your money away a little at a time without you really noticing unless you know how to protect yourself.
All banks are thieves, practicing legalized thievery with their thieving thieve business structures. And I know Wells Fargo is an easy target, given their thievery exposure in the last 3 years, creating accounts without customer knowledge, charging them fees on the sneaked accounts, stealing from their customers and facing zero consequences for their thievery (has any Wells Fargo executive gone to jail?), firing their middle class middling managers for the thievery instead of their .01% gazillionaire brain-trust executives. And I’d love to write a thievery banks-are-assholes post without being cliché and writing about the thieves at Wells Fargo. But, honestly, they do it to themselves.
This morning I get an email from Wells Fargo stating my savings account is in the negative.
“What’s this?”, I thought. How can an account I never use and have mostly forgotten about be negative? Last I knew, I had 50ish dollars in it, and only because I signed up for the account when I opened the checking account, and the account rep emphasized over and over again that it was free, it was free, it was free, and I should put money in there and have it act like an overdraft pool. I shrugged and did just that.
For the first year, nothing happened. I mostly ignored the savings account. I ignored it the second year too. We’re now in my third year, and here I am in the negative. Wells Fargo decided in the middle of my second year that I should not have a free savings account, they decided I should have a savings account that charges me $5 a month. The account statements even show zero activity for a little more than a year, then suddenly subtracting $5 a month.
I called Wells Fargo and said “Why are you stealing form me, give me my money back, and hey, are you thieves pulling your sneaky thieve games again?”
The agent tried the accusatory tactic: “Your savings account charges $5 a month if you don’t xyz”
I said “I didn’t sign up for an account that requires xyz. Gimme my money back”
Long story short, the agent was able to confirm that I did not, in fact, sign up for anything requiring me to do xyz or abc or anything other than giving Wells Fargo the privilege of hanging onto $50 of my money. In the end, I shut down the account and got back $30 (the agent couldn’t get further back than 6 months, and I’ll be going into a physical branch to collect the rest of my stolen money).
There are two lessons here:
1. Monitor your bank accounts. Banks are thieves and if they find they can get away with stealing your money, they will do it until you notice and tell them to stop.
2. Call the bank and get fees reversed. Seriously – even if you think you mistakenly signed up for something that charges a fee without realizing it, ask for it back. If YOU don’t realize you’re going to be charged fees, that’s THEIR fault for not emphasizing it up front. THEY stole from YOU, not the other way around. Get your money back.
PS. I suppose there’s one more lesson: don’t have more accounts than you need. If you don’t have a specific purpose for a checking/savings account, then don’t have it.
PPS. Banks provide a necessary service and they deserve to get paid. I get that. But banks should not be allowed to steal from their customers, legally or otherwise.
Lettuce. You can treat indoor lettuce plants almost the way you do sprouts – let them grow a little, and cut the leaves when they’re young. And bonus points – they grow back. How’s that for the gift that keeps on giving! I plant lettuce seeds in a long, shallow pot and sit it on the windowsill… even on a north-facing windowsill.
You can grow root vegetables inside like carrots and potatoes. Potatoes are probably the easiest, since you’re continuously packing more dirt on top to encourage more upward growth, and therefore more potatoes, but the fact is, no apartment I’ve ever lived in have I had superfluous amounts of space to give up to potato grow bags. Frankly, I’ve never been tempted to give up living space to potato grow bags in any house I’ve ever lived in. But it can be done, if that’s your priority. If you want to give it a try, read this article.
Mushrooms. You can absolutely grow mushrooms since they need zero light. These are forest floor-dwellers, after all. But I hate mushrooms, blech! Besides, they look way fussy and not nearly as simple as growing sprouts!