The 100 by 30 project

It's hard to give control over my finances to other people...

... even when it's my husband!

For the first time since I started filing taxes 13 years ago at age 15, I am not doing my own taxes. Because our wedding was last summer, this is the first time my husband and I are filing jointly. For a reason that I really don't recall  -- my grad school stress is always a likely answer -- we decided he'd be in charge of filing our taxes.

It's been interesting.

The loss of control wasn't really freeing for me in the way ceding other financial chores to a partner has been. There are two reasons you might assume that this was hard for me:

Fear of the IRS/legal ramifications. This is different from him just, say, incorrectly balancing a checkbook and incurring some fees. Yes, I know the IRS wouldn't put someone away for an honest one-time mistake on our part. Anyway, this isn't really a concern for me. I don't really share the pop culture loathing of the IRS; I've called the IRS in the past to clarify some issues, and they've been polite and responsive every time.

"Taxes are hard." As I mentioned, I've filed my own taxes for 13 years, and that includes the year in which I worked in three different states. My husband is a computer programmer and is more patient and methodical than I am, anyway, so I don't think taxes are particularly hard, and even if they were, I wouldn't about his ability to navigate the forms and instructions.

So what exactly was the problem? It was a mixture of all the complicated issues being mine, and him using computer software.

By the former, I mean that I'm the one with the student loan interest to deduct, I'm the one with the mortgage interest and property taxes to deduct (because the house is still in my name only), and since I've itemized before and he hadn't, I'm the only one who knew that you can deduct state and local income taxes. I know these things exist, and I anticipate them. I'm more tax savvy.

So I'd freak out a bit when he'd say "we can file federal before we do state or local".

Me: "HUH? But without that number you can't determine whether we should itemize or take the standard deduction."

Him: "What?"

Me: "What piece of crap software are you using, anyway?!?"

I'm certainly no Luddite; I don't object to using software to do taxes. But this software didn't inspire a lot of confidence.

Anyway, the taxes are filed and we're getting a $1,500 refund. I know this isn't good because interest-free loan to the gov't, blah, blah, blah, but I was really afraid that we'd owe because I withheld all last year on my piddly stipend as if I was filing singly. So it was a really nice surprise.

No longer a Craigslist virgin

I live in a medium-sized city that's large enough to have a craigslist board, which I've never used other than a few years ago when I was hooked on reading "Rants and Raves" for about two weeks.

But we had some furniture we wanted to get rid of to make room for a nursery (did I just say that?! I mean to... make room for a guest room). We'd have happily given it away but Vietnam Veterans of America, our favorite charity for household donations, does not pick up furniture. So I turned to craigslist.

I posted two pieces of furniture to the list that were hand-me-downs to begin with, and was totally unsure what to expect. There were a lot of furniture listings on my city's board -- about 40 over the past two days -- and since a lot of it was overpriced junk, I assumed that there weren't a lot regular readers. Who wants to sort through that crap day after day?

But the response was phenomenal! One piece of furniture only earned two emails of interest, but one of them committed as soon as I replied with a suggested pick up date. The other generate seven interested emails, and while no one has committed yet (we're still trading "yes, it's from a non-smoking household", "no, pickup can't wait until next month" emails) I'm pretty sure the other piece will sell easily.

Although I'm sure my success had a lot to do with underpricing the items -- the two will bring in $50 -- I'm excited by the results. And craigslist doesn't charge, and will host pictures for free?!? It's fantastic.

"The most unseemly freezer in Washington"

An amusing story for 20-somethings who dream of the days that they'll achieve power, fame, and the end of needing roommates:

While Washington may have more than its share of crash pads for policy-debating workaholics, few, if any, have sheltered a quorum as powerful as this one. About a quarter-mile southeast of the Capitol, the inelegantly decorated two-bedroom house has become an unlikely center of influence in Washington’s changing power grid. It is home to the second- and third-ranking senators in the new Democratic majority (Mr. Durbin, the majority whip, and Mr. Schumer, the vice chairman of the Democratic caucus) and the chairman of the House Democratic Policy Committee (Mr. Miller).

....

In fact, the roommates have never resorted to violence, at least with one another. (Crickets are another story.) Their weapons are verbal, and often aimed at Mr. Schumer, who admits to a serious dereliction of roommate duties, like grocery shopping. He is also prone to a blatant disregard for conserving a most precious household resource, cereal.

“I love cereal,” Mr. Schumer said, digging into his second bowl of granola, going a long way toward depleting a box that Mr. Miller had just purchased.

I love this story. I lived in a co-op and fully enjoyed the multiple-housemate experience. Of course, I love living with my husband, but I'd love for us to someday be part of a communal living experience. The problem is that we're not quite hippie enough to fit in with most adult communal living groups -- maybe, when we have more money, we'll start our own.

A walk through February's Kiplinger's Personal Finance

1. "Nearly 80% of credit-card users who asked their lenders for a lower interest rate got one, reports Synergistics Research." Really?
   
2. They produce a graphic describing how much you need to save per month to have $1mil at age 65, starting at $0 from ages 25, 35, 45, or 55. I thought this sounded familiar, but apparently Money magazine had a similar piece. I share JLP's belief that it's not especially helpful to compare what it takes a 25-year-old to get to $1mil versus a 55-year-old. I can understand why they go that route -- there's only one variable to compare across -- but it's sort of misleading in that the theme of these pieces always seems to be "look how much easier things are when you start young". Yes, it's easier for me to save $1mil over the next 40 years than it would be for my parents over the next 10, but we'd also experience wildly different retirements on that $1mil.
3. A piece on prenups notes that you can "stipulate a limit on how much weight your spouse may gain (although you may have trouble enforcing it)". At first, I assumed they meant enforce it legally. But later in the piece they discuss provision that can't be determined by a pre-nup (e.g. child support). So now I'm wondering if such a provision is legally enforceable, and Kiplinger's was merely referring to the fact that, short of tactics that would get you arrested for , there's no sure-fire way to keep another adult from gaining weight. So is it legally enforceable, if not preventable? A little research suggests it is not.
   
   But check out the last link, where we see
   
   Prenups can include responsibilities that don't deal with money, but you should avoid making demands that might seem frivolous, such as requiring that your spouse not gain weight, or      that he or she quit smoking and take out the garbage three times a week. A judge could look askance upon terms that are less serious than, say, stipulating what religion your children will observe if you and your betrothed are of different faiths.
   
   I'm a little annoyed that something like smoking -- in which you're exposing both your spouse and your children to second-hand smoke -- is likely to be considered "less serious" than the religious affiliation of the children. It's "serious" to get worked up about Episcopalian versus Catholic, but my spouse willfully exposing our children to large doses of carcinogens is no more serious than bickering about chores? The idea of a judge deciding what's a "serious" claim worries me -- my totally uninformed opinion is that they should say "anything goes" and protect the process from too much projection of the judge's ideas on what a marriage should and shouldn't be (except child support, I'm on board with that one), or they should disallow all stipulations, even ones about different payouts depending on who was unfaithful.
   
4. There's a piece on the 50 best values in public higher education, which I see from One Big Mortar Board was available as web content four months ago!

No news is good news

There has been no activity in my checking account since the 8th. I know this probably doesn't seem like a big deal, but just a few years ago the idea that I'd go four days without charging a meal out or grabbing $40 out of the ATM would be unthinkable.

Four days of financial silence is incredibly calming.

Tithing-through-bankruptcy bill passed the House this week

The House of Representatives today gave final approval to a bill sponsored by Senators Barack Obama (D-IL) Orrin G. Hatch (R-Utah) to protect an individual’s right to continue reasonable charitable contributions, including religious tithing, during the course of consumer bankruptcy. The measure passed the United States Senate in late September and will now be presented to the President for his signature. 

Which gets me thinking that I'd like to look into the rules of what defines charitable giving. How little of the money can an organization spend on (or at least toward) the needy in order to retain federal charitable status?

Chit-chat

During my bus ride into school yesterday, I chose a seat next to an elderly man. He didn't say a word for the first ten minutes of the trip, but then he turned to me and opened up with this:

"I have two granddaughters who graduated from the University of North Carolina, and a third who is a senior who a senior and about to graduate. And do you know that if I hadn't helped their parents pay for it, they'd be drowning in debt right now?"

Unique small talk, no? Maybe he could sense the presence of another personal finance hobbyist. We went on to talk about "kids these days", consumerism and materialism, soaring tuition prices, etc.

What really struck me is that towards the end of the conversation he mentioned that his daughter and son-in-law were planning to take an early retirement soon. Either the man is overselling the magnitude of his contribution to the education fund, or the two of them are really underfunded for this early retirement, or they were early adopters of the "your kids can get loans for college but you can't get loans for retirement" strategy. I wonder how he feels about his daughter and son-in-law having him pay for their daughters' education while simultaneously preparing to retire at 60.

Man, the details of other people's financial lives are so interesting. No wonder we all like blogs so much.

In some ways, young adults' financial future less bleak than I suspected

I was reading this story on ABC News about young adults and debt. One statistic struck me as especially good:

Among all twentysomethings, the fastest-growing group owes $20,000 or more in student-loan debt. Though it's a small group, its proportion has doubled in the past five years to 3%.

Three percent seems really low. Granted, that's relative to all twentysomethings, not just the ones who went to college or took out loans to pay for it. And granted, one of the surest ways to rack up a ton of student loans is to go to grad school in a professional program (e.g. law, MBA, med school), which many people put off until they're out of their twenties. But still. Is it good or bad that I expected the number to be much higher? At least half of the people I went to college with graduated with that much debt, and I went to a pretty wealthy college where many people had Mom and Dad footing the full cost. Because of how my school structured financial aid, if you had any loans at all you were pretty likely to have at least $20k: the first $5k of the financial aid package each year was student loans. So before the school gives you any financial aid, you're already in the hole $5k, no matter how poor your family was. (Or maybe I should say especially if your family was poor, because they were less likely to be able to help you out even if they couldn't fully cover the tab.) So I suppose the 3% seems low to me because I'm used to thinking of "needing any loans at all" as synonymous with "needing $20k in loans".

When personal finance cliches collide

There are two pieces of advice that echo through the personal finance community:

1. Stock up on essentials when they're at a good price
2. Don't buy something just because it's on sale

These two axioms collided for me yesterday during a trip to the store Ann Taylor Loft. As I entered the store, the saleswoman announced that if I opened a store credit card I would receive 35% off of my purchase.

The key here is that I buy a large portion (say 40%?) of my clothing at ATL. I hadn't planned on buying any new clothing in the next couple of months, but for such a large discount I was very tempted to stock up. Especially since the look in the store right now was a tad more formal -- more blouses and dress pants in silk and tweed -- which is what I've been buying lately.

But it's clothing... so would I be stocking up on a staple, or foolishly splurging because of the sale?

In the end I resisted, but only because I was tired and didn't feel like trying on clothes. I might head back next weekend with fresh legs and see what I can find.

(For anyone who might ask "why not buy off the sale rack at a savings comparable to or better than 35% off?", the answer is that I'm a Tall, and Talls never last long enough to make it to the sale rack.)

A few fascinating links...

...that I'm posting so I'll remember to write more on them later.

1. As both a scientist and someone who eats healthy for environmental reasons, I have a lot to say about this article on the (bad? unimportant?) science behind the environmental effects of obesity.
2. This Money mag piece suggests that any future class revolt will be instigated by the "lower uppers", people at the bottom of the top 1% of wage earners.