The Rules Report: April

What I spent in April:
Rent: $625.00
Groceries: $171.47
Eating out (socializing): $38.00
Entertainment: $21.73
Healthcare: $90.00
Aesthetician: $62.00
Miscellaneous: $2.50, postage for my taxes
Taxes: $186.54 (net of federal and Illinois state taxes minus NY minus "economic stimulus payment")
Total: $1197.24

Savings: $2650

This month's developments:
- In spite of the fact that I wasn't sticking strictly to a budget this month, I spent less than I did in March. I think this is because I've internalized some of my budgetary guidelines (don't buy books, don't eat out for convenience) so well that they're becoming second nature.
- Spent twice as much on food
- Started getting my prescriptions by mail order, which saves me 33%.
- Virtually no miscellaneous or extraneous expenses.
- Paid taxes, which were actually less than I feared they would be. Doing taxes on my freelance income turned out to be not a big deal at all--I'm very glad I didn't shell out to get them professionally done. Next year I'll probably skip TurboTax, too--I don't have enough deductions to itemize, so the "expert" information in the package doesn't really benefit me.
- I acquired (free or through paperbackswap) several new books this month. Nonetheless, my crazy pile of "books I own but haven't read" is down to 10. I'm still limiting the number of books I check out from the library to minimize my information overload.

Small Slips:
- Paid $10 extra to get my feet waxed. She asked if I wanted them done, I said yes, thinking it was included in the price, and when she said it cost more I was too shy to take it back. Must stop this silly pattern.
- Last Friday while tipsy I bought a magazine. That would be okay except I still haven't read it and, now that I'm sober, really have no desire to.

May Plans:
I may have a couple of bigger expenses coming up--I want to go to a conference in June, and I want to take a vacation to the West Coast later this summer, so eventually I'll need to book a plane ticket and lodging.

I'm still convinced there must be some way to get my food budget down further without depriving myself. The amount I spent on groceries this month falls into the "low-cost" portion of the USDA Food Plans. The "thrifty" food plan for a woman my age is $145.80. I'm thrifty, darn it, and I want to be recognized as such! (I might dismiss this as an unrealistic government figure except that Amy D., my frugal cooking guru, spends about 30% of the "thrifty" plan for her family.)

My next plan for trying to reduce my food budget is to calculate the cost of several of my favorite meals and either lean towards using the cheaper recipes more often or find ways to make my favorite recipes cost less. For instance, one of my favorite meals includes artichokes, but it's almost as good made with much cheaper spinach instead.

May will mostly revolve around my company's annual conference in the middle of the month. I've been preparing for it for months and spending almost all of my work time on it for the last six weeks. After it's over, I'm going to take my first official paid vacation days since May of 2006!

Do you have any spending or budget goals for this month?

$5 Adventure: Volunteering

Frugality can be dangerous. If you don’t live somewhere with an easy casual social life, like a college dorm or a commune, it’s frightfully easy to let all that not eating out and not spending money on movie tickets turn you into a hermit. If you look carefully at last week’s post on Meetup.com, you’ll notice it’s tagged “$5 Adventures.” This is the second post with that tag. The $5 adventure posts will focus on cheap ways to get out of the house and shake up your routine for—wait for it—$5 or less. Mostly, these posts will focus on free things, but the $5 budget allows for gas, bus fare, or incidental purchases like snacks.

Today’s $5 adventure is volunteering. I’m not really talking about contributing to the community here, though I’m obviously very in favor of it. In this post, I’m going to assume that for the moment you’re more interested in doing something stimulating or fun than in making a difference in the world (that’s just a bonus).

My most recent experience with volunteering was at Open Books, a Chicago literacy organization. I'd been on their volunteer mailing list for a couple of months, but hadn't participated in anything yet. Then my college alumni group signed up to help out at their warehouse sorting books. Meeting people from my college + worthy cause + books = perfect!

The warehouse was in a part of town I'm not familiar with--it's always fun to see a new neighborhood. The book sorting room took up an entire floor--maybe the size of a football field--filled with thousands of boxes of books.

I spent the first hour or so making boxes with an eight-year-old girl who'd come with her whole family. Then I spent some time talking and sorting with my freshman roommate's best friend and catching up on the news from people we both knew in college. Finally I spent a lot of time opening up new boxes (felt like Christmas!) and sorting them into broad categories. I found it quite satisfying to find an obscure title and know it belonged in young adult fiction or women's studies. There were also some interesting things in those boxes--books in Japanese (history books as far as we could tell), a beautiful but very obsolete atlas.

There are several good ways to find out about casual volunteer opportunities like this one. First, if you know of any organizations in your area where you might like to volunteer, get on their e-mail lists. I'm also on lists for Working Bikes, Planned Parenthood, and a group that hooks up at-risk kids with writing mentors.

One Brick focuses on short-term or one-shot volunteer opportunities and organizes events in Chicago, New York, San Francisco, Washington, and Minneapolis/St. Paul, with more cities coming soon. Here's May's Chicago schedule--lots of good stuff here.

Volunteer Match is more about long-term volunteering, but lists opportunities nationwide and allows you to search by interest area and keyword.

Craigslist's calls for volunteers can be good for finding more obscure organizations and causes that fit well with your interests and skills. (If you haven't checked out craigslist lately, they've started boards for every state and many smaller cities and towns.)

Local publications often run calls for volunteers on a weekly or monthly basis. I've mostly seen these in free weeklies, like the Chicago Reader or the Austin Chronicle, but that may only be because I rarely pick up a standard newspaper!

My Open Books experience was not only free, but came with a few perks, too--snacks and bottled water, a free t-shirt from my alumni group, and repeated assurances from the Open Books guy that we could take home with us books that looked interesting (I did cave and bring one book home, a book I've been wanting to read that I know isn't available at the Chicago Public Library or at Paperbackswap).

Out of the Bloffice

No more blogging for me for the next few days. Work alone is exhausting me, and I've still got way too much to do on my freelance project. The project is due on Monday, so I'm hoping I'll be sane again by Tuesday night.

Until then,

Rachel, who knew it was a questionable idea to accept the freelancing, but couldn't resist a book called Religion, Race, and the American Presidency.

Health Care for Independent People: Part II

This post is part II in a series exploring the different options available to people who don't have health insurance through their jobs, or who are hoping to retire early or go freelance and need to plan for healthcare costs. In part I, I talked about self-insuring by setting up a large emergency fund for healthcare costs. For many people, putting away several thousand dollars in a dedicated account could take care of all maintenance healthcare costs as well as treatment for minor conditions and injuries. But in a country where cancer or a broken leg can bankrupt you, self-insurance isn't enough. Some kind of insurance is necessary.

One source of health insurance often mentioned in books on early retirement is joining a professional association that offers group health plans to its members. Since I plan to still do some freelance or casual work in retirement, this might be a good option for me. I checked out two well-known associations in my field to price health insurance through them. (It's worth noting that neither of these associations requires you to actually make money or have a registered business in the field in order to be a member--you simply must pay the dues. This is probably true of many other professional associations as well.)

Association A offers an HMO from a national insurance provider. The cost? $1287.58. Per month. For an individual. For a "family" (member plus spouse and children) it's $4043.00. They also offer a PPO, but it's even more expensive.

But they have another option--this one's only $26.95 per month, plus a $20 enrollment fee. This "customized discount plan" offers 10% to 30% off most health care costs. Sounds okay for physicals and prescriptions, as long as you don't get seriously ill or spend any time in the hospital. Cancer treatment can cost $300,000 a year. 30% off $300,000 is $210,000. That'll take a chunk out of anyone's nest egg.

Association B is a bit less grim. Their HMO is $477.08 per month for an individual. Still not a happy number, but one that's at least within the realm of possibility. They also have a "health savings plan," which seems to operate like high-deductible insurance. The deductible is $5200, and the annual premium for a family is $3016--less than the monthly cost at Association A.

I was surprised at the huge difference in cost between the plans offered by these two groups, so I checked out a third group, a group for graphic designers. This group offered the same HMO plan as association B. Their second option brought me to a site that offered quotes on many different types of plans, all of which were discounted because of membership in the association.

When I entered my information (fake contact info but accurate health and geographical info), I was given seventeen plans to choose from, ranging in price from $67.00 per month to $267.00 per month. Some of them were PPOs (what most people think of as "regular" insurance, in contrast to an HMO's "managed care") with quite good benefits. Others had high deductibles, but good catastrophic coverage. There were also a couple of health savings plans, none of which seemed as shady as the "discount plan" offered by Association A.

Are associations a good way of getting health insurance? From this quick survey, it looks like some organizations offer decent plans, but it depends a lot on the association. The largest association I looked at offered the best deals, and was also the most geographically diverse (the other two associations only offered plans in certain states and metropolitan areas). Even for associations with good health insurance offerings, there's still no guarantee that you'll be approved for coverage.

What about the prices? In the next post in this series, we'll see how these prices measure up by venturing into the frightening world of individually purchased health insurance.

More About Rachel

Finally online after ten hours at work and additional hours of freelancing. My company's annual conference, the focal point of the year, is in three weeks. My department has about a hundred and thirty-seven projects to finish by then, and I'm running around trying to coordinate everything and keep my staff on track without turning into Evil Slavedriver Boss.

I don't have much energy left tonight for blogging. Luckily, Retired Syd at Retirement: A Full-time Job tagged me for a meme. She’s not a big fan of memes. Neither am I, so I’m throwing away the rules and just doing the ones that seem interesting to me at the moment.

Four jobs I've had:

- Student worker in the rare books room of my college library. My roommate and I vacuumed the entire pre-1801 collection after it was accidentally covered in construction dust. We wore protective cotton gloves, providing fodder for many mime and Mickey Mouse jokes.

- Afternoon bakery assistant. This mostly meant I spent a long time every day in the freezer room counting out the doughnuts, rolls, etc. for the morning bakery assistant to put in the oven. I liked it, and I never did get sick of doughnuts.

- Audio typist in London. I listened to dictation tapes all day and became an expert in the differences between British and American English. Typing was relaxing and strangely satisfying. I would be tempted to become a court reporter if I didn't already have warning signs of carpal tunnel.

- Telecommuting development editor. This was my last job before this one. It was an ideal job, except for my hideous boss. He was a man who loved getting revenge by killing people’s future careers, so I jumped ship before I got on his bad side. I miss telecommuting. I still had to get up early and keep regular hours, but I could listen to music and cook my own lunch. I loved being able to cook my own lunch.

I temped for a long time, so I've had a lot of jobs. I once started counting the jobs I've had that lasted more than a month and stopped at fifteen.

Four Places I have lived:

Impossible to pick just four (see sidebar). I'm 27 and have moved 26 times. I'm hoping I'm mostly done.

Four places I have been on holiday:

Egypt, Rio de Janeiro, Finland, and Rocky Mountain National Park in Colorado.

Four websites visited daily:

Early-retirement.org: the fount of all wisdom regarding early retirement and investing. Lately, I've been googling things that I don't think have anything to do with early retirement and getting this site as one of the top results--I think I'm being assimilated.

the 1bruce1 community on livejournal, where twentysomething and thirtysomething adults make fun of Sweet Valley High books

Early Retirement Extreme

Gala Darling's Icing, my first blog crush.

Four places I would rather be now:

London

India

My parents’ house in DC. I’ll probably won’t get a chance to go there again, as the silly people are moving to Korea in June.

May 25, 2008—the week after our annual conference, when I'll finally get a chance to catch my breath

Frugal Tip: Choose Rich Doctors

[Photo by brimelow]

How did you choose your doctor? Their gender? Their specialty? Fame? Recommendations from friends?

My insurance plan lists thousands of primary care providers. Narrowing by gender and specialty still left me with over a hundred, and all of my friends hated their doctors.

So I chose the doctor with the best address. Not the one closest to me, but the one with an office in the poshest area.

I learned this trick from a friend long ago. All else being equal, choose the nicer or richer environment. In her case, it meant choosing a job with a beautiful office (seriously). In my case, it means finding stores and service providers that make me feel rich without spending more money.

My doctor's office is in this building. My dentist works here. The copays for healthcare providers in landmark skyscrapers are the same as for doctors in bad neighborhoods. This is where I go for salon stuff. The salon in this building costs $10 less than the slightly sketchy place near my house and has better magazines to boot. When I do errands or go for appointments at these places, I feel rich, even though I spend less than most people.

The same principle also applies to free things. I go to the Harold Washington Library as much as I can, because the service is better and the environment more pleasant than at my local branch. If I need a restroom when I'm out and about, I'll try to find one at a fancy hotel rather than at a Starbucks. (Using the bathroom anywhere without being a customer is slightly ethically questionable, but that's another entry.)

You can also twist it around: find reasons to feel good about places where you go to save money. Lots of people don't like putting a quarter in the cart at Aldi (you get it back at the end of your visit), but to me, it's a reminder of growing up in Germany and the German roots of the company. Thrift stores and Filene's Basement? Treasure hunts, with a more interesting and varied selection than what you find at Macy's.

Obviously, I don't mean you should choose service providers or stores based on their atmosphere alone. Do your research to find out which option is cheapest or offers other things that you value, like a grocery store with local produce or a doctor with special expertise. But after that, if you still have more than one option, go for the place that makes you feel good.

A Social Life for Cheapskates

[Photo by bahman]

Checking out meetup.com was one of the best things I've ever done.

Okay, I may be a little biased--I met R. through a Meetup group. But I do think Meetup is a great resource for anyone who wants to meet new people, find others who share their interests, or just try something a little different on a boring night without dropping too much cash.

Here's how it works: search for an interest or browse through the listing of groups for your city or area. Just a few of the groups meeting in Chicago tomorrow night include New in Town, Libertarians, Pick-up Soccer, Neuroscience, several singles groups, and a "Friday playdate" for moms. When you find a group that interests you, sign up for it. When the group sets up their next event, you'll receive a notice and a request to RSVP.

Arriving at the event can occasionally be a little awkward, as you're meeting a group of strangers. Many Meetups are held at restaurants or coffee places, and the staff will know whether a Meetup is being held that day. Otherwise, just look for the other people who are either glancing around nervously or looking at the entrance as though they're waiting for somebody.

I've never been completely stood up at a Meetup, though once when R. and I had just started dating we both accidentally attended a Meetup that had been cancelled. Meetup was free when I first started going to Meetups--now the organizer of each Meetup group pays a monthly fee of about $15. At many meetups, the attendees pay the organizer $1 each to reimburse him or her.
You'll also probably want to order something to eat or drink if the Meetup takes place at a coffee shop or restaurant, but it's usually possible to keep the total to about $5--in my experience, most people don't order full meals and you won't be the only one nursing a single muffin or cup of tea.

Every group is different and every individual meeting is different because of the new mix of people.

- The very first Meetup I attended was a board game Meetup. I was thinking Scrabble and Trivial Pursuit. Instead, it was Risk and other strategy games with the guys who hang out at your local independent game shop. That particular night, the group split into several smaller groups, some playing competitive games, others teaching each other simpler games. It was a very low-pressure and friendly environment and, during a bad period in my life, the first good laugh I'd had in months.

- In Austin, Texas, I attended a livejournal Meetup. This one was unique because many of the members knew each other online, but had never met in person. There were a lot of "oh! You're cookie976?" conversations. It was held on a patio outside a sandwich shop on a beautiful fall night, and I don't think the waitress ever even came out to take an order.

- My first group of friends in Chicago grew out of the Meetup where I met R. Five of us became quite tight, with other members of the group moving in and out of our circle of acquaintance. This group became my family in Chicago--people I loved, and a few people who just annoyed me, but who all accepted me as I was. Fragments of this group (the ones who haven't moved away or lost contact with the rest of us) still get together from time to time for birthdays and holidays. Another couple also started dating and is now living together.

- The Children's Literature Meetup is the only Meetup I attend regularly right now. Children's literature is a pretty unusual interest for an adult, and I love talking to people who share my passion. The organizer is a librarian at a research library, and one of the regular attendees is a prominent scholar in the field. When the Modern Language Association meeting was in Chicago last fall, several of the speakers dropped by our Meetup. This Meetup has been an amazing opportunity for me to talk to people who I otherwise never would have met in person.

- At a dining out Meetup, I spent an evening at Spring with two other women. This Meetup was the opposite of frugal--it still stands as the most I've ever spent for a single meal. The conversation was awkward, the atmosphere was pretentious (our server spoke in a fake restaurant, and there was grass growing in a planter beside the table), the food was fabulous, and I'll never forget it.

Meetups have worked so well for me that I haven't explored many other ways of improving my social life. What are some other ideas for getting to know new people without spending a lot of money?

Health Care for Independent People: Part 1

For anyone who wants to live outside the confines of regular employment, one of the biggest questions is, "What about health insurance?" This question is so big and scary that many resources on early retirement pretend it doesn't exist, or simply say, "You must have health insurance," as though it's a given.

Back in March, I laid out my rough plan for becoming financially independent by sometime in my thirties. I also examined how a potential child could affect my budget. Today, it's time to tackle healthcare.

The traditional solution to post-retirement healthcare is Medicare. There’s a heck of a long time between 35 and whatever-astronomical-age-I’ll-become-eligible-for Medicare, and I'm not overly confident that it will exist in a form like it does today by the time I get there. So for the purposes of this post, Medicare isn't a factor.

The first pillar of my healthcare plan, and one I would recommend to anyone who's planning to live without employer-sponsored health insurance, is to self-insure for routine medical expenses like maintenance prescriptions and annual physicals. The premiums for health insurance that covers these expenses are often astronomical, as we'll see in part two of this series. For many people, it will be far cheaper to pay these routine costs out of pocket.

At my current level of health, I would expect to pay about $1700 annually for health maintenance. This covers my two current prescriptions, which would cost about $105 a month, a yearly physical with blood work and a pap smear, which according to the bill from my doctor would have cost $359 without insurance, and perhaps a second doctor's visit for a straightforward health problem, which would cost about $150. These costs should be built into my baseline post-retirement budget.

I would also plan to "self-insure" (meaning I would pay out of pocket) any healthcare cost under $10,000. This would cover minor but less routine costs like some emergency room visits, extra tests, and minor injuries. I'd put about a third of this in a Health Savings Account, currently capped at $2850 in contributions per year. This account functions like a Roth IRA--money is taxed when you put it in, but is not taxed when you take it out. For long-term savings, this is an excellent deal, since the interest on your savings can far exceed the initial contributions. Unlike a Roth IRA, there are no age limits on when money can be used. Eventually, the HSA would become large enough to contain all of my self-insurance money. For the first few years, I'd put the balance of the $10,000 in a liquid and low-risk investment, like a high-yield savings account.

Even with a large amount of money set aside for self-insurance, major medical events like surgery or cancer can be catastrophic. Cancer treatment can cost $300,000 a year. Young people may get away with not having insurance for short periods of time (I have, and am none the worse for it), but any long-term budget must include some form of health insurance. What are the options for getting health insurance on your own? How much does it cost? We'll start exploring this in Health Care for Independent People: Part 2

First Poll!

I've been learning a lot about investing lately, but I've been holding off on posting about it until (a) I learned enough to talk about it coherently and (b) I figured out how to make it interesting. Now I have several half-finished entries and need to decide which ones to polish and post. What investing topics are most interesting to you? Please vote in the sidebar!

It's been quite a week already. Sunday I spent relishing my weekend freedom by writing e-mails to a couple of scholars I admire asking for research advice (they both wrote back today--yay!). On Monday night, I came home to find that we had no running water. I spent the evening finishing my taxes and wrestling R. for the last bit of moisture in the Brita. Also on Monday, my post The Financial Generation Gap was included in the Carnival of Personal Finance at Gather Little by Little.

The water came back on at 10:00 this morning. I ran myself through the shower, hustled off to work, and spent the next seven hours jumping from one urgent project to another and one meeting to the next. Lunch was grabbed in bite-size chunks between conversations. I managed to mail my taxes about 3:00 due to the kindness of our mailroom guy, who let me owe him the postage after I dumped a wallet full of pennies and nickels all over his desk.

Hurry and scurry is rather fun as an occasional thing. The downside is, by the time I get home, I'm functionally mute. R. found me cooking about 8:00 and asked me what it was. I could only get out single words--"Hamburger . . . tomatoes . . . cheese." Thankfully, I was conscious enough to save leftovers of Thrown Together Casserole for tomorrow's lunch.

The $62,500 Question

$62,500. That's approximately how much I make, before taxes. I'm pretty comfortable revealing that here, in front of (mostly) strangers, but it's a different story in real life.

Last Monday morning, one of the women I supervise walked into my office before I'd even poured my first cup of tea.

"Did you freak out on Friday?" she asked. "Did you think you'd been demoted?"

"No...why?" I said, searching my brain for something that might have gone wrong on Friday afternoon.

She held up a pay envelope. "I accidentally got your paycheck."

We have the same first name, and our checks got switched. I rarely look at mine, so I hadn't even noticed.

She seemed to think it was a good joke, but for me, it was awkward. I don't like her knowing how much I make. And I don't really know why. I make more than her, of course, but the difference isn't astronomical, so I don't think she'd resent my salary. And I can't think of any situation in which her having that information would hurt me or benefit her. Still, it feels like she knows something private, something that somehow gives her a small edge on me.

I debated telling my parents about this blog because I wasn't sure I wanted them to know how much I make. I'm sure they assume the number is lower, even though they know I got a big raise when I took this job. I tell my parents a lot about my life, and would tell them even more if they weren't so conservative, but this, for some reason, I wanted to keep to myself. I did finally tell them about Working for Rachel. They don't read it--they read the one post I told them about, but I'm not sure they quite understand the concept. :)

Today R. and I went grocery shopping. At the checkout counter, I picked up the latest issue of Chicago magazine. Every year, Chicago does an issue where they feature the salaries of a cross-section of Chicagoans--celebrities, athletes, businesspeople, artists, and so on. Some people are identified only by their first names; others are profiled in half-page articles including all their vital information and a color picture.

I flipped to the page on arts and media. On the lower right hand page was a guy about my age standing amid piles of paper--my friend Sarah's ex-boyfriend. The article listed his name, occupation, alma mater, and salary down to the dollar.

That took bravery. I imagine most of the people he knows will see this article--it'll travel fast in the circles we run in. He grew up in Chicago, so people he knew as a kid may see it. And people who dislike him, like me and like Sarah, will also see it, and judge him for it. My first thought was, "Whoa, a guy I know is in a magazine." My second thought was, "Ha, Sarah makes way more than him."

The taboo against sharing salaries goes deep. I'm rather infamous for telling people more than they wanted to know about myself. With those I'm close to, I babble about painful childhood memories, openly share things that most people would consider deep dark secrets, and when something embarrassing happens to me, I can't wait to share the funny story. And yet even I get close-lipped when this topic comes up.

6 Books for Frugal Cooks

With millions of recipes on the Internet, are cookbooks obsolete? For people trying to spend less on groceries, the right cookbook can still be the ultimate tool. While almost any recipe you can imagine is available somewhere online, recipe sites tend to favor recipes that are impressive and complicated, use brand-name ingredients, or are heavy on convenience foods. (For the ultimate in convenience food cooking, this book is disturbing. There's an entire section of meals based around beer. Oh, ew, there's a microwave version, too!) It can take a lot of sifting to uncover simpler alternatives.

Here are five of my favorite cooking references to have available within arm's reach of the kitchen.

1. More-with-Less Cookbook by Doris Longacre
Hands down the best frugal cookbook out there. Written by a Mennonite woman and full of submissions from the Mennonite community, these recipes are distilled to their simplest and most frugal forms. Most of the usual bases are covered, along with more unique entries like Pakistani Kima and Formosan Fried Cabbage (since many Mennonites are missionaries, there is a "global" feel to the book). It's also an excellent source for vegetarian and less-meat recipes and help in planning simple meals. The recipes encourage experimentation--I've found that some of the dishes benefit from additional seasoning.

2. Now You're Cooking! by Elaine Corn
This more contemporary book gives simple, easy-to-follow recipes for things like hummus and smoothies. It's a comprehensive guide for the beginning cook, and also a great tutorial for a "by the numbers" cook who'd like to learn to go with the flow more--the author suggests adaptations for many of the recipes, and explains the "why" of different cooking techniques and ingredient choices.

3. The Complete Tightwad Gazette by Amy Dacyczyn
Yes, I recommend this book for everything. That's because it's awesome and has changed my life. Amy D.'s cooking advice is all about the numbers. A dozen different times in these books, she asks for reader submissions for, say, homemade worcestershire sauce, chooses the cheapest one, and comes up with a new version that costs half as much. She also sprinkles several "universal" recipes throughout the book--I've used the universal muffin and universal casserole recipes several times with very satisfactory results. I've long since written all the Tightwad Gazette recipes on recipe cards so I don't have to page through the books every time I want to use them.

3. The Joy of Cooking by eight million generations of Rombauers
This is the gold standard of comprehensive general cookbooks. I love it for its combination of information on food (the different ways of cooking asparagus; the difference between pudding and custard) and recipes that invariably produce wonderful results. I rarely use a recipe out of this cookbook exactly as written, but I still turn to it whenever I'm cooking a new dish. If I'm using a recipe out of The More-for-Less Cookbook, for example, I might use Joy of Cooking for ideas of additional ingredients to add or to see what steps the simpler recipe skips and whether I might want to add them back in. If I'm using a recipe I found online, I'll turn to Joy of Cooking to see whether any of the components of the recipe can be made from scratch without too much additional work.

5. How to Cook a Wolf by M. F. K. Fisher or Good Recipes for Hard Times by Louise Newton
Both of these books are written by women living through tough times on tight budgets. M. F. K. Fisher was a famous--perhaps the most famous--food writer. How to Cook a Wolf, written in 1942, one of the bleakest years in modern history, is both a collection of funny and quirky essays and a practical guide to very frugal cookery. (Wolves, however, are merely a metaphor and not on the menu.) Fisher offers more tips than actual recipes, and some of her recipes are hard to adapt for the modern reader.

Good Recipes for Hard Times, in contrast, is primarily a collection of recipes, and as such provides more direct help to the ultra-frugal cook. This book goes even further than The More-for-Less Cookbook in making each dish as simple as possible. However, the perspective of the author is rather grim--her own shopping list is based very heavily on grain products, allowing little room for even fruits and vegetables, much less meat. She's been through what sounds like decades of hard times and seems a bit worse for wear, which could make this a useful but rather depressing read for those struggling to stick to tight budgets.

What are your favorite sources for cheap recipes? Are there great web sites out there that I'm missing?

Update on my Book Fast and Link Love

[photo by el7bara]

Last Purchase of a Book: 2/4
Number of books in to-be-read pile: 22

That's 66 days and counting, folks! My reading interests are getting increasingly obscure, but so far the trusty Chicago Public Library is holding up pretty well. I did search for something the other day that was available in exactly one library in the world, the public library in Wetherby, Yorkshire, the town in which one of my relatives once performed in drag as Cinderella's ugly stepsister during a Christmas panto. He was horrifying. I would link to a picture, but I don't think he'd appreciate having that posted online.

Some great posts that caught my eye lately:
Kacie lays out her debt in Monopoly money. I love it! Here's to freedom from debt in 2009 for her and her family.

Budgeting Babe (a fellow Chicagoan) talks about finding work after college--she's run into some of the same generational issues I have.

Can I Get Rich on a Salary shares nine ways of getting rich. Very interesting stuff--there's a part 2 coming soon!

The Financial Generation Gap

There's a personal finance generation gap, and it has nothing to do with credit cards.

People my age (I was born in 1981, on the cusp of Generation X and Generation Y) are supposed to have a sense of entitlement, of naive optimism. We were sheltered, people say, and our expectations of the "real world" are too high.

Even in the generally youth-friendly blogosphere, I sometimes see people asking questions like, "Why do young people have such a tough time managing their money?" They assume the answers have to do with too much personal spending and not enough self-control. People who urge 22-year-olds to max out their 401(k)s are also operating on some of the same false assumptions.

I don't think those over 40 or so realize how much things have changed since they were starting out in the workforce. Young people today live in a different universe.

You start life in debt. If you went to college, you probably have student loans. Whether or not you went to college, you probably have credit card debt, too. You were eighteen when you got that first credit card and hadn't really figured out yet what a bad deal a 22% interest rate was.

A college degree doesn't create security. We don't graduate into entry-level jobs at 3M and IBM--we get internships, temp, or work retail. We don't buy houses after graduation--we rent apartments with roommates. Today's recent college graduates aren't in any position to get married, start families, or sock away money for the future.

"Real" jobs are hard to get. Employers, even little non-profits like my employer, *love* to save money by hiring people part-time, three-quarters time, or as "permanent temps" in order to save on benefits. They also love to hire freelancers. All of these people have to be responsible in lesser or greater degree for their own health insurance and retirement plans--any "benefits" offered to them are a shadow of what was offered to corporate employees thirty years ago.

There are no pensions. You get a pension from working for the government or joining the Army. In any other job, you get a 401(k)--if you're lucky. If you're really lucky, you will have an employer match on that 401(k). If it takes a year or two years for that match to kick in, it might as well not be there as you probably will have moved on.

Traditional health insurance is dead. If you are lucky enough to get insured, it will come with high deductibles, no prescriptions, no coverage for preexisting conditions, or administrative headaches. HMOs and PPOs are the high point.

We're not counting on the government. Most of us don't think Social Security will be around for us. Medicare? Who knows. We're not used to having good health insurance, and the current Medicare would be a step up for many of us.

What's a career? People who write careers love to trot out the statistic "you'll have 7-10 careers in your lifetime" (or 10-12, or 12-15) as though it's a new piece of information. I'm 27, and I've had at least a dozen jobs that have lasted three months or more. I have no idea how many "careers" that makes and couldn't care less--all I care about is how I can combine and describe those jobs on my resume to make me attractive to someone who's hiring for the next thing I want to do.

Whatever we do, and however short a time we've been doing it, we're already thinking about what we're going to do next. We do not relax into jobs and stay at them for twenty years. I have been at my job for five months, and while I have no intention of leaving anytime soon, I still keep track of job openings and have a sense of what my next step will be. The thirtysomething woman I supervise is much less ambitious than I, but she still keeps a foot in the freelance world and my boss predicts (rightly, I believe) that she won't be with the company for more than three years.

This is mostly self-preservation--we know that company loyalty and job security do not exist. To succeed, we need to pay attention and plan ahead.

Are we entitled? Are our expectations too high?

If we demand higher salaries, it's because you can't pay a hefty student loan bill on $30,000 a year. If we are impatient for promotions and raises, it's because we realize how little of a safety net we really have. Your salary is much more important when your health insurance sucks and your company has no retirement plan. A quick promotion is much more important when you know how tenuous job security is. The boss who is grooming us for promotion in 2012 may not be around in 2012. She may leave, or the company may be reorganized or the department absorbed into two others. There is no guarantee that the next boss will have any interest in our ambitions to be more than administrative assistants.

I've painted a grim picture here, but I'm not complaining--I think I've accepted all of the facts above without resentment. I haven't ever known the world to be any other way.

I'm still a cockeyed optimist. I believe that younger people still have a good chance of getting out of debt, buying real estate, retiring comfortably, and even retiring early. But for our generation, financial security requires total independence and total responsibility. We are the only ones we can count on when it comes to our financial futures.

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[picture by exfordy]

No Credit Needed asked last week, What are your personal finance strengths and weaknesses?

I'm a big believer in introspection. If we know what our strengths and weaknesses are, in any area, we can act in ways that maximize our strengths and minimize our weaknesses. Or, alternatively, we can try to learn more and change our habits so that our weaknesses are no longer liabilities. Also, making lists like this is fun.

My Strengths:

• Frugal background and habit of frugality.
  
• Interests that don't cost much to explore and the creativity to enjoy exploring less expensive ways of fulfilling my needs and wants.
• An aversion to debt—the only debt I’ve ever had was a credit card balance of about $1000 and student loans of about $8000. I’ve never had a car loan or bought anything on any other sort of “payment plan.
• The resources (intelligence, education, fairly prosperous family) to stay out of debt.
• An early start—I've been investing my money since college graduation, though I've only gotten really serious about it in the past year or so.
  

My Weaknesses:

• I have a tendency to get pressured into spending by people who are less frugal than I, and I always regret it when I give in. I remember such episodes with self-loathing for years—don’t get me started on the $13.00 I wasted in San Francisco in 2002.
• Aversion to debt means I haven’t yet taken any big risks like buying real estate or starting a business. I’m also reluctant to go to graduate school, although the sorts of graduate programs I’m interested in would be unlikely to increase my earning power anyway.
• Low tolerance for boring investments. Even if Gould’s Pumps was the most well-run and profitable company in the entire world, I would probably never invest in them because the very thought of the company puts me to sleep. I'm also extremely bored by bonds, even though everyone in the world thinks they're an essential part of a balanced portfolio.
• Procrastination. I paid $1.10 in library fines today. I’ve also paid penalties for filing my income taxes late more than once--not because I didn't have the money or time to file them by the original deadline, but because I "just didn't get to it."
  

What are your strengths and weaknesses when it comes to money?

Fill Your Bathroom Cabinets for Less

It’s easy to ignore or forget the money spent on bathroom essentials when we throw a tube of toothpaste in our cart at the grocery store or make an emergency run for a bottle of shampoo. Yet the choices we make can be very frugal—or very expensive. Take conditioner. Conditioner can cost $1 (the cheapest drugstore brand) or $36 (for Ted Gibson, Frederic Fekkai, and other salon brands). If a low-end t-shirt cost $10, and a low-end car cost $25,000, that salon conditioner would be the equivalent of a $360 t-shirt or a $900,000 car (the most expensive current Rolls Royce costs $360,000).

I spend about $5 a month on the stuff that goes in my bathroom cupboards. I’ve also picked up a few good ideas from friends that are a little less extreme!

Haircare

1. The simplest option: buy cheaper or generic brands. I always buy the $1 shampoos and conditioners, like White Rain or V05. If you find that your hair doesn’t react well to these products, large drugstores or supermarkets carry a range of generics that mimic brands like L’Oreal and Herbal Essences.

2. Use less. Try using half your usual amount to see if you notice a difference. Shampoo can be transferred into pump hand soap containers so that the amount you use is easier to control.

2. If you use conditioner, see how your hair reacts to going without it. I’ve found I don’t really need it except in the winter, when my hair gets dry.

3. A professional hairstylist once told me that salon brands are more expensive because they don’t include salt or sodium byproducts, which dry out your hair. They are also very concentrated, so he suggested watering down the shampoo so that it fills two bottles instead of one, which cuts your price in half. The last piece of his advice I’ve never tried—he claimed that because salon shampoos don’t dry your hair out, you can save more money because you only have to wash your hair once a week. Well, once a week hair washing was the standard for generations (until about the 1960s), so he may be right.

4. Go without shampoo altogether by washing your hair with vinegar and baking soda. This idea is popular with the green and Compacting crowd because it uses no artificial chemicals

Toothpaste and Oral Hygiene

1. Don’t pay for things you don’t need. Few teeth whiteners have been proven to work, and some may actually wear away your enamel—research the active ingredients in your toothpaste to figure out if it’s worth the money. If you have fluoride in your drinking water, don’t pay extra for fluoride in your toothpaste.

2. Many toothpastes boast that they include baking soda, but baking soda on its own is quite effective. I use this when I run out of toothpaste and don’t want to go to the store—my mouth afterwards feels very pleasantly sweet. Baking soda is also a safe whitener.

2. Toothpaste itself isn’t necessary—it’s the friction/rubbing motion in brushing your teeth that’s important. A wet brush or even rubbing your teeth with a piece of cloth also removes plaque.

Feminine Products

1. Many women are reluctant to try generics for such a personal product, but I’ve had very good experiences with these. The generic pads from Boots in England were my favorite product ever, beating any brand name I’ve used by a mile for comfort and “stableness.” Keep some of your favorites on hand while experimenting so you don’t have to spend a week wearing something you don’t like.

2. For women who are willing to branch out a little, “green” feminine protection is both better for the environment and cheaper in the long run. The cheapest of all are sea sponges (identical to the natural cosmetic sponges sold in drugstores). Other options include the Keeper (which I have on good authority is not as scary as it looks), cloth pads, and padded panties.

Other Stuff

1. To save on skincare and makeup, check out Don’t Go to the Cosmetics Counter Without Me. Paula Beguon has devoted many years to testing almost every product out there to find out which ones are effective and which ones aren’t—and many, many ingredients that cosmetic companies promote and charge lots of money for really do nothing at all. The skincare routine she recommends for dry skin has worked very well for me.

2. Dry your razor with a cloth after each use to make it last longer.

3. Conditioner or even soap can be used in place of shaving cream.

4. Women’s shaving stuff is almost always more expensive—buy men’s shaving cream or gel with a neutral scent like aloe and don’t pay extra for pink razors.

5. Many over-the-counter medications aren’t very effective—research the active ingredients in the products you buy to make sure that they’re really doing what you think they’re doing. Cold medicines especially tend to be marketed in a way that makes us think they’re more powerful than they are.

Did I miss anything? If you have ideas for saving money on toiletries that I didn't mention, please share in the comments!

My Weekend Mission

["Balloons Lack Freedom" by neoliminal.]

On the weekends, I try to give myself freedom.

Let me rephrase that. I try to give myself freedom every day. If I want to stay up late, I stay up late. If I need a little longer to get ready in the morning, I take it and come in at 9:15 instead of 8:45. If I'm distracted at work, I usually let myself be distracted. But weekday freedom has many boundaries and can only be pushed so far. I can't blast music in my office. I can't run to the library to find a book I'm suddenly dying to read in the middle of the day. And in the mornings when my alarm goes off at 7:15, I frequently have to remind myself of the reasons I chose this job instead of going freelance and why it's important for me to go in today. Not every morning. But often. I just don't like 7:15.

On the weekends, I try to give myself the freedoms I don't get during the week.
Freedom to take naps.
Freedom to not leave the house.
Freedom to wear clothes that make no sense.
Freedom to cook an elaborate lunch at 4:00.
Freedom from "have to."

I do this because freedom creates the mental space that I crave. It allows me to dig deep into the subjects that have been in the back of my mind all week. It allows me to get up the courage to write frightening emails and make frightening phone calls. It allows me to recharge my introvert spirit after a week of too much interaction. And for some reason, at about 5:00 every Sunday night, freedom makes me actually want to clean up my office.

_________

This week I participated in the Money Hacks Carnival over at Bible Money Matters. I'm the first one in the section "Top Hackers," associating me with the infamous Adrian Lamo. Whoo!

Personal Finance Book Reviews: The Short Attention Span Edition

The three books I'm highlighting today are written for three very different audiences. I had strong reactions to each of them--but are my reactions the same as yours would be? In addition to my own thoughts on each book, I'm including links to other opinions so you can get a better idea of whether these books would be useful to you.

Work Less, Live More: The New Way to Retire Early by Bob Clyatt
Bob Clyatt is a longtime member of Early Retirement Forums, and it shows. This book is packed with the real-life experiences of early retirees. He pays close attention to the emotional issues involved in retiring early. Another factor that sets this book apart is his emphasis on the idea that many people will continue working after early "semi-retirement," because part-time work allows them to retire earlier, to fill gaps in their finances, or simply to keep busy at something enjoyable and productive. He was a little weak on follow through, filling his chapter on part-time work with fairly straightforward career advice, but I'm glad that he encourages his readers to look beyond an "all-or-nothing" career model.

Work Less, Live More is written in a conversational tone similar to the "for Dummies" books. This would be a great first read for someone just starting to think about early retirement. He does occasionally jump to conclusions without sharing too much detail, so it's worth reading more before making too many decisions based on this book.

Other takes on Work Less, Live More:
FIRE Finance lists it as one of their top early retirement resources
John Greaney's Retire Early Home Page gives it a glowing review.


The Wealthy Barber by David Chilton
I spent two commutes of my life on this book, two commutes I will never get back. It was painful. The stilted dialogue. The stereotypes. The "good-natured" gibes at feminism. The "hilarious" secondary characters.
The actual advice was sound--mostly. Chilton (or his alter ego "Roy"), includes two major gaffes in his otherwise good plan for financial stability.

1. After warning his audience away from single stocks by explaining that most stockbrokers don't beat the market (good advice), he recommends that they buy mutual funds with "expert" managers who have good records, including paying higher fees for a good manager. What? Why? He gives no explanation for why mutual fund managers would be able to beat the market when stockbrokers can't, and treats stock mutual funds as though they are a completely different, less risky type of investment than single stocks.

2. This book consistently mentions very high rates of return on investments--11%, 15%, 20%. The reader who would get the most from this book is an absolute beginner in personal finance and might easily make the mistake of assuming these are average or likely returns--even for CDs, which Chilton recommends in a few places as "safer" without emphasizing the much lower rates of return.

Still, I will forever be indebted to The Wealthy Barber. When Roy, the friendly barber, shared his wisdom about SEP-IRAs, I had a *duh* moment and realized that I'm eligible for one of these, meaning that I can sock away up to 25% of my freelance income in addition to the $5000 I contribute annually to my regular IRA. I lurve tax-advantaged savings.

Other takes on The Wealthy Barber:
Trent at The Simple Dollar wrote several posts on this book.
J.D. at Get Rich Slowly agrees that the writing isn't all that good, but it's still one of his favorites.


How to Retire Early and Live Well by Gillette EdmundsIn this book, a guy who started living off his investments in 1981 at age 29 tells you everything he knows about investing in very extensive detail. Sound dull? I was initially disappointed that this book was about investing rather than personal finance. But by chapter 3, it was like crack. I stayed up until 1:00 three nights in a row devouring the vast amounts of information and strategy he packed into this small book. I made an emergency trip to the library to check out other books on investments to check his reasoning. I started boring everyone I know by talking about asset allocation, correlation, and emerging markets funds.

Edmunds grabbed my interest by talking about a whole range of investment options, not just U.S. stocks and bonds, and how combining different investments in the right way can allow higher returns and also protect you against things like inflation. I guess I'd always thought that when the stock market tanked, I was doomed to low returns until it recovered. This book taught me otherwise.

It would be hard to take all of advice without having a large amount of money to invest. Nonetheless, this book is highly recommended as an unusual and readable take on investing. His step-by-step "humility portfolios" are particularly valuable.

Retire Early Home Page gives this book five stars.
Some helpful Amazon reviews.

Judgement Day: Did My March Budget Work?

[Day in the Life: Lunch Money by emdot]

Back on February 23, I set a goal for March: stick to an approximately $1000 budget, with a specific spending limit in each of my major budget categories. Last week, I was close to or over my budget in every category, but still clinging to my budget and under budget overall. By March 23, I was definitely playing chicken with the grocery store.

My complete March Budget:
Rent $625
Food $ 97.41
Wardrobe $ 75
Books $ 0, or $17.43 if I finish all my to-be-read books
Entertainment $21.45
Spa Treatments $80 (a decided luxury, but for now it's staying)
Prescriptions $40
Miscellaneous $100

Total $1038.86

Did I make it?

Almost.

Food was the most challenging category. I depleted most of my staples and dug into the long-forgotten reaches of my cupboards and freezer. Last week, I spent $3.00 of my remaining $5.00 on vegetables. I then bought some milk for Dear R., depleting my last two dollars.

On March 29, I broke my budget by spending $25.00 on dinner for R. and I.

Why? Convenience. Exhaustion. Lack of cheaper restaurants open within walking distance. The knowledge that I didn't have anything very appealing at home--after a rather rough day, a cobbled-together meal of my last fish filet, steamed broccoli, and eggs didn't sound very appealing.

Our restaurant meal was good. Was it worth the $25? Probably not. I ate out a total of four times this month, and three of those times my hunger could have been just as well satisfied by some good quick home-cooked comfort food.

Wardrobe: I spent $38.00 on a pants-spree at thrift stores early in the month. It wasn't too challenging to stick to the budget in this category--partially because I bought tons of new clothes in November/December!

Books: I've recently become very aware of my information overload. I subscribe to about 125 blogs and read several books a week. I have a few dozen to-be-read books sitting on my mantel, creating a certain mental pressure to "work through" them. I wasn't at all tempted to buy any new books this month. Instead, I read several of the books I own but had never read and tried to limit the number of new books I checked out from the library.

Entertainment: I paid for our Netflix rental and bought a few VHS tapes at Sally Army. I didn't feel any real need to spend more on entertainment. I did go to the ballet--I bought the ticket last month. Most of my entertainment came from blogging, talking to friends and family, and watching addictive TV available on-demand on the Internet (Nothing But The Truth, lonelygirl15).

Waxing: One dollar under budget!

Prescriptions: $45, 5 dollars over budget because I failed to take into account my increased copay.

Miscellaneous: $60 on tax software for a challenging tax year. $10 on a birthday gift. $30 on a doctor's visit.

Utilities: The stealth category that smashed my budget. Our gas bill this month was $194.25.

Total spending for March: $1228.89

Lessons learned:
- It's worthwhile to spend a little extra on groceries in order to always have something appealing in the house. $5 of cheese or meat could have saved me that $25 restaurant meal.
- It's time to start budgeting for utilities. For several months, R. was covering our utilities because I'd paid for some major purchases in the past and he was "in debt" to me. That golden time is past.
- I'm surprisingly okay with not spending much on entertainment. I thought this would be a major challenge, but it turns out I have little need for a life!
- Miscellaneous expenses are often predictable. If I'd planned ahead, I could have anticipated all three of my miscellaneous expenses (and possibly saved a little on the tax software).

My next budget challenge:
I'm going to continue my all-time lows challenge, but in April I'll leave the update on my budget and spending until the end of the month. I have a new obsession with investing--terms like "correlation" and "asset allocation" are thrilling the heck out of me. Sometime soon, I'll talk about how I suddenly got interested in this stuff and how I'm planning to apply it. I also have a couple of ideas for ongoing series up my sleeve, which I'll launch when I come up with the right posts to start them off.

Keep up to date with Working for Rachel in April and beyond by subscribing to my feed.