80/20 Frugality?: Spend more on...What?

Mr FS and I have a combined age of 124. We are close to retirement if we really want it. In fact, we are too old for early retirement. Not that we wanted it. What could be more rewarding than yapping about literature?

Every now and then, I make a vow in this space. Generally, I do not keep my vows. Everyone knows about the Pareto Principle, right? That's the idea that everything is 80/20. You get 80% of the results with 20% of your effort. Then, to get the other 20%, you need to put out 80%. This works with stuff also: we wear 20% of our clothing 80% of the time; we use 20% of our cookbooks 80% of the time, and so on.

This would mean that--in my frugal path-- I've gotten 80% of the benefits from 20% of the effort. For a long time, we put in the extra 20%: we wanted, for instance, to make sure our kids graduated college without debt. DONE. We wanted to pay off our house: DONE. 

Thanks to the recent swoon in the stock market, I have reverted to my 2008 behavior: I no longer look at retirement balances. Time is no longer on our side: whatever we save now will have a relatively small impact in the long run. 

That is disappointing, but freeing. It's hard to change habits. But I herewith vow to try to do only the 20% that will garner the 80% of results. 

So I'm trying to figure out what add-ons we should indulge in. Frugal Son wants us to treat him (and ourselves!) to more of the pricy restaurants in New Orleans. So we're doing a bit more of that.

I can't think of anything else. Any ideas?

Have you ever deliberately INCREASED your spending? On what?

Why Keep Working?

The Great Recession knocked down the stock portion of my retirement accounts by almost 50% and led to the firing of the three tenured French teachers. In a panic, I discovered the Firecalc site (Financial Independence/Retire Early??) and learned from their easy to use calculator that even with my much-diminished accounts and even if both Mr FS and I  were let go because our program was eliminated, we WOULD NOT END UP DEAD in the STREETS. We would have a very, very, very  humble retirement, to be sure, but we would NOT DIE in some Dickensian institution for the impoverished.

That comforted me. Fast forward, and--though no raises in all that time--we are still working and our equity portions have, as they say, recovered. Also we now have a combined age of 124, rather than a combined age of 110. Our life expectancy has--perforce--gone down. So a fairly humble retirement probably looms, but not as humble as it looked in 2008-09.

The people who post on Firecalc are either eager to retire ASAP or ecstatic to have done so. Many seem to be or have been highly paid folks in IT, engineering, and so on. Some even had a stock option windfall. WORK is a dirty word on the site and is humorously typed as w*rk.

Then, while goofing around recently, I read some blogs that I don't usually visit. A common theme was  the lack of structure and meaning in retirement. And that is precisely why I keep working: not just because of the structure and meaning (teaching is meaningful work however you slice it), but because of the goofing around.

I should mention that because of serious budget issues (Great Recession again), there are no classes on Friday--to save on energy. Hence our schedule. We teach two VERY LONG DAYS a week, and can then do the rest of our work at home. And, since we don't teach in the summer (we are FRUGAL), we have a lot of flexibility there too. I think if we were working 50 weeks a year, 5 days a week, I would be longing to retire.

Another thing: teaching is like a mortgage. When I began, I was always in a panic. I would read twenty articles to figure out how to teach a little sonnet. Now I know how to teach many, many things. And teaching new things is not an occasion for so much anxiety. The time I spent in preparation a long time ago has "paid off" after all these years.

So why keep working? If I retired, I would have to find meaningful pastimes. Every day. I would goof around too much. I would feel guilty.

As it is, the meaning and purpose are taken care of by my job. In between tasks, I can goof around without (too much) guilt. I can even write a blog post. 

Ends of Frugality

Now that Mr FS and I are in our 60s, we are having lots of "what" and "when" discussions. When should we retire? What if...we retire? What if...we have to retire? And, of course, the biggies: What is it I/we really want? What's it all about?

And that brings us to "ends." Ends in the sense of "purposes." Ends in the sense of "the end." I've been thinking about endings, well, ever since I became a serious reader.  

Right now I'm thinking about the purposes of my lifelong habits of frugality. I am thankful for the example my frugal parents provided. Frugality got me through many years of panic in graduate school, more panic during a difficult job market. More panic though worries about tenure. More worries about ...well many things. I am a worrier. It must be genetic.

It occurs to me (us) that I (we) don't really need to be particularly frugal any more. We've done what we've done. What we do now won't make that much difference. This would not be the case if we hadn't saved over the years. Then it would be great to adopt frugal practices, which WOULD make a big difference in retirement. So maybe we are--or could be--at the end of frugality in that sense.

So we can keep chugging along in our frugal fashion. Or not so much.

To that end (haha, pretty obvious), we have a plan that is sort of frugal, sort of not frugal. If we do it, I'll write about it. (OK--we want to build a little guest room behind Frugal Son's New Orleans house. Where we can stay).

To that end, Mr FS does NOT want to retire any time soon. We both love teaching, in spite of living in a state that has not valued us for many years (If interested, do a google search. Too dispiriting for me to rehearse all the indignities).

To that end, I had my eyebrows tinted at the nearby beauty college.

To that end, I've redone my wardrobe via various online sites that do NOT involve auctions (more another time).

Treats are really fun when they are occasional. Ditto for vacations. Looking forward to spring break...

I was going to close with the "last words" of some piece of literature, but instead I'll end with something from the END of the FIRST ACT of Shakespeare's Henry 4, Part 1. 

If all the year were playing holidays,
To sport would be as tedious as to work;
But when they seldom come, they wish'd for come.

Back to School: Frugal Bliss

I've been off in my still-frugal universe. My colleague Merton (still teaching at 72) and I were discussing financial issues. I told him that he can probably loosen up and spend more. To which with characteristic  Zen wisdom he replied: "Frugality is my life." Selfishly, I don't WANT Merton to retire. He is my only frugal colleague and he is a good mentor to me.

Aside from being back AT school, I have gone in a sense back to school. In addition to practicing my French via Duolingo, though I have been rather a slacker at that of late, I have been blissing out at Yale. That is, at the FREE Yale on-line courses.

This seems to have been an idea that came and went, since all the courses were posted in 2005 or thereabouts. If you bliss out taking in an excellent academic lecture: here is your chance. So far, I have watched courses on the Old Testament and the New Testament. It is easy enough to read the primary texts under discussion.

Even if you think these will be boring, based on your memories of college days, give them a try. I am a way better student now than I was then. There are quite a few available, by the way.

I am really dying to watch/listen to a good art history course. Does anyone know of one?
Any other good courses available?

Mr FS says: Life is friction

That's one of the things he says when I mention retirement. He says we need to keep some friction in our lives. One source of friction: students! We are always helping them deal with problems little and big. You can have a great syllabus and a prepped class....but nothing ever goes exactly as planned.

He's right though. We've seen many retirees--some in our own families--dealing with boredom, the result of eliminating certain kinds of friction.

My latest bout of friction is a result of doing my taxes (on extension) over the last week. Taxes are pretty easy, unless you have 1. a tiny amount of self-employment income 2. some investment income from old investments that you would not buy again but which are too complicated to unload and 3. rental property.

Each year I--lover of numbers--discover that in the friction areas numbers are not necessarily exact. You make loads of small, potentially questionable decisions. It doesn't add up to much, but it is stressful.

I am almost done and pretty proud of myself because I have figured out how to do rental property! I read a book. Now I know what and how to depreciate!

It's not much good to tell me to get an accountant. I'd still have to get all the info together, which is the time-consuming part,  and every accountant I hear about makes terrible mistakes.

Doing my taxes is so stressful that I have spent the last week with the physical symptoms I recall from my other most stressful periods: finishing my thesis, applying for jobs, working for tenure. Really, if I had this feeling of sickness all year round, I WOULD have to retire.

I am thankful for these small bouts of stress. Thankful too that in my last years of work, the friction comes only intermittently and in discrete doses.

I took the book out of the library. I will be happy to return it.

One More Year

Stress upon stress upon stress. First of all, I am at the end of my semester: expected stress. Second, we decided to go ahead with the house for Frugal Son, commencing a grand experiment in uncharted waters. Third, UGH, we had our SIXTH yearly scare about the budget. Actually, the scare is on-going even now.

I think things are going to be OK (let us hope--some of my colleagues are pretty hopeful), but I live in a state where the only unprotected areas in the budget are healthcare and higher ed. So for 6 years, we have endured major mid-year cuts, the most drastic of which led to the zapping of the French major. But, hey, when we committed to this house for Frugal Son, I figured the budget crises were past. Many states have surpluses this year.

When we heard the scary news, I had a sense of deja vu: I first started reading Funny About Money a few years ago. She helped HER son buy a house at what they thought was the bottom of the market. The housing market promptly tanked further and Funny--with a teeny bit of warning--had her position eliminated at her university.

So what can a worry wart do? First, I ran my numbers through my new BFF firecalc. I discovered that Mr FS and I are on track for a humble retirement. Then I read around the site. One of the things these early-retirement wannabes warn against in OMY. That means ONE MORE YEAR. People fear early retirement and so keep adding OMY to their plans.

I'm using OMY differently. When I think of a splurgy or uncharacteristic purchase, I now think: would I buy this if I only had OMY? Yes: to storage containers. Yes: to travel. No: to Hermes scarf. No: to fancy handbag. Of course, that's just me. You get to make your own choices.

I feel a lot better. Wish the legislature good luck with their deliberations. Wish me and Mr FS as many OMYs as we desire...

Can You Get Rich With Burritos?

Even though I read lots of blogs dealing with (supposedly) frivolous topics, I am at heart a frugal girl. Married--thank heavens--to a frugal guy. And the parent of--even more thank heavens--two frugal offspring.

As a frugal girl, I crave contact with other frugal types. Sadly, with the exception of my colleague Merton, I have no one to discuss such topics as "What is the best stock-up deal at Piggly Wiggly this week?" Yes, even though I am a teacher of literature and love to show my students how certain words reverberate through Hamlet, I find such discussions compelling.

Needless to say, the blogosphere was a godsend to frugal girl in search of frugal friends. Sadly, most of the frugality blogs seemed to devolve into "Make more money blogs" stuffed with ads for payday loans. Then I discovered Mr Money Mustache. Get it?

A lot of people must be in search of frugal friends, because his posts get 100 comments! He's a guy who saved 3/4 of his engineer's salary for about 10 years and retired. Not to sit around, but to do other stuff. And yes, he has a family. While I don't aspire to early retirement (in fact, MR FS and I are at the age OF retirement), I believe in frugality as a general principle. So I've been blissing out reading through his posts. Ahhhhhhhhh.

One of his themes is "Get rich with." Get rich with the library. Get rich with your bicycle. These are not new ideas. Even the great Amy D of Tightwad fame admitted there was nothing new under the frugal sun. But how much more compelling to say "Get rich with" rather than "Save money with."

I have some new frugal apprentices this year: Miss Em's friends Mr C and his roommate C. They are Americorps volunteers. Mr FS and I send Miss Em off with 100 frozen homemade bean and cheese burritos each semester. We learned last year that Mr C was eating a lot of them.

Guess what? Mr C is a very smart fellow, having achieved knockout scores on his SATs and--we hope--on the MCAT. He learned how to make burritos himself. Then C started eating them. Now they make burritos together.

Can you get rich with burritos? They cost around 30 cents a piece. If you eat two or three for dinner a few times a week instead of the usual more costly options, well...you do the math. I may ask Mr C to work it out: he majored in Economics.

First Quarter 2012

After a rather lengthy hiatus--since 2008, I've thrown my financial statements into a box and said OMMMMMMMM--I just opened up a few. Well! My very conservative retirement account went up 6% in the first quarter. My go-go smaller retirement accounts went up as much as 18%--in just one quarter. Sounds great.

I notice, though, that the go-go account is about where it was in 2000, the time of the tech bubble bursting. So I have not achieved anywhere near the 26% annual returns (that would double your money every three years) that the Romney boys have made in their gift accounts over the last 15 years.

So I guess I have to keep saying OMMMMMMM, thank heavens Mr FS and I are still working, give a big thank you to Frugal Son and Miss Em for choosing state universities that wanted them badly enough to take them for free and throw in room and board, and a bigger thank you to my frugal forebears for instilling me with a frugal ethos.

I don't think I will ever recover from 2008!

Have you recovered? Do you open your statements?

Multi-Generational Housing? Retirement?

I guess I never told you that we were going to Florida. Well, we're back, and Miss Em is off to her next adventure.

I'm in the waning days of my vacation, and love nothing more than curling up with a good book. FROM THE LIBRARY. Everyone knows that is a key part of Frugality 101: use the library.

One book I'm reading and loving is this.

Yes, I am thinking about multi-generational housing.

Every few days, it seems, there is some article on the increase in multi-generational housing brought on by the financial meltdown, We hear of college grads or young adults moving in with parents; parents moving in with kids; the middle-aged moving in with even older parents; or the same older parents moving in with their middle-aged kids. This is always presented as some dire necessity,* to be escaped from ASAP.

The parents of the baby boomers are especially horrified at the prospect. My mother--aged 81--was talking about assisted living, and I suggested she move in with us if she needed extra care. She said, "That is the cruelest thing anyone has ever said to me." I didn't mean it that way! I thought I was nice.

Anyway, the dire articles always have zillions of comments, most, like my mother, horrified. Then there are those, mostly of Asian descent, who say: That's how we do it! Some point out that college grads who do that can save up for a house. The elderly can hang with their grandchildren and children. Multi-generational housing is presented as positive--something that can be pro-active, rather than simple re-active to economic or other emergency.

That last has been especially on my mind. Instead of a few intense (and not always in a good way) visits to relatives, wouldn't it be nice to have a more low-key relationship--every now and again, for a short time?

The book pictured above shows many ingenious transformations of houses (and not Mcmansions) to accommodate more than one family, with opportunities for togetherness and lots of privacy. I've already figured out how my 2000 square foot house with small back building could accommodate not one, but two families in addition to Mr FS and me.

Food for thought. What do you think of the issue of multi-generational housing?

*After writing dire necessity, I knew it was from somewhere. It is: Milton's Samson Agonistes. This tells of Samson's death, when he pulls the walls of the temple down, killing the Philistines and himself.

O dearly-bought revenge, yet glorious!
Living or dying thou hast fulfill'd
The work for which thou wast foretold
To Israel, and now ly'st victorious
Among thy slain self-kill'd
Not willingly, but tangl'd in the fold
Of dire necessity

Retirement and Riches!

I've been slogging through almost 200 pieces of student work over the last few days. Hence this post is part of my PROCRASTINATION PROJECT. This is a project that I don't need to explain: we all have expertise in this area, except for a few very focused souls.

Anyway, reading the prose of more than 90 students is not conducive to writing. So I will instead send you over to Duchesse of PassagedesPerles, who used to write about jewelry and style (still does), but also meditates on retirement. She outlines some creative responses to this dilemma: how can I travel?

Next, let's check out Funny About Money. Like many of us, she is often in a panic about money. Well, today, she posted quite a cheery piece about her new sources of income and the snazzy St John suit, rich lady attire par excellence, she snagged at a consignment shop.

Somewhere in the depths of history, I wrote about getting a St John jacket (still unworn by me) at a thrift store. I was inspired by this WSJ article. In a comment to Funny, I mentioned that Nancy Pelosi and other Washington bigwigs wear St John. According to the article, wearing St John garners you R-E-S-P-E-C-T.

Back to grading. My outfit: a pair of Eileen Fisher pants that are too big but very comfy, topped by a Hanna Andersson pajama top. Both from thrift stores!

When I'm done grading (I have a few more days), I will resume commenting on my comments. Thanks, Readers!

What is Your Image of Retirement Anyway?

Shelley wondered in a comment yesterday if I would take my mother in. In fact, I would. In fact, my mother is horrified at the very thought. It would be very low on her list of desired retirement options. She has said that, if she can no longer stay in her Florida condo, she wants to move to assisted living so she can be with friends. Not necessarily the friends she has now, but friends nonetheless.

As for me and Mr FS. We are unlikely to do what my parents did: move AWAY from the area where they had lived for many years (and where one child still lived...and lives) to move into a condo/golf community with constant social activities. Mr. FS and I hope we can move TO wherever at least one child settles. We're hoping that would be OK with our children.

My parents and Mr. FS's parents had no interest in babysitting for grandchildren. My parents took a few weekends when Mr FS and I had professional obligations. Mr FS and I, by contrast, hope that our children don't wait so long to have kids, because we would love to do a lot of childcare.

I guess that in days of yore, people didn't have so many choices.

Do you know what you want to do?

Elderly Parents and Overspending: Responsibilities

Ahhhhhh. Since my anonymity has long since been compromised . . . an embarrassing topic. What do you do when you see an elderly parent overspending?

My mother is 81. My father, who handled all the money, died almost three years ago, during the depths of the economic meltdown. Three days after he died, my mother got an accountant (a neighbor). Four days after that, she put half her money into the hands of an advisor, recommended by the accountant. The other half is in TIAA-CREF. The advisor has been urging her to take that money out and let him manage it. The advisor has not told either her or me (I asked him directly) how he is compensated. He did tell me that he and his wife made $700,000 in 2007.

Anyway, my mother has been totally transparent about her assets. I noticed that she is taking more than 10% from the TIAA account. I told her that is not a sustainable withdrawal rate, even for an 81 year old.

I don't want to go into the details of her spending at the moment. I did get her to call someone at TIAA, who told her that her money would run out in 9 years.

I guess it's good that I'm pathologically frugal! My mother gets angry at me as the bearer of bad news. My un-frugal sibling said that the advisor seems like a great guy!

So...what does one do when one sees an elderly parent overspending? Any advice would be appreciated.

Why Aren't You Frugal Anymore?

So asked two of my students who found my not-so-secret blog. The post where I discussed my luxe-on-a-budget lunch at Restaurant August.

First, I should point out that my being LESS frugal than I am normally would be EXTREME frugality for others--not quite in the Amy D. of Tightwad Gazette category, but pretty darn close.

What I said to my inquiring students was this: I had three major financial goals, and I've reached two of them. Goal one was HOUSE. Goal two was COLLEGE for kids. Goal three is retirement, a scary proposition, but the only one left.

Once I realized that, we decided to live it up a little more. Just a little.

Have you reached any of your financial goals?

Frugal in France: Carrot Lady and Community

There is a famous book--A Pattern Language--that proposes ways to structure environments for comfort and utility. I haven't read it in a while, but I remember that the authors suggested that elders be housed in small cottages in areas with foot traffic. Each cottage would have a bench outside, so the elders could watch the world go by and chat with people.

Could such a dream be realized in the USA? I have been observing both my parents and parents-in-law and am trying to figure out what kind of old age I hope to have. The little French town in which I have been residing offers elders plenty of opportunity to remain part of the community. First, a bakery and small grocery are within walking distance of most places. I see many elders with canes going to get their daily--or twice-daily--baguette.

The carrot lady whose grocery purchases I wrote about a few days ago is a case in point. She was quite vivacious and used the slowdown at the register to initiate a discussion of what shops would be open on Bastille Day. We saw her talk to several people on her way home--just a few steps from the grocery.

I think her total purchases came to under 3 euros. Mr FS and I surmised that she goes to the grocery every day in order to have some social interaction. Since houses are close together here--many sharing walls--it is easy to interact with neighbors of all ages.

My dream is to live in a walkable city with public transport. Is there any place in the USA that offers that?