Counting My Pennies » economy

Shutdown?

Megan — Thu, 07 Apr 2011 12:59:24 +0000

As I have discussed here before, I’m a Federal Employee. And I’m not sure how much press this is getting outside of the DC Metro area (the DMV as it is often called, though I believe that acronym is taken by a much more painful entity), but we’re looking at a government shutdown. Why? Because Congress can’t decide on a budget. That’s right, we’ve been operating without an approved budget for half the year already.

In general, Federal employees get trashed a lot for our pay and benefits, but in general, there are a lot of hardworking federal employees who are going to be furloughed for an undetermined amount of time because people can’t come to an agreement on a budget. I am okay with furloughs to try to save money (something that’s also on the table as a possibility) but this sort of situation is just ridiculous.

What happens to the Federal employee who is furloughed due to a shutdown? Well, you just have to sit around and wait for notification that you can come back to work. You can’t go anywhere because the budget could be passed at any time, meaning you need to be back the next day. You can consider getting another job to tide you over, but there are restrictions on what government employees are allowed to do outside of work (we have to fill out an “outside activities” form) so it’s always a risk (though bartending for a few days probably won’t hurt you).

I’m lucky – even though I just bought a house, I will be okay if I lose a week or two of pay. I keep a solid emergency fund, and since I use YNAB and live of of last month’s income, I won’t even feel the pinch until next month. The last time this happened, the Federal employees who were furloughed got retroactively paid. I don’t expect that to happen this time, and I don’t think it should happen. And maybe I can say that because I’m in a stable financial position, but given the hatred directed towards us already, I don’t think it makes sense to pay us for doing nothing. Does that hurt the people struggling to make ends meet? Absolutely, and I don’t know how to rectify that.

In general, I don’t like uncertainty. I’m a planner. I like to know what’s going on and what’s going to happen next. I like schedules and lists. So this uncertainty makes me very uncomfortable. But I’m exasperated that it’s April and we still don’t have an approved Federal budget. Get to work, Congress.

Federal Pay Freeze

Megan — Sun, 05 Dec 2010 16:52:11 +0000

At work right now, the big talk is the federal pay freeze. As a federal employee, this affects me, and I have to admit, my reaction is “Well, it sucks, but it’s only fair.” I honestly can’t complain. I know that I’m lucky to have a job and to not be worried about layoffs (though there is always a chance of a reduction in force). Some in Congress are pushing for a 10% pay cut for federal employees. That would be much harder to swallow. But a freeze? Okay.

Sure, our health insurance is going up 10%. So my paychecks will ultimately be smaller next year. I’ll make it work. But for some of my coworkers, it does put them in a bit of a pinch. Some are quite angry. Others share my opinion.

This is likely going to be the driving force needed to get people eligible for retirement to decide to leave. That’s good and bad. Good because it frees up some great work opportunities. Bad because if we’re on a hiring freeze, we won’t be able to replace them, and everyone will be doing a lot more work. But hey. I’m employed. I have a good job. I get a paycheck and I have good benefits. I have no room to complain.

What do we owe them?

Megan — Tue, 22 Sep 2009 10:00:47 +0000

So I’m sure we all know someone who is currently out of work. Maybe they’ve been laid off, maybe they’re a recent grad still looking for a job. Maybe you’re one of those people.

My friends and I have been discussing the current unemployment level quite a bit. In a discussion among employed friends, we got on the subject of our unemployed family and friends. What do we owe those people? Do we owe them anything?

The conversation started when someone mentioned a friend who had agreed to let her sister live rent free for some time. The assumption was that the sister would help out around the house a bit and start paying small amounts of rent when she finally got a job. The sister got a part-time job to help fill her days while still looking for something more permanent… and has yet to pay any rent. Why? Well, her theory is that the homeowner would be paying the same for the room regardless of whether or not she was living in it. Also, I hear her housekeeping skills aren’t that great, but that’s another story.

The homeowner wondered whether or not she should make her sister pony up some cash or threaten to kick her out. Of course, she didn’t want to kick her out, knowing that she would struggle to find another place to live. We decided that was a tough situation all around but that the sister should at least be pitching in somewhere – maybe buying groceries or cooking dinner or something.

But then the conversations started. Someone had a friend who expected her to pick up lunch every time they went out – no matter who invited. Someone else had a roommate who never pitched in for groceries. And the question became – what do we owe these people who are out of work?

On some level, I think I would always let a friend crash on the couch – at least temporarily. Once that friend got some income, however, it would be time to pony up or move along. And if I knew someone was down on their luck, I might invite them over for dinner once a week. Or, if I had a washer and dryer, let them do laundry at my place rather than head to the laundromat.

I guess some of it is situational. While I would be happy to offer these things, I don’t know how I would feel if someone felt I owed it to them. And on that level, maybe I don’t actually owe these people anything. That just feels very selfish to say. Thoughts?

“Recessionista?” Seriously?

Megan — Fri, 04 Sep 2009 10:00:11 +0000

Twice over the past week, I have seen advertising discussing the latest and greatest fashions for the fall season – all “inexpensive Recessionista style!”

Recessionista? The word in itself is kind of ridiculous.

But the best part was that the items for sale were not anywhere near what I would consider inexpensive, frugal, or appropriate for someone worried about the recession. If you are worried about money, don’t buy this season’s new $700 purse.

On some level, the statement “Frugal is the new black” is funny. It’s especially funny to those of us who have always been frugal (even if we do buy $700 purses, we’ve saved in other areas to make that happen). But I’m starting to find the whole Recessionista trend a little annoying and slightly insulting. I get this vision of rich spoiled young women (the sort you find on many reality tv shows) going about as if they’re so great because they’re buying slightly less expensive things and doesn’t that make them fabulous? Doing it not because it’s necessary but because it’s the “in” thing to do.

And on the other end of the spectrum, there’s the young woman who really would love to dress in fancier clothes for work but truly can’t afford the look she so desires. By making do and accessorizing with inexpensive pieces, she’s truly being a Recessionista.

Don’t take advantage of your friends

Megan — Tue, 09 Jun 2009 10:00:44 +0000

To recap last Friday’s entry, my roommate’s financial situation is not all that and a bag of chips. This I know, and I’m sympathetic. If she pays her rent a few days late because a check needs to clear, I accept that.

But I think she’s trying to take advantage. Before paying her rent, she said “Feel free to say no, but since I’m gone most of this month (she’s away for a 3 week fellowship), can I pay less rent?”

I didn’t even know how to respond. Clearly, the answer was no, but I felt like I had to have a reason why. So my answer was “Sorry, no, I’ve already budgeted for the month.” Our rent includes utilties, so it’s not like our overall bill is less because she’s gone. We do have a cable bill, which she won’t be using, but again, we aren’t getting charged less because she’s gone. If she had suggested the idea of subletting, that would be one thing, but I thought it was pretty ballsy of her to even ask.

Now, if she were showing signs of real financial hardship, maybe my answer would have been different. But knowing that she spent her week going to some pretty pricey D.C. bars did not make me sympathetic to her plight.

So if your financial situation is not so great, remember that your friends might be willing to help you out where they can. But don’t take advantage of their generosity.

Economic Struggles Hit Home

Megan — Fri, 05 Jun 2009 10:00:40 +0000

This week, my roommate got some bad news. Her dad got laid off.

Now, this wasn’t entirely unexpected. He’s got a number of years of experience and education, but he’s in an industry that has been especially hard hit by the current economic conditions. He and his wife have been anticipating this and planning for the possibility, so they will be okay. They’re some of the lucky ones.

This has been incredibly eye-opening for my roommate, however. She just finished grad school, and she has yet to find a job. Again, not entirely unexpected. But she had a safety net. Her parents were happy to help her out while she continues to job hunt. I haven’t discussed it with her, but I have a feeling that they aren’t cutting her off, even though their financial situation has changed so dramatically. I do think that she has suddenly realized that she can’t continue to take advantage of their generosity.

I have had issues with her money management for a while. I think it’s great that her parents help her out where they can so that she doesn’t have to take out so many loans, but at the same time, I have often thought that she is perhaps taking advantage of their generosity. We live in a nice apartment, but she wants to move into a new apartment that will run her about $300 more a month. (I will not be moving with her, which means that I will be roommateless again.) If she were employed, I wouldn’t say anything about this. If she wants to spend more money on rent, that’s her choice. But I don’t think this is a choice she should be considering if her parents are paying her rent.

I was watching an episode of 18 Kids and Counting the other night, and the mother was asked if her eldest son, who recently married, is still being financially assisted by his parents. She laughed and said no, the purse strings had been cut. And sure, her son and daughter-in-law might have to live on love every so often because there’s no extra money to go around, but it’s important to learn those lessons.

My parents haven’t helped me out financially for years. If I needed them, they would, I think, but I wouldn’t ever want to have to ask. I’ve discussed my roommate’s situation with them, and they said if I were in her position, they would help me out with rent for a few months while I job hunted, but after that, I would be on my own. However, if I wanted to move back home and live with them, I am always welcome.

It is unfortunate that it took my roommate’s father losing his job for her to finally see the light and realize how lucky she has been and realize that she really needs to step up her job search and maybe look for a retail job to help pay the bills while she looks for something in her field. I do hope that things work out for her family as quickly as possible. It’s always hard to watch those around you struggle.

The “Plight” of the Twenty-Somethings

Megan — Fri, 03 Apr 2009 10:00:04 +0000

A recent article on Slate.com discussed how twenty-somethings are dealing with the recession. I particularly like the title: “The Real World Threw Up All Over Us.” The article does, at times, seem a bit whiny on the part of the twenty-somethings interviewed, but the author is careful to say that the e-mails she received were anything but whiny. They just showed how uncertain people are feeling.

I think a lot of us understand. As the article points out, we “set up [our] lives based on assumptions that suddenly no longer apply.” And we don’t know what the new rules are. A lot of us grew up with the belief that we should go to college, get a good education, and if we worked hard, we would get good jobs and by our late twenties, be buying homes and starting families. And while that still occurs, I think everyone feels a bit more economic pressure.

One big problem, I think, is student loans. I was always encouraged to aim high and to get the best education possible. At eighteen, do you really understand what student loans mean? Sure, I was a very smart eighteen-year-old, but I don’t know that I could conceptualize the idea of paying off loans for twenty years or more. I just wanted to go to a good school where I could get a good education and have a great time doing it. Plus there’s always the underlying belief that if you do well enough, you’ll get a great job and pay off those loans in no time flat.

Clearly, that’s not what’s happening. And student loans are nothing new. My mom still talks about the payment book from my dad’s college tuition and how she wrote that check every month for years until the loans were paid off. But even with inflation, he wasn’t faced with the numbers that students are faced with today.

Sure, some of that is their fault. Before law school, I distinctly remember a lawyer I worked with telling me “Be sure to take out extra loan money so you can go on a sweet Spring Break trip. You can just pay it off later. It’s totally worth it.” I didn’t listen to that particular advice, and I can’t say that I regret that.

Given my recent work highs and lows, one quote in the article really rang true for me. A woman taked about waiting for a promised promotion and not wanting to ask for more and be more vulnerable to a layoff, yet having always thought of herself as someone who would value her worth and demand fair pay. It’s definitely a struggle. No one wants to be undervalued at work, especially when others around you are compensated higher than you for equal work. But sometimes, being the lower paid employee doing excellent work makes your position safer in the company.

At the same time, there are some positives. The article speaks of learning to live more simply. While it may seem tough to not have a lot of disposable income, if you can learn to live on less and be happy, then when you do find yourself making more money, maybe you won’t feel the need to go spend it immediately. You’ll learn to save and spend your money on what’s most important. My grandparents still live a very simple day-to-day life, doing everything they can to save a few pennies (rinsing foil and plastic bags, wearing clothing til it literally falls apart, then repairing it), but they’re financially very well off, probably due to this way of life. Not that they’re cheapskates. As I’ve discussed here before, they go on nice vacations and go out to dinner and to the theater where they splurge on the good seats. But that’s what’s important to them.

I wonder if perhaps this struggle is a good thing. I’m on the cusp between Generation X and Generation Y, but the general impression is that people currently in their twenties were all born with silver spoons in their mouths, even if our parents couldn’t necessarily afford it. We never had to struggle for much of anything. I went to a presentation by a eighty-something feminist historian who commented that young people, people under twenty-five (she looked very pointedly at me, though I passed that mark years ago), don’t know what it means to struggle. They have been given everything they have ever wanted and they are weak because they don’t know what it’s like to have to fight to get what you want. While I think that’s an overgeneralization, the idea that having to struggle and work for something makes you stronger and makes you value it even more. So perhaps the good part to this economic struggle is that it reminds us that life isn’t always easy and can’t be planned, but hard work and determination pay off in the end. And that building a substantial savings account feels pretty darn good.

Support your non-profits

Megan — Tue, 31 Mar 2009 10:00:24 +0000

A few hours after I found out about my raise, I went to choir rehearsals, where we were treated to a conversation about the financial status of our organization. We’re a non-profit choir, and one of the big choirs in DC is ceasing operations at the end of the season. Naturally, we’re all a little bit worried about the status of our organization. We know that times are tough and that tickets aren’t selling like they used to.

Our news was better than the other choir’s. While they were struggling for the past three years, we’ve been in the black until this year, when it looks like we will take a relatively small loss. Given the economy, that’s not unexpected. Having just heard about my raise, of course, I made a mental note to make an extra donation to the choir this year. We’re never asked to donate, as we donate our time and our voices, but I get so much out of the organization that it never helps to give back in more ways than one.

I’ve noticed a lot of non-profits struggling lately. For as long as I’ve been here, the National Cathedral has had a little donation box sitting just inside the doors with a suggested donation for individuals, families, and military and seniors. It’s not required, of course, but the Cathedral continues to struggle. In the past few weeks, I noticed that they put up a bunch of fairly tasteful signs asking people to please give $5 to help support the Cathedral’s operations.

Those of us in D.C. often tout the great free things to do here. I regularly visit the Smithsonian Portrait Gallery on my lunch break, and I’m a bit ashamed to admit that I have not once bothered to drop a donation in their box. The problem is, nothing is really free. These wonderful things cost money to operate, even with the numerous volunteers. With the government struggling to bail out banks, it wouldn’t be much of a surprise to see funding to these sorts of programs get cut.

If you’re out enjoying the free or inexpensive programs being put on by non-profits or community organizations, maybe consider making a donation. It doesn’t have to be something big. If you’re visiting a museum with a donation box, drop in a few dollars. If you love community theater, consider sending them a small check or seeing if there are any supplies they could use. Spend a lot of time at the library? See if there are any books that they are hoping to add that you might be able to donate. Some libraries have Amazon.com wishlists. Maybe your library could use a donation of supplies for a children’s event. If we all just give a little, we can make a big difference.

Has the economy changed your spending habits?

Megan — Fri, 27 Mar 2009 10:00:01 +0000

Has the state of the economy changed how you spend? I’m serious. I’ve been reading personal finance and frugality blogs for nearly two years, and there are a lot of blogs out there on these subjects that have been around for years before that. What that tells me is that there are a lot of people out there who were mindful of their spending before the economy really started to tank and people started to get scared and think about replacing their box spring with bars of gold and sod their living rooms to start work on an indoor victory garden. (Side note – in college, my roommate and I thought that sodding our dorm room and building a sod couch was a brilliant idea. Spill something? Oh well! Sadly, this was not a plan that ever came to fruition.)

Since I started blogging and really tracking my finances, I’ve been keeping a close eye on my spending. I know where my money goes. And not just the money I actively spend. I also pay attention to my paystubs. This week, I noticed that my direct deposit was minimally higher than normal. I immediately looked at my paystub to figure out why there was a change and where my money was going.

I use YNAB to track my spending, and I have chosen to not automate my finances and instead hand enter every single transaction. It’s much less tedious than it sounds, and it forces me to spend an extra few seconds with every transaction, adding a level of awareness I’m not sure I had when automatically downloading transactions. Just a personal trick I use and I realize that it’s not for everyone.

What I’m trying to get at here is that I have always been careful to spend wisely and save as much as possible. I do my best to avoid impulse purchases and I research big purchases to make sure that I’m buying the best product at the best price. The economy hasn’t changed that. I’m still just as cautious as I was, and still splurge here and there, but they’re planned splurges.

I have a feeling that for those of you who have been involved in personal finance and dedicated to saving and paying off your debts as fast as possible, you’re in the same boat. But there are many more personal finance blog readers and writers out there now that the economy has taken a turn for the worse, and to you, I say welcome! Maybe that’s one good thing that this economic climate has brought us. More people interested in their finances and saving money. It’s always good to add voices to the conversation.

Who’s to blame? And does it matter?

Megan — Tue, 10 Mar 2009 11:00:14 +0000

I’ve seen a lot of press lately about the state of the economy and who we should blame for the current economic situation. I’ve read that the fault lies with just about everyone – the government, the banking system, greedy executives, home-buyers who over-reached, predatory lenders, etc.

And while finding fault is helpful because you can get to the root of the problem and try to solve it, at some point, you just have to move on. You work to fix the problem, or in this case, let those people with more power and skill work on the problem, and you just forge ahead.

We’re all angry or upset or frustrated by what has happened, and those are very valid emotions. But as of late, I have seen a lot of people complaining and blaming, and not a lot of people doing anything to improve their situation or the situations of others.

Admittedly, this is a pet peeve of mine. I understand the need to complain. Sometimes you just need to vent, and the current economic situation is definitely vent-worthy. But in my opinion, you also need to do something to fix the problem. If you’re working to fix things and still complaining, well okay. You need to vent. (Perhaps you should try to talk about other things, but I get it.) However, if you complain but do nothing to help improve the situation, I feel like you no longer get to complain.

But this situation is so big! What can you do to help?

Well, you can improve your current situation. If you’re out of a job, make sure you’re looking in every place possible (if you’re reading this blog, however, I’m sure you’re doing that – it’s the people out of work who sit on their couches watching tv and waiting for a job to fall in their laps that are the problem). If you’re worried about your job, prove to your boss that you’re an integral part of your company. And make sure your resume is up to date, just in case. If you’re worried about your bills or about saving for the future, see where you can cut back your spending. Even an extra $5 a month can add up. (Don’t cut back too much, of course. You should always make sure that you have a little bit of money for fun, even if it’s just for pizza and a DVD rental once a month.)

So I think it’s time we stop playing the blame game. Stop blaming and start doing.