Counting My Pennies » government

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.

No More Pennies?

Megan — Thu, 12 Feb 2009 11:00:47 +0000

Happy Birthday, President Lincoln. To celebrate, stores have decided to stop accepting the penny.

That’s right, in West Concord, Massachusetts, a number of stores are refusing to accept pennies as of today, calling pennies “wasteful and time consuming.” Instead, they will round all purchases down to the nearest nickel.

I suppose no one can really complain – after all, they will simply be getting a few cents off of their purchase. Buy a cupcake that costs $2.74? No pennies allowed, so that cupcake now costs $2.70. It just seems a bit harsh to put the new rule into effect on Lincoln’s birthday of all days, especially this year, which seems to be the Year of Lincoln.

I can’t say I spend pennies all that often. They do end up in my wallet, and if I have exact change, I try to use it, but every few days, I dump the majority of my change into my change jar. I like filling up a change jar. Getting rid of the penny would make that a bigger challenge, that’s for sure.

We’ve gotten rid of coins before. Years and years ago, the U.S. minted a half-cent piece. It looks like we might be getting closer to putting the penny out to pasture as well.

The Dollar vs. the Euro

Megan — Tue, 08 Jul 2008 10:00:00 +0000

Earlier this week, I read this article about the current state of the American economy. I found the discussion of the dollar versus the Euro to be fascinating.

First off, I don’t think that I knew that the dollar was considered “the leading international currency.” Given the recent American domination in many areas, I suppose it makes sense, but I never thought of it as a leading currency. I knew that the dollar was often accepted in other countries, but I assumed that was mostly in tourist areas or in poorer countries. I would never expect the dollar to be dominant in Europe. I suppose the description is more in terms of banking currency, of course, and I can’t say that’s an area I’ve ever stopped to ponder.

The article discusses how the Euro may be taking the place of the dollar. Quite shocking to me was the fact that many Manhattan retailers are putting signs in their windows indicating that they accept Euros. This is an indication both that the dollar is losing its dominance and that European tourists are flocking to the U.S. to take advantage of the exchange rate.

I suppose it’s good for the economy that foreigners are taking advantage of the exchange rate and coming to the U.S. for vacation. I’m sure that many vacation destinations in the U.S. are struggling because of all the Americans who have decided to scale back this year and have a “staycation” instead, so an influx of foreign visitors will hopefully boost them back to their normal levels.

Unfortunately, it looks like the dollar may have a few more years of struggle ahead of it. Some believe that the dollar is at an unnatural low, others believe that in the 90′s, the dollar was overvalued and now things have started to normalize to where they should be. I can’t say that I know enough about international monetary policy to make an informed guess. But I do thing the next few years will be interesting.

And hey, if the exchange rates don’t improve, maybe this means I’ll be able to convince all my friends to take that trip to Yellowstone I’ve been hoping for, rather than the exotic foreign destination they seem to all crave.

Abundant Life Spending Spree – $25,600
$25,600 will probably buy me a hybrid car. Not that I do a lot of driving as it is. But with gas prices as they are, it seems to make sense. Plus it’s just good to do the most green thing possible (even though I hear hybrid cars aren’t as green as they seem, what with the methods of disposal available for the batteries).

Facing the Storm

Megan — Tue, 18 Mar 2008 23:46:00 +0000

So as I’m sure everyone has heard or read, the Federal Reserve Board again cut rates in an attempt to stop the current economic downslide. From what I’ve read, it sounds like a number of analysts believe that we are officially in a recession.

I haven’t decided if this means I will be making drastic changes. Of course, I have already noticed the increased price in groceries, so it might mean adjusting my grocery budget or simply working to buy less food.

I’m a little concerned about what’s going to happen to my rent come September when my lease is up. I should really consider picking up a roommate, even if it’s just an intern who comes for the summer.

I’m going to continue to funnel money into my ING Direct accounts. The interest rates aren’t excellent, but they’re better than I’m getting at Bank of America, and I like their security and their customer service.

I’m going to work on slowly funding all of my budget categories. Even if I can only drop in $5 a month, that’s better than nothing.

After the slight success I’m seeing from cleaning out my closets and listing items on eBay, I’m going to continue that plan. It’s kind of a dual benefit situation – I clean out my closets and declutter my life a bit, and I get a bit of cash in return. I’m selling things that I’m not using and therefore are worthless to me. Because of that, I’m delighted to get a few dollars back for it. Sure, it might be “worth” more than what I end up selling it for, but as many people have said, an item is only worth what someone is willing to pay for it.

I have a family vacation planned for the summer, but my only expense there is transportation and incidentals once we arrive (I may try to convince my parents to let me buy them dinner one night, though) and immediately following that is a friend’s wedding. Other than that, I don’t have any travel planned until Christmas, so no expenses to be cut there. I do have a few items of clothing that I really do need to replace, but I know exactly what I want/need (size, color, brand), so I will just watch for sales and find them when I find them. I may also decide to do more shopping online. Yes, I pay for shipping that way, but I save on gas, and more importantly, I save on impulse purchases.

I will continue to contribute to my TSP each paycheck (I become eligible for the match in June, which will be a nice bump to that account), and I plan to start funding my Roth IRA for 2008 in the coming months. I have a Roth with Vanguard, and I want to buy a new fund, which requires a minimum $3000 initial purchase, so I’m waiting a bit until I’m actually ready to put that chunk of money into an investment.

Other than that, I just plan to ride this thing out. I’m not in a position to buy a house, and the falling interest rate does hinder my plans to save for a down payment, but not by all that much. Only a few hundred dollars a year, really, and while that would be nice to have, it’s not the end of the world that I have to save a little bit longer.

To summarize, I would say that my plans for this recession are to simply dig in my heels and hold on and maybe try to make a little progress in the face of the storm.

Learning about the Federal Reserve

Megan — Thu, 28 Feb 2008 15:55:00 +0000

I just returned to the office after a three day training course here in Washington, D.C. As part of the training course, I had the opportunity to meet Kevin Warsh, a member of the Board of Governors of the Federal Reserve System. We had two journalists as part of the training who agreed to not write about the speeches they heard, so I feel that I shouldn’t blog too much about what he had to say, but after hearing him speak, I feel absolutely confident in the Board of Governors and trust that they are doing everything they can for the U.S. Economy. One of the coolest parts about the meeting was that it was held in the boardroom of the Federal Reserve. I was able to sit at the table that the Board meets at to discuss issues regarding the U.S. Economy. Maybe I’m a bit of a political geek, but it was really a cool experience. And also a very cool room.

If you really want to learn more about the Federal Reserve, there is a PDF book available on their website explaining the Purposes & Functions of the Federal Reserve. But here are some basics, taken from that document.

During the late 19th and early 20th century, there were a number of bank failures and bankrupt businesses due to financial panic and people withdrawing funds. After a severe financial crisis in 1907, Congress established the National Monetary Commission and then passed the Federal Reserve Act “to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.” This was signed into law on December 23, 1913.

The Federal Reserve System is comprised of the Board of Governors in Washington, D.C., and twelve regional Federal Reserve Banks. Federal Reserve Banks are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. The Federal Reserve uses the federal funds rate to implement monetary policy. This is “the rate at which depository institutions trade balances at the Federal Reserve.”

The Federal Reserve has a number of duties, but these can be placed into four general areas, as indicated by the above referenced document.

“Conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment,s table prices, and moderate long-term interest rates”
“Supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.
“Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.”
“Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system.”

We haven’t heard much about the Federal Reserve until recent events in the market, but I’m finding the background on what they do and how they do it absolutely fascinating. The PDF of the book is definitely a worthwhile read.