Wednesday, February 19, 2014

Frugal-Generous Balance

We've all heard the phrase work-life balance. Similarly, two of the principles that I strive to live by are frugality towards self and generosity towards others. Or, to coin a new phrase, frugal-generous balance. To that end, I try to give away roughly 15% or more of my gross income each year. The first 10% goes straight to my local church. And the remaining 5% or more goes to various not for profits and charitable organizations.

So, how did I do in 2013? Well, it looks as if I gave away roughly 14% of my gross income, thereby missing my goal by at least 1%.

I admit that last year was a bit of an anomaly. Without steady employment, it's a bit harder to be consistent about giving. As a consultant, I wound up working only 10 months out of the 12 on two very different long-term assignments. Plus, December was one of the busiest months ever in both my personal and professional life. That's not really an excuse for missing my annual giving goal, but it does explain why I was a bit surprised when I crunched the numbers.

So this year, I'll try to be more proactive in terms of giving. I've already set a reminder for myself to do a quick check up in October and/or early November, just as I would with my savings plan.

As a side note, I learned the principles of tithing and generosity at a very early age from my parents. When I started working, I asked my mom whether I should tithe based on gross or net income. I'll never forget her response. In her heavily accented English she said, "Tithe on gross, receive gross blessings. Tithe on net, receive net blessings." I had to laugh. I'm not saying that I agree entirely with her theology. There have been many, many articles written on the so called health and wealth gospel, seemingly overlooking vast sections of the Bible that refer to suffering and persecution. But I do appreciate my mom's heart. It's a good thing that God doesn't give us what we deserve. That's grace, in a nut shell. But if we're stingy towards God, we can't exactly complain when God doesn't shower us with blessings in return.

Thursday, February 13, 2014

The Butterfly Effect of the Target Data Breach

You've undoubtedly heard about the massive Target data breach that affected anywhere from 70 to 110 million customers. And you've probably heard that Target is offering one year of free credit monitoring and identity theft insurance to all of its customers (not just the ones affected). And you also may have heard that the hackers accessed Target's network via a heating and cooling contractor that fell prey to a simple 'spear phishing' attack.

But what you may not know is that the data breach has had a 'chilling' effect on philanthropic giving. I was startled to hear a heartfelt plea on my favorite listener supported radio station this afternoon. The announcer begins by reassuring the listener that their personal information is safe and secure (a statement that's been proven false time and time again), then he goes on to acknowledge that many listeners have had to cancel their old credit cards and obtain new ones recently. He ends by encouraging listeners to update their credit card information to enable the radio station to process pledge commitments.

In December, I had to cancel and replace my credit card after an unauthorized $500 charge appeared on my statement. Ironically, it had nothing to do with the Target data breach. In my situation, it was simply a shady local business that tried to charge my credit card for services that it had never performed. However, one of the first things I did when I received my replacement card was to look through my old statements to see which bills I had on 'set it and forget it' auto payment. So, if I had been using that credit card to make monthly payments to the radio station, I probably would have caught it.

What about you?  Have you had to replace your credit cards in the last few months? If yes, did you remember to update your information for auto payments?

Saturday, February 08, 2014

Free FICO Score for Discover Card Customers

Okay, true confessions.  Since I first opened a credit card 20+ years ago, I've pretty much paid all my bills on time. So, I've never bothered to pull my credit score.  I figured I probably had a pretty decent score.  But I've been curious.  And now my curiosity has been satisfied.

Discover has expanded one of its offerings and is now providing FICO credit scores to *all* of its credit card customers for free! And yes, it's a real score vs. the close approximation from vendors like Credit Karma.  Ironically, my first credit card was a Discover card. So, it's kind of fitting since they're contributing to 15% of my score via the "length of credit history" component, don't you think?

I just shared my score with a close friend who is in my opinion a personal finance queen.  And apparently, her score is 7 points lower. Her disgruntled comment was "I attribute it to the fact that you're older."  Umm...okay. Considering length of credit history is a very minor component of the score, I really don't think so :-)

Wednesday, February 05, 2014


I have to admit, this story about a millennial who quit his six figure job and gave most of his possessions away, really struck a chord with me.  My parents are very frugal, and they taught me the values of minimalism even before I became aware of the minimalist movement. But I admit that in my early 30s, I did have a tendency to acquire way more 'stuff' than I needed. Instead of exercising or meeting with folks during my lunch hour, I used to go clothes shopping. However, the decision to go back to grad school in 2007 helped re-prioritize and reboot my life. I sold my luxury sports sedan, gave away most of my book collection, and put myself on a really tight budget. After graduation, the lack of steady employment for 3 years definitely reinforced my minimalist ways. So, in some ways, I'm grateful for the recession. When you no longer have the trappings of success, you start to see more clearly the things that really matter to you. I no longer buy books, unless they're on the bargain rack at my local library or Goodwill store. And my clothes are mostly items that I found at thrift stores or hand me downs from friends. But I'm a lot happier now than when I was making a six figure salary with an impressive title and closets full of random 'stuff' :-)

Tuesday, February 04, 2014

When Social Justice and Frugality Collide

Two years ago, I read a book entitled Everyday Justice by Julie Clawson. It's a short little book that provides some practical suggestions on 'living ethically'. Some of the information may be out of date. But it's a good place to start if you're feeling inundated about all of the information on various social justice issues, including modern slavery. I've since started trying to make small adjustments to my buying habits, particularly Fair Trade coffee and chocolate. More recently, I listened to the Planet Money's T-shirt Project podcast series. And they go into much more detail on the economic pressures that are shaping the global textile industry, including the unintended consequences of import/export regulations dating back to the Nixon era. The net effect is that I feel guiltier than ever buying 'cheap' products when I know that the folks who produced the products are not making a fair wage. At the same time, I know that these pangs of conscience are a luxury as well. For folks who are barely making ends meet, urging them to purchase Fair Trade or organic products is akin to saying 'Let them eat cake'.  They're concerned about feeding and clothing the children in their own homes, not the child laborers in Bangladesh or C'ote d'Ivoire. So, I try not to impose my choices on others. But the other day, my friend mentioned that she tries to shop at Walmart as much as possible because of their low prices.  I mentioned that I avoid Walmart as much as possible because they don't pay their workers a fair wage. And I referenced the book Everyday Justice. Her reply? 'That's why I don't read'. Yes, she was joking, but her response startled me. In point of fact, she exemplifies in many ways what it means to be both frugal and sacrificially generous towards others. But I wonder how many folks have the same mindset as my friend. If you have the luxury of buying Fair Trade items, do you choose to do so? Or do you look for the cheapest products, live a frugal life, and donate the excess income/savings to worthy causes?

Monday, February 03, 2014

Return of the Prodigal Daughter

When I started this blog, I could count on my hand the number of friends and family who were interested in discussing issues or topics related to personal finance. But as a Christ follower, I noticed that the Bible had a *lot* to say about money. This blog was my attempt to work through some of my frustrations and concerns about finances in a relatively safe environment without being judged by some of my more legalistic acquaintances. Yep, there's a lot to be said for anonymity :-)

However, it's been 6 years since I've updated this blog, and a lot has happened in the intervening years. In a nutshell, I....

  1. Sold my condo in the city in April of 2007
  2. Sold my BMW and replaced it with a more reliable, mid-size, family sedan
  3. Purchased a smaller condo in the suburbs
  4. Started a graduate school program in clinical psychology in August of 2007
  5. Along with the rest of the nation, saw my retirement portfolio and net worth drop precipitously over the course of a very short span of time
  6. Graduated with a master's in clinical psychology in May of 2009 during the height of the recession
  7. Could not find a full-time job as a therapist, so worked part-time at the community counseling center where I did my grad school internship
  8. Started working remotely as a part-time legal consultant with my old employer 
  9. Gave up on finding a full-time position as a therapist that didn't require me to be on call both nights and weekends or relocate to a different part of the country
  10. Started working full-time as a legal consultant at various positions that required me to be on site during the work week
  11. Paid off the remainder of my student loans
  12. Saw my retirement portfolio and net worth bounce back to pre-2007 levels

So, what prompted me to post an update now, as opposed to say last year, or the year before? Surprisingly, it was a letter from PricewaterhouseCoopers, indicating that I had a $24.99 credit from Google AdSense "due and owing" to me. It was an 'in your face reminder' that some folks actually did visit my site and hopefully read my blog posts while clicking on some ads. But like the author of a bad serial novel, I left my readers hanging, without providing any closure. Please accept my apologies, dear reader, for my long absence from the blogosphere.

Coincidentally, one of my friends recently asked me what I would want to do if I managed to retire early. My response was a no brainer. I told her that I wanted to write full-time. After majoring in rhetoric in collge and working as a technical writer for two years, I gave up on my dream of making it in the publishing industry and decided to go to law school. But working as a transactional attorney in Corporate America for 8 years left me feeling restless and pretty unfulfilled. So, I decided to make yet another transition into what I thought would be a more fulfilling career as a psychotherapist. Of course, that didn't work out so well, since my timing was a bit off.  In future posts, I'll share some of my 'lessons learned'.

However, be forewarned that I plan to expand the focus of this blog from personal finance, to other more general topics (i.e., whatever strikes my fancy). Although I still have a strong interest in personal finance, there are other topics that are also near and dear to my heart (i.e., social justice, Christianity, psychology, technology, leadership, management, productivity, etc.).

If you've stayed with me this long, thanks for reading my post.  If you skipped over the middle section and jumped right to the end, you are definitely missing out on the good parts :-)