Lampshade Economics

Last weekend I purchased a lampshade at Target (said of course with the ridiculous yuppie pronunciation). Simple, functional and turns out slightly damaged when I got it home.

So I returned to Target to exchange it for a new one. No problem. In and out in no time.

The catch.

The original shade was purchased in Virginia. The exchange happened in the District.

It cost me 15 cents more to exchange the shade in D.C.  because of the difference in tax rates. Plus the $1.50 in parking (no free surface lots in Columbia Heights). Of course, I started compounding this cost differential in my head on a variety of things we purchase on a regular basis and was not pleased. Ouch.

And yes, this is where all my Virginia friends can remind me that this is why people move across the river.

Almost Home

Our new building. Only two units
inside and one is ours!

It's official. We have roots in the form of a mortgage. After arriving here 14 years ago, five apartments, and three states later we have a little corner to call our own. It will be fall before we move in, but it's ours and we're very excited.

To celebrate we're getting a new couch and vetting the rest of the apartment. We've got a lot that needs to go and certainly if it hasn't been unpacked in multiple moves, it's not coming with us.

So before the cardboard, bubble wrap and packing tape invade our current apartment (and before our first check is due) we're enjoying the idea of finally having a place to call our own.

Couldn't Pull the Trigger

There was a brief moment this weekend where we almost bought a townhouse. We even had them hold the lot as we contemplated whether we were ready to jump in feet first. Then our carefully honed financial consciousness kicked in and we walked away.

Many of our friends and family have scoffed that we're more willing as a couple to go live in remote regions of the world than actually own something, but it's true we're still not quite there yet.

Brass tacks, we're still working on a saving for a down payment that's worth something. But we know the tide is finally starting to turn in DC where the market is showing signs of recovery, but finally you can get more for your money by buying not renting. So we'll get there, likely in the next year, but not today.

At least we know we love DC, we'll always call it home. Even if we wander far, our roots are here, they just don't have a mortgage.

We've worked so hard at achieving financial stability that we don't want to take on more than we're ready to do too soon. And yes, I still have moments where I think, well maybe we should pay off all of those student loans before we buy a house. And then I laugh, and think about how ridiculous that actually is, I mean seriously, we'd be nearing retirement before that would happen.

So, mindful fiscal living wins another round.

Reframing Microfinance

If you give only what you do not need, it's not giving.

Harumph. This is an uncomfortable idea. One that may be easily dismissed, but caused me to sit bolt up right and grab a pen to write it down. Striving to consume less requires a prioritization of purchases, commitments and giving. Considering what you give to potentially be of limited consequence is not so pleasant.

I've been examining our spending and consumption habits to-date from a save more, consume less point of view. What if the whole point is to save more, give more?

Realistically, I'm going to reach a point where we've run out of books to give to the library; clothes and items to donate to Goodwill; dress clothes to give Dress for Success; unused pantry items for the food drive. These are all things we do not need. Sure we are giving it and others will benefit from it, but the greater sentiment is not moot.

What if the point is reframing our point-of-reference even further?

There's the much repeated story by various members of the Kennedy family about having cereal for dinner one night a week so that the money they would have spent on dinner could be given to charity. A similar sentiment was shared this past week, when our minister Charlie Parker remarked in his sermon, wouldn't it be great if we had to tell our kids, our families, we can't do this or that because we choose instead to give to the church?

Giving does not need to be framed in the context of Christianity or any other belief system for that matter to be meaningful or directed. It need only be authentic, purposeful, life changing.

And I guess that's it. What does that mean for us? How does giving to a cause factor into actual budgeting? After the mortgage, expenses, saving for the college fund, paying off the college loans, and saving for retirement...where's the line item for investing in change? On our own micro, maybe nano level.

Microfinancing isn't something we can do only for Africa. Microfinancing is what we should be doing with our own budgets. We could each be investing in the local, national, and international causes we believe in with the same discipline we pay our bills. That's meaningful, that would be amazing.

Commitment Issues

Travel is a part of our lives. Well, for at least half of us. Here is the conundrum. When one of you flies to far flung places for a living and the other stays put, where do you vacation?

Add to that your new found obsession with frugal and it creates perpetual list of  "well what about..." There are days I want to climb on top of a metaphorical chimney and shout "why don't we just go already? We're freaking kid free let's travel!" This is usually fueled by some sort of discussion that involved me saying, yet again, something about my new passport not yet having stamps. So classy. So thoughtful.

We've been to some great places, but with our new found responsible financial behavior, we're much more reluctant to just book a flight and go. I'm afraid we have vacation commitment issues.

First, we talked about taking out this nice girl Paris. Spend 10 days with her, rent an apartment, take advantage of great flights from Air France, shop the phenomenal January sales, see Versailles with snow, ooo la la.

Then we talked to a more outdoorsy chick Lake Placid. She has a killer lodge. Smores, roaring fires, hiking, down comforters, venison steak. Yum.

We flirted with the seductive Morocco. Oasis, sand dunes, history, the fez. Oh so spicy, but best enjoyed allegedly with a tour guide. We didn't want a chaperone.

There's always the venerable weekend trip, the one night stand of vacation relationships. We thought about picking up a few of those. New York, Charlottesville, Chicago, etc.

We've trolled jetsetter.com like it's going out of style. I discovered wanderfly.com and thought, yes! And then the ol' commitment issues crept back.

So outside the obvious (family obligated trips), how do you settle on where to travel and when?

Fine Print

I have not read every word of the financial reforms that have passed Congress. I have also not read every word of every agreement ever mailed to me by a bank, credit card company or student loan department. I'm also not blindly obligating myself (to my knowledge) to any scams from a Nigerian king or bank or any other exploitative effort.

I would however still consider myself a fairly attentive consumer. I have read every term of every lease I've ever signed for an apartment. I do check to make sure there isn't anything glaringly wrong. I do read anything that requires my signature very carefully.

So when I recently went in search of a high-yield saving account I did my homework. I checked out multiple sites, I reviewed bankrate.com to see what their rates were holding at after the promotional terms end. I checked for hidden fees, easy access to money, ability to transfer between banks, etc. This was a multi-month process because I didn't want to commit and then have "deposit remorse" that I could be making more interest somewhere else.

This search ended with the opening of a high yield account with Capital One. Their 1.35% interest rate (I know, get excited) was far more stable and was higher than others on the market. I had long considered ING to be the right option for a liquid account, but their 1.1% and the continued decline of that rate took them out of contention. I looked at Sallie Mae, our own credit union, Ally, etc.

Cutting to the chase.They actively promote that funds transferred between external accounts and Capital One accounts will be available within 3-4 business days of the transfer. Sure fine. Technically I don't even need access right now, it's an emergency fund. It's principle people (wow, this soapbox is getting long tall).

Here's the fine print. On a separate website, in a separate section, three clicks down there's this language:

During the first 30 days following initial account funding, funds deposited into your account will be held for ten business days (available to you on the eleventh business day) after the day we receive and process the deposit.

For accounts opened and funded older than 30 days, funds deposited into your account will be held for five business days (available to you on the sixth business day) after the day we receive and process the deposit.

I only know this because I had to specifically ask why money I could see was deposited was not "available." Here is where as a marketer I cringe. They are using the word "post" in their ads, not "available." Thanks for the lesson in nuance banking world.

I read every word of what you sent me to sign and this was not in it. I'm guessing this was somehow referenced in a cloaked manner for me to deduce, but wow way to bury the fine print in a new and creative way.

So no, I don't have "deposit remorse", but I am irked as a consumer that the new "clear and easy terms" that we're supposed to be enjoying still aren't happening.

Focused on Savings

There's been an ongoing debate at our house (not just in my head) over how to save effectively for the future. Not just retirement, but emergencies and futures wants as well. Faced with the pleasant, but somewhat intimidating reality of moving from a "just get it paid off" mode to "hmm, where do we put $$ when you're planning for the next 60 years."

Not shockingly, after reading everything from Dave Ramsey to Mint.com, I wandered back over to my Motley Fool roots and started reading their personal finance materials again. There I rediscovered my confidence to not have to pay someone to manage my money (at least at this point).

The strange side effect of finally digging in and becoming an adult about our finances is that I'm slightly paranoid now about spending money at all. Brilliant you say, but not really. I can talk myself into going out for tex-mex for dinner faster than you can say queso, but I'll put off buying say work shoes because I don't want to spend the money.

I'm also more aware of how much less we could be living on. The statistics about the majority of the country living on or less than $50,000 a year keeps rolling around in my head. In DC you'd have to have two roommates and keep to a strict budget to really make that work for one person, it would be heroic for two.

So I continue to evaluate how to consume less in an effort to save more. But more importantly, I'm realizing living with less is possible.  Things on the savings block as of late:

• broken myself of a serious Crate & Barrel habit.
• cut out my high end spa trips for the occasional nice, but not nearly as swank pedicure.
• stretching a few more weeks between haircuts.
• always checking for coupons online before making an online purchase.
• using what's in the pantry to plan menus (having it overstuffed is pointless)

Not exactly saving the planet here, but it's a start.