A lot of readers weighed in on my post about a friend who stopped paying her mortgage. A few readers castigated me for judging my friend so harshly.
Marla said:
I wouldn’t want to be a friend of yours. Yes, she did something foolish, but in this time and situation, times are tough and your loss of sympathy for your friend isn’t right.
Others, like OCNanis, gave me the benefit of the doubt:
I am sure she & her friend are perfectly aware of what would be shared on the blog & don’t think BB would post her insight in regards to the situation if she hadn’t verbalized it to her friend already. That is what friends do. Tell you what you need to hear even if it isn’t what you want to hear.
I re-read my post and believe it was fair if also brutally honest. I’ve never been the type to hold back, but I try to share my opinion in a way that doesn’t offend. I do not always succeed.
Luckily, my friend read the post and the comments and wrote me to clear the air. I’ve changed the name of her partner to protect her anonymity, but otherwise these are her words, verbatim:
1) I did not buy more house than I could afford – when both Shawn and I were working we made our payments on time every month. We did that for 3.5 years.2) We never saw our decision to buy a house as a way to turn a quick buck. Like most young people we bought whatever we could afford and figured that in 3-4 years time we’d have enough equity to move somewhere more to our liking.3) Our decision to stop making payments was not done blindly. We thought about this for a LONG time and didn’t do it until Shawn lost his job. We are not irresponsible people but staring at a negative equity of more than $150,000 can push many people over the edge. I’m glad the post forced people into the conversation. It’s interesting how people can make judgments – good or bad – on folks they don’t know.Anyway just my thoughts. Oh – we sought the counsel of two financial advisers before making this move.
I’ve been tagged by Free From Broke in some kind of personal finance blog game called a meme. I don’t know what a meme is but it sounds like fun. Here are the Meme rules:
- Link to your original tagger(s) and list these rules in your post.
- Share seven facts about yourself in the post.
- Tag seven people at the end of your post by leaving their names and the links to their blogs.
- Let them know they’ve been tagged.
7 Things You Didn’t Know About Bargain Babe
1) I have two older sisters, two younger sisters and two younger brothers. I am one of seven!
2) I have a master’s in Jazz History and Research. The research part has come in handy, the jazz stuff not so much.
3) I hate olives, raw tomatoes, and mustard. Yick!
4) I am a triathlete. I like running the best but am faster at biking and swimming.
5) For my college graduation present my Mom bought me a plane ticket to Africa, where I lived with my peace corps sister for four weeks in rural Guinea. I ate a lot of rice, boiled all my water, and my latrine and shower were one and the same!
6) My favorite candy is Twix, followed closely by Smarties, Snickers, Sweet Tarts, Skor, and Charleston Chew. Also, ice cream is very high on my list of things I would die for.
7) I really like to drive my MINI fast.
There you have it, 7 things you didn’t know about Bargain babe!
To continue the fun I’m tagging:
- Frugal Dad
- Tightwad Tod
- The Simple Dollar
- Frugal Freebies
- The Frugalista Files
- Girls Just Wanna Have Funds
Hi folks, I accidentally sent out the blog twice today. I apologize. I changed the time the email goes out and for some reason the newsletter software thought I wanted to send it again. Tomorrow and every other week day you will only receive one email from me.
Thanks,
~Julia
The Budget Fashionista compiled some great tips to make money from cleaning out your closet, including how to decide what to sell and the paperwork you need for donations, selling clothes on eBay, selling clothes at a consignment shop.
Start the process by dividing everything into four piles, which the Budget Fashionista calls:
1. The I’m Going to Keep These for Sure pile
2. The I’ll Probably Keep These pile
3. The I Didn’t Know I Still Had These pile
4. The Get Out of My Closet, Vile Clothing! pile
When you are done sorting, put the first pile back into the closet. Go through pile two and sort between keeping/selling. Check pile three for anything that could be considered vintage and toss pile four. Now it’s time to make money!
Stiiiiiiiiiilll filing your taxes? Productivity 501 has a long list of sites where you can e-file for free. Note, some of the sites this blog suggests have income limits or are available only to residents of certain states.
No matter where you live, you can file free online by using the IRS’ Free File if you make less than $56,000. If you make more than that and are using forms 1040, 1040A or 1040EZ, use Free File Fillable Forms, which requires you do the math on your own.
A reader named Susan emailed me with an intriguing way to reign in troublesome spending.
One lifestyle change that has really made a significant impact is the Gift Moratorium. Years ago my 4 sisters and brother used to exchange little “gifties” – you know, the tchotchkey stuff you see and think, “oh my sister would love this!” The truth was, we all came to the conclusion that we could live without most of those little things.
One year my sister bravely called a moratorium on gift giving. She let everyone know that she did not have the money to buy us all gifts, and that her kids already had too much stuff. Since then, we have stopped exchanging gifts among our siblings. For Christmas and birthdays, I send a check to each of my nieces and nephews for $5.00. The little ones are thrilled to get any amount. When they turn 13 I kick it up to $25.
I have extended this gift moratorium to all my friends as well. For close friends I give the gift of my time – hours of free babysitting, petsitting, garage organizing, you get the idea. When I invite people to my home, I include on the invitation NO GIFTS. I tell the ones who can’t imaging not getting me a gift that I really want something I can’t buy myself, like photos of the kids or their artwork.
Recently I watched a friend go through a catalog, excitedly picking out $35 and $50 gifts for friends and family. This same friend can’t sleep because her financial situation is so tight. She is living on the edge, and has cut back on everything, even food. Yet she still wants to give expensive gifts – which may end up on someone’s re-gifting shelf.
I ‘d like to start a national campaign – “Just Say No” to gifts!
I love the idea of giving time and receiving childrens’ artwork or framed photos as gifts. I think of my nephews every time I see their paintings in my office. I love to pause in the hallway and look at family pictures.
I know my family would understand if I went on a gift moratorium, but I think it would be harder to explain to all my friends. Sure, my “real friends” would understand, but it would still be awkward to explain my decision. I suppose that is the first part of the challenge – figuring out a way to talk about money as if it were the weather.
Would you go on a gift moratorium? If yes, how would you tell your family and friends. If no, why not?
We’ve all heard about people walking away from homes worth less than the mortgage, but until recently I did not know anyone in this situation. Then my girlfriend told me she and her partner were stopping mortgage payments. WHAT???
My friend paid $470,000 for her home in 2004. Now it it worth $300,000, according to Zillow. My girlfriend and her partner bought the home with two loans totaling 100 percent of the home’s purchase price. The intended to sell it before their main loan reset. When things got sticky no one would refinance because they lacked equity. The market crashed and, well, you know the rest.
In January they stopped paying their $3,100 mortgage. She feels guilty, but then her partner lost his job so she reasons they would not have been able to keep up with the payments anyway.
Her father, who stopped paying his mortgage in August, just received a letter from his bank saying they were willing to work with him. She hopes the same thing will happen to her.
“You can’t have a nation of people with s—y credit,” she said to me recently over coffee. “There’s got to be a forgiveness program.”
Maybe, I thought. But why in the heck did she buy the home, which she did not even really like, in the first place? She and her partner were making interest-only payments that added up to more than 30 percent of their monthly income. Come on, girlfriend!
“We believed in two years the market was going to be great,” she said. “We would sell the home, make a few thousand, and buy a home we really wanted.”
As an outsider, I can’t help but think she should have been smarter about buying the home in the first place. But then again, Hubby and I also bought a home just before the market peaked that stretched us financially. The main difference between my friend and me is that my mortgage was 30-year fixed and we sold the place before the bubble deflated.
I wished my friend had not made a decision that, in hindsight, was a bad one. If her bank will not modify her payment, she will have to file for bankruptcy.
On the other hand, if she negotiates a lower rate and can stay in her home, I will not feel like she has unfairly gotten ahead of folks like Hubby and I, who played our cards conservatively. My friend has a huge ordeal ahead of her (read: stress and paperwork) and if things work out well, she will still be living in a home she does not really like.
NPR says walking away from a home need not be a shameful decision. The station’s reporters found a web site called You Walk Away that “empowers homeowners who purchased their homes at the peak of the real estate market to take control of their financial future.” Which is not-so-subtle code for reneging on your mortgage.
The site has an interactive calculator that helps you figure out whether you should walk or not. Seeing how their business is helping people walk away, I’m guessing the calculator is biased. Still, it may be worth looking into for some readers.
For some time I have been a fan of FreeShipping.org, which is a great site to search for free shipping coupon codes. They just launched a blog called Go Frugal that combines tips from a number of savvy-spending bloggers, including myself!
Posts will share tips on how to have fun on a budget, how to look sharp for less, and many online bargains and freebies.
The site also has a new service called My Favorite Coupons, which lets users create a personal page that has their favorite coupons. You can get daily or weekly email alerts, too.
A recent visit to my Uncle’s house shed light on a disturbing email I received from him which said that a recession garden (even the Obamas have one) does not actually save money. GASP?!? Was I fooling myself to believe planting one could save $500?
My Uncle has been gardening for 30+ years so I took what he said as the truth:
- It takes a LOT of time to pick, freeze, juice, wash, and prepare the food grown in your backyard. My Aunt swears she has to wash the lettuce four times!
- You have so much of one thing at one time that you can’t eat it all or preserve it all by freezing or juicing. So you end up giving most of it away, which is not financially beneficial (though popular with friends and family).
- The quality is inconsistent. Sometimes the tomatoes look great, other times they are inedible.
What it comes down to is that a recession garden is time consuming and inconvenient. It’s not like going to the grocery store and pick out the tiny quantity of whatever vegetables you need, my Aunt said as she washed three pounds of snow peas.
I like the idea of growing some of my own food. But as a bargain hunter I’m curious. Has a recession garden saved you money?
Hubby and I are rolling out our tax paperwork this weekend and crossing our fingers we won’t have to write a check. If you doing your taxes this weekend too here are some last minute tax tips:
Charles Schwab suggests 8 tips to lower your dues to Uncle Sam, including verifying eligibility for the Alternative Minimum Tax.
SmartMoney has put together a 36-page PDF brochure that covers everything from how the stimulus bill will affect your taxes to tips for small business owners and tax traps.
Fox Business lays out just how expensive it is to NOT pay your taxes by April 15. Also, did you know you can pay your taxes with a credit card? I’m scandalized!
Still confused? The Washington Post’s money guru Michelle Singletary is hosting a live chat to answer your tax questions on April 9 at 9 a.m. PST.
My bi-monthly radio appearance on the Internet radio station TalkRadioOne.com is tomorrow, Friday April 3. Please join me and host Marc Germain by going to TalkRadioOne.com.
If you have the right software, you should hear the show playing when Marc is “on the air” between 8 pm and 10 pm. I am coming on at about 9:30 pm.
If you miss the show, look for a MP3 audio file dated 4/3/09 and click on it to play the show. Move the cursor around to get to my interview. Thanks for tuning in!
I am a red meat and potatoes kind of girl. So giving up all meat for Lent is one of the healthiest – and cheapest – decisions I have made in a long time.
I’m not really religious but I think it is important to remember what it feels like to want something you cannot have. My deprivation is artificial, but reminds me of all I have in my life.
I have already slipped up twice – chicken wrapped in bacon! – but I hope to win a few brownie points with God by highlighting the virtues of practicing sacrifice. This particular sacrifice has the added bonus of saving me money. Wahoo!
My grocery bill in February was $364.96. In March it was just $157.78. Not all of that drop is because of meat, however. I was out of town for two weeks last month, so I’m guessing when I was gone Hubby took most of his meals at work (they bribe the employees with grub to work longer).
A more accurate comparison is the cost of vegetarian protein v. the cost of animal protein. A 14-ounce can of black beans that provides 3 meals cost $.89 at Trader Joe’s. A 19-ounce pack of organic tofu that will generate 5 meals cost $1.19 at Trader Joe’s. Total cost for protein in 8 meals: $2.08. Protein cost per meal: $.26.
Before I gave up meat I bought a whole chicken for $7.48 ($.99/lb) at Albertsons that would have made 6 meals. A pork shoulder for $6.88 ($2.99/lb) would have made 5 meals. Total cost for 11 meals $14.36. Cost per meal: $1.30.
Meat is expensive! To be exact, meat costs $1.05 cents more per person per meal. For a family of four that eats meat 7 nights a week at dinner, going vegetarian could save you $29 per week or $1,522 per year. If you buy pricey cuts of meat, you will save even more.
I could never give up meat – I am already planning how to break my fast – but now that I know how much eating vegetarian saves me, I’m going to pass on meat more often.
Here are some of the recipes I have been making while eating vegetarian during Lent. Only 10 more days until I can eat meat!!!
Green lentils over rice
Grocery list: lentils, yellow onion, spices
Soak 1 cup of green lentils overnight to reduce cooking time. Cut up a whole yellow onion and saute lightly in oil. Drain lentils and add them to the onions. Add a teaspoon or more of yellow curry, cumin, and salt to taste. Add enough water to cover the lentils and plus an extra 1/2 cup. Simmer over low heat for 15 minutes or until lentils soften. Serve over rice. Optional extras: cherry tomatoes chopped into pieces, diced carrots, chopped walnuts. Makes 4-5 servings.
Brussels sprouts with balsamic vinegar
Grocery list: a dozen Brussels sprouts, garlic, balsamic vinegar, yellow onion, butter
Peel any loose or damaged leaves off the sprouts and wash. Cook in boiling water for 5 minutes. While they are cooking saute chopped onion and 2 cloves of garlic in olive oil. Add the sprouts and saute until they are cooked to your liking. Slice in half, then add 2 tbsp vinegar and toss. Add 1 tbsp butter, salt and pepper and toss again. Makes 3-4 servings.
Tofu tacos
Grocery list: onion, garlic, spices, 1 package tofu, tomato, tortillas
Drain tofu and pat it dry with paper towel. Slice it into half-inch cubes. Chop onion, tomato, and garlic. In a large skillet, heat 2 tbsps of olive or canola oil. Saute onion for 4 minutes, then add garlic and cook for another 30 seconds. Add the tomato, 2 tbsp chili power, 2 tsp ground cumin, and tofu and cook for 8 to 10 minutes. Salt to taste. Heat tortillas in toaster oven, microwave or on stove. Top with tofu mixture and other fixings such as lettuce, cheese or salsa.
What are you favorite vegetarian recipes?
As much as I love saving money by not eating meat (gave it up for Lent), I am already day dreaming about how to break my fast on Easter.
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