My Kind of “Free Market” Economy

Last week, one of the coupon mom bloggers I follow on Twitter mentioned that she had posted on Freecycle to give away some of her stockpile of feminine hygiene products and got a response from someone who thought they were a weird thing to give away. She questioned her own judgment in these matters, and it got me thinking about the massive quantity of such things that I just got for free at Rite Aid last week (paid with $16 on a gift card from a previous deal, earned a new $25 gift card). So I went on my local Freecycle site, which is run as a yahoo group, and searched for anyone wanting or giving away pads or ‘pons. Lo and behold, I came across Dana, who has a medical condition that requires a fairly large and constant supply.

Dana and I have exchanged a few emails, and she’ll be picking up 10 packs sometime this week when she can borrow a friend’s monthly Metrocard and save the subway fare. She asked if I’d ever attended any of the Freecycle meet-ups — I hadn’t, because they’re held in Brooklyn, plus I picture a cruddy, dusty flea market. Then she told me about the Really Really Free Market organized by a local anarchy organization and hosted at a midtown church on the last Sunday of the month, and unfortunately I wasn’t able to make it because I got some work. I wouldn’t have gone anyway in that abominable weather — Mother Nature was cycling through every type of rain in her arsenal at warp speed. I wasn’t too disappointed, figuring it would probably be a grubby, dusty flea market.

Last night, Dana emailed me about her afternoon at the Really Really Free Market. First, she listed the things she’d brought (clothes, shoes, carrots books), and that pretty much met my expectations for a flea market, except for the carrots. Food? thought I. How odd, how…useful. Then she mentioned a bunch of tarts which were being given away slice by slice, to be eaten on the spot. That caught my attention. But what really got me to reconsider the whole cruddy flea market expectation was the collection of goodies she’d brought home with her:  bananas, eggplants, ex-swag tea mug with strainer, bread, fresh cut roses and sunflowers, cosmetics, perfume. Why, these are things I would either want or be delighted to bring as my contribution.

So I’m thinking that this is yet another resource to tap into, and a way to offload quality unused items I couponed down to free in return for things I (or my collection of broke folks) really need and would otherwise pay for. Like bananas! Still, I need to do my homework on all this – I wouldn’t want to show up with a bag full of shampoo and toothpaste at a clothing swap. Stay tuned for tales of my rather odd “free market” endeavors…

Charity on the Cheap: Donating school supplies

It occured to me last night that I will have access to more free school supplies than my adopted/sponsored family will need. So I hit up Freecycle, Craigslist and Google for some ideas and got lucky with the ol’ Googler. Those of you who like to donate things instead of money are going to love what I found:

While many of you may have heard of a site called Donors Choose, where teachers list projects or supplies for you to fund at whatever level you want, I found a site that works a little differently and more in line with how I like to give domestically:  ILoveSchools.com. Teachers list things they need and, while you can give money to fund the purchase of such things, this service seems geared more towards the direct donation of goods, and even gives tips on safely meeting up for the delivery. I plugged in my zip code and the type of items I wanted to donate and found a public primary school and a non-profit after-school/summer-school day care center in need of school supplies, including the extreme basics like pencils, just a 7-minute walk from my home.

There are tons of ways to get heaps of school supplies for free or what looks to me like sub-wholesale prices at CVS, Walgreens and Staples – other places too, no doubt, but these are the only ones I have easy access to in Manhattan. Anyway, these sales are right now, when most teachers aren’t pulling in paychecks, and families that are barely making it would rather put $3 towards milk and toilet paper that they need right now than a great deal on 5-subject notebooks and folders that won’t be needed for 6 weeks. In conjunction with ILoveSchools, this presents a great opportunity for those of us out there who:

• Prefer giving things rather than money.
• Really want a community connection. I’ve come across a lot of people who don’t like giving internationally or even nationally – they want to make a difference locally.
• Don’t have a lot of money to spare for charity and think that $5 won’t do much anyway. Well, if you take that $5 to Walgreens today, you could walk out of there with 5 x 10ct packs of Papermate Pens, 10 highlighters, 5 x 10ct packs of pencils, 5 rulers and 2 bottles of glue without a single coupon or “Register Reward”. Want to make it even better? Before buying any of those things, do 5 transactions on their special G2 Pilot gel ink pen deal (love those pens!) – 2ct pack for $1, get $1 back in Register Rewards (no card or club membership required – really easy to do as long as you remember to just buy one pack at a time). Then buy all the other stuff with those RRs. Your donation is then increased by 10 high-quality pens for the teacher, for no extra cash except maybe tax (they change what is and isn’t taxed so often in NYC that I have no idea). That’s a decent sack of goodies for $5.03! And I talked a friend through 3 transactions at CVS the other day where $5 got her 2 packs of loose leaf paper, 2 packs of pens, 2 assignment pads and 2 Speedstick deos – and she has $6 of store credit (ECBs) to spend on things next week. That $5 is going to get recycled through all the back-to-school sales and will likely produce over $100 worth of donated supplies by Labor Day.
• Are worried about being scammed. What in the world could anyone do with 2-cent pens that would make you feel cheated? These things have no street resale value or prestige attached, and honestly if someone is that desperate for so little money that they’ll attempt it, they can have at it. 
• Hesitate and yet are curious about very personal giving. You are giving to the teacher, who is really the middleman. While it saves them from dipping into their pockets, the beneficiaries of your efforts are actually the students. It removes the layer of weirdness I know a lot of you anticipate feeling in a situation like the one I’m in with giving food and household supplies to Ayten every week.
• Salivate at an opportunity to make a donation that goes 100% to the project/need and 0% to administrative costs. Hey, this blog does fall under the PF umbrella – so why not mention the whole “bang for your buck” angle?

Give it a shot, blog about it, and be sure to let me know that you’ve done it. Trust me, it’s FUN.

Revisiting my food budget

In a recent post about my whole life policy budget item, FrugalShoppingIdeas left the following comment which has had me thinking ever since:

The amount you set up for restaurants is sooo high though! There are so many free options these days or discounted. Even at Arby’s, buy a soft drink and you get a free Roastburger. haha Restaurant.com has deals pretty often where you can get a $25 gift card to a restaurant thats listed for only $3.

I don’t really keep track of my spending for this, just because it would be fiddly. I tried for a little while, using some of the online budgeting tools (Wesabe and Buxfer, to be exact – chosen because at the time, they were the only ones that let you input cash income and purchases), but accounts like PayPal and ING Direct were getting screwy so I stopped.

My eating out budget is high because (a) I get a lot of take-out, and (b) those great fast food deals that FrugalShoppingIdeas mentioned are very, very limited in NYC – the chains either don’t have any branches in NYC, or they just don’t participate in promotions. So no free slurpee at 7-11 on 7/11, for example, because there are no 7-11’s in Manhattan. But I take advantage of anything I can — well, except things like yesterday’s free pastry at Starbucks because I really don’t need the calories.

I decided to keep one of the free assignment pads I got a CVS on Sunday for myself, so I can keep track of food spending. When I created that budget back in September, it was really just a guess and a lot of my habits have changed since thanks to both bargain-hunting and health restoration (no, I’m not sick – just fat again, which sucks). Even though I buy groceries and household items for another family, I think I’m spending quite a bit less than I used to. So here’s the influence blogging has had on my food spending…

It turns out those restaurant promos are for real. Whenever I visit my mother, we don’t automatically go to her favorite steakhouse. She’s totally up for a deal, and we have taken advantage of the last two BOGO entree specials at Ruby Tuesday’s (sheer chance that my visits coincided with them). Not only does it save me about $30 on a meal for two, but Ruby Tuesday’s doesn’t offer unlimited free homemade bread like her steakhouse of choice – which my waistline appreciates.

I double-coupon shop by “electricity”.  I look at online circulars for the supermarkets in my mother’s area that double manufacturers’ coupons, then send her coupons and a little list to do along with her own shopping. I’m lucky if I can get 8oz of cheddar for $3 in NYC, but there I can get it for under $1. And I go through a lot of cheese. It’s also how I get free and nearly-free food for donation (tomato sauce, mustard, pasta/rice side dishes, peanut butter, salad dressing, cereal, brownie mix, etc).

Chain restaurant promotions – unless there was a commercial for it (and even then I figured there was a lot of fine print), I never knew about it. I now think of them as “treats for free” – a meal from KFC, McDonald’s Free Mocha Mondays, ColdStone Creamery birthday club, Starbuck’s volunteer pledge coffee. I also sign up for their online clubs – no need to ever pay full-price at KFC again.

CVS ExtraBucks system = free milk, free eggs, free iced tea whenever I want it, meaning I don’t wait for deals and just use up some of those “bucks”. Besides, drug stores in NYC have the best day-to-day prices on milk and eggs anyway, go figure. Also, there are times when it’s worth burning a few “bucks” to pick up the slack on cereal, crackers, spices, mayonnaise, coffee, nuts/cookies/snacks, tuna, gum deals.

I never say no to doggie bags and leftovers. I don’t actually do this for financial reasons – I do it because I hate cooking and don’t have a lot of variation in my home-made repertoire. It adds variety, costs nothing, and tastes better than anything I can concoct. Hm, maybe I’ll encourage my mom to make her artichoke and cheddar quiche for us when I visit this weekend, and then make off with a big chunk when she’s not looking. I’m her kid, that’s what we’re supposed to do, right? I mean, just because I’m too close to 40 for my own comfort doesn’t alter my birthright to pillage the contents of my parents’ fridge.

Anyway, I’m not going to let recording my food spending alter my spending habits – I might if I think they’re ridiculous though, but for now, I’m just going to figure out the reality.

A shout-out to my new “helper”

I’ve mentioned before that other people have helped my charity activities (unsolicited, which makes it all the more meaningful) by sending me their coupons, jumping into the fray at the shelter to cook for the masses, donating to causes I’ve blogged about, and one even mailed a $25 Walgreens gift card for me to pass on to the family I “sponsor”. You are all soooo awesome for doing all this — and for putting up with some of the odd things I do and write. Those of you who’ve met me have continued to read, communicate and meet up, so I’ll take that as a sign that I’m not too much of a whack job.

Anyway, my newest “helper” is Debbie over at On The Banks of Stony Creek. Last month I mailed her the Zyrtec I’d made money on at Rite Aid — oddly enough, no one I know or help suffers from hay fever/allergies. She offered to PayPal me some money for them, but I declined since I’d actually made over $20 on the deal. Well, my fellow CVS nutcase (and I mean that in the most complimentary way!) found a fantastic way to repay me this past week…

I don’t have the right coupons to get diabetes test meters for free that will generate a $5 ECB — in other words, free money. There are two types of meters and the limit on each is two, so do the math…that’s $20 free money to spend at CVS. I also haven’t figured out a place to donate these meters, so instead of having her mail me coupons for a product I might not even be able to find or find a home for, I gave her the phone numbers associated with the cards I use. In other words, this wonderful Coupon Crazy generated $60 worth of store credit to use as I please, and snagged 12 more meters to donate to her patients.

Debbie, you ROCK.

Shopping for Free for Me + Three

I was in the mood for a coupon orgy this weekend – I had about 30 Kelloggs coupons that I just couldn’t let go to waste, especially since I had gone out of my way to buy them. I asked my mother if I could mail her the coupons to do 3 simple orders at Target, but she threw a fit — apparently way too much of her living room is cluttered up with free Ragu, mayo, mustard, salsa and toilet paper awaiting my next visit. A blogmate (There must be a word for people you meet through your blog but I don’t know it) in the Jersey burbs was kind enough to let me tag along with her Saturday coupon shopping errands…

Target had Kelloggs cereal on sale for $1.88 a box. There’s a rebate deal where you buy 10 Kelloggs/Keeblers/etc products and you get $10 back. I did three orders of 27 boxes of cereal and 3 boxes of Eggo waffles. Four items were for the blogmate, who wasn’t doing the rebate deal, so I forked over $23.60 for 24 boxes of cereal and 2 boxes of Eggo waffles and will get $30 in rebates eventually. I might even submit for a fourth – I also did the so-so Special K deal at CVS, so I’ve got half of another rebate’s worth of items. Yeah, it’s only one rebate per address, but that’s what family is for, right? Maybe I’ll even have one sent directly to Ayten (“Working Poor Mom”).

Speaking of Ayten, we met up on Sunday and I was able to observe one of the differences I’ve made. She showed up in her (probably uninsured) 12-year-old car that she parks in a warehouse district for free because she rarely has gas money. Her office is moving, she decided to “multi-task” and pick up her work things and her care package – and take her mostly-blind diabetic friend who rarely gets out for a spin. A month ago, Ayten has asked if I could put together a nice little care package for this friend, when she was hospitalized after attempting suicide, so it was nice to meet her in person. Anna, the blind lady, had made a list of products she frequently uses in case I came across such freebies. Yay, a new shopping challenge! My only problem with the list is the cat food – honestly, does any cat eat Friskies anymore, or do all you catlovers out there spoil them rotten with Fancy Feast?? Coupons for that one suck. And I have no idea what Deli Cat is. Not really complaining, I just don’t get the whole treat-pets-better-than-people thing that I observe way too often ’round these parts.

Since Ayten came on Sunday after I’d done my Astoria CVScapade, I gave her a massive load of school freebie school supplies along with the usual. Honestly, between CVS freebies, Staples penny deals, Walgreens 29-cent deals, etc., I would argue that it’s cheaper than ever to gear a kid up for school. I started buying my own notebooks and stuff when I was 12, and there were never sales like this. Ever. Maybe it’s been going on for years, but being a non-mom and a non-student, I haven’t really been taking the retail pulse of these items. But boy did those two full bags of 1, 3, and 5-subject notebooks, pens, folders, binders, loose leaf, glue, etc. put an enormous smile on Ayten’s face. When we first met, she told me how she always stocked up on school supplies in August and lived for Staples dollar and penny deals. Her kids go to NYC public schools and are required to provide the classroom with certain supplies, which she gets a list of at the beginning of every school year. I don’t remember everything and she might not have told me everything, but I remember loose leaf paper, pencils (or pens?), paper towels and toilet paper. I’m just remembering this now and am a little annoyed with myself for not hitting up Rite Aid last week for their Bounty Basic deal (BOGO @ $1.29, coupon for $1 off 2 = 15 cents each, and I had 3 coupons). But hey, I handed over 600 sheets of loose leaf, woohoo. Anyway, she mentioned this as being a very embarrassing source of financial stress, because it was putting her in a position to tell her daughters that money was so tight that there wasn’t an extra $30 to spend on this stuff, which would then put the girls in an awkward position with their teachers. It was the constant trickle of “little” things like this that drove her to begging on craigslist back in May.

I’m planning to offload a ton of cereal at the teen shelter tonight. There are so many boxes in a single stack in my closet that the bottom ones are getting crushed. I’m just glad I could get them all out of sight. It’s so tempting to just walk up to the homeless men who sleep on the steps of a nearby church and just hand them boxes of Frosted Mini Wheats…less stress on my shoulders. And hands. Oh yeah, one of the plastic bags filled with cereal cut of the circulation in my left index finger for about 90 seconds on Saturday, and it’s only just returning to normal-ish 48 hours later. Do you know how scary that is to someone who has nicknamed her hands “the moneymakers”??

My Pricey Neighborhood: The Awesome, The Annoying, The Absurd

I had a particularly dense 24 hours of unexpected entertainment without wandering more than a few steps from my eyrie bower. You tell me if this justifies or explains the hefty price tag on said bower…

Wednesday afternoon, I nipped out to mail some coupons to my mother and couldn’t get to my usual mailbox of choice – first thing I noticed were the news vans with the telescopic satellite transmitters. Second were the corralled masses on the sidewalks. Clearly something pretty awesome was going on at the David Letterman/Late Show studio half a block over, and the nearest policeman confirmed it: Paul McCartney would be performing live on the marquee. He told someone else he didn’t know when the concert would start, but it really doesn’t take a genius to figure that out – the show starts filming at 5pm, and the few concerts I’ve stumbled across in the past have usually kicked off around 5:30pm. The Cute Beatle started at 5:25pm and kept at it for 40 minutes — twice as long as Phish gave us a few years back. I’ll say it again, awesome.

The following day, I caught something in the lunchtime news about our president being in the city today. I googled and found out he’d be giving a dinner speech at the NAACP convention. At the Hilton. On my block. I realize the man seems to have rock star status these days, but I hate when presidents are in the ‘hood – Clinton with his own personal UN meeting every September, and in the past, Bush giving speeches at the Hilton or attending fundraisers at the Sheraton. Can we say snipers on the roof, ear-wigged G-men in the street, and 6 hours of random street closures and not being allowed out of my building (or into it, if not already there) for 10 minutes or so at a time. Yeah, annoying. Very annoying. I had no business that day.

In between these two events, I picked up my mail and found a stuffed blank envelope in my cubby, with nothing but an apartment number for a return address. A penthouse apartment number. Of someone whose name I can’t mention because her media watchers found it in my blog and…well, let’s just say that I’ve deleted all past posts on a certain apartment-related subject. So for the sake of calling her something, let’s go with “Ms. Stonefeller”. I’ve been invited to a cocktail party fundraiser to campaign against some kind of building plans that will mess up the skyline (I translate this to mean “her view”). Apparently there’s some kind of neighborhood preservation society for a whopping 2 blocks, and it’s a registered non-profit/charity. How…noble. But I think I’d rather spend the $75 minimum donation providing supplemental support for my Working Poor Mom and her daughters for two months Or paying a rescued girl’s school fees and related costs in Nepal for a year. Or finagling 250 boxes of cereal for the teen shelter. And when all is said and done, it’s beyond absurd that someone like this would have the gall to ask for contributions from people with about 5 zeroes less on her net worth statement. But if she needs a cup of sugar (or better yet, a box of Raisin Bran, to alleviate the stress on my closet space), she’s welcome to knock on my door – I’m happy to do that kind of neighborly thing.

When all is said and done, I’d say that this month I got my rent’s worth of home entertainment – the awesome rock concert, the annoying presidential security measures, and the absurd invitation from my, uhm, neighbor – in just 24 fun-filled hours.

Kiva: The End of a Love Affair

I started participating in microlending through Kiva about 20 months ago, and have cycled my $225 through 28 loans so far. Actually, it’s down to $212.50 because a bunch of borrowers in Ecuador defaulted after an earthquake, and the one I was in on had only repaid half, hence the odd amount. For those who don’t know, Kiva is essentially a way to provide microlending institutions (which sound like credit unions, Third-World style) with free capital, and you get to choose exactly who you lend to. You do it in $25 chunks with other lenders until the loan is funded. You get no interest on your funds, Kiva takes nothing, and the local microlending institution charges a massively lower interest rate than the borrowers qualify for elsewhere – meaning they can’t get a loan from a “normal” bank and can only get one from, well, their societal equivalent of a loanshark. In essence, we are capitalizing these microlenders/credit unions.

Last month, Kiva piloted a “microlending” program right here in the USA (I use quotes there because I don’t consider a $10K loan to be micro). A lot of Kiva lenders have expressed vehement disapproval on the basis that it draws available funds away from the developing world. But I object for a number of other reasons…

The Interest Rate
I had a look at the website of one of the U.S. microlending organizations that Kiva deals with, Accion USA, and their loans are made at interest rates between 8% and 15% (closing costs of 3-5% are waived for Kiva loans, it bothers me that they apply to any socially conscious loans. Or any loans at all, really). Kiva considers the comparison base – typically the only alternative, according to Kiva’s website – as 127%. I’m guessing that figure is based on a payday loan? What I’d like to know is how accurate this is as a basis for comparison, especially since none of these people even draw a paycheck to link a loan to. Is it really the only viable alternative? If so, that’s not someone who should be getting ANY kind of loan. Many of the borrowers sound like they have access to credit cards (heck, some even own their own homes – I don’t!), which, as much as they would like to, don’t charge anywhere near 127%. Heck, until a few months ago, it was practically in the Bill of Rights that we are entitled to credit cards with limits equal to our gross salaries. In triplicate. Sorry – off on a tangent. My point is that I have very serious doubts that a 127% loan is the only option for any of these folks, and it casts a lot of doubt in my mind over Kiva’s statistics for all the other countries.

I’m already capitalizing plenty American banks with my taxes…
…why would I want to do it with my real money? Our money is lent through a bank that gets all the interest while not sharing one tiny bit in the liability. In other words, it’s kind of like a high-risk/no-return savings account. I inherently don’t trust Americans who can’t plan for an annual car insurance bill that they know about all year long, or who left a professional job without enough in savings (and really, we’re not talking a whole lot by our standards) to get a new biz off the ground. Despite the current credit crisis, I just don’t think most Americans take debt seriously after decades of easy credit and cheap tranfers/refi’s — I opted not to participate in things like Prosper (p2p lending for profit) because I really didn’t like the delinquency and default rates, even for people rated as low-risk. I think folks in the developing world have a much greater appreciation for the loans and programs that microlenders offer.

I would much rather put food on someone’s table…
…than gas in someone’s financed car, or premium channels on their cable package. I believe this falls under “Return On Investment”, meaning that at a lower level, my free capital achieves a great impact in terms of how the income from the improved business is used. That’s not saying there aren’t low-quality loans in other countries — you wouldn’t catch me funding a Lebanese man’s wedding (sorry, no link, I stumbled across it over a year ago but it really stuck in my memory) — but in the vast majority of cases, the money is life-changing.

Of course, the beauty of Kiva is that you only fund the requests that you want to, so it’s not like I have to invest in a US-based “entrepreneur”. However, I still can’t get over the implication that Kiva lenders would be investing their free capital in people whose credit is so bad that their only alternative is, on average, a 127% loan.  That’s either a terrible gamble or an inflated and misleading figure.

Please, Kiva, go back to your original mission of alleviating poverty. Having to rent a shed instead of owning one outright for $10K is not a hardship by anyone’s definition – especially when there are people out there just trying to maintain a $6/day income.

Charity or Sharing: A dignified blurring of the lines

Last month, I picked up some Keebler Pecan Sandies on a drug store deal with the intention of giving them to Working Poor Mom/Family. But she didn’t come to collect her goodie bags fast enough, and I…I…I opened the package and ate some. For breakfast. In an effort to save my waistline, I taped up the package, put it back in the bags of groceries earmarked for her and gave her the option of rejecting the open cookies. Hah, as if – those cookies are too tasty. Her take on the cookies was “we’re sharing”. I liked that…we’re sharing.

Now fast-forward to this past weekend, where my mom observed my purchase of 4 medium-size bottles of Excedrin, 12 bottles of French’s mustard, 2 bags of Chex Mix, 3 lbs of hamburger meat, 1 lb. of mozzarella, 2 bags of salad and 2 big bottles of Kraft salad dressing for a grand total of … $9.09 (total based on sale prices but before coupons: $35.10). Although she knows I have this “adopted family”, she didn’t understand this grocery order — What are you going to do with 3 lbs of meat, you’re one person? That salad is only good until the 14th, you’d have to be a rabbit to get through it all! If you’re trying to lose weight, why are you buying ranch dressing and chocolate chex? All very valid questions until I explained stockpiling and my new concept of sharing.

I kept 3 of the 4 Excedrin, half the meat, half the cheese, half the salad, half the dressing. Even using coupons and sale prices, that alone would have cost me $14 in Manhattan in a very good week. So I felt like I got $6 off my stuff by shopping in the ‘burbs, and the rest of it was a bonus for my adopted family (well, not all the mustard – most of it goes to the shelter, which is always in need of condiments). I hauled it all back to NYC on the train, cooked or froze the meat, and bagged up the rest to give away. I explained this plan to my mom, and she asked on Wednesday after my weekly visit with Ayten (a.k.a. “Working Poor Mom”) how it went with the meat, etc. It must have gotten her wheels turning, because this morning…

Mom called to discuss a great deal on a big ham shank, wondering if there was a way to make it work for my “broke-ass family”. Hard not to laugh – there was a time when she and the rest were my broke-ass family! Anyway, back to the hunk o’ ham… It was just .49/lb but would weigh in at around 8-10 lbs. I told her to get it, cut off whatever she wants for her purposes, I’d cut off whatever I wanted for myself, and the rest would go to Ayten and her kids. If it turns out they’re not ham-lovers, then it could go to the teen shelter. Once she established that there was no such thing as a food shopping mistake, she sounded quite happy with herself over her “find”…and then, in order to appear less of a dork for getting all excited about cheap ham, threw in: 

“Well, we had to get them something to go with all that free mustard!”

Whole life policy: Good or bad decision?

Last summer, my financial advisor talked me into a whole life policy with an annual premium of $9K. Two weeks after signing on the dotted line, Lehman crashed and the value of our country and planet spiraled. I have since been questioning my ability to keep up the payments, whether it’s the right product for me, the security of Mass Mutual, etc. I still don’t have a clue, but I have an odd source of perspective in my even odder personal history…

I’m thinking that it was a much better decision now than when I made it for a number of reasons, the first being that it has a guaranteed minimum appreciation. The main reason I went ahead with it despite not entirely understanding the nuances of how it works is that it’s nearly identical to a very popular mortgage-attached product in the UK called a “with profits endowment”, with which I have significant familiarity. In the UK, instead of having a traditional repayment mortgage, you could opt for an interest-only deal and the portion that would have gone towards the principle is invested in this product. However your ability to repay the mortgage in full at the end of the term hinged on whether that endowment achieved it’s projected value, not its guaranteed value. Bonuses to the policy’s value are locked in annually (again a feature of both the US and the UK products) and therefore protected from future market fluctuations. The worst that can happen is that the policy only increases by the guaranteed minimum. It seems that the UK product was heavily marketed as a mortgage alternative in the 80s and early 90s (possibly the 70s too, but I honestly don’t know), and there were all these delicious news stories  in the late 1990s about people who’d chosen the 15-year term option getting massive windfalls upon cashing in the policy. Think about where the Dow was in 1982 (800) v. 1997 (9000) and you’ll understand what I mean. No, people didn’t increase their wealth by a factor of 10, but it was extremely common to hear of people whose policy value exceeded the minimum value by 100% and their mortgage needs by 30-50% when the time came to cash it in. Now do the math based on a $100,000 mortgage.

Which brings me to my second reason for liking this Whole Life decision:  the economy is in the toilet. Anything, ANYTHING that Mass Mutual invests in was already down significantly when my money went in, and dropped further. I think that over the next few years, those locked-in policy bonuses will be rather sweet, since there’s so much room for rebound – which is a wonderful thing this early in the life of such an instrument…right? Or am I missing something?

The major hurdle for me is the monstrous premium. I based my level of savings/investment on my income not dropping more than 10% from its 2007 to mid-2008 levels, and it has dropped more like 25%. The premium will be due sometime in September, and right now I’ve got $5K out of the full $9K set aside. I thought I had two ways to make up the slack this year, but neither has come through – one being my brother’s huge bonus upon the sale of the company he works for (which fell through), the other being Bridezilla repaying a $6K car loan. She doesn’t start her first job as a nurse until August, is getting married in September…yeah, that’s not going to start coming through in time.

So here are my options for handling an anticipated shortfall of about $2500:

1. Pay the full annual premium, making up the amount I’m short from my savings account (emergency fund), and cross my fingers that this is the only year I’ll have to do such a thing.
    
2. Opt to pay in installments. The downside of this is that it’ll cost about 2-5% more because I’ll lose the little discount I get for paying up-front. The less frequent the installments, the smaller the extra amount. I could conceivably choose semi-annually with the next chunk due in March, but I really don’t like the proximity to tax time and IRA contribution deadlines.
3. Pay what I can, call that the new premium, have the policy value adjusted accordingly. I hate this one because I get no benefit from the difference between what I paid last year and what I pay this year; the money just goes poof.
4. Do 15 “naughty” massages in the next 10 weeks. Okay, that’s an absolute 100% joke – I just put that in there because this post needed something to wake you all up. And to shock any relatives who ignored my instructions from two posts ago to never ever visit my blog again. Heh. Serves you all right for ignoring my wishes.

Stockpile Distribution Etiquette

My recent post about working the drug store games attracted a very thoughtful and relevant comment from one of my readers:

The down side [of bargain-hunting] is that as much as [my mother] loves a bargain, she looks for things not only for herself, but for everyone who lives close enough to her for her to give things to them. It drives my brothers crazy, because there comes a point at which her bargains– even the food ones– are junk coming into the house that they need to get rid of or find a place for. I’m glad that I don’t live close enough to her for her to be foisting so much stuff off on me. As it is, she’s sent me a few boxes of things that–yes, they’ll be useful eventually, but I didn’t really want them at that moment. It’s not always a bonus. Even if you’ll eventually use 10 bottles of glass cleaner, you only need one for now. The other 9 are a pain if you don’t have space for them. And sometimes, the reason a person doesn’t have an item is because he or she doesn’t really want to have it. Cost isn’t a factor– desire is.

I’m not saying that your family isn’t grateful and I’m not saying that you (or my mother, for that matter) shouldn’t enjoy what you do. I’m just saying that as a sometimes recipient and as a sibling of more-frequent recipients, there are times when “take it, it was free!” or “here, it was a bargain!” can be a nuisance.

Actually, I’ve never been on the receiving end of this kind of behavior so I can’t relate perfectly. However, I have had friends who would, for example, get tired of a hair product when only 1/4 of the way through it and foist it on me with “we have the same hair type, you’ll love this”. I’d have folks clean out their closets and make like they were being wonderfully generous by giving me the dusty, unwanted crap that they never found a use for.

I caught myself going down this road early on and changed my behavior. I went CVSing with a friend who appreciates a good deal, and I got 2 bottles of contact lens solution as a “money-maker”. Well, it takes me a long time to get through a whole bottle of contact lens solution, so I gave her the other one. She started to explain that it’s not the brand she prefers and then just shut up and took it. To this day, I’m not sure if she took it because (a) it’s hard to turn away “free”, (b) she re-thought her brand loyalty and realized it wasn’t that important to her, or (c) it would make me happy. So here’s what I’ve done to make sure I don’t annoy the people I distribute my freebies to:

Mom:  She’s with me for a lot of my shopping. I spread it all out before packing it up to bring back to NYC, and she takes what she wants. We occasionally come to blows over brownie mix.

Sisters:  In addition to their silly-but-useful “color boxes” that I’m preparing for Christmas, I set aside anything I know they use. Or more accurately, anything our mom knows they use – the woman has a shopping list in her head for each of us. When she doesn’t know, she defaults back to what we liked/used in 1985.

Brother:  He likes smelly things in general and is a very happy recipient for all the free air freshener contraptions that Glade keeps putting out. He’s also something of a naive new homeowner, so anything household-y will not go amiss. Heck, unlike the commentator above, he could actually used a few bottles of glass cleaner – the house has 4 levels and a whole lotta windows.

Ayten (aka Working Poor Mom + 2 teens):  The first delivery, she was so desperate for anything and everything from unwanted laundry detergent to milk that there was just no getting it wrong. But since I’ve established an ongoing care package relationship with her, I’ve gotten a wish list and also check that she and her kids actually use/need what I give her. I told her that if I ever give her something that doesn’t suit them for whatever reason, to tell me or even give it back – I won’t be offended. She then went on to describe how several of the items I’d supplied (peanut butter, Knorr pasta sides, etc) were making life a whole lot easier for her because they were things that her kids could make on their own while she’s at work.

Friend:  I asked my best friend for a list of her health/beauty/household stuff she uses – this is the same friend I gave the contact lens solution to last year. She indicated brands, which things she was brand loyal to and which ones whe wasn’t picky about. It was kind of funny how quickly she rattled things off:  Dawn but only the blue kind, Lysol but only the orange pourable, Tresemme for colored hair (really? it’s kinda cheap…), Satin Care or really any shave gel as long as it’s girlie, any toothpaste in a whitening formula, etc. Wow, I’ve got half her list committed to memory. Now that’s friendship.

Client:  Okay, so Ms Phone Sex is really turning out to be more friend than client, but I figured the odd things I’ve given her warrant a mention. I don’t think she’s all that picky she likes a bargain – especially one she doesn’t even have to go out and get herself. And heck, she’d actually requested dishwashing liquid. I loved showing up with odd bits and pieces that she needed, like Dawn and Nivea shower gel. It firmly established a lack of pretention early on in the friendship, which is really important to me.

So there – that’s how avoid turning my adventures in de-cluttering into someone else’s reluctant re-cluttering.