All Dressed Up

Ping Pong net: $10, divided by six
Ping Pong paddles: $2.99 each
Ping Pong balls: $1.99 for six
Ping Pong shirts: $8
Plastic visors: $1
Fannie packs: $1
Homemade Ping-Pong holsters: 66 cents
Lettering to read "PROUDLY HANDLING BALLS FOR MORE THAN 100 YEARS": $2 per shirt

Admission to an all-you can drink party: $30

Dressing as part of a Ping-Pong team on Halloween: Priceless



(I'm on the right.) Read more!

Open Enrollment Season - Check Your Spending

Many companies will open their flex spending enrollment during the next few weeks. I have never contributed to these types of accounts, but I will this year. Here's some of my own advice from an article I wrote earlier in the year. Enjoy... then sign up!

(Now I'm off to 1-800-contacts, where I can use my insurance plan (VSP) to file a claim before year's end. Toodles.)

Given that I'll spend a few thousand dollars on health care this year (more than usual due
to the braces and oral surgery), I could have saved a couple hundred dollars by utilizing my office's
flexible spending account for health and dental care..
Prior to this year's health fiasco, I didn't understand how these accounts
work, so I did a little investigating.

Health spending accounts benefit employees because money spent on
health care is income-tax free. While government does not place a limit
on the amount of money you can set aside for health care, individual
employers sometimes do, often setting limits near the $2,000-$3,000 range (www.bls.gov/opub/cwc/cm20031022ar01p1.htm). Drawbacks do
exist to these accounts - if you overestimate your yearly health care
spending, you loose the extra money.

Though I haven't put aside money for my health spending account yet,
I'm currently totaling up my costs for next year. Here are some tips
based on my strategy:

- Anticipate large costs: If you can put off an expensive
procedure until next year (when you can put in dollars against your account)
such as lasic eye surgery, wisdom teeth extraction or braces, plan to
do so. Then, discuss costs with your health care provider. Next year,
for instance, I'll put $1,536 away to cover my monthly orthodontics payments.

- Check last year's office visits: Count costs for annual visits to your
eye doctor, dentist, dermatologist, gynecologist, etc. I plan to also factor
in two doctor's visits for colds. Add these to your running total.

- Include health care purchases: A quick look at your debit card or
checkbook will remind you of monthly prescription costs (heartburn medicine?
birth control?). Don't forget about contacts and/or glasses (yes, you can use
1-800-Contacts under most plans).

This should give you a good idea of how much to store away in your
spending account. Of course, you can't anticipate medical emergencies.
But based on your health history and purchase behavior, you can get a good
estimate for your account without going over.

And many Americans do go over. In fact, according to USA Today, $210 million
in unspent money is forfeited each year to health spending accounts (about
7 million Americans use these accounts). Upon closer look at the figures, given
that the average employee puts in $1,000 per year and leaves three percent
on the table, I estimate most people forfeit about $30 each year.

If, at year's end, you're stuck with money left in the account, fear not! Sandra
Block at USA Today offers helpful tips for draining your health spending account:

http://www.usatoday.com/money/perfi/columnist/block/2004-12-20-ym_x.htm

Some of my favorite ideas here are to restock your medicine cabinet
(check dates and toss out old medicines), buy new contacts (even if it's only
one box!) and bump up payments on installment plans (like orthodontia).

If you don't like the idea of flexible spending accounts, other options exist,
like health savings accounts (HSAs) and reimbursable medical accounts.
You can find plenty of information about both on the Internet.
Read more!

Halloween Ideas

Have a party to attend but can't afford a cool costume? Here are some cheap ideas for you. Homemade costumes are much funnier than store-bought ones anyway, in my opinion. Just remember to be creative with what you already have.

Singles
- A marathon runner. Just throw on your workout clothes and pin on a sheet of white paper with a marathon number. Add you number to your legs and arms with black washable marker for the full effect.

I went as an old school marathoner one year and wore striped tube socks, shorter shorts, a turtleneck and bright yellow Jersery, with pig tail hairdo, and sweatbands on my head and wrists.

- Prom queen. Finally, something to do with that hideous bridesmaid dress! Even better if your dress is from the 80's. Borrow a tiara from your little cousin, get a few flowers and you're off to the dance. Bonus...add a sash with your state name and you're Miss America!

- A One Night Stand. Get a cardboard box and draw drawers on the front. Cut a hole for your head, arms and torso. Next, glue on you alarm clock and reading lamp (I said cheap, not easy). Now for the fun part... haphazardly toss on a bra, condom wrapper, and perhaps a few travel bottles of liquor. Scandalous.

- Greek god or goddess. You know the drill here. One white sheet works wonders. Toga, toga, toga!

- A feline. Purchase one pair of black ears and some sort of black tail. Wear with a black turtleneck and black pants.

- Sugar daddy/Sugar mama. Wear whatever you want, just stick a bunch of wrapped candy to yourself for the night.

- Nerd. Buy some phony glasses at Walgreen's and tape the nose bridge up. Mix plaids with checkers and stripes. Wear suspenders. Hike your pants up. Throw in a pocket protector and don't wash your hair. Presto! Instant nerd.


Couples
- Bad puns. A friend of mine went as "walking papers and pink slip" one year. She wore a pink slip, he stapled newspapers to his clothes.

- Tequila and Salt. Although it requires the purchase of sweatsuits, it's worth it. One person wears a bright yellow sweatsuit with a logo of a tequila brand taped to the shirt. The other wears an all-white sweatsuit, perhaps with a grey turtleneck, and hangs a lime from the neck. To make it more recognizable, stitch a stuffed animal toy worm to the cuff of tequila's pants.

- Famous sports duos. Brian and I thought about going as Nomar and Mia Hamm a few years ago because he had a Red Sox jersey and I could wear my hair in a ponytail and walk around with a soccer ball. Besides, what guy doesn't want to dress up like his favorite team? Admittedly, not too many famous sports couples come to mind right now. But remember, Nomar and Mia are easy to do!

- Tree hugger. One wears brown from head to toe (with perhaps a green hat), the other dresses earthy-crunchy. Handcuff yourselves together if you can stand it.


As for my halloween costume this year, well, I can't share. It's too good and I don't want to spoil the suprise. But I will say this... my costume is cheap, well-planned and funny. I'll be sure to post a pic! Read more!

December's Perfect Storm

According to CNN, this holiday season is poised to create the perfect storm...in your wallet. I can't get to the story (because I don't have a plug-in), but here's the headline:

CNN's Ali Velshi says the holiday season economic forecast, pressed by rising energy and food prices, looks gloomy. (From CNN.com)

Another story from Reuters predicts a colder winter than usual, further fueling the above arguement:

Cold, expensive winter forecast
Americans should brace themselves for a frigid season and high heating bills, EarthSat says.October 17, 2005: 3:58 PM EDT

NEW YORK (Reuters) - U.S. households should brace for a frosty winter, particularly in the Northeast, which consumes the most heating oil around, private forecaster EarthSat predicted Monday.

"The current winter outlook is colder than last year and much closer to the 30-year normal for the national average expectation," EarthSat said in its revised outlook.

"The focus of the coldest anomalies should be more frequently toward the East Coast rather than midcontinent," EarthSat said.

You get the general idea without reading too much further. Predicted higher gas prices mean more Americans will spend more money heating homes. Meanwhile, the cost of gas will drive up the price of everyday goods, like food. All this means ordinary babes and boys should spend less while holiday shopping this year, but alas, the National Retail Federation says we'll actually spend more:

Early signs good for holiday retail
Hurricanes, gas prices haven’t deterred shoppers
By KARA KRIDLER Daily Record Business Writer

Even higher energy costs and the impact of two hurricanes aren’t expected to ward off holiday shoppers, according to numbers released Friday by the National Retail Federation in Washington. The organization said strong retail sales last month — which jumped 7 percent over the same period last year — are a good indication the holiday season will follow a similar path.

Although many shoppers wait until the last minute to make holiday purchases, the holiday shopping season kicks off Nov. 1.

“While many analysts expected consumers to hold back on spending as a result of higher gas prices, shoppers had other plans,” said Rosalind Wells, chief economist for the retail federation, in a statement. “This is a good sign for retailers as they head into the holiday season.”

Although our nation's willingness to spend more during the holiday season is well-received by retailers across the country, it doesn't mean we've been saving up all year for these purchases. On the contrary, Jean Chatzky, from the Today Show, says:

"It's official — and it's abysmal. The latest report of the Bureau of Economic Analysis shows that in August, just as it was in July, the personal savings rate in this country dipped below zero. That's worse than simply not saving. It means that, on average, we're spending more than we are earning. " (October 17, 2005)

Before holiday shoppers bust into Tazmanian-Devil-in-the-Mall mode, it's worth reminding ourselves that some years, simpler, smaller, more intimate gifts with more meaning can be worth more than big, expensive impersonal ones. Here are some gift-giving tips I've compiled over the past year that are worth sharing again as you prepare for your holiday shopping bonanza:

• Before going to the store, make a list consisting of each person you want to buy for and how much you're willing to spend. Be honest about how much you can spend - you won't appreciate the gift-giving process as much if you're anxious about your credit card bill. These price limits can also come in handy to curb impulse buys in case you can't find the item you want to buy.
• Don't feel bad if you can't spend as much as you like on someone - remember it's the thought that counts. I don't know many people who get upset because their Christmas presents are too cheap. Your family and closest friends understand your financial situation; I bet they're happier to spend time with you then get your gift. Admittedly, we all know people completely obsessed with price tags and labels. Don't try to appease them with a gift you can't afford. They have larger issues to deal with than your underpriced gift!
• Don't go shopping during your holiday vacation time in order to bond with your friends. See a movie, go to a concert, exercise together...whatever. Do something where you pay first, then enjoy (instead of spending limitlessly throughout the day). When bonding while shopping, you risk equating the great feeling of friendship to the feeling of shopping.
• Pay with cash. This is a serious deterrent for girls and guys who are serious about curbing spending. When you have to plunk down every precious penny, you're forced to look at the money leaving your hands. Ouch! (Truthfully, I still can't do this without weeping.)
• Try a grab-bag exchange this year. You'll only buy one present for your best friends instead of 10. It cuts down on shopping anxiety and bills. Plus, you have to throw a holiday party to exchange gifts!

I'll have more tips to share with you throughout the holiday season. Stay tuned!

Read more!

Formula for Financial Success?

I'm back from vacation! I had a magnificent time hiking among enormous green trees, misty clouds and the angry ocean in Oregon - I only wish I had more time there. The opportunity to travel is definitely one of the goals I save for year-round. All the cashmere sweaters in J.Crew couldn't provide me with the peace of mind I get from one great trip.

While I attempt to write some new articles for the site, here is a great piece by Humberto Cruz (courtesy of the Chicago Tribune's Your Money section) to remind us all about the importance of finanacial knowledge and goal-setting. I think you'll find it inspiring.

Saving strategy takes work, not a magic formula
By HUMBERTO CRUZ
Tribune Media Services columnist

Posted October 16, 2005

Q. I catch your column in the paper every now and then, but not always. So I don't miss it, please e-mail me the formula for figuring out how much to save and how to invest.

A. I am sorry I can't e-mail you any formula because I address reader questions only through this column--and, more important, because no simplistic formula can provide a satisfactory answer. But I am glad you asked, because your question is representative of literally thousands I've received in 10 years of writing this column.

Largely, I have found that most readers long for formulas and sound-bite type answers to financial questions. They want a quick thumbs-up or thumbs-down to a financial strategy or product rather than the almost always more appropriate answer, "It depends."

And I am afraid I agree with Jonathan Clements, personal finance columnist of The Wall Street Journal, who wrote a couple of months ago that most people aren't really interested in educating themselves about financial matters but want to be told precisely what to do.

That's too bad, because the business of financial writers is to explain and educate as well as we can, to present facts and lay out the pros and cons so readers can make better-informed decisions. Only you can decide what's best for you, either on your own or with the guidance of a competent financial adviser who spends the time needed to get to know you and help you prioritize your goals.

That brings me to another point. Many people who ask questions or seek financial advice do so without a clear understanding of what they want to accomplish or what their most important goals are. If you don't know what you are saving or investing for, how much it is going to cost you, and when you will need the money, how can any formula be of any help?

"My experience shows that the vast majority of people do not know where they are trying to go or what to focus on," said Larry Frank Sr., a certified financial planner in Roseville, Calif., and author of the book "Wealth Odyssey: The Essential Road Map For Your Financial Journey."

One of his main points: Financial planning is a process rather than a collection of separate products or issues. "People are conditioned to think about the products that solve their concerns, yet they have not adequately determined what their concerns are, or what their priorities are among those concerns," Frank said.

In practical terms, that means most financial products--different types of investments or retirement accounts or insurance policies or annuities, for example--are not "good" or "bad" in themselves but rather appropriate or inappropriate in the context of your goals.

Another problem is that even when people say they have clear goals, their actions belie their words. "People make decisions that undermine their goals every day," said Mari Adam, a certified financial planner in Boca Raton, Fla. For example, they may say their goal is to retire at age 55, and then they stretch their budgets and spend $50,000 on home improvements they are unlikely to recoup if and when they sell.

That doesn't mean the expenditure was necessarily "bad." Perhaps the home improvements will bring more satisfaction than retiring at 55 would. But you have to know that.

"If your mind is clear as to what you are trying to do, if you can say what you want out of life and make your money moves in that direction, you will be happy," said Adam, a self-described saver whose own priorities include protecting her children financially, providing for their college education, and having a reasonably comfortable (but not extravagant) lifestyle, now and in retirement.

On the other hand, "you need to know what motivates you," Adam said. "If buying a Porsche is going to make you incredibly happy, maybe that's the right decision." (Of course, you need to make sure you can really afford it.)

"It is OK to spend money" Frank said. "That is the purpose of money. However, it is not OK to spend money if there is nagging concern about not accomplishing" goals that are more important than the immediate purchase at hand.

So here is my "formula:" Know yourself. Know your goals, and prioritize them. And spend, save and invest accordingly. If saving for retirement is indeed your most important financial goal, for example, contribute to a retirement account first, then budget for current expenditures with the money that is left. Read more!

Keeping your 401K

This bankrate.com article appealed to me to because I can easily understand it, and because my only true investment is a 401K. Happy reading!


Don't be dumb -- don't cash out your 401(k)
By Laura Bruce • Bankrate.com

We all do dumb things now and then. Sometimes it doesn't really matter, but other times we find ourselves days, weeks or years later wishing we'd made a different decision. Cashing out a 401(k) before retirement will likely have you kicking yourself some time in the future.

A survey by Hewitt Associates, a human resources consulting firm, shows that 45 percent of employees take a cash distribution of their 401(k) plans when they leave a company. That's long been a problem with twentysomethings as they job hop and cash out of small-balance 401(k)s. But the Hewitt survey uncovered a more-disturbing fact -- 42 percent of workers age 40-49 take the money and run. How stupid is that?

They're not cashing out paltry, insignificant amounts, either. Nearly one-third of employees with balances between $10,000 and $20,000 say, "So long, 401(k); show me the money!"

"These people are serial consumers of their 401(k)," says Lori Lucas, director of participant research at Hewitt. "It was somewhat surprising to see people age 40-49 cashing out. It's surprising to see people closing in on retirement who aren't preserving their wealth.

"People in their 40s may think they have balances that aren't worth preserving. That's not a good way to think. Even in your 40s there's still plenty of time for small balances to grow much bigger by retirement. They may have felt the need to use the money for other reasons. Maybe they left one job and didn't have another to go to right away. But some people look at it as a bit of a windfall and use it to buy those things they've wanted -- like a big screen TV."

Serial consumers of 401(k)s have plenty of opportunities to break the piggy bank. The federal Bureau of Labor Statistics says the median number of years that all workers have been with their current employer is four. That number is referred to as "tenure" by the bureau. The median tenure of workers age 25-34 is 2.9 years and 9.6 years for workers age 55-64.

Read the rest here. Read more!