Considering travel insurance? Make certain that you get terms in writing before you pay — terms that prominently include the word ‘refund’.
That’s the takeaway message from the latest ‘Haggler’ column in the New York Times, where journalist David Segal goes to bat on behalf of beleaguered consumers. I was particularly appalled by the story of a cruise agency which markets its ‘protection plan’ to vacationing seniors for a 10% upcharge:
The plan is described this way: “In essence, should you have to cancel your cruise for a covered medical reason — anytime prior to departure — you need not worry about forfeiting the cost.”
If you read these words without appreciating that the world is a dark and cynical place, you might think “protection” amounts to a money-back guarantee. But the world is dark and cynical. The verbiage here implies “refund” without saying so.
What does the protection plan really offer? A voucher for future travel — not so much use in this case, since one of the vacationing seniors suffered a heart-attack and died, and presumably his widow is Not in the Mood to be trolling online dating sites for a replacement travel partner.
The writing, by the way, elevates this from a merely useful column to a thoroughly delightful one:
“… one of the more entertainingly combative lawyers the Haggler has encountered. Mr. Nashawaty, bless his contentious heart, howled at the unfairness of a universe in which the Ms. Bendors of the world can badger the likes of Vantage Travel.”
I really enjoy Segal’s cynical, biting style and will be watching for future columns. “The Haggler” appears in the Sunday New York Times every other week.
(Photo by ecstaticist.)
I love fresh homemade bread. Once, in my early twenties, I made a loaf by hand. I had picked up the classic Tassajara Bread Book from a remainder table, and one afternoon I went at it for several hours, kneading and punching away. It made a glorious loaf which we happily devoured straight out of the oven, but the effort-to-results ratio was just too high, and I couldn’t imagine going through that ever again.
Many years later, I bought a bread maker. Aside from an annoyingly difficult-to-clean paddle, the process was vastly simplified, and the results also quite good. That bread maker is still in a box in our garage, but our current kitchen (which we are likely to have for quite a few more years) is too small to make single-use appliances very practical — there’s no place to store something so large either on the counter or in the cabinets.
So I’d given up on homemade bread for the foreseeable future, until sometime last year when I started running across references online to ‘no-knead bread.’ I was skeptical, but positive reports abounded. Last weekend I finally decided to try this miracle for myself.
At his last annual checkup, Jak tripped the alarms for ‘pre-diabetic’ levels of blood sugar, and as a result I’ve made an extra effort to stick to whole grains and low-glycemic foods. Which is why I ignored the very attractive white-flour no-knead options and went straight for the whole wheat ‘bread brick’ introduced by New York Times food writer Mark Bittman.
It worked like a charm. It takes about six hours start to finish, but total active time is only about ten minutes. You need five items: one large mixing bowl, one non-stick loaf pan, a teaspoon, a measuring cup, and a brush for the oil. No expensive appliances, and cleanup is a breeze. It’s so easy that I’m going to use the next loaf to teach our ten-year-old how. (Edit: The kidlet did great; that’s the one she helped with in the photo above. Next time she’ll be ready to do it on her own.)
Here’s the recipe; the only adjustment I made was to use extra wheat flour in place of the rye I didn’t have. It’s arguably not the most beautiful loaf ever, but it sure is yummy.
I worked out the cost per loaf to be around 80¢ at regular price; by watching for sales on flour and yeast I can probably bring that down by a dime or two. The dense whole-grain bread I’ve been buying for Jak at Costco is something over $2 per loaf, though the loaves are slightly larger. Still, at a conservative estimate, switching to the homemade bread should save us $1.20 a week, or about $60 per year.
Frankly, though, homemade bread is so much better than anything storebought that I’d do it even if it didn’t save a penny!
In the last month I’ve had to come to terms with the fact that purchasing this house when we did was a huge financial error. It’s been hard, and I’ve engaged in a lot of self-flagellation over the subject.
We closed on this house December 1, 2006. Two and a half years later, we’ve paid down our mortgage principal by $31K. We’ve also put about $19K into major home improvements — like new windows and hardwood floors — which should have increased the value.
Zillow lists our house as worth $26K less than we still owe. My own best estimate, using more intelligently-selected comps, puts us upside-down by about $10K. Which means that we’ve lost at least sixty thousand dollars on this house so far.
By contrast, we could have moved into a comparably-sized rental house for probably a thousand dollars less per month than we’re paying in mortgage. Just sticking that money in the bank would have given us another thirty thousand dollars by now, not counting interest. And we would likely have been in a nicer house and a more convenient neighborhood, as well.
We were urged to buy — sooner than we’d planned, and with less money down — by our real estate agents and mortgage broker. I don’t blame them, though, or think they intentionally misled us. As far as I know, our agents and broker believed that they, and we, were doing the right thing.
The catch-22 has always been that when real estate is climbing steeply — as it frequently tends to do in coastal cities, and had been in Seattle since I moved back here in early 1998 — it’s almost impossible to break in and buy that first house. 20% savings for a down payment becomes an ever-receding goal; by the time you have $60K saved up, that $300K house is now worth $450K and you need $30K more. Incomes don’t rise nearly fast enough to keep up.
In 2006 we saw a rare chance to get our foot in the door, and we took it. To do so we had to compromise in location and quality from what we could have had as renters; the plan was always that this would be temporary — five to seven years, and we would be able to sell this one and buy a nicer one in a more convenient neighborhood.
Hindsight is 20/20, of course, and today the collapse of the housing market is such a foregone conclusion that buying a house in 2006 seems like obvious idiocy. The housing crisis had already begun; why in the world did I jump on that patently rickety bandwagon?
But when I actually went back and looked up what I was reading in the fall of 2006 about Seattle real estate, I began to feel like less of a bonehead. Even as home prices in many areas of the country were starting to nosedive, the prevailing wisdom at the time was still that Seattle would dodge that bullet:
- March 2006, Bankrate, Top 30 Markets to Watch: Seattle ranked high on the ‘housing will continue to appreciate’ list.
- September 2006, Forbes, How Low Will Real Estate Go?: In contrast to most cities, Seattle’s projection shows about three years of very minor appreciation, but values up almost 60% at the end of ten years.
- September 2006, Seattle Times, Home prices’ long rise: Is the end near?: “If history is any indication, King County may escape” the national housing bust. A local economist estimated that “appreciation will slow to 2 to 3 percent a year”, while the chief risk officer for PMI Mortgage Insurance explained why Seattle was relatively unlikely to see prices dip.
Seattle Metropolitan Area*
(Forbes, September 2006)
I thought I was being conservative in my projections; I was prepared for a couple of completely flat years, with a mere two percent annual appreciation otherwise — worse than what anyone was imagining at the time. Instead we’ve had two roughly flat years followed by at least a 10% drop in the third.
It pains me terribly every time I think about how much better off we’d be if we’d continued as renters, but wallowing in regret doesn’t really help anything. So I am trying to focus on the positive: we aren’t in danger of foreclosure; we still have a positive net worth; and we can wait years before selling this house if we need to.
Meanwhile, I have very viscerally learned the investing adage that ‘past performance is no indication of future results’, and it’s left me a much more cautious person.
(Photo by Seven_Null7.)
If tough economic times are causing you stress, you can bet your kids are picking up on the tension as well. Knowing how much to tell them about financial matters can be tricky; you don’t want to overburden and worry them, but neither do you want to leave them surprised and unprepared.
I thought the movie Kit Kittredge: An American Girl made a terrific springboard for discussion with our kids, especially the younger one. Set in the middle of the Great Depression, the movie touches on economic issues — like unemployment, foreclosure, and homelessness — in a way that kids can relate to. The point-of-view character is a spunky ten-year-old girl who learns to cope with various changes that result from financial hardship.
It’s a fun movie, and so doesn’t come off as preachy or boring; the second half is basically a caper mystery, where intrepid children discover the truth that adults can’t see and chase down the bad guys, who are more comical than actually scary. Before the silliness, though, there is a lot of grounding in the Great Depression setting. Despite some grim events — her friend’s family loses their house to foreclosure; her own father loses his business and winds up eating in the soup kitchen — the overall tone of the movie is one of stubborn cheerfulness.
I’d guess ages six to twelve will get the most out of this movie. Our younger daughter was nine, and watching it sparked discussions about things from soup kitchens to the basics of mortgages and foreclosures. Here are a few more ideas for conversations with your kids based on scenarios in Kit Kittredge:
- Kit’s family begins to keep chickens and sell the eggs for extra income. What things might we do to generate extra cash?
- Kit’s mother sews dresses out of feedsack calico to save money. What storebought things can we try making at home more cheaply?
- Some of Kit’s classmates make fun of other kids for egg-selling and homemade dresses. Have you ever been teased or embarrassed about not having much money? What’s a good way to react?
- Kit’s father has to go to another city in search of a job, while her mother rents out rooms in their large house to make ends meet. What lifestyle changes might be in store for our family? How will we adapt to these changes?
When we bought our house in December 2006, there was a surprise in the garage: the former owners had left us a huge old chest freezer.
Now, Jak and I had a chest freezer already, a smaller model we’d bought at Costco about five years earlier. So this one was a bit superfluous, more than our family of two-and-sometimes-four needed. In the course of the move, however, it was convenient to move our frozen food into the windfall freezer temporarily while our original freezer was in transit.
‘Temporarily’ lasted, as it so often does, almost two and a half years. Last month we finally got around to rearranging the garage and transferring everything to the smaller freezer. I assumed that doing so would save us money — older & bigger versus newer & smaller seemed a no-brainer — but had no actual evidence.
With the model numbers of the two freezers and the kWh cost of local electricity from our bill, today I was able to use the government’s EnergyStar calculator to determine the exact difference:
- 1988 Kenmore 15.8cf freezer: $59.10 per year
- 2001 GE 7.2cf freezer: $24.55 per year
Savings: $34.55 per year, or about $2.88 a month.
(We have some of the country’s cheapest electricity here in Seattle; if we lived in New York, where it’s most expensive, the annual cost difference would be about $80.) I prefer to think of this as $34 we’re going to save every year from now on, rather than $86 we spent needlessly by procrastinating this task since moving in. Ahem.
There’s one more factor, though, that’s not as easy to calculate: with twice the freezer room my tendency was to buy extra food to fill it, which I then often lost in the depths, buried under piles of other food, until it was freezer-burned beyond all palatability. Or I would buy a ginormous bag of frozen peas at Costco, only to excavate a prior unopened bag from the bottom. (I use fresh produce as much as possible, so it can take us half a year to go through a single large bag of frozen vegetables. Having two such bags is just a waste.)
In the month since making the switch, I’ve already seen improvements in frozen-food turnover efficiency. I still think I need a better record-keeping system for both fridge and freezer though; I’ll work on that!
The EnergyStar calculator also tells you how much you’d save in electricity by buying a new freezer that meets current EnergyStar specs. In our case, this is a mere $7 per year — not a patch on the cost of a replacement, not that we were considering one anyway.
I am going to resell the windfall freezer, once I have an afternoon to spend cleaning it out. For someone with no second freezer at all, it could be a real bargain — especially if they have a large family or are carnivores!
(Photos by jonner and Squiggle.)
