Recent Reading

Here's a few posts I found interesting and useful from some recent trawling around the blogosphere:

Feminist Finance on the different financial advice given by men's and women's magazines

The Simple Dollar on how you can help flood victims in Iowa

My Money Blog on the Japanese concept of Kaizen as applied to personal finance.

A guest post at Get Rich Slowly about the benefits of bartering

Blueprint for Financial Prosperity on how to convert a paper I-bond to an electronic one

More on Governor Patterson' s Giving

I didn't really mean to beat up on Governor David Patterson the other day, after his $150 charitable donation raised so many eyebrows. He seems like a nice enough guy and his tax return probably doesn't reflect a true picture of his attitude towards generosity. Sure enough, after a few days, the Governor did address the issue and say that he is a generous person but did not want to reveal more about his giving because it would violate the privacy of people he has helped.

But you know how the media is whenever someone wants to protect anyone's privacy! Further investigative reporting has revealed some of the ways in which the Governor donated his time for charitable activities, which included judging a beauty contest for a community fundraiser, and participating in a $1,000-a-hit skeet-shooting contest at a charity event.


Ok, I'm bad. I'm really bad. It's not the first of the month any more. Sorry!

Be Careful What (Or Who) You Google

Have you ever googled an ex-boyfriend or -girlfriend's name to see what they're up to? I just did and got a big surprise-- one of the first things that popped up was a $2,300 donation to Hillary Clinton's campaign.

It's not like I thought "Shorty" was a Republican, but $2,300 is a lot of money to send as an individual donation to anyone or anything, as far as I'm concerned. I didn't think Shorty had such strong political opinions, or so much disposable income!

I also googled Shorty about a year ago-- yes, I'm bad and I'm bad repeatedly! It was even worse last time-- I discovered that the apartment we used to share had been sold for about $500,000 more than we'd paid for it, and Shorty used the proceeds to buy the much nicer apartment upstairs that had the fabulous roof deck we always wanted. Hmph.

Oh well, life goes on and it's not like I begrudge Shorty anything. But if I'd been nursing any resentment about the break-up, news like that would not have helped!

$150

That's how much the new governor of New York gave to charity last year, according to his tax return. And it was just $150 worth of stuff donated to the Salvation Army, not cash. Governor David Patterson and his wife had income of $269,815 last year, so that is a tiny fraction of a percent of their earnings. As this New York Times article points out, this doesn't necessarily mean he didn't make any donations, it just means he didn't declare them on his tax return to get the deduction. So if we're going to go all judgmental on him, he's either a miser or he's stupid! (Or, less likely, he has some very noble ideas about voluntarily paying extra taxes.) Here's what a few people had to say about it:

Alitha Martinez, a comic book artist who lives in Manhattan, gave several hundred dollars’ worth of clothing that her 6-year-old son had outgrown to neighborhood charities last year. She also took a $1,000 tax deduction for donating an old Macintosh computer. And she occasionally sells her artwork and gives the proceeds to the Hero Fund, which provides scholarships to children of military personnel....

“That’s the equivalent of, ‘Let them eat cake,’ ” Ms. Martinez said [about Governor Patterson] as she went to mail her own return at the main post office near Pennsylvania Station on Tuesday morning. “That’s not cool.”

***

Jennifer Fiore, 39, would not say what she does for a living, but she did say she took a deduction on her 2007 return of about $1,000 for donations of clothing that went to benefit breast cancer research, as well as furniture and electronics that were picked up by a group that helps Vietnam veterans.

“It’s almost an insult,” she said of the Patersons’ $150. “It’s not like he doesn’t have enough to give away.”

***

“It’s up to an individual and someone’s conscience,” said Matthew Kelty, 38, who works at the New School and gave money last year to groups that included the Human Rights Campaign, the Gay Men’s Health Crisis, CARE and Save the Children.

Still, he said, Mr. Paterson’s tax return made him wonder about the new governor’s character.

“It’s interesting that someone who we put our trust in doesn’t seem to care,” he said.

Just hit the "charity" category in the sidebar and you'll see how this same topic has become an issue for me, when some commenters felt I did not donate a large enough percentage of my income. Of course, giving is always a very personal decision: there is no "right" amount to give and people have different reasons for giving or not giving that may or may not seem valid to others. But just to put things in perspective, the Times article had this graphic about average deductions for charitable donations broken down by income range.




I'll save you the trouble of calculating how much the average giving amount is as a percentage of the average income:

$5,000,000	$10,000,000	$297,627	4.0%
$2,000,000	$5,000,000	$115,463	3.3%
$1,500,000	$2,000,000	$62,046	3.5%
$1,000,000	$1,500,000	$41,192	3.3%
$500,000	$1,000,000	$20,858	2.8%
$200,000	$500,000	$8,528	2.4%
$100,000	$200,000	$4,081	2.7%
$75,000	$100,000	$2,945	3.4%
$60,000	$75,000	$2,625	3.9%
$50,000	$60,000	$2,408	4.4%
$40,000	$50,000	$2,207	4.9%
$30,000	$40,000	$2,101	6.0%
$20,000	$30,000	$1,973	7.9%

I didn't find these percentages all that surprising. At the higher end of the income scale, people's basic needs and even luxuries are easily taken care of, so they can afford to donate to charity. At the lower end of the income scale, there is a certain dollar threshold below which people don't want to fall, but of course it is a larger percentage of their income. (Also, maybe they're more tempted to fudge it for the IRS because they desperately need the bigger tax refund.)
Then you have the people in between: Governor Patterson's income range has the lowest percentage for giving. People in these in between levels are the ones who are supposedly "wealthy," or maybe upper-middle-class, or just middle-class in places like New York City where the cost of living is so high. They're anxious about paying for all the expensive things they think they're supposed to have, they're buying homes and having kids and trying to save for retirement: they feel squeezed, and charity is getting squeezed out.
Of course, I should be saying "we," as my adjusted gross income of around $87,000 puts me in the lower range of this group and my charitable giving has so far been even less than these averages. But at least I coughed up more than $150!

New Sources of Blog Revenue

I've been wanting to increase the charitable giving this site supports, but I've been relucatant to add more advertising. I don't want readers to feel overwhelmed by intrusive ads and sponsored links to things I don't necessarily believe in or support. So instead, I thought people might like to support this site via purchasing official "My Open Wallet™" merchandise, designed by me!

Official Madame X Converse Sneakers:
Wouldn't you look swanky trotting around town in a pair of custom Chucks? Designed by Madame X, these classic Converse All-Stars feature suede uppers and a unique color scheme. The Madame X imprimatur on the heel marks them as something truly special. Unisex sizing. Your price of $100 allows me to make a $25 charitable donation.



Official Madame X Clock:
What time is it? Time to save money, of course! Why not enhance the decor of your home or office with this custom designed fine timepiece, designed to help you remember what's most important: it's always time to save money, and it's always time to read My Open Wallet™! Your price of $25 allows me to make a $14 charitable donation.
Official My Open Wallet™ Kleenex Tissues:
Put your money where your nose is, and no, I don't mean you should develop a coke habit! Custom Kleenex boxes are the ultimate way to show you care about your finances and your sinuses, while still maintaining a sense of style. This Madame X original will only set you back $15 while allowing me to donate $10 of your purchase price to charity.



Please help me support my favorite causes by ordering your Official My Open Wallet™ merchandise today!

Irish Dancing in the Bronx

This is the best thing I've seen in a long time-- make sure you watch the video!

With a student body that is 71 percent Hispanic and 27 percent black, Public School 59 does not seem an obvious home for a thriving Irish dance troupe. And when Caroline Duggan first arrived from Dublin at age 23 to try her hand as a New York City public school music teacher, it wasn’t. Many of her students had never heard of Ireland. Why, they wanted to know, did she talk funny?

Then, to stave off homesickness, Ms. Duggan hung a “Riverdance” poster in her fifth-floor classroom, and one thing led to another. The children pointed to a long-haired dancer on the poster and asked if it was her. No, she laughed, but I could show you a few steps. The impromptu lesson grew into a wildly popular after-school program and, for the first time last year, a trip to Ireland that still inspires dreamy looks among those lucky enough to go.

The group is called Keltic Dreams, and they are looking for donations to support the program and send the kids to Ireland again. It took me about 2 seconds to decide I'd be mailing them a check! The article doesn't include the contact information for donations, but here they are.

Make checks payable only to: The Keltic Dreams / PS 59
Mail them to attention of
Caroline Duggan - Music Teacher
Public School 59
2185 Bathgate Avenue
Bronx New York 10457

You can also find more information and photos at www.thekelticdreams.com

March Madness!

It's time for March Madness, even in the world of personal finance blogging. Free Money Finance is once again hosting a tournament in which the best personal finance blog post will triumph! You can download the bracket here, and see the rounds that are being played so far here. Two of my posts are in contention:

Game 26: Lessons Learned from Diet Books: How to Think Like a Rich Person
and
Game 27: Rule #16: Who Do You Think You Are?

The contest will be decided mostly by reader feedback so please comment at Free Money Finance to vote for the posts you like best in each game. (In other words, vote for ME!!) The champion blogger wins a donation of $500 towards the charity of his or her choice-- my pick is Diabetes Action Research and Education Foundation. Regardless of who wins, the posts in the contest are well worth reading-- it's a best-of-the-best collection of personal finance articles. Enjoy!

What is the "Right" Amount to Donate to Charity?

Over the time I've been writing this blog, a number of commenters have taken me to task for not donating enough to charity. I'm not going to say they're wrong-- I look at the numbers myself and think I'd like them to be larger, because I've had a lot of advantages in life and it just seems like the right thing to do. One thing that is worth mentioning is that the budget and reported actuals for my charitable donations are what I consider my "personal" donations. What I don't budget for or include is the proceeds from this website, all of which is donated, and which I hope will be more than double my personal donations for 2008. But even with that included, is that "enough?"
Ultimately, for me the decision comes down to slicing up my budget into a number of things I am trying to prioritize. I think I live fairly frugally by New York standards, with the exception of certain areas where I spend rather more highly, for reasons of convenience (food) and pleasure (travel, and again food). The other thing I prioritize is saving for retirement. I expect to be solely responsible for taking care of myself in my old age-- I don't expect to have a partner or children who will do it. And as another commenter pointed out in my defense, other members of my family are not necessarily in as good financial shape as I am, and it's always in the back of my head that I may need to help them out.
If things go reasonably well and my long-term budgeting works out, I expect to have some money left over when I die. I'll give a little to my niece and nephew, but otherwise, that will be a time when I can give a significant amount of money to charity.
So the question comes down to my current lifestyle: how do I balance what I spend on my own enjoyments vs. benefiting other people? What luxuries do you allow yourself at the expense of charitable donations? How does that shift as your income increases? Is there a certain percentage of your income that should be donated? Who is more generous/stingy, a person who donates 1% of their $100,000 income, or the person who donates 10% of their $1 million income? How do you plan for making donations right away vs. in the future?

I've read a few articles about the philosopher Peter Singer, who, if I understand his ideas correctly, believes that all life has equal value, and that consequently we should all be vegetarians, and to take things to an extreme, that it's amoral for anyone to have luxuries while others are suffering. It's an interesting idea-- if you assume that each person who works as hard as they can, to the best of their ability, is equally deserving of rewards, how do we justify the different levels of luxury enjoyed by CEOs vs. teachers vs. people who work in factories in China? And are any of those people, all of whom have an income that can probably meet their basic needs, morally obligated to donate the rest of their money to better the lives of people for whom self-sufficiency isn't an option, and that only once all those people have been taken care of can anyone justify spending money on personal luxuries?
Obviously that is a rather deep and weighty and not realistic way of addressing the question of my own donations, and obviously I've made peace with the idea that I don't personally have to sacrifice all material pleasures until I've saved the world's population from suffering and hardship. But it's all food for thought. How do YOU decide what to donate to charity? Let's hear it...

What Are the Best Charities?

It's that time of year: all the fuss over Black Friday and holiday gift guides can lead to a certain level of disgust with rampant consumerism and greed. The story that did it for me was a mention of a woman who hurled her entire body onto a pile of $50 digital photo frames at WalMart to make sure she'd be able to buy one.

So what's a good antidote? Thinking about ways to help people whose needs are more basic, or organizations that do valuable work. I have given to a variety of charities this year-- I'm committed to donating all profits from this blog, and I'm finally getting to the point where my ad revenues are enough to increase my giving quite a bit. Here's some of the organizations I've given to this year:

DonorsChoose
Memorial Sloan-Kettering Cancer Center
American Cancer Society
WNYC New York Public Radio
Pan-Massachusetts Challenge
Heifer International

It can be hard to decide to whom you want to donate. In my case, it's often been that someone I know asks me to donate, and I say yes, knowing it's a major charity for a good cause. But sometimes I wonder if I should be doing more research about who uses the money best. I get so much junk mail from charities, how do I know which ones are deserving? Sometimes I just get lazy and want recommendations... so who better to ask than my wonderful community of readers?
What are your favorite charities? Who do you think deserves your money, and why? Please give a bit of explanation and hopefully this will turn into a good resource. And I will try to donate more ad revenue to the charities you recommend, since you readers are responsible for whatever comes in. Thanks!

Financial Literacy Challenge at DonorsChoose

Donors Choose PFBlogs.org Financial Literacy Challenge

Led by HC of OneBigMortarboard, a number of personal finance bloggers have been promoting this initiative at DonorsChoose.org. If you're not familiar with the site, it's a great way to provide funding to specific classroom projects proposed by teachers. There are several financial literacy projects that have already been 100% funded by personal finance bloggers and their readers, over $1,600 worth as of this writing, all in barely a week! This is part of a blogger challenge at DonorsChoose, and we're currently #5 in the amount of money raised.

I just made a $100 donation (so now it's actually over $1,700), and encourage you to do so as well, in any amount you can afford! Let's show everyone out there that the personal finance blogging community isn't just interested in earning, saving, and investing money for our own gain-- we also care about giving something back, and promoting the cause of financial literacy.

How to Deal with Finances During a Health Crisis

Blog-friend The Travelin' Man has asked a number of people to start a wave of information on how to think about finances when you may be faced with a serious illness, as he is right now. Boy, is that a tough question to deal with, and one I felt quite unprepared to face. But as usual, my first impulse was to look for books with answers. One that might help is Aftershock: What to Do When the Doctor Gives You-- or Someone You Love-- a Devastating Diagnosis, by Jessie Gruman.
For many people , money might be the last thing on their mind if they are suddenly faced with a life-threatening diagnosis. But finances are something you should think about, and a chapter in this book is devoted to money issues.
In Chapter 8: Pay for Care, the author tells you what you need to know right away when you've received a serious diagnosis, for example:

• What doctors and health-care facilities specialize in your illness
• What your insurance co-pay and deductible are for in-network and out-of-network providers
• How much it will cost you if the specialist of your choice doesn't take your insurance
• What kind of pre-approval or notification does your insurance require to make sure services are covered

There are lots of other tips and reminders of questions to ask of your doctors and insurance provider. Then there's also a section called "Taking Care of Business," which begins

Whether or not you have health insurance, this diagnosis is likely to pose a threat-- the size of which is as yet unknown-- to your financial stability.

The chapter includes the following advice:

• If you think there may be times when you are not going to be functioning well enough to take care of routine matters, make a list of bills and payments that will need to be made-- things like regular utility bills, but also things that might only come up infrequently, like life, auto, or property insurance. If you are going to be treated for your illness somewhere away from home, make sure to arrange for your mail to be forwarded.
• Be prepared to try to negotiate your doctor bills, hospital bills and even credit card bills. If you aren't comfortable doing it yourself, or think you might be too sick to, ask for help from a friend, family member, or financial professional.
• Ask if the doctor or hospital offers interest-free installment payment plans.
• Check the fine print on your auto loan, mortgage, and credit cards to see if they came with any kind of disability insurance. Often people have this coverage and are not aware of it.
• Look into nonprofit organizations that help people facing a devastating illness by assisting with financial matters, applying for Medicaid and Social Security, negotiating medical fees, etc. (The book has an appendix with information on these organizations.)
• Make sure your legal documents are in order: will, medical power of attorney, health-care proxy, and an advance directive.
  

I thought these closing words in the chapter summed things up well:

Taking care of this business is hard. You are forced to imagine your death and its impact on your friends and family. But as painful as it is to think about this and take these actions, these legal protections are acts of generosity. They lift the burden of difficult decisions from those you love.
Act now.

These suggestions are just a beginning. What would you do? Please share your suggestions and stories here so others can benefit. I know several other bloggers may also be posting about this topic, and I'll update this post with links to the discussion there too:
Get Rich Slowly: JD has shared Travelin' Man's own specific questions about his financial situation and decision-making.
Blogging My Way Out of Debt has shared her own story of facing cancer surgery without insurance.

As I've mentioned before, any ad proceeds from this site are donated to various charities. I am a bit backlogged on actually making my donations, so any ad income earned from March 2007 through the end of July will be donated to the Memorial Sloan-Kettering Cancer Center. Thank you to Travelin' Man for inspiring this post.

Singin' On the Subway

This is a classic New York money issue: how do you react to subway panhandlers? The other night, I was on the train and saw a regular panhandler who sings in the hope of a few coins. He's actually pretty good, I think, and does a snazzy rendition of "Ain't Too Proud to Beg" while tapping out the beat with his cane. But the other night, he abruptly switched from one of his standards into this gem:

If you want my body
And you think I'm sexy,
Come on sugar, let me know.
If you really want me
Just reach out and touch me
Come on honey, tell me so...

He altered the melody slightly in a way that made the song sound plaintive, and almost wholesome, but regardless of that, there was no getting around the fact that those words were being sung by a scrawny, almost toothless, at least pretending to be blind, kinda dirty, probably homeless old guy on the subway. As he made his cane-tapping way down the car, I couldn't wipe a big smile off my face, though I kept looking down at my book. When I dared to peek at others around me, I realized another young woman sitting across from me was hiding her face and trying not to crack up, and other people nearby were having the same reaction.
It's kind of sad-- that panhandler knew exactly what he was doing, and really, we all should have just had a good laugh, enjoyed the song, and given him a buck or two. But because he's a panhandler, and "we" are comparatively well-off, employed, nice young ladies taking the subway home, it's like this paralysis sets in: must not look up, must not acknowledge, must not laugh! We worry that it's a bit cruel to laugh at this man, who is not sexy and whose body is the last thing any of us want to reach out and touch. And we can't quite laugh with him as someone who's trying to entertain us either, because that would somehow open us up a bit too much, to a kind of shared humanity that's hard to face.

I think I've given this particular singer money in the past, though I didn't this time. Like most New Yorkers, I encounter people asking for money several times a day, and the complicated inner debate that inspires is worth its own post, which I'll tackle one of these days. In the meantime, I've just got to get that song out of my head!

$183,000 an hour

That's how much money Larry Ellison, the founder of Oracle, would have to spend to avoid increasing his net worth, according to an article in today's New York Times:
Why Do the Richest People Rarely Intend to Give It All Away? by Austan Goolsbee
Instead of wondering why Warren Buffett would want to give away $42 billion, Goolsbee says, we should be wondering why all the other multi-billionaires in the world don't give away more:

The rational economic argument for accumulating wealth says that people want to use it for something: to spend, to give to their families to enhance their future standard of living or to do something philanthropic.

But when you compare the Slate 60 list of the year's biggest philanthropic gifts to the wealth of the Fortune 500 list, it turns out "people are accumulating money much faster than they are giving it away." Take Ellison, for example: with his net worth of around $16 billion and a 10 percent rate of return, Ellison would have to spend $183,000 an hour just to stay even. And that $183,000 an hour has to be spent only on things like parties and meals and travel that have no resale value, i.e. that aren't becoming assets that would be counted towards his net worth, as would cars, houses, art, etc.

So is this lack of charitable giving because billionaires want to pass their wealth on to their children? No, Goolsbee says, since their wealth is growing so much faster than their number of heirs that the children will have a hard time spending all the money too! And surveys show billionaries don't cite children as a prime reason for wanting to accumulate wealth. And those with children save money at the same rate as those without.

So then why do the rich like accumulating wealth if it's not to spend, not for charity, and not for their children? Because they like money, and they like to win the game of who has the most. That's why I think we should give the super-wealthy a little extra challenge to make that game more fun for them: raise their taxes!

Talking Back to the NPR Pledge Drive

My morning routine includes listening to National Public Radio from the time I wake up to when I leave for work. This week my local station has been having the dreaded pledge drive, so I've spent most of those woozy morning hours having an imaginary conversation with the announcers as they plead for donations. Perhaps many other personal finance geeks find themselves having the same response:

WNYC: Your pledge of $75 a year works out to only about 21 cents a day. Isn't all our great programming worth 21 cents a day to you? I mean, come on, it's only 21 cents a day, I lose that much walking down the hallway...
Madame X: I've had days where I picked up 21 cents on the street and was really happy about it... where is this hallway?
WNYC: Think about it, your $100 donation would mean so much to us, and you probably spend that much on coffee...
MX: Yeah, that Latte Factor (TM) will kill ya...
WNYC: And to thank you for your generous gift of $50 and up, we'll send you a fantastic tote bag...
MX: What do I need another tote bag for? Even if I did need one, I could get it for way less than $50!
WNYC: ...or you can choose as your gift a subscription to the New Yorker magazine...
MX: I already subscribe to the New Yorker.
WNYC: ...or you can get a one-year renewal if you already subscribe...
MX: So you want me to voluntarily pay way more than my renewal would normally cost?
WNYC: Think of all the hours of listening pleasure you get out of WNYC-- All Things Considered, This American Life, Studio 360, Car Talk, and of course our in-depth news coverage...
MX: I do love the programs. But radio is free, and you want me to pay for it-- doesn't that kind of make me... a SUCKER?
WNYC: Right now we're having a two-for-one matching donation, courtesy of Mr. and Mrs. J.P. Moneybucks...
MX: Well why aren't they just giving you all that money if they're so loaded? Why are they holding it hostage waiting for peons like me?
WNYC: Public radio gets less and less funding from the government. We count on you to make sure we can survive. And remember, even a gift of $50 a year-- that's less than 14 cents a day-- makes a big difference to us.
MX: Yeah, it better! That 14 cents a day, with interest compounded monthly, will be over $5,000 by the time I retire...
WNYC: And if you call right now, we'll enter you in a drawing to get an iPhone before they're available to the public...
MX: hmmm...
WNYC: [music, guitar chords---"if you leave me--" girls screaming -- "I'll go crazy..."] For $75, you can also choose this wonderful CD, the legendary "Live at the Apollo," by James Brown...
MX: Why have I never replaced that old cassette tape? 21 cents a day... You know, I always have meant to donate to NPR... and it is tax deductible...