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| Saturday, May 03, 2008 |
| MP Dunleavey reads her bank statement |
MP Dunleavey's New York Times article: Listen to Your Statement reports that she is reading her bank statement - and surprised at how much she is spending. Last year it cost about $150 to fill up our tank each month. Given that gas prices are about 25 percent higher now than they were a year ago, lately I had estimated that we were paying close to $200 per month.
Try $256. That’s what my foray through our bank statement showed. I was shocked. I don’t know if the truth sets you free, but staring your finances in the face, as opposed to devising convenient estimates in your head, is as vital to your financial health as checking your cholesterol is to your physical health.
[...]
A year ago this time, we paid about $400 a month for groceries. The tally for this April was $587. During the same period last year we spent about $140 on miscellaneous household items and sundries; this year we spent $346. At the end of the article she wonders if she and her husband should try to earn more, spend less, or a combination of both.
After reading her articles for years, I know that spending less would be a real challenge for MP and her family. Not that they should not try - I just don't have much confidence in them succeeding. But if they have the ability to earn more, they should definitely try to do that. They still have debt, only a small amount of retirement savings, and an underfunded emergency account. Add in stagnant wages, rising prices, and a growing toddler in a recessionary economy - and MP has a recipe for trouble.Labels: MP |
| posted by Boston Gal @ 9:03 AM *
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| 10 Comments: |
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Good morning BG! I read MP's article, and given that going through the detail is a tedious task, she should try to automate her finances. Last night my husband told me he broke the $70 barrier for gas (yikes!) and within a few minutes I was able to bring up on my laptop what we'd spent on gas in the last month ($586 to 2 vehicles!) as well as how much his previous fill-ups were.
With the economy as it is, we can't afford to keep our finances on auto-pilot anymore. The totals can be eye-opening, but at least we know where the money is going.
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I agree with your points about MP... I sometimes read what financial decisions she has made and I shake my head in disbelief (like buying a second home with their debt and underfunded retirement fund, anyone?)
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I don't understand how anyone can make financial progress without tracking their spending.
Yes, it can be tedious, but how else can you know where your money's going? How else can you come up with a plan?
It's weird that Dunleavey only realizes this now.
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I've been waiting for you (BG) to link her MSN article which came out this past week, called "How $10 can save your retirement". It really helped me to understand something about MP Dunleavy: she hasn't the foggiest notion what it costs to retire.
In the article, she talks about how small amounts over time can add up (absolutely true). But then she makes a few eye-popping statements, such as calling a retirement nest egg of $140,000 "huge". No, that's not a typo.
In the article, she also reveals that she and hubby have temporarily stopped retirement contributions in order to pay their taxes (I assume income taxes).
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Hi MomThing1,
I did read that MP article on MSN, but really could not build up the enthusiasm to post about it.
I realize any savings is better than no savings, but getting excited about someone saving in $10 increments when they are earning over $75,000 per year was difficult for me. So I decided to obey the old rule - when you don't have something nice to say about someone, say nothing at all...
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I enjoy your comments on MP Dunleavey and I admit a lot of what you've was once applicable to me too. But now that I've set up a monthly spreadsheet and input all my ingoing and outgoing dollars I have a much clearer idea of my financial picture. I find that I have to open that spreadsheet every day to keep it updated accurately and to reinforce my saving goals.
That's why I found the following surprising: MP states that "I have found that spending 10 to 15 minutes reviewing the bill payments, checks, debit charges and other transactions in a single month — in this case, our March-April statement — can be valuable." and then a few paragraphs later says "Bad eating habits and bad money habits have a nasty way of building up if you’re not paying attention."
Aren't those two contradictory ideas? 10 minutes/month? Sounds like it's more like a hobby for her than a serious interest.
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So a bigger house and rising costs means that MP's family is spending more money? Well, duh!
She frustrates me when she overlooks the obvious solution to problems. For instance, they could switch banks to a bank in their town and avoid ATM fees.
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I suppose that's why my blog is entitled a 'fiscal challenge'. It's kind of hard to be disciplined at this sort of thing. I'm more of a short burst vs sustained effort sort of person. I imagine fiscal responsibility is a bit of a challenge for MP Dunleavey as well.
MP's articles don't really thrill me. She doesn't packages her presentation in a way that thrills me. She should be a blogger rather than a "professional personal finance writer."
How can she NOT use a financial software package to view her finances monthly? It takes me 30 seconds with Quicken to look at my numbers every month and really drill down to what I'm spending and where. I just posted recently what I spent on gas for 2006 and 2007 with some early Q1 2008 analysis. It was so easy!
I know you read the WIR series and MP Dunleavey, and I value your blog for pointing out these articles, but lately I feel like some reliable PF bloggers really know there stuff and use them for guidance more than folks like Orman, Kiyosaki, etc.
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I don't track my spending to the dime. I know approximately how much and where my money goes. My spending doesn't flucuate much.
I appreciate her emphasizing that small amounts can add up. Some people give up saving even $10 because they think it doesn't matter. I'm all for encuraging people to save.
I don't know why anyone would have to ask whether they should earn more. If you can, why not? Why not do all of things? Earn more, save more, spend less.
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Good morning BG! I read MP's article, and given that going through the detail is a tedious task, she should try to automate her finances. Last night my husband told me he broke the $70 barrier for gas (yikes!) and within a few minutes I was able to bring up on my laptop what we'd spent on gas in the last month ($586 to 2 vehicles!) as well as how much his previous fill-ups were.
With the economy as it is, we can't afford to keep our finances on auto-pilot anymore. The totals can be eye-opening, but at least we know where the money is going.