Panic Once More: Let's Move to Languedoc

My father used to point out that teachers were involved in a trade-off: you traded high salaries for tenure, lifetime employment. So at the beginning of the economic downturn, I watched with lurching stomach the downturn in my retirement accounts. I solved that problem by not opening any statements EVER.

But then the scary statements about program reductions starting wending my way. Maybe my job IS in danger. OK: worst case scenario: unemployment in your 50s.

I wrote about this before, declaring that I'd rent out my house and move to Costa Rica. Now I have a longer list of places to go. I asked the library to order How to Retire Overseas by Kathleen Peddicord>

And the LOVELY bookbuyer did order it. And I'm reading it now. Predictably, the author of the book has lived overseas--and still does--and makes her money by running a website on retiring abroad.

What is useful about this book is that it contains numbers: how much it costs per month to live in various places. Buenos Aires: $2590; Paris: $2960; Morella (Mexico): $899; Abruzzo: $1405; and so on through other places. My current fantasy is Languedoc, coming in at $1495, which includes $300 for household help, which I am pretty sure I wouldn't avail myself of.

Isn't it nice--or nicer--to mix panic with wonderful--and apparently do-able--fantasy?

Where would you like to live?

Virgin Mobile: They Rescinded Their Offer of Compensation!

Blogfans: Don't even bother reading what is below, which is my newest communication with the Better Business Bureau. Short version: Virgin Mobile called this morning and the nice rep told me that her superiors would not permit her to offer us three months of service and so the offer was rescinded. She apologized for speaking too soon. Do you believe this?

A little while ago, I reported my lengthy, annoying experience with Virgin Mobile--this involved double billing, conflicting information from at least three reps and their supervisors, suspension of service, lack of follow through, being told to initiate a chargeback through the credit card company, being told the chargeback precipitated suspension of service, being told that reversing the chargeback would allow resumption of service, not having service resumed, etc. Eventually, I wrote a detailed report on all this on your site.
A few days later, I was thrilled to received a call from a Virgin Mobile rep, who acknowledged that we received incorrect information all the way through, apologized profusely etc. She offered us 3 free months of service. Though this did not compensate for the HOURS and HOURS we spent trying to resolve an issue that began with a double-billing, we accepted, thrilled that the company proved responsive.

This morning the rep called and said she had spoken too soon and that he higher ups did not allow her offer to go through. The reason? The phone had been locked. I pointed out that the phone was locked because the problem had not been resolved. (First call from us over double billing was at the end of April). I said to the rep: "So you are saying that this is it from Virgin Mobile; you are rescinding your offer; and that we will never use your company again?" She agreed.

This is doubly disgraceful. It would cost this company very little to make good on all their mistakes. To offer a "Carrot"--a few months of free service--is little enough. Then to rescind the offer...well, that is absolutely horrendous.

Our Summer Vacation: Money Out, Money In

Poor Mr. FS: he is in charge of travel reservations, which make my head spin. Each summer, we visit our remaining two parents--one on the west coast, one on the east coast. Like last year, the plans of our children limit our travel dates, so, again like last year, we will travel in a triangle: Louisiana to Massachusetts to California and home. We will be gone almost three weeks. The bill for plane fare plus car rentals in both places: $3000.00. Everything has gone up this year.

Yes, it is time for our annual scary credit card bill. Our upcoming credit card bill will be $4000.00! About half of that is plane fare for 4 people. Plus Mr. FS is rebuilding our garage, so lots of lumber yard bills.

I love reading extreme frugality blogs, with the writers living (very well) on $1000.00 a month or so. I guess I don't qualify.

Lest you feel sorry for us (and please don't), let me point out that our parents live in places people spend big bucks to visit. To visit my mother in Massachusetts, we get to visit a cottage on a lake near Tanglewood, Tanglewood is where the Boston Symphony Orchestra plays in the summers. (The link to the cottage on the lake is to a much fancier one I found on the internet. But even our modest house is wonderful.) The area is full of nature AND culture, with the great Clark Museum nearby, not to mention Edith Wharton's home, Herman Melville's home. Oh, I could go on forever.

The original owner of our house was my mother's uncle, Viktor Polatschek, who was with the Vienna Philharmonic and then, luckily for our family, with the Boston Symphony. When my mother and her parents came to the United States from Vienna in 1938, they lived with my great-Aunt and Uncle in Boston. Eventually, the house came to be owned by my grandparents and parents. Today it is owned by my mother. This is a place with tremendous emotional resonance for me; it is also a fantastic to visit.

We do not lack for things to do there. Still, that's a lot of money out in a single month. Wait! There is some money coming in. My mother's uncle, the first owner of the house, played the clarinet and wrote some exercises, which, I recently learned, are still in print.

My mother told me that she gets part of the royalties from Polatschek's work*: She said it's around $25.00/year and "Someday it will all be yours."

*If you buy through the Amazon link, my mother will get a few cents and so will I! Only if you play the clarinet, of course.

BFS and BBB: New BFFs

A while back, one of my favorite bloggers, Budgeting in the Fun Stuff, wrote about her (bad) experience with Fedex. She complained to the Better Business Bureau, got satisfaction from Fedex, and even a gift card. I was impressed. I had always thought of the Better Business Bureau as a do-nothing organization (why, I wonder).

As you may know, I have been ranting and whining about my experiences first with Chico's (which was mainly annoying) and then with Virgin Mobile, which was truly a through-the-looking-glass experience. Last you all heard, we had--at Virgin's urging--reversed the reversal on our credit card, so that our daughter could get her service back. Well, of course she didn't. When Mr. FS called Virgin, the rep said there was no record of any of our dealings OR of our daughter's phone. THAT WAS IT! We called Amex and asked them to reverse the reversal of the reversal, which they did. (I love you, Amex.)

Then I read Fun Stuff's post and realized that I, so proud of my customer service spine, was actually kind of a slacker. Plus it was around Father's Day, and my late father, difficult to deal with for most people, was a scourge of bad customer service: he would NOT GIVE UP. So, in honor of Father's Day, I wrote a complaint on the BBB website about Virgin's service.

And guess what? Today we got a call from a lovely and competent Customer Service rep, who apologized profusely. At the end of our chat, shse asked me if I wanted my daughter's service re-connected. I said that, while I loved dealing with her, I would NEVER use Virgin again, unless they offered a free year of service. I told her that Mr. FS and I had wasted many hours dealing with incompetent people.

She called back 15 minutes later with an offer of three free months! We haven't decided what to do yet.

So, folks, use the Better Business Bureau. And thank you to BFS: you are my new BFF.

Macro Economics vs MYcro Economics

I wish I understood economics. I once had dinner (about 25 years ago) with an economist who taught at Indiana University. I told him I wished I understood the big picture of economics. He smiled magnanimously and said, "Ask me anything." So I asked him something, though I can't remember the specifics. I guess my question was so inane--or so remedial--that he just shook his head in pity.

That was the end of the lesson. Just this morning, I read that Obama wants the Europeans to spend their way out of the recession, while the Europeans are instituting severe cuts in spending.

In my own household, I guess I've always been European. But then, I don't understand which is better on the macroeconomic level.

It also occurs to me that European countries have social safety nets so that huge cuts would not threaten life and limb as they might in the U.S.

But then, I don't understand all this. At the dinner, we had wonderful lemon ice cream for dessert. It was made by Breyers, and was discontinued shortly after I had it.

Can you make any sense of the big economic picture?

Help Me With My Title: College Cooking

I am having so much fun testing recipes for my mini-cookbook. It turns out that it's very easy to create an ebook to sell on Amazon. Not easy for me. But Mr. FS, who also typed my entire dissertation into the computer as a SURPRISE many years ago, thinks that he's figuring it out.

I am a decent writer; titles, however, have always been a weak spot. I can think of only three good titles I came up with--that's over almost 40 years.

My readers ("fit audience . . . though few"*) are excellent writers. Perhaps someone can help me.

My concept is: College Cooking for Dorm Dwellers (and Others?)
No stove
(Almost) no time
(Almost) no shopping
(Almost) no prep
(Almost) no cleanup

No ramen
No Kraft Mac and Cheese


Any titlists out there? Any suggestions appreciated.

*Paradise Lost (Book 7)

College Debt: Is It Worth Taking on Debt for an Ivy Degree? Some Practical Advice

A while back, I wrote (yet once more) on the college debt situation, featuring the now-notorious NYU grad with $ 200,000 in debt. I received this response from a reader:

You know, I wish I was in the camp that looked at the financial situation before deciding on where to go to college. But what about those who realize they are getting themselves into an unreasonable amount of debt in the middle? There are perks in terms of facilities and recruiting (and internships which can lead to jobs). And is it worth transferring to a state (and I live in a state with a not so great school system) school after already going into so much debt?

I agree even after doing it that it is foolish to take out massive loans on the promise of a high paying job. But that promise does get more likely if you go to a school well known in its field.

So is it worth it to go $200,000 K into debt for a religious studies degree? Probably not. But if you want to go into say consulting or investment banking...

Oh, how horrible to feel the monkey of debt on your back. How horrible to be so conflicted about your choice WHILE you are in college.

Before I respond (not that I have the answers, needless to say), let's review the college scholarship reality. There are MERIT scholarships and NEED scholarships. Ivies don't give merit scholarships because they don't have to. My children got merit scholarships at schools that wanted them--where their SATs and National Merits were desirable.

Need is another matter. If you make under say, $80,000/yr--you can probably get a full need-based scholarship at any Ivy or other private school of prestige. If you are in the middle-class doughnut hole, between @100,000-180,000/yr--you will get nothing, even though an Ivy--or any private--education, may be more than 1/2 your take home pay.

My family is at the lower end of the doughnut. I realized that my kids would have received FULL SCHOLARSHIPS if one of us quit our job. Amazing! Some self-employed people of my acquaintance manipulated their income downward during the crucial pre-college and college years. While most of the kids receiving need-based scholarships ARE genuinely needy, there are ways--as a Wall Street Journal column recently put it--to "game" the financial aid system. The kid with the NEED scholarship may be the child of a cardiologist who has many business expenses--like a company car. Salaried people like us can't do that.

Anyway, the year before the big meltdown, the new prez of Harvard announced that families who made between $100,000 and $180,000 would only have to pay 10% of their income. I think Stanford may have followed suit. That would be quite a reasonable price for an Ivy education, one I could have easily fit within my frugal budget.

BUT not all kids--even the smartest and most accomplished--can get into an Ivy. I doubt my children would have gotten into Harvard, Yale, or Stanford, though they may have gotten into Penn or Cornell. Just don't know. Other private schools could not match the Harvard/Stanford plan, so those in the doughnut remained, facing a $50,000 bill.

Back to my questioner: what should a student do who has already completed one Ivy year and feels the hot breath of future debt on the back of the neck?

1. Transfer to a state school. This is not a great idea. Anyone who gets into an Ivy is wooed with goodies out the wazoo by state schools. These offers don't apply to transfers. So, you don't get the prestige of the Ivy, but you also don't get the goodies the state school would have heaped upon you as an incoming freshman.

2. People in business might disagree with the above. They would discuss the "sunk cost fallacy."

In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. Both retrospective and prospective costs may be either fixed (that is, they are not dependent on the volume of economic activity, however measured) or variable (dependent on volume).

Behavioral economics recognizes that sunk costs often affect economic decisions due to loss aversion: the price paid becomes a benchmark for the value, whereas the price paid should be irrelevant. This is considered non-rational behavior (as rationality is defined by classical economics). Economic experiments have shown that the sunk cost fallacy and loss aversion are common; hence economic rationality — as assumed by much of economics — is limited. This has enormous implications for finance, economics, and securities markets in particular. Daniel Kahneman won the Nobel Prize in Economics in part for his extensive work in this area with his collaborator, Amos Tversky.


Still, an Ivy has some value, though what the value is, no one knows for sure.

3. Assuming the person wants to continue at Ivy U, what to do? Well, here are my frugal tips. Do not change your major! In fact, try to graduate in 3 years. It would be more cost-effective to take a few courses at Local State U than to work in the summer. You need to make sure your college will accept these credits BEFOREHAND. Colleges are often reluctant to accept transfer credits.

4. DO NOT do Study Abroad. With Study Abroad, you pay your school's tuition and fees. Hence, my son spent a year in France. He paid the state tuition, fees, room, and board. Guess what? These were covered by his scholarship! The other people in the program paid between $10,000 and $50,000 a year--for the same program. You can do your year abroad AFTER college, paying the program costs out of pocket. These are--based on my son's investigations in France--less than half the cost of private US college tuition. room, and board.

Can anyone think of anything else?