I am now strongly coming to believe that my daughter Faith would grow up to be in the graphic and animation industry and give all the boys a run for the money. She loves the Disney movie ‘The Road to El Dorado’ and already has two fat sketch books filled with her own doodle interpretation of the movie’s characters and her favorite horsey Altivo.

As a person who is obsessed with the financial affairs of the world, I do understand that we have an obligation to fulfill. We owe an explanation to kids about the consequences of the financial crunch that we have currently created! I decided to first explain how this all began to my daughter in the form of a story involving some of the El Dorado characters. Soon she will grow up and start asking questions and I better be prepared.

You can tell this to your children or give your own explanations!

Lets compare the savings of all the people in the world to El Dorado, the land of many treasures.Tulio and Miguel loved the money that they found in El Dorado and everyone knows it. They soon wanted see their money make some more money. So to do that, they has to invest some of their treasure in order to make some more money in the future. Usually, the people of El Dorado including Tulio and Miguel invested their money in secret places and became super rich but what happened is that, soon other kingdoms found out their secret and started to increase their treasures. Soon, the people of El Dorado did not have many good places to make good investments.

Having understood this, Tulio and Miguel went to the US treasury and invested it in the treasury bonds. Because this gave them the most amount of profit with the least amount of risk. But unfortunately, what happened is that the high priest Tsekel-Kan aka Alan Greenspan reduced the interest rates so low that it did not make any sense to invest in them anymore.

This made Tulio and Miguel turn their eyes towards mortgages. Legends told them, that over the years people have been repaying their mortgage loans every month without fail and therefore it was a safe investment. Since these two weren’t the best of all fraternizers, they sent out Altivo the horse to do the job for them. Altivo the horse, as much as he was smart, he was also lazy. So hired some men and some horses to be mortgage brokers. So people who wanted mortgage loans to buy homes went to these mortgage brokers. Soon a system came into being. These mortgage brokers sold these mortgage loans to El Dorado banks. The banks sold them to the investment companies in the neighboring kingdom of Wall Street. These investment firms in Wall Street made these loans into shares and sold them to Tulio and Miguel aka the global savings.

Tulio and Miguel loved it because more money was coming in. Soon they wanted some more. The mortgage brokers that Altivo the horse had hired didn’t know what to do. So they relaxed on their principles. Earlier, only people who had enough money in the bank and a steady job could apply for a loan. Since the standards were lowered, everybody could get loans even if they did not have enough bank balance or a job. These kind of mortgages came to be known as ‘Sub-Prime’ mortgages. Soon enough, these sub-prime mortgage owners started defaulting on their repayments. This made Miguel and Tulio very unhappy because their treasure was not growing.

So Tulio and Miguel stopped investing their money from the treasure and did not send out Altivo the horse. Soon the entire system collapsed. There wasn’t much money anywhere and that is how it all began – The global financial crunch.

Then came a man named Obama with a lot of plans to make Tulio and Miguel invest their treasure again. But, hey! that is another story.

Alright people, it is my birthday time!! And what really happens every year on my birthday,since I’ve been married is that my husband, Steve, tries to surprise me. Yes! He is adorable and I love him for that. But he just can’t pull off a surprise on me. I always manage to figure out what he is planning because he just can’t keep any secret.

Birthdays mean shopping and partying. It also means extra expenses. Now as a grown up, I can afford a little binge every now and then but it was not always like this. Let me rewind my life a little bit and take you down memory lane. When I was a little girl, my dad would take me shopping for a birthday dress at least a month in advance. The reason why my dad used to do this was because my birthday falls on Halloween, which is incidentally on end of the month. Towards the month end, the finances would usually be a little tight around the house, so my dad would also set my birthday party budget much in advance, so that there would be no unwelcome surprises.

The funny thing is that, when you grow up, the tables get turned. It is now cheaper, if you shop on your birthday than on any other day. A lot of stores give discounts or freebies for the birthday kid.

Victoria’s Secret does that and so does the cosmetics retailer Sephora.. I’m sure that there are many more on this list. This would please a lot of people out there. The trick to happy shopping on your birthday is to know the stores that give will you goodies for free or at discounted rates.

So this time around, it turns out that you can bake your cake and have it too.

Happy Birthday to me and Happy Shopping to you!

Research is part and parcel of my new job and as I was researching in the world wide web, I stumbled upon this article on the Wall Street Journal website where there was an article on the improvement of the US economy. In that, the Federal Reserve Bank of Atlanta President Dennis Lockhart said that in overall, the U.S. economy is improving but still fragile. He also said that the he was confident that we (America) will return to a sustainable fiscal path but it would be unwise to be “Panglossian” or naively optimistic about the whole financial state.

In another article I found that the Federal Reserve Chairman Ben Bernanke, in his prepared testimony for Congress’ Joint Economic Committee had said that among the enormous costs of the downturn is the loss of some 5 million payroll jobs over the past 15 months. However experts predict that job losses and the unemployment rates will come to a sustainable level. Obama’s government is undergoing a tough, challenging phase and they are working on this, so let us give them some credit for their planned bail-outs.

So my question to Mr. Lockart is “Why not?”

Why not we stay Panglossian?

With a slow and steady resurgence in various sectors like manufacturing, real estate and every thing else, this the time when we can actually breathe a bit easy. America is a great country with the largest economy in the world and also by PPP. To top it all, we have the second highest income per hour worked in the world. Everything is close to perfect so why are we being so frugal?

The world is not coming to an end. This is the time of economic re-birth world wide.  I am beginning feel that the recession is becoming more of a mind thing than of a money thing. Let’s cut the recession drama down a bit and try and stay a bit more optimistic. Panglossian, maybe.

PS: The word Panglossian derives from Pangloss, the optimistic tutor in Voltaire’s Candide.

Back when I was 10^th grader, my parents forced me to take up ballroom dancing classes. I never really fell in love with it in the first sight (read dance) but it grew on me. Then I put this to best use in my high school prom. I kept telling myself that I was there to dance for myself and in the end I was crowned as Ms. Whirlwind for dancing non stop that night. I didn’t even get to sit down for a single song. If I could turn back time, I would gladly be time struck on my prom night.

Dancing non stop has a couple of perks.

a) You burn calories b) glimmer.

I was glimmering with sweat that is and M.A.C was ready to sue me for stealing all the ’shine’ out of their ‘Bodyshine’. Lol. Well, this is not exactly, how a girl would want to be on her prom night.

 Now, do you think all the boys asked me to dance? No, not really.

I went ahead and asked a lot of boys to dance. The fact is that most of the boys will never say ‘No’ when a girl asks them to dance. So, coming back to the scene, the other boys who saw me doing that, came and asked me to dance. Besides, I would like to think that I had the right attitude and I was and I am still a whole lot of fun. In a typical chick-flick kinda way, a jock asked me to dance. I told him “I’m very sweaty.” and he bent down and whispered “That’s why I picked you.”

So, this blog is all about making that first move. If you have been wanting to take that trip to Bahamas or drive that fancy Cadillac or buy that Malibu villa but never did because you still think that you can’t afford it. Get out of that thought process and start thinking that you can do it. It might take a while but you can do it. And start saving. Make sure that you work on a ’special savings’ holiday budget and save small amounts every month. And when you do, do it happily. Be happy to do so because in the end, it is you that is going to be soaking in the sea or driving that car or sipping vodka in your dream house. If saving is not making you happy, don’t do it. Don’t crib either. Period!

Its like what they say, if the mountain doesn’t go to Mahmoud, then Mahmoud has to go to the mountain.

Take a chance. Its one life. Thats all we get.

Take the lead, make the first move.

PS. What’s behind my new spurge of optimism? The Secret. I feel so much better these days and I’ve found a babysitter and a new job. Watch out for my upcoming posts that come with a new twist.

I know that I’m not exactly the role model when it comes talking about abundance and creating wealth. I only know about being prudent and saving money. But, hey! you have Rhonda Byrne with her ‘Secret’ entourage of wise people and wealth amassment gurus to tell you how you can attract money among other things into your life. I am a skeptic and I don’t always buy the new age philosophies that is available in this great country. Over the years, I thought myself how to be a rationalist in thinking. But recently I am coming to think that there is something terribly wrong with us.

Last week, I heard my neighbor’s seven year old twins blissfully and rather ignorantly singing this:

“Recession bites, reality bites

Tighten your belts, Stop buying felts

Save every pence for all the hens.”

I wonder how they came up with this or what influenced them. But seriously,does it sound like a new-age nursery rhyme? Or does it sound more like what you hear and read about everyday. If this were to be a new nursery rhyme, then I would sue the school for breeding such negativity in all the young minds. I have a daughter and I don’t want her to begin to think that money is a hard thing to earn. Most importantly I don’t want her to lead a life of lack.

And a couple of days ago, I had taken my daughter, Faith, out for a little quickie shopping at Walmart and there I saw a mom like me constantly denying everything that her little girl was pointing to. It was then that I had an epiphany.And I was like, “Wait a minute, I do that too”.I have denied my baby even when I could afford what she wanted. We were saving everything for a rainy day (which hasn’t come so far) and had forgotten to live in the present. I don’t remember indulging in anything for more than an year now, which, in all honesty had left me craving for a lot of things. The funny thing is that I could afford a lot of things for which I crave.

The question in my mind was “Why do we do save, when saving is not making us happy?”

So, in the end what happened? We splurged a bit but felt really good. You can call it the upliftment of the spirit from the shackles of the damn recession, if you like.

This blog is not gonna be about how to save on this or that. Instead, this is an open ended one. How you take the thought forward, is entirely up to you.

PS. I am reading ‘The Secret’ and I think I have been cruelly wrong about the philosophies these kind. And as for those who have read ‘The Secret’, do you think that I should buy myself a lotto ticket?

I’m an obsessive compulsive socializer and a party animal. During Greek days in school, I was known as Cindy the Entertainer (I love Cedric the Entertainer, by the way). In all modesty, I’ve hosted some spectacular parties that used to be the talk of the sorority (and the fraternity) for weeks. Some of my girlfriends say that my obsession with compulsive socializing is a disease and some of my aunts tell me that it is a genetic trait that I’ve inherited from my father.

Being a full time mom had me craving for some quality ‘all girl’ time. So I sent my husband and baby packing for a weekend and I threw a ‘ Sexy Lingerie Party’ for the girls that had our men begging for entry. It kept them wondering and wanting. Well, did they get it? But that is another story..

Any party is what I make it.

And I’m going to tell you how to party like a Rock Star when you are not.

Make your budget first!!

Be it $0 or $5 or $500, know your limit and stick to it. This is the most important thing that the host of the party should know. Always throw a party just about 1 week from the receipt of your paycheck because even if there are some binges on your party budget, you can still survive.

Make noise!!

Noise is good because it generates a lot of attention. And attention is damn good. It will turn a regular-Joe party into an A-List event. When you do it, make sure that you create noise like no-else has done before.. If you have an account in facebook, twitter or in myspace, create a event and invite friends to attend. If you are graphically good, then you can design and send your e-cards.

Food and drinks

Potluck affairs are always the best. You can ask some of your friends to bring in the alcohol.

You can ask some to bring the salad and the dessert, while others can bring in the main course meal. And, remember, when you cook, make sure that you cook only for half the population. Trust me on this one, there will always be excess of food on your table.

El Musica!!

This should be the last of your concerns. Download the music from the Internet to suit the theme of the party. Never waste money unnecessarily by buying the music dvd/cds. Keep the speakers to a minimum and don’t let the music wake your neighbors up. Or you could soundproof your home if you have the Benjamins and turn the bass up.

Space!!

If your guest list is small and so is your house, keep it in. If your guest list is big and so is your house, keep it in. If your guest list is big and your house is small, have it outside. If you have a garden, make use of it. You could also take the party up to the rooftop. As I said earlier, party is what you make it.

Games!!

Arrange for a lot of games. Adult games or childish games or whatever but we all love playing games, don’t we? Playing games helps your guests to interact and get comfortable with each other.

It would be an icebreaker for many of your guests.

People!!

Have the right people at the right parties. You can’t have a square peg in a round hole, can you? Its your call.

You!!

Always be yourself. Never try to be what you are not. Never try to do what doesn’t come naturally to you. Never neglect your guests. It is your responsibility to make them comfortable. Be generous in receiving help offered for arranging such parties. Keep smiling, keep laughing and party like a Rock Star without spending like one.

Here’s a situation. The month is coming to an end and you are eagerly awaiting your paycheck. This is when your boss walks in and says that all the company’s paychecks will be delayed for a week due to some God-only-knows reason. How would you react?

 What the fish? Why the fish?

I know how that feels because I’ve been there and done that.

But, seriously, what would you do apart from cussing about the delay? Or, rather, what should you do?

 A paycheck delay could mean disaster for many people. Many people live paycheck to paycheck. There are bills to be paid on time to avoid late payment charges and a you-are-in- deep- s**t situation. When I was single in the big city, I wasn’t in great control of my money and been in that situation many times. But I became more responsible after I got married and became a mom. I didn’t have a choice but to become more responsible. And that is how I came up with my 10 Cindimandments (read Cindy’s Commandments) that can used universally.

 Here are some of the things that you could do, till that paycheck comes by. What I mean to say is here are the 10 Cindimandments that will deliver you from being flat broke.

1. Pack your lunch for a week. You could save some money by not eating outside. Besides binging on all those big mac burgers and oily French fries is not really great for health anyway. Pack a chicken salad and a peanut butter sandwich. For all that you know, after a week, you might get too comfortable with this and might want to continue this new self-imposed healthier diet regimen.

2. Tell your landlord that your paycheck is going to be delayed and so will be the rent. Tell your bank, tell everyone if needed. Telling the truth might actually help than sneaking out of your house before the landlord wakes up from his beauty sleep.

3. Volunteer to do some extra work outside that might earn you some money. Mow your friend’s lawn, have a car-wash Saturday, work in a neighborhood grocery store for a couple of hours. Are you getting the drift? There are a million tiny ways to make some extra money during that tight week.

4. Don’t take your car out for a week. Ask your husband/wife/mom/dad/brother/friend/anyone to give you a lift. Of course do be so blatant and be up on their faces. Be polite is asking them and be ready to take no as answer too. Better still take the bus or the subway if your office is only a couple of blocks away from your home.

5. Think twice before buying anything. Stick only to the absolute essentials for that week.

6. Switch off everything that you can switch off before leaving your home. We take everything for granted these day, especially when we are quite aware about the global warming threat. Switch off your laptop, your TV, your DVD player, if nothing is inside your refrigerator, switch that off and before I forget, switch off that damn bathroom light. On a more serious note, you could end up saving a lot of money on electricity this way.

7. Curb that thought of pubbing with generous amount beer on Saturday nights. Just hold your horses till you get your money into your account. But if you must, try and go there only during the happy hours.

8. If you have a baby sitter, give her/him a week off. Invite your mom over to take care of the baby. But you have to be sure that your spouse is absolutely OK with having his/her mother-in-law in the house. Make sure that this doesn’t blow into a ‘Monster-in-law’ situation.

9. If you have children and you drive them to school every morning, you might want to consider car-pooling with other kids’ parents. However, I wouldn’t strongly recommend this because having someone driving your kids to school is a matter of trust. Do so, only if you are 110% sure that your kids are in safe and capable hands.

10. Stay positive. Keep smiling. And stop frowning because that is no way to live.

The new president already seems to be dipping in popularity charts and NY Times even had a page 1 story on Mr.Obama’s increased grey hair in just 44 days of taking over as President.

Coming to the point, Mr.Obama’s Tuesday night press conference did not appear to cut much ice with the media and people waiting for a ‘change’. The NYT describes his address as “sounding like the teacher speaking in the stillness of a classroom where students are restlessly waiting for the ring of the bell.”

The outrage over the huge bonuses that AIG officials paid themselves was a moot point in the press conference. AIG is 80% owned by the government and received billions of dollars in federal bailout money, even as the executives paid themselves huge bonuses. When asked why he did not go public with his outrage on learning about the retention bonuses at AIG, the president has responded, “I like to know what I’m talking about, before I speak”.

Large business corporations made windfall gains when the economy was on a boom all these years and shared the bounty among themselves. Now when the economy is on a tailspin, they rush to the government with bailout pleas (sometimes in plush private jets).

Blogger Hazzard calls to scrap bailouts and let things fail, because “there are hundreds and hundreds of financial institutions out there that made good business decisions. It’s time that they got to reap the rewards of managing their business in a responsible way”. Now, isn’t that what free market economy is all about?

At last the responsible tax payers, sincere homeowners and law abiding people are finally getting their due. Having spent thepast few months watching leaders of large business flying in their private jets to ask for bailout of their companies and board members of defunct financial groups having paid themselves huge bonuses, I started wondering why common people like us always get a raw deal. But now I guess it is pay-back time for being good citizens.

I am referring to the mortgage refinancing package announced by President Obama last week. Unlike the stimulus packages for large business houses which I feel benefit the heads of corporate houses more than the employees at the bottom rung, the mortgage refinancing package is aimed at the responsible homeowners, who have been regular in their mortgage repayment.

The package, which you all must be knowing by now, has two parts. The first, called “Home Affordable Refinance,” is for homeowners whose property has dropped in value. It would not reduce the principal of the loan, but allow the borrower to refinance the principal up to 105% of the home’s current value.

The second program, called ‘Home Affordable Modification,’ is aimed at borrowers whose payments have become unaffordable, because of either a job loss, illness or increase in interest rate. Here the lender will lower the monthly payment to as much as 31% of the borrower’s gross monthly income. The government would compensate the sum accordingly with the lender in terms of cash payments and financial subsidies.

And this one is the icing on the cake. In many cases, the lender would reduce the interest rate to as low as 2% for five years. Now, mortgage repayment at 2% is quite a steal. Fellow blogger Refinancing Condo makes an interesting observation by saying that refinancing at 2% interest rate will almost instantly raise home values.

But then again to qualify you have to be regular in your mortgage repayment and also your loans should be backed by Fannie Mae and Freddie Mac. NY Times has more details on what you need to know about this housing plan.

Economists have time and again being pointing out that foreclosure of homes is one reason for the economic crisis facing the country today. This effort by the Obama administration will go a great length in reducing instances of foreclosure. Allfinancialmatters has a totally different take on foreclosures and states that it is not that bad after all.

Just hoping that this mortgage refinancing package brings in the much needed liquidity into the financial system.

 

Disaster proofing our homes is an integral part of personal finance planning. The images of the small Jewish boy who was orphansed when his parents were killed in the terror attacks in Mumbai in November last year, is still fresh in my mind. It was like watching a rerun of the 9/11 attacks sans the airplane.

Being a mother myself of a fifteen-month-old, I could well imagine my child in the same situation and cannot but be scared. These are uncertain times and if not a terror attack, an earthquake or a hurricane or even a road accident is sufficient to throw our peaceful lives out of gear and life may never be the same again.

What occured to me then was that I have to make few arrangements to ensure that, even if something happens to me, my child is not left helpless to fend all for himself. So the whole of last week my husband and I took some time off our work to disaster proof our home.

We first made a list of all our bank accounts, stock market investments and term deposits. We made  3 copies of the list, kept one at our house, one in our bank locker and one at my mother’s place, just in case. We then checked the personal details that had provided in our financial/bank accounts and we realised that some of the details like address and contact details that we had provided were old and the nominee detail was missing in few accounts. We completed those details as well, so that in case there is a need for that information in case of an emergency, the updated information is available.

Only few weeks back my hubby was cribbing about the annual insurance premium payment which he thinks is useless and was eating up most of his money. But this time I did not have to persuade him to pay the premium so that the policy does not lapse. He did it by himself.

Thankfully we have the habit of keeping a sum of 3-6 times our monthly income as an emergency fund, untouched. We decided to continue with that habit of ours. We had already shot pictures of our valuables like jewellery, appliances and cars for our home owners insurance policy. We have now made  few copies of those CD’s and stored them in bank lockers and at my parent’s place.  We already have a fire alarm in our place. We still thought it wise to buy a fire extinguisher and keep in a place that is  easily accessible.

My mother thought we were being very pessimistic. My friends called it a knee-jerk reaction. But we never realise the importance of certain things unless they happen to us. And it is better to be safe than to be sorry.