Working Hard on Fun

Lighten the long summer days at your J-O-B by picking up a copy of this month's Color of Money Book Club selection, "The Levity Effect" (Wiley, $22.95) by Scott Christopher and Adrian Gostick.

You can join me today at noon ET to chat with Christopher about how to keep your workplace fun.

Make sure you check out my column on the book.

A few weeks ago I asked for funny office stories from readers.

Here's one more story:

Holly Byrnes wrote: "I bought an old computer keyboard from Value Village, sprinkled it with alfalfa seeds, and sprouted them. That took a good week. By April 1, there were nice thick green sprouts coming up between the keys. I pushed my boss's regular keyboard to the back of the keyboard drawer and put this keyboard in its place. He sort of laughed but started picking the spouts out and dumping them in the trash. I couldn't believe he'd think I'd do that to his actual keyboard! Though that made it funnier."

Now that's a LOL story. Got your own tale? Then join my chat today and share.

A Not So Funny Story

I'm not even sure where to start on this next story. It's so sad and infuriating.

At any rate let's start with the sad part. An Atlanta-area family is facing foreclosure on a house built courtesy of ABC's Extreme Makeover: Home Edition.

The Harper family beat out thousands of other families vying for a new home. Their dilapidated house had an overflowing septic system that was destroying their belongings, health, and spirit.

About 1,800 volunteers helped Extreme Makeover tear down the old home and build the family a four-bedroom palace. In the end, the Harpers walked into a home fully equipped with furniture and appliances. They were given money for property taxes for decades, and cash for their three kids' college funds. Oh, and they had no mortgage.

Unbelievably, the Harpers took that gift and plunged themselves into debt by ripping $450,000 in equity from the home. They used the money to invest in a business that went bust. Now they face foreclosure and are unable to make their mortgage payments.

If I had helped build that home as a volunteer, I would be livid. But you know what? This family did what so many others -- perhaps even you -- have been doing in recent years. They used their home as an ATM.

What has happened to the Harpers is "symbolic to our era like a sledgehammer to drywall," wrote Washington Post staffer Hank Stuever in his essay, The Extreme Reality Makeover Show (July 29).

You should read Stuever's essay. He poignantly writes that this has been the decade of "constant home do-over fetish, in real life and in the reality of reality TV."

The Harpers represent so many homeowners.

"You could (and will) say the Harpers had it coming, but really, we all had this coming," Stuever writes. "One thing we'll always remember about this decade was the constant home do-over fetish, in real life and in the reality of reality TV -- the constant warping of the consumer's sense of entitlement, the fairy-dust economics, the MasterCard reminder that the experience is priceless."

Willie Oswalt, the mayor of Lake City, Ga., the Harper's home town, helped lift a beam into the Harper's living room. He said in one news report, "It's aggravating. It just makes you mad. You do that much work, and they just squander it."

Put Yourself In A Mental Recession

If you want to avoid ending up like the Harpers then read my column from last Sunday: The Blessings of Living in a 'Mental Recession'.

I think we all need to live in a mental recession.

Phil Gramm, former campaign co-chairman and top economic adviser to Sen. John McCain, said that Americans were suffering from a "mental recession." Initially those words made me mad.

But then I thought, we should adopt that phrase and make it a personal mantra.

A few people had comments about the column. Here's what they said:

"I am a 61-year-old RN who was raised by my parents who had been young adults in the Great Depression," said Ann Baldwin of Brevard, N.C. "They continued to save money relentlessly even with my father's income as an anesthesiologist. Now when I discuss the economy with my like-aged friends, we are so grateful for all the frugal living experiences we have had."

Summit Point, W.V., local, Michael Del-Colle wrote: "While others may lament Phil Gramm's comments I, much like you, believe we are reacting to the word and not the message. Clearly, we are a blessed nation and people. As I look at our own lifestyle I realize not only how much we have, but how much beyond what we need we have."

"All my life growing up, my family was poor," said Karen Nye of Mishawaka, Ind. "I put myself through college mainly by working part-time, full-time in summer, a very small amount from my parents, and some very small scholarships. When I got out of school, I loved to spend every last dime because I never had the ability to do so prior to that. I built up a little debt. Not bad, but enough that it was stressful to me. Then I finally realized that the thing to do is live beneath your means - your version of the mental recession. People criticize or tease me for driving my 1994 rusty Eagle Talon. But hey, it's paid for."

Living Beyond Our Means

It's no wonder individual households are living beyond their means. Our government is setting the example.

Experts forecast that our deficit will be a whopping $482 billion thanks to the war in Iraq, tax rebates, falling house prices, inflation and the slow economy.

To make matters worse, the projection doesn't even include the new housing bill signed by President Bush yesterday that is expected to provide $4 billion in aid to communities hit hard by foreclosures, among other initiatives.

Read and weep about our nation's deficit in Jonathan Weisman's Record $482 Billion '09 Deficit Forecast (July 29).

Is Your Home Where The Money Is?

Last week, I asked you to read Alexander Von Hoffman's opinion piece about the declining value of owning a home: Home Values are Down, and Not Just at the Bank.

Here's what some of you had to say about it:

Kevin J. Hogan of Madison, Wis., says, "To me, owning a home is primarily something you do to house your family, and secondarily, to gain a sense of security from owning your own piece of real estate that you can modify as you wish. I believe that owning a home has absolutely nothing to do with investing."

"We have worked hard to find a place we could afford, then slowly pay off the loans," Sharon Richwine of Columbus, Ohio wrote. "When we first looked, the bank tried to get us to buy something they said we could afford - but we wanted to feel comfortable with the payment. So we continued to look for 2 years until we found something somewhat lower, but still GREAT!"

"I am outraged," says James A. Vander Poel in Northborough, Mass. "Using tax dollars to shore up failing businesses like Fannie Mae and Freddie Mac and to help big banks weather their self-inflicted crises is just wrong. It's an unfair burden on those who played by the rules. We're about to own our home, and we're being asked to help out people who bought bigger and fancier houses, beyond their means, and got into financial trouble."

Sue Monahan of Bozeman, Mont., writes: "Buying a home was the scariest thing I ever did. On closing day, I resisted a powerful impulse to forfeit my sizeable deposit and simply walk away. I was 32 and single, and I imagined disaster if I ever failed to make a mortgage payment. I'd avoided debt until that time and it pained me to owe that kind of money for 30 years."

Monahan continues: "The value of my house means security to me. It's mine, and is worth an amount I never thought I'd be able to call my own. My home is my refuge and the context for my life. It's where I am grateful to live my days."

Ultimately I think if you treat your house as a home, it will be priceless, and not because you use it as a piggy bank.

You Asked

Here are a few questions left over from my last online discussion. Next week, I'll answer any questions leftover from today's chat.

Q: For those of us who live under the umbrella of being a "frugal" person, we are paying the price of living on a fixed income and still trying to get the best (safe) return on our money. What should I do about my money market savings or CDs that pay us so poorly for being a saver?

A: If the money in the money market or CDs is your emergency cash or if you need it soon, there's not much you can do. You don't want to invest it because you risk losing the principal. It's okay to have some funds in low-yielding accounts as your safety net or for short-term use. But for long-term you should be well-diversified, including putting your money in the stock market through mutual funds. (And yes, I say that now even with the market see-sawing up and down).

Q: I have old, unused credit cards with $0 balance that are doing nothing but clogging up my credit report. I used them for balance transfers years ago. I have other, active credit card accounts with less than 30% credit used; some even less than 10%. I understand that closing credit card accounts changes the ratio between available credit and balances, but in my case, it wouldn't hurt me. I fall within the right range with all my other credit cards. So why can't I close these old accounts that have been dormant for years?

A: First, even using 30 percent of your available balance is not great. It means you are carrying a balance on your credit card or cards and that means you should stop using any of the credit cards until you get those balances down to zero.

Now to answer your question, you can close the accounts you don't want. Your score may drop a little but as long as you continue to pay your bills on time, your score should jump back up.

Q: In my first job at 22 years old, making $39,000. I have the opportunity to pay into a 401 (k) which I am, but there's no match. Is there a better place to invest my money or at least have it available because there's no match there anyway?

A: In this situation I might recommend you also invest in a Roth IRA. Contributions to a Roth are made with after-tax money, but your earnings are not taxed. One of the biggest advantages of the Roth is that you can withdraw your contributions without penalty. For 2008, the contribution limit for a Roth IRA is $5,000, or $6,000 if you will be age 50 or older at the end of the year. To get more information about investing, especially in a Roth, read Get the Facts: The SEC's Roadmap to Saving and Investing.

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

Charity Brown contributed to this e-letter.