Category Archives: Money

How Not To Retire By 40 – Part II: An Ode To Emergency Fund

This post was included in Carnival of Personal Finance #299: The March Break Edition as one of  the Editor’s Picks!

Family History

I was raised by my mother and my grandmother. An emergency fund was non-existent in our family. I don’t think that growing up I even understood what it means. Neither my grandmother nor my mother discussed family financial matters with me. Even when I graduated from the University and got my first job, no one ever told me: save up Aloysa, spend less than you make, think about retirement.

Our family never had savings, and in case of an emergency my mother or grandmother would ask friends to loan them badly needed money. Somehow their friends always would have money to loan… till the payday.

My mother and grandmother were teachers. Teachers were not paid very well in the Soviet Union, and it was not easy to run a household full of women. In fact, I am not sure anyone was paid well back then unless they belonged to the communist party, KGB or worked in the defense ministry. However, there were always people (like friends of my mother’s) who always managed to have savings.

Historical Background

Ironically, it was considered shameful to be rich in the USSR (the rule never was applied to the communist party members.) People who were better off were frowned upon and could easily become a subject of KGB investigations. Those people had to hide their wealth and money. Sometimes I wonder if habits of hiding money in socks, pots, books and under mattress came from that time.

The Revolution of 1917 that eventually led to the creation of the Soviet Union was built on the hatred  (as so many other revolutions in the world) of rich and powerful. I know it is a pretty simplistic and unsophisticated way to look at it (there was so much more to the causes of the Revolution than that), but I don’t want to go into a detailed history lesson. This post is not about that.


We lived from paycheck to paycheck, and sometimes we wouldn’t manage even that. Thankfully, there was no credit system in the Soviet Union. It scares me to think what would happen to the majority of people if there would have been one. Friends who were a little richer, a little better off were our lifelines. We could not build any emergency fund because there was nothing to build it from.

It was one of my friends here, in the US, who told me once that it was always important to have some savings build up because “you never know what life will throw in your way.” She was also the one who introduced me to the notion of “spending less than you make.” She was very frugal. Sometimes to the point of being plainly cheap. But there was a  good reason for that. She was building her savings account because she was preparing to run away from her abusive husband. She was a powerful saver who managed to put away enough money to get herself out of the marriage by simply cleaning houses twice a week. 


It took me years to realize how important an emergency fund is in one’s life. Without it, you sink deeper and deeper into debt. Without it, you are not a free person to live your life. You are a slave to circumstances. I’ve been one for years and believe me, it is not a pretty picture.

Credit cards, personal loans, banks let you down, but emergency fund never does. Emergency fund is stronger than anything you can ever accumulate. It is stronger than time (depending where you keep it.)

Its strength holds you together when nothing else can.

How Not To Retire By 40 Part I: Things That Undo Us

The series of the following posts was inspired by one of my good friends and a great blogger Joe, the creator of Retireby40 , where he is chronicling his journey to retirement. Joe wrote a post How To Retire By 40 where he outlined and mapped his journey to an early retirement.

It is a very stimulating post and an exciting journey for those who stayed on track, who have mapped, saved, invested, planned from the early age. Those people already can visualize a nice bungalow somewhere warm and exotic. They close their eyes and see themselves raising their grandchildren. They stock up on travel books because they know they will travel the world. In other words, those people see the light at the end of the tunnel by age 35 or 40.

But then there are those, who are not staying on their retirement track for a variety of reasons. They close their eyes and see bills. They stock up on travel books because that’s the only way they can travel the world. They don’t see the light at the end of the tunnel. In fact, they are not even sure where this tunnel can be found. I am one of those people.

Pick The Right Partner

The right partner means common goals and mutual understanding. It means partnership. It means working together towards common future. Beaker and I are definitely right for each other in spite of the fact that I am a spender and he is a saver. In spite of the fact that I look at money as something to be spend on travel, books, furniture, and clothes, and Beaker looks at money as a means to an end that provide security and stability.

What can I say? We complete each other.

Get Rid Of Consumer Debt

I came to the U.S. with no debt. Then over a few years living in a consumerist paradise I accumulated quite a bit of it. I told my story about that time in my life here. I took out some student loans to get myself through the school. The result of my few years in the US: piles of credit card debt, student loans and a car loan.

Beaker had one student loan when he met me. A few years and one European honeymoon later, we increased our debt by a few thousands and enthusiastically added a mortgage on a top of it.

Looking back I am not sure what triggered the bitter awakening, but something definitely did. Maybe it was the realization that debt sets us back in our life achievements. We finally saw that in order for us to do what we want to do, to live the life we want to live, we need to get rid of our debt. As fast as we can.

Last year we were able to pay off $13,000 on our debt. It feels great. But we still have a long way to go. But at least by now, we know where that mysterious tunnel, we were searching for sometime now, is located.

Spend Less Than You Make

This is a very simple truth, isn’t it? Wrong! It surely sounds simple. But try living according to it and you will see that there is nothing simple about it.

Some of us don’t follow the notion of spending less than we make not because it is difficult to do, but because so many of us are oriented towards immediate results and instant gratification.

The devil of consumerism appears at your elbow full of sympathy, suggestions and possibilities. Humans are weak (at least those if us who came from the former Soviet Union) and we give in to the devil’s temptation. Yes, I served the devil of consumerism for years. Budgets and savings love us in the long run. But it requires time, effort and discipline. The devil of spending (or consumerism) takes an interest in us and provides an immediate gratification we humans crave. By the time you realize it, it’s too late and the damage is done.

There is only one financial thing I fear now – debt. For I have seen it, felt it and lived it. In fact, I am still living it.

I know now that it is debt and reckless spending that undo us.

To be continued.

P.S. By the way, Joe just had a baby, and if you didn’t say “Congratulations” yet, head over to his site immediately and do so!

Introducing Talk It Out and Aloysa’s Reading Picks

Please make sure to check out my staff writer post at Beating Broke, What Our Chinese Guides Taught Us About Pragmatic Consumerism.

I came up with an idea for a new series TALK IT OUT: Money and Relationships. This series will be all about money, relationships and our lives.

Money can bless a relationship or curse it. Am I wrong? Let’s put it this way: money does affect relationships. Anyone disagrees? Is she a compulsive spender? Is he a frugal saver but she is a gold digger? I am sure you have plenty to say, so let’s talk it out!

If you like discussing money and relationships, if you have something to say or to ask, if you have a personal story to share, a personal experience to talk about, if  you want to be heard and if you want to see what others have to say then email me.

How It Works:

1. You tell me your story through email. If you decide to stay anonymous, let me know. If you don’t care, so be it.

2. I will read what you have to say, and let you know when your story, experience or a question will be heard, shared and answered.

3. If you want to ask Aloysa a question about Beaker, our relationship with each other and our not so simple relationship with money, please do so! We promise to respond.

4. Twice a month my readers and I will discuss, brainstorm and share our own experiences with you. Payroll Tax Holiday: Why Most People Will Get A Raise In 2011 @

What You Get Out Of It:

1. You vent, you confess, you rant, you rave, you share, you cry, you laugh. You spill it all.

2. Your opinions will be respected. Your questions will be answered. Your experiences will be appreciated.

3.  If you decide NOT to stay anonymous, I will gladly promote your blog.


You get to know my readers and me, Aloysa!


Moving on to Aloysa’s Reading Picks (as usual in no particular order):

Who wants  a free iPad? I do! Win An iPad, Amazon Gift Cards, And A Starbucks Gift Card!! @Buy Like Buffet;

What do you think about plastic bottles? Check out Sustainability Tip #21 Steel vs Plastic @Sustainable Personal Finance;

Did you think the guy in my “gym affair” article was creepy? How about this creepy guy in How I Overcame The Worst Ever Health Club Membership@TransFormX;

Men vs Women in offices, what are your thoughts? Find out reading I’m Not That Kind Of Girl, But I Should Be@Yes, I Am Cheap;

I usually don’t read book reviews that much but this one caught my eye. Book  Review: Your Money or Your Life@Retire By 40;

Do you prefer a hustle and bustle of the city life or tranquility of suburbs? Young Professionals in the City: Will the Allure of the City Break the Bank?@Brokeprofessionals

Ever wondered what it is like to work at a hotel? Heard horror stories and wondered if they are true? Find out readingFaulty Towers vs Reality @I Am The Working Poor;

What are your financial milestones? 20 Financial Milestones for your 20s @Budgeting In The Fun Stuff;

Someone just got a place together! Huge step! Our First Home Together @Invest It Wisely;

I discovered something new while reading The Beardstown Ladies @Money Cone;

Express your opinion about gender equality after reading Gender Equality and Opportunities for Girls Today @Squirrelers;

What if one of you would have to stay home and raise children? When Two Incomes Become One @MomVesting;

Did you think you got an unexpected pay raise when you saw you paycheck in January? Payroll Tax Holiday: Why Most People Will Get A Raise In 2011 @Faithful With A Few;

Saving for the first home but life gets in a way? What are your priorities? First time Home Buyer – Saving for a down payment @Wealth Informatics.

Separate or Joint? Mine or Yours?

Want to know how to haggle? Then please make sure to check out my staff writer post at Beating Broke today, The Golden Rules of Haggling!

This post was featured in Carnival Of Personal Finance #288.

In my family we always had a common pot of money.  We didn’t have a bank account but we would put money in a big brown envelope. Yes, I still remember the color! My grandmother was in charge of it, and she would do all the necessary budgeting. If I needed money for school lunch, I’d have to ask her for an allowance. If my mother needed a new coat, my grandmother would decide when the family budget could afford it. I grew up with one brown envelope, or I’d rather say one “joint” account.

Years later, when Beaker and I moved in together, we opened one checking account and one savings account, with both of our names on the accounts. I did not question our decision. Neither did Beaker. It seemed natural for us to combine our finances and move towards our common financial goal – building our lives together.

My friends however questioned every step of this process. That’s when I discovered that some people draw a line when it comes to finances, opting to keep separate accounts. My friend, the one who hides purchases in the trunk, told me that separate accounts are necessary for separate spending. “There is our money, and there is my money,” she said. Understandably, she is very protective of her savings. Probably because having separate accounts prevents arguments about overspending.

I understand that people want to preserve what they had, what they have accumulated before they became a couple or a family. Having separate accounts gives some level of comfort and peace of mind knowing that “what was mine, remains mine.” Especially if you were financially established, owned some assets and investments, you could decide that having separate accounts works better for you. However, I believe thathaving separate accounts also discourages the development of shared financial goals.

Neither Beaker nor I had accumulated assets, houses and investments when we decided to start our lives together. We brought our debt into this relationship, so the natural choice was to have joint accounts to pay the bills, save and plan our financial future. We decided to share everything: our debts, our bills, our paychecks. We decided to share our lives.

I think that in the end, it all comes down to a question of trust. Marriages are built on trust and commitment, right? It is all about sharing, isn’t it? So, why do we need separate accounts? Is it because we don’t trust each other completely? Is it because we think that the other person will go out and spend our money? Or is it because we want to preserve a piece of us, we used to have before we were committed? Something that would show us that we have not totally dissolved ourselves into the relationship?

I am a huge believer in joint accounts because they create a concept of  “our” instead of “mine.” They reinforce trust and commitment, and ultimately they create a sense that “ we are in this together.” Isn’t that what marriage is all about?

Beware of Men Counting Pennies

This is my third and last installment (so far) of the horror dating stories that either my friends or I have encountered. Let’s talk about men I call Penny Pinchers.

Situation 1

Years ago I was asked out by a guy in my class. He asked if I would like to go out and have dinner with him. I thought it sounded nice, so I agreed. He told me that we will “go dutch.” Dutch for me back then meant someone from Holland. I was clueless what he meant. Was he talking about the name of the restaurant? I looked at him not knowing what to say. He explained to me that in America “going dutch” means splitting the bill. I did not like it because I was not accustomed to it. In my culture if a man asks you out, there is no question who pays for a date. Nevertheless, I agreed. It turned out to be a huge mistake that cost me at least a couple of my paychecks.

I was a full-time foreign student paying my way through the school with scholarships and credit cards. I was working only part-time because foreign students were not allowed to work full-time for the first few years in the US. The guy who asked me out was living with his parents, working full time and taking one class at a time.

We went to a fancy restaurant and our bill was pretty hefty. Of course at the end of the dinner he expected me to pay my half. When I saw the amount of my half of the bill, I wished I would have known that in advance. I would have chosen a different place. He at least should have asked me if the restaurant he chose for us was affordable for me. I paid my half of the bill, and after that night I was “too busy” to go out with this guy again.

Dating takes effort. It also takes money. I am not saying that men have to spend a fortune, or “going dutch” is not an option. But they have to put some effort (emotional and finaicial) into dating. It should not be all about convenience.Don’t you think that there is a huge difference between being cheap and wanting to share financial responsibility?

Situation 2

My friend was dating her rich neighbor for a while. He had a luxurious Porsche, a nice big house and took long and expensive vacations. Alone. He never asked her to “go dutch” but he never took her to any fine place either. He liked to cook dinners at home, rent DVDs, and shop in TJMaxx.

One day my friend got the flu and asked him to get Theraflu for her from the store. He gladly ran to a store, got the Theraflu, and gave my friend a receipt asking her to pay him back at her earliest convenience. My friend was shocked. She told me that he constantly asked her to pick up his clothes from the dry cleaner. She paid his dry cleaning bills and never asked him to repay her back. After the Theraflu incident, I told her that maybe she needed to tell him to start picking up his clothes from the dry cleaners himself.

It is much harder to have a good time with a cheap man. I am not talking about frugal and responsible man who knows and understands the value of money. I am talking about a man who doesn’t pick up tabs, who chooses the cheapest eats in town and refuses to go out to movies because The Red Box costs only $1.

Is a man who won’t part with his pennies one you should avoid? Or is he the one to learn money management skills from? Decide for yourself.

Edit: This article was included in Carnival of Personal Finance #284.  Make sure to visit it and read some great articles!

The Great Pretender

Relationships should be based on mutual trust. Otherwise, I believe that there is no future possible. Finances are important. Same values are essential. Mutual chemistry is necessary. But when you break trust, you break the bond between you, don’t you?

Main characteristics of The Great Pretender: he showers you with gifts: designer bags, fancy jewelry, mind blowing shoes and exquisite perfume. He takes you out to expensive restaurants where you taste meals you cannot pronounce. He tips so generously that you secretly start considering a new career as a waitress. For your birthday you get an unforgettable trip to Paris or Rome, or Tokyo.

You live in a fairy tale. You are afraid to wake up in the morning and find out that he exists only in your dreams. Unfortunately for you, he is as real as he can be. Your relationship is getting serious, you move in together and that’s when the reality hits you.

First, you find out that his house is couple checks away from going back to the bank. Second, you find out that his truck is leased. Third, you find out that he is in debt up to his eyeballs. All the meals you had with him, all the trips you took together, all the gifts he gave you, everything was financed on his countless credit cards.

You are horrified. You are not sure if you can build your indestructible future together based on mistrust and uncertainty. You ask him (your voice is shaky, you eyes are teary) how much he owes. He waves his hand carelessly, saying that he doesn’t owe that much. He assures you that it is all manageable. You listen to your inner voice that says that something does not add up. Your last trip together to Asia, or Europe, or Antarctica was not cheap. A bracelet, or a ring, or a designer bag he gave you last month costs a fortune.

You decide to investigate on your own. Because you work at a bank, you can access certain information. Carefully, not to get caught, you bent some rules and pull a credit report on the love of your life. What you see is your worst nightmare.

Numbers flash at you from the pages of his credit report, making your head spin like during a never ending roller-coaster ride. The total balances of his seven credit cards add up to $75,000. “Not really that much” takes a terrifying form. You realize that his words do not match the message.

Do you bail out or do you stay?

My friend stayed. She did ask him why he never said a word about his debt. He innocently explained that it never occurred to him that it was THAT important. He lived in debt, using credit cards to finance most of his life and never had any problems. He promised to change. He promised to pay off the debt, find a second job. They decided to forget the past and focus on the present.

I don’t know where they are going to be in five-ten years from now. But right now they are working on his financial problems. Together.

His Wallet Is Empty But What About His Head?

My girlfriend and I had a conversation about men. I guess girls do that – gossip about men when there are no men around. My friend is single and dating. As you can imagine she had quite a few stories to share. I listened to her musings about the guys she met, and felt relieved that I am not playing the dating field anymore. It sounded … tiresome.

Dating when it is done right can be a lot of fun. It can also be hard work. Especially when it comes down to whom and how you are dating.

Ladies, this post as well as subsequent articles will be drawn from my own dating experiences. What I am going to say is based on a few examples of a few men my friends and I have encountered.

Gentlemen, if you are going to read this any further, you should realize one thing – I am not generalizing. I am not saying that all men have to fall into certain categories.

I believe that there are certain types of men that can trap you financially and emotionally. I met them myself, I dated some of them and now I want to write about them: The Poorhouse, The Great Pretender and The Penny-Pincher. I am planning to write a series of posts about each of these categories. Today I would like to discuss The Poorhouse.

Main characteristics of the Poorhouse: he is going through some financial difficulties and cannot afford a lot of things. He is broke because he either just lost his job (economy sucks) or he doesn’t have an emergency fund because while looking for a job he spent it all. Other circumstances are possible. He lives with his friends because he cannot afford his rent anymore or he lives in a trailer park because it is all he can afford.

Ladies, would you give him a chance?

Situation 1. I met my husband when both of us were broke. I was plowing my way through grad school, he was digging his way out of the student loans. He wanted to impress me, so on our first date he took me out to an expensive restaurant. There he spent his whole paycheck. Mind-blowing? Absolutely. Stupid? You bet!

But we made our relationship work. I overlooked the fact that he was broke (so was I!) and that he could not afford a lot of things. What I liked about him (besides other non financial stuff) was that he paid his bills on time and he was working hard at his job to get a promotion.

I evaluated all of this and the fact that I do not validate my self worth depending on how much money a guy spends on me. Do you?

We still managed to go out and do fun stuff. We had great dates that did not cost a lot. We cooked dinners at my place, watched movies at his, walked in a park, played board and card games, visited his and my friends, went on scenic rides. Somehow, we were in this together – struggling financially but building a better future.

Situation 2. One of my girlfriends met a guy who announced to her almost immediately that he was broke and could not afford a lot of things. He, in fact, told her that if she wanted to eat out, go clubbing and just go see movies, she would have to pay. He was unemployed at the time they met. I was surprised to hear that he had admitted to being unemployed because I always thought that unemployment was the last thing a guy would want to admit. But I am generalizing here…

She did it for a while (love is blind sometimes): paid for dinners, movies, drinks. She tried to find him a job. She was networking for him, she was pulling a lot of strings with no appreciation from him. I was puzzled. Why would a successful career woman be dating a guy who was smoothly moving from one job to another, did not want a stable life, and was living in a trailer park because it was cheaper than an apartment?

I do understand that love is blind but to what point?

My friend broke up with this guy after six months. Six months! It sounded like a lifetime. When I asked her why, she said “I am a very accepting person but I got to the point where there is only so much I can do. I needed help and he was not willing to provide that help.”

Isn’t it ironic that my successful friend needed help?

I believe that no relationship should be based on money. Unfortunately, money very often shapes our relationships.

UPDATE: This article was included in the 281st edition of the Carnival of Personal Finance. Make sure to visit the Carnival and check out other great articles.