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I’ve just spent the last four hours online, researching my finances. And I feel frustrated. Not just because I’m sick and my head feels like a giant balloon is expanding inside of it, or because after four hours of sitting on the floor, my bottom has fallen asleep, or because it’s a lovely summer Saturday night and I’m stuck at home. No … I’m frustrated because I’m working hard to every day to save my money, but my accounts are acting like total deadbeats — unmoving, unsuccessful and quite possibly hung over.

After my last post, a reader asked me to explain exactly how inflation is affecting my bank account. So I went back to pull the numbers, and analyzed my accounts during May 07, November 07 and May 08. I expected to find that expenses for ordinary things have gone up over the last few months. But on the contrary, I’ve been pretty good about adjusting my purchases to keep groceries and other staples at the same cost; for instance, we’ve made an effort to shop at Trader Joe’s more regularly vs. Whole Foods, and at the high-priced Whole Foods, we’ve cut back on the higher-priced items.

While I was rather impressed with my spending discipline, I knew there were more accounts to investigate.

Up next was my savings account - and that is most definitely hurting. First, the good news: I have managed to save nearly $15,000 towards my downpayment during the last twelve months! Now the bad news: During the last twelve months, my money market account has plunged from a 5.05 percent APY in May 07 to a 2.75 APY in May 08. It’s not even keeping up with inflation (which is currently at 4.2 percent), which sort of defeats the purpose of a savings account.

In fact, none of my accounts are keeping up with inflation. Not my bank savings account, not my money market account and not my 401K. In response to this statement, B said, somewhat sarcastically, that if my rates of return are above zero, the accounts still doing OK, and that the only people doing well right now are those who invest in commodities. I asked him if this meant I should invest in eggs and corn and cows. He laughed for a second, and then, more seriously said, “Well, if you open a brokerage account you can. Corn and gold are up right now.”

Unfortunately I don’t know how, or where, to open a brokerage account. Or if it’s a good idea. So I looked it up on google, and found that it’s pretty much just a standard investment account, which is not on my list of things to do with my downpayment funds.

It’s weird - I’m so close to where I want to be with that account, but it still feels so far away. I’m probably a year to 18 months away from buying a place — I have about $25,000 saved up right now — and I have a plan for the next twelve months that involves home buyer education and real estate market analysis. So I should feel good, or great, about my progress. But instead of feeling like my money’s doing well, I feel like my accounts aren’t working as hard as I am to help me reach my goals.

But given the economy, I guess everyone’s in the same boat. Maybe I should be happy that despite my savings accounts, I’m still managing to sock away money. Maybe I should also be happy that I haven’t lost any money, or any equity (since I don’t own a house). My net worth has steadily grown, despite the “market contraction.” All very positive things. So what’s bugging me?

I think the problem is that I feel helpless to do anything about the fact that my accounts aren’t keeping up. On the downpayment account, I shouldn’t move into higher risk, higher yield accounts, because I’m not planning on keeping money there five years or more. On the retirement account, a 1.9 percent rate of return is actually better than where my account was in November 07 (-4.5 percent). Truth be told, I wouldn’t want to make any bold moves in this economy; there’s too much uncertainty. And really, the difference between a 5.05 percent APY and a 2.75 percent APY probably only boils down to about $20 per month for me. So the best bet is to sit here and continue to save, like I always do.

I don’t know, maybe it is the weekend cold talking. Let me get a little better and tell you how I feel next week.

It may be time to adjust your budgets. I’m noticing a change in my bank accounts - are you?

AP: Inflation rate jumps highest in six months
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - The inflation rate shot up in May at the fastest pace in six months, pushed higher by soaring costs for gasoline and other types of energy.

Read the full article here.

Along the same lines, I read something yesterday on “stagflation.” Can anyone explain that concept?

As I noted a few posts ago, summer’s gonna be rough for vacationers - gas prices have skyrocketed, airline tickets are outrageous and nobody has any extra cash to spend on exotic getaways, since prices of everyday things are rapidly rising. So what’s a girl to do when she needs to get away?

My answer: Shack up with a faraway friend.

This may seem obvious for legions of college students accustomed to spending time crashing on friends’ couches during summer vacation, but for many young couples and young-at-heart singles, the days of “crashing” ended with the diploma (or at least the sober, non-sexual kind did). Work schedules, family life, significant others and small apartments create imposing barriers to hospitality, and eventually it becomes easier for everyone involved to stay in hotels. As a traveler, you don’t want to impose on your friends.

But one of my best friends just moved to Elko, Nevada, with her husband, and since I was desperate to get the frick out of Chicago and she was happy to have a visitor, we found a cheap flight, coordinated our schedules and made it work over a long weekend. The entire trip ended up costing about $150 more than I expected due to a last minute travel snafu (more on that), but overall I ended up having lovely time in a totally unexpected place that would never have been on my radar … all for about $750, including flight, meals, entertainment, gambling money, snacks, souvenirs and extra lodging.

So if you’re thinking of shacking up this summer to save a few bucks on a hotel room, here are some tips: plan well in advance to score a cheap flight, don’t assume anything about your hosts’ schedule, be as specific as possible about what you want to do during your trip (set expectations) and be a polite guest.

If you’re interested in my trip to Elko and some cheap activities we did there, read on. My trip synopsis is below… I warn you, it’s a long one; I will edit later… Read at your own discretion for now.

Day before the flight:
8:00 a.m. - I send an e-mail to my friend informing her how excited I am to visit Elko, then run off to attend about 800 morning meetings.

10:00 a.m. - When I come back to my desk, I find an e-mail from her nicely telling me that I am a moron because I assumed she was taking a half-day off work to pick me up from Salt Lake City. She is not, and now my options are to wait six hours at the airport for her or wait twelve hours to take a train. Rats.

12:00 noon - Friend informs me that she has found a flight for $180 to take me from Salt Lake City to Elko and offers to pay 1/2 the ticket b/c she feels bad that I am an idiot. I accept. She books the flight. Hurrah! I’m definitely getting to Elko, but since I’m planning to insist on paying the whole thing, my flight is now costing me roughly $480. I am mad at myself but too busy to care much.

Day one: United sucks. Reunions rule.
I make it to O’Hare fully packed with plenty of time to spare. Then I sit on the runway for 90 minutes. Then I miss my connecting flight, and the United flight attended tells me I’ll probably have to pay another $100 dollars since my flight itineraries weren’t linked and my missed flight was on Delta. I want to step on her toes.

Luckily, someone at the gate is much nicer and gets me onto the next Delta flight for free. She is a goddess. I profusely thank her and dash over to catch the flight to Elko… which leaves three hours later. Luckily I bought an $11 Quizno’s sub and a $15 dollar copy of “My Sister’s Keeper” to hold me over during the wait. I spend most of my layover crying like a baby in the airport. Damn that book is good.

At 6:00 p.m. I finally meet up with friend in the Elko airport. She and her husband take me on a brief tour of this high desert town — we drive past the mysterious brothels of Elko, the oldest casino in Nevada and some men wearing cowboy hats. I learn that Elko is as high above sea level as Denver, that it’s a gold mining boom town and that there are so many people trying to buy property there that all the hotels are booked with semi-permanent residents waiting for homes to be built.

We eat at a folksy Basque restaurant called “The Nevada” where the waitresses are super friendly, the gold miners eat in long rows and there is no sign of Basque cooking from what I can tell; however, friend points out that the homemade soup contains alphabet letters and this makes us happy. I estimate that the population of Elko is about 30 men to every one woman. Over a few cocktails, we speculate what it would be like to be a single woman in Elko. I bet you’d get a lot of … um, dates.

Then we go see Sex and The City. It ranks a “meh” and shoulder shrug on my SATC scale. We’re tired and go to bed.

Day two: Elko gets plastered
I sleep in while friend works; when I wake, I discover that I have the worst hair of my life in Elko - one half is plastered to my face and head via static and the other half is sticking straight up. I try five different hair creams to no avail. My hair sticks up like pipe cleaners. No wonder there are no women in Elko.

Friend gets off work early, and we eat lunch in a casino with a polar bear on the front. It’s the only place in town that’s open for lunch at 2:00 p.m. (Elko moves at a different pace.) We window shop around and pick up some souvenirs. I do not buy cowboy boots. We visit the cowboy museum, where the national cowboy poetry reading is held annually (who knew there was such a thing?). Then we watch her husband compete in a tug-of-war for charity (who knew there was such a thing?).

In the evening, we go to this crazy party at the Red Lion Casino, which friend tells me is THE BIGGEST PARTY OF THE YEAR in Elko. And no wonder! There’s a band, a beer tent, a mechanical bull (yep!) and an amazing all-you-can-eat buffet with a seafood bar. AND IT’S ALL FREE! Apparently one of the gold mining companies is doing so well that it can host this extravaganza for about 1,000 people every year. They don’t do that stuff in Chicago! I proceed to partake in the free bonanza.

By midnight, I’m playing craps at a $3.00 table with $20 worth of chips. At $5 left, I resolve to quit with my dignity in tact, but friend’s friend says to me, “No risk, no reward!” so I keep playing. I end up getting on a nifty streak and winning my money back, plus $35 more dollars. Life in Nevada is good, and my souvenirs are covered with my winnings. Plus, gamblers drink free so I still haven’t really spent anything on the awesome evening. Vegas, eat your heart out.

Day three: Ruby Mountain High
We wake up late because we’re hung over. Then we drive 20 minutes outside Elko to the Ruby Mountains, which are amazingly beautiful. Our campsite is $15 per night, it’s secluded and it’s on a mountain stream. We pitch tents, cook dinner and start a fire.

But we’re freezing cold, so we go to sleep early. The temp gets down to 30 degrees at night, and I am shivering in my winter jacket, gloves, hat, hood, sweatpants and wool socks. I think about going to the car or jumping into friend and her husband’s tent, but it’s too cold to get out of the sleeping bag. I think I hear a murderer or a grizzly bear outside but am more intimidated by the cold than the bear. So I wait in bed until the sun comes up. And when it does, I am warmed and I fall asleep and I am at peace.

Day four: Hiking the Rubies
When we finally get up, the sky is bright and we are refreshed, but my skin feels like sandpaper. I disregard it and we feast on campfired eggs and turkey sausage — protein never tasted better. We then hike up to the snow line in the mountains. It’s more beautiful than I imagined from our camp site.

After hiking, we head home, wash up, pack up and hit the road for Salt Lake City, where friend and I booked a hotel on priceline.com for $60 near the airport. We have a fantastic seafood dinner in Salt Lake City, though the city is dead on a Sunday night. After I roundly kick her arse at air hockey at a local watering hole, we head back to the hotel, exhausted and full. I am sad to say goodbye.

Day five: Homeward bound
Friend leaves Salt Lake City at 4:30 a.m. I sleep in and leave for Chicago around 1:00. I cry reading “My Sister’s Keeper” the entire trip home. I hope no one sees me. With my dry skin, flat hair, red-rimmed eyes and general look of exhaustion, I’m sure I paint a pretty picture. But despite my outward appearance, I feel alive. And that’s what my vacations are all about.

As I noted a few posts ago, summer’s gonna be rough for vacationers - gas prices have skyrocketed, airline tickets are outrageous and nobody has any extra cash to spend on exotic getaways, since prices of everyday things are rapidly rising. So what’s a girl to do when she needs to get away?

My answer: Shack up with a faraway friend.

This may seem obvious for legions of college students accustomed to spending time crashing on friends’ couches during summer vacation, but for many young couples and young-at-heart singles, the days of “crashing” ended with the diploma (or at least the sober, non-sexual kind did). Work schedules, family life, significant others and small apartments create imposing barriers to hospitality, and eventually it becomes easier for everyone involved to stay in hotels. As a traveler, you don’t want to impose on your friends.

But one of my best friends just moved to Elko, Nevada, with her husband, and since I was desperate to get the frick out of Chicago and she was happy to have a visitor, we found a cheap flight, coordinated our schedules and made it work over a long weekend. The entire trip ended up costing about $150 more than I expected due to a last minute travel snafu (more on that), but overall I ended up having lovely time in a totally unexpected place that would never have been on my radar … all for about $750, including flight, meals, entertainment, gambling money, snacks, souvenirs and extra lodging.

So if you’re thinking of shacking up this summer to save a few bucks on a hotel room, here are some tips: plan well in advance to score a cheap flight, don’t assume anything about your hosts’ schedule, be as specific as possible about what you want to do during your trip (set expectations) and be a polite guest.

If you’re interested in my trip to Elko and some cheap activities we did there, read on. My trip synopsis is below… I warn you, it’s a long one; I will edit later… Read at your own discretion for now.

Day before the flight:
8:00 a.m. - I send an e-mail to my friend informing her how excited I am to visit Elko, then run off to attend about 800 morning meetings.

10:00 a.m. - When I come back to my desk, I find an e-mail from her nicely telling me that I am a moron because I assumed she was taking a half-day off work to pick me up from Salt Lake City. She is not, and now my options are to wait six hours at the airport for her or wait twelve hours to take a train. Rats.

12:00 noon - Friend informs me that she has found a flight for $180 to take me from Salt Lake City to Elko and offers to pay 1/2 the ticket b/c she feels bad that I am an idiot. I accept. She books the flight. Hurrah! I’m definitely getting to Elko, but since I’m planning to insist on paying the whole thing, my flight is now costing me roughly $480. I am mad at myself but too busy to care much.

Day one: United sucks. Reunions rule.
I make it to O’Hare fully packed with plenty of time to spare. Then I sit on the runway for 90 minutes. Then I miss my connecting flight, and the United flight attended tells me I’ll probably have to pay another $100 dollars since my flight itineraries weren’t linked and my missed flight was on Delta. I want to step on her toes.

Luckily, someone at the gate is much nicer and gets me onto the next Delta flight for free. She is a goddess. I profusely thank her and dash over to catch the flight to Elko… which leaves three hours later. Luckily I bought an $11 Quizno’s sub and a $15 dollar copy of “My Sister’s Keeper” to hold me over during the wait. I spend most of my layover crying like a baby in the airport. Damn that book is good.

At 6:00 p.m. I finally meet up with friend in the Elko airport. She and her husband take me on a brief tour of this high desert town — we drive past the mysterious brothels of Elko, the oldest casino in Nevada and some men wearing cowboy hats. I learn that Elko is as high above sea level as Denver, that it’s a gold mining boom town and that there are so many people trying to buy property there that all the hotels are booked with semi-permanent residents waiting for homes to be built.

We eat at a folksy Basque restaurant called “The Nevada” where the waitresses are super friendly, the gold miners eat in long rows and there is no sign of Basque cooking from what I can tell; however, friend points out that the homemade soup contains alphabet letters and this makes us happy. I estimate that the population of Elko is about 30 men to every one woman. Over a few cocktails, we speculate what it would be like to be a single woman in Elko. I bet you’d get a lot of … um, dates.

Then we go see Sex and The City. It ranks a “meh” and shoulder shrug on my SATC scale. We’re tired and go to bed.

Day two: Elko gets plastered
I sleep in while friend works; when I wake, I discover that I have the worst hair of my life in Elko - one half is plastered to my face and head via static and the other half is sticking straight up. I try five different hair creams to no avail. My hair sticks up like pipe cleaners. No wonder there are no women in Elko.

Friend gets off work early, and we eat lunch in a casino with a polar bear on the front. It’s the only place in town that’s open for lunch at 2:00 p.m. (Elko moves at a different pace.) We window shop around and pick up some souvenirs. I do not buy cowboy boots. We visit the cowboy museum, where the national cowboy poetry reading is held annually (who knew there was such a thing?). Then we watch her husband compete in a tug-of-war for charity (who knew there was such a thing?).

In the evening, we go to this crazy party at the Red Lion Casino, which friend tells me is THE BIGGEST PARTY OF THE YEAR in Elko. And no wonder! There’s a band, a beer tent, a mechanical bull (yep!) and an amazing all-you-can-eat buffet with a seafood bar. AND IT’S ALL FREE! Apparently one of the gold mining companies is doing so well that it can host this extravaganza for about 1,000 people every year. They don’t do that stuff in Chicago! I proceed to partake in the free bonanza.

By midnight, I’m playing craps at a $3.00 table with $20 worth of chips. At $5 left, I resolve to quit with my dignity in tact, but friend’s friend says to me, “No risk, no reward!” so I keep playing. I end up getting on a nifty streak and winning my money back, plus $35 more dollars. Life in Nevada is good, and my souvenirs are covered with my winnings. Plus, gamblers drink free so I still haven’t really spent anything on the awesome evening. Vegas, eat your heart out.

Day three: Ruby Mountain High
We wake up late because we’re hung over. Then we drive 20 minutes outside Elko to the Ruby Mountains, which are amazingly beautiful. Our campsite is $15 per night, it’s secluded and it’s on a mountain stream. We pitch tents, cook dinner and start a fire.

But we’re freezing cold, so we go to sleep early. The temp gets down to 30 degrees at night, and I am shivering in my winter jacket, gloves, hat, hood, sweatpants and wool socks. I think about going to the car or jumping into friend and her husband’s tent, but it’s too cold to get out of the sleeping bag. I think I hear a murderer or a grizzly bear outside but am more intimidated by the cold than the bear. So I wait in bed until the sun comes up. And when it does, I am warmed and I fall asleep and I am at peace.

Day four: Hiking the Rubies
When we finally get up, the sky is bright and we are refreshed, but my skin feels like sandpaper. I disregard it and we feast on campfired eggs and turkey sausage — protein never tasted better. We then hike up to the snow line in the mountains. It’s more beautiful than I imagined from our camp site.

After hiking, we head home, wash up, pack up and hit the road for Salt Lake City, where friend and I booked a hotel on priceline.com for $60 near the airport. We have a fantastic seafood dinner in Salt Lake City, though the city is dead on a Sunday night. After I roundly kick her arse at air hockey at a local watering hole, we head back to the hotel, exhausted and full. I am sad to say goodbye.

Day five: Homeward bound
Friend leaves Salt Lake City at 4:30 a.m. I sleep in and leave for Chicago around 1:00. I cry reading “My Sister’s Keeper” the entire trip home. I hope no one sees me. With my dry skin, flat hair, red-rimmed eyes and general look of exhaustion, I’m sure I paint a pretty picture. But despite my outward appearance, I feel alive. And that’s what my vacations are all about.

From the WSJ: Bennigan’s Owner In Crucial Credit Talks (hat tip Geoffrey) The owner of national casual-dining chains Bennigan’s, Ponderosa and Steak and Ale is in talks with its major lender GE Capital Solutions in an effort to stave off a possible bankruptcy filing …

The problems at Metromedia show just how difficult life has become for casual-dining chains. Consumers are cutting back on

Here is an update on the Ireland housing market from UTV Insight:

Part I: (8 minutes)

Part II: (8 minutes)

Part III: (8 minutes):

Several readers have sent me the link to this Milwaukee Journal Sentinel story about a wretched tale of mortgage fraud. It’s worth reading, both for an understanding of how many parties need to be complicit for such a blatantly fraudulent transaction to occur, but also for the way it tracks the hardening of attitudes of the lender over time, from an initial spontaneous recognition that this

Check out this interview I did with Kimberly Palmer at US News & Report. I think it’s worth a listen over your lunch break.

Podcast: Being Young and Thifty
US News & World Report
Interviewer: Kimberly Palmer

What do you guys think?

(No more to read on this one, so ignore this >>>)

From the LA Times: Sales of foreclosures are on the rise

THE MARKET may be down, but sales of bank-owned properties are picking up, with multiple offers being made in many cases as lenders drop their prices to move foreclosed homes off the books.
…
“A $650,000 to $700,000 appraisal a year ago in some areas is now worth about $350,000. It took a while for the banks to adjust their mentality to that.” [said Earl Bonawitz, general manager for Century 21 Wright in Temecula]
…
John Karevoll, an analyst with DataQuick Information Systems, also is seeing that REO prices have come down and more homes are closing escrow than a few months ago.

“The big question is whether we’re in a recession,” he said. “If we are, we’re in for some more downturn. If we’re not in a recession, it’s likely that prices have found their bottom and that most of the declines are behind us. That’s true for REOs and the market as a whole.”

Yes, some REO lenders are finally getting realistic with their pricing, and in areas with significant REO activity (and aggressive lenders) prices may be close to the eventual nominal bottom. This is one of the key points I made in House Price Mosaic.

But this article misses a far more important point: house price changes vary widely by area, not just by state, but even within cities. Over time the equilibrium between different price ranges will return, but the price dynamics will be different. Areas with a large number of REOs have seen much faster price declines - and are probably closer to the price bottom. Areas with fewer REOs will exhibit “sticky prices” and the prices will probably decline for some time.