Everybody Loves Your Money

Well, we’ve pretty much been glued to the TV watching for any sign of what our parent’s house looks like outside the french quarter. So far we haven’t seen their street but we are hoping that it’s not completely under water. If it isn’t under water, and wasn’t damaged too bad from the hurricane itself, there is always the real possibility that it’s been completely looted. The worst part is that we won’t know for WEEKS, if not MONTHS. Anyone that has seen the house would have been looking to be rescued so there isn’t much hope they’d be posting status on the internet.

I’m doing my best to tie this in to personal finance. You know what? It’s relevant. My inlaws are lucky enough to have a good job to count on and some savings. While they aren’t Donald Trump, they also aren’t living in poverty like so many of the people suffering in Louisiana, Mississippi, and Alabama. We are just thankful that they had the resources and intelligence to get out before the hurricane. They are living off of their emergency fund now. I can think of no better reason for having an emergency fund than to support yourself while you can’t access your house (for weeks or months), not know when you can go back to work, and not know what your house will look like when you finally do get to see it.

So, if you take anything away from this chapter in our history, at least give it a moments thought how you would handle this. Would you have any financial resources to get by? Would you have to resort to sleeping in a shelter? What would your quality of life be? Would you really want to count on a credit card company to get you by? What if they decide you are too big of a risk based on the current situation? Wouldn’t it give you more piece of mind if you could use your own money? I know it would give me more piece of mind. If you aren’t addressing your financial state, maybe this is a good time to consider making some changes to protect yourself and your family in an emergency like this.

I’ve been glued to the TV and working besides. My inlaws live in New Orleans and were evacuated. They are assuming their house has been destroyed. They are up in Arkansas staying in their camper van. Not exactly the most comfortable situation, but it could be worse. The local government is saying that they may not be able to come back for weeks to months. I keep hoping to see their house on TV (it’s right outside the French Quarter), just to know what shape it’s in.

It’s just a bit stressful worrying about what’s going to happen down there.

I’ll get back to posting regularly soon.
Thanks
Hazzard

I read a fairly long article in the paper this morning that talks about how much debt we as a nation have. If every man, woman, and child paid their share of the debt, we’d each have to shell out $145000.00. WOW. Our government is overspending to the tune of over $300 billion and borrowing from people all around the world.

It cited the fact that even during the booming 1980’s, when we were spending like crazy, that our savings rate was still around 7%. It’s down around zero now. Thank goodness I’m helping bring the average up, rather than down. At some point, something very big is going to happen and the economy is going to get really ugly. Many people are going to face some serious financial problems. WE CREATE THE SITUATIONS WE ARE IN. I’d like to say I’m going to feel sorry for all these people, but I won’t. People need to take another look at their finances! SET YOURSELF UP FOR SUCCESS. If I say that expression one more time, the police will probably have to come to my house and arrest my wife for beating her husband. She hates that expression, but it’s true. You have to plan for success. Set goals. Track progress. Create opportunities. Plan for emergencies.

I guess I probably shouldn’t rant about this, but it justs makes me crazy. Why is it so hard for people to live within their means and plan for tomorrow? How can people live under the constant stress of the possibility that the house of cards is going to crumble? OWN YOUR ENVIRONMENT. Be your own friend. Help yourself out. Do yourself a favor. Cut yourself some slack. Just stop spending. If you have the urge to spend money, go try to make the equivalent amount of money instead. Be creative. Have fun with it. Once you see how hard it is to make the same amount of money that you are thinking about spending, you might just reconsider. THE SWITCH IS RIGHT OVER THERE. TURN THE LIGHTBULB ON.

I called my broadband company today. 6 months ago, I had called to threaten to cancel if they didn’t give me a discount. They dropped the price for 6 months for me. Well, that 6 months is over so I called them back again. Here’s how the conversation went:

Me: Hi. I’d like to change my broadband service to your 2 megabit speed instead of 4 megabit speed.
Her: Uhh Sir, we don’t have a slower service. We only sell the 4 megabit service and it will be going up to 6 megabit.
Me: Hmmm Bummer. I don’t like paying that much for broadband and the phone company is hitting me hard to sign up for DSL.
Her: But Sir, Why would you want a slower DSL connection?
Me: Do you use all 4 megabits of bandwidth? I don’t. I bet at my peak, I use less than 1 megabit. So why would I want to pay more for that 3 megabits that I’m not using? Why not switch to DSL and pay less than half? I really need to lower my monthly bills because we are overextended.
Her: Oh, I don’t even have an internet connection. My friends keep asking me to get it.
Me: But if you did, do you really think you’d use 4 megabits per second? Do you have any idea how fast that is?
Her: Well some people like the speed for gaming.
Me: That’s nice. I don’t play games.
Her: Well, how about if I drop your price by 35% for the next 6 months?
Me: Okay, you talked me in to it.
Her: Oh, well I’m sure glad you’ve decided to stay with us.
Me: Yeah, me too. I really appreciate all of your help. I’ll call you back and talk to you in 6 months.
Her: Okay. Thank you sir.

So, I got my price dropped again. She said that she probably wouldn’t be able to do it next time. I said, “Okay. I guess I’ll cancel in 6 months”. She didn’t say anything. Someone told me that if you talk to them about the other options out there and tell them that you are considering switching, they have some leeway to give you a discount to keep you. You have to choose the option to cancel or change your service when you call. I’ve found, rather than threatening to cancel out right, that it’s better to ask them if they have a less expensive service. I always say that we are overextended on our bills and that we have to find a cheaper alternative to their price. It has worked like a champ both times. Good thing she can’t connect me to my blog. Next time I call, I’ll have to really paint a bleak picture. If they won’t give me a discount again, I’ll probably price out DSL. I’d hate to give up cable broadband though. I really do like the speed…….

I started writing this blog because I wanted to create dialogue around personal finances. I’ve always loved personal finance and am really amazed at how little most people care about their finances.

So, here I was blogging away and then I noticed that Google had a thing called Adsense. I thought, WOW. I could actually earn money while I blog? It almost seemed too good to be true. Do something I enjoy, and get paid for it.

Well, I can honestly say the honeymoon is over. Had I been able to keep up the momentum of the first couple weeks of having Adsense on my site, I would have been okay. But……. that didn’t last. Now I see most days with a big fat 0.00. All I seem to be doing is creating ad impressions so that Google can make money. So, I’m back to doing this because I enjoy it. The money is trivial. I figured out that if I put this amount of effort in any number of other things, I’d earn FAAAAAR more.

I guess that’s enough ranting about not making any money at this. I’m still working on other posts, so keep your eye out for something new. I’ll be taking a short vacation later this week, so I may not be very active this week. I will be taking my wifi enabled laptop to see if I can pick up any signals where I’ll be. I’m heading to England in less than a month and am just praying I’ll find some signals over there. For the length of time I’ll be there, I’ll probably shrivel up and die if I can’t get online.

For the first time in at least a year and a half, my wife and I went to see a movie last night. We didn’t even know what we were going to see until we got to the theater. It was mostly just a break from watching our daughter since my wife’s parents are in town. They told us to go out and do something, and in fact even handed us some money to go. (I didn’t know that until we got to the theater and my wife handed me the money. Normally I wouldn’t accept it and have been turning down money all week from them)

When we got to the theater we though we might see March of the Penguins. I have heard that it’s a good movie but also noticed it’s not quite an hour and a half long. Normally I wouldn’t pay attention to the length of the movie, but as soon as I saw the cost of a ticket, I decided I wanted to sit in that movie theater as long as possible. Two tickets were $18. Now I noticed that NYCMoney posted about movies recently and he said they are $10.50 where he is at. What the heck? I think the theater companies are hitting that point where they are just gouging their customers for fun.

My wife and I contemplated walking away due to the price but then decided, since we don’t get the opportunity to get out with bringing our daughter very often, we might as well see a movie. We bought two tickets to “Dukes of Hazzard” and went in. Now, no need to flame me and tell me what a fool I am for seeing “Dukes” over March of the Penguins. We should have seen that. Lesson learned.

After getting the tickets from the emotionless ticket guy, we headed in to the lobby where I knew I would be equally shocked at the concession prices. Since we were really living it up (basically, I guess you’d call it a date), we had to get popcorn. I normally hate to get popcorn because it is the most obscenely overpriced product you can buy. It costs them something like $.25 to make and they charge $6 for it. The rather lumpy guy at the counter asked us if we’d like to buy a “Combo”. Of course there weren’t any prices on the combo board so we asked. $14.50 for a popcorn and two medium sodas. No thanks. We’ll just take one popcorn and ONE drink. That only came to $10.50. We kind of laughed because the guy behind us, who was a fairly large guy, said, “You want to know a secret? The trick is to come here without having eaten dinner because you get free refills on the popcorn. I come here, eat as much popcorn as I want, and then get it refilled right before I leave. That way I have a whole bowl for a movie at home the next night.” Thanks for the tip. But I don’t think we can even finish the one bowl we’ve got, let alone get a refill.

Now don’t get me wrong. I’m talking about the crazy cost of going to a movie at length here, but we didn’t obsess about it at the time. We had accepted that we would be gouged ahead of time. The movie ticket price got us in the mood to be taken advantage of right when we got there.

The movie was a little better than we expected, although I don’t think the cast needs to hold off any vacations around Oscar time. All in all, it was nice to get out of the house for a couple hours. Total cost for the night: $29.50.

I once dated a girl that chose to go to a private college that cost over 3 times what it cost to go to a public institution. My understanding is that she ended up getting a social services degree from this college. Was this the best financial decision? Not from my point of view. She spent over, by my estimation, $80000 to get a degree in social services. There aren’t a ton of social service jobs that pay a really high salary. Most people, like her, choose to go in to social services because they feel a calling, or a passion for helping others. The pay gets them by, but is probably secondary to their job having purpose.

While I certainly don’t fault her for going in to a social service field, I do question the logic of going to one of the most expensive private schools in the state to get her degree. In her case, it probably would have been most advantageous to attend a public university to significantly save on the cost.

If only it was as easy as simply choosing a school, and getting a degree. The reality is that, like me, you don’t always know what you want to get your degree in until you’ve been there awhile. In light of this, I have a few ideas on how to get the most out of the cost of a college degree.

Option 1:
Attend a junior college for the first two years. During these two years, you can take the basic courses that are required before you move in to the upper level courses that are tied to your specific degree. Some states will actually guarantee you a spot in a 4 year college after completing an associate degree in the junior college.

Option 2:
Only attend a private institution that is significantly more expensive if you are sure of your degree area and that school offers a highly rated degree in that area.

Option 3:
Take accredited courses in high school (many schools offer head start programs) that will speed up your degree in college. For every quarter’s worth of classes you can get done while still in high school, you can save thousands.

Now I’m sure that this post will probably earn me some hate mail. I’m trying to approach this from a “return on investment” point of view. Obviously it is extremely challenging to measure how long it will take to recoup your investment in college if you don’t even know what your income level will be once you graduate. Certainly the very prestigous schools such as Harvard, Yale, Stanford and the like might get you a higher starting salary, but I would be willing to bet that the starting salaries for graduates of more obscure private colleges probably aren’t significantly higher than reputable state schools. This being the case, from a financial point of view, it would probably be less risky and a more positive business case to attend a public university.

Think I’m crazy? Am I missing something here?

I had to blog about this article. I have a lot of feelings when it comes to living on social security because it’s what my parents are going to be doing.

It can be done but it certainly isn’t ideal. If you have any debt, you probably can’t pull it off. Also, depending on how early you opt to start taking social security, you may have very reduced benefits.

Here is a quote that I wanted to highlight:
“She’s fortunate, she says, because her treatments for colon cancer — which has spread to her lungs and liver — don’t require a lot of costly medications. “I think the good Lord looks over me,” Rathbun says. Luck????? Her cancer has spread but she feels lucky that it doesn’t take a lot of expensive medication? I’m glad that she has a positive outlook, but it just doesn’t seem ideal that her concern is about what medicine she can afford in this situation.

Ending up in this situation scares me to death. I don’t want to end up having such limited choices and being at the mercy of the bureaucracy. It’s yet another reason that I am passionate about saving for the future. I pray that I’m not hit with an illness that puts me out of work and puts all of what I’ve saved so far in jeopardy. All I can do is plan to the best of my ability and hope that things work out.

Anyway, I could ramble on about this subject in length. Check out the article and see what you think. If anything, it might scare you in to saving a bit more.

http://www.usatoday.com

Never before in the history of mankind has such sophistication and effort gone in to taking your money. Companies are spending billions of dollars figuring out exactly how you think, how you act, and how to dial in your preferences so that you will buy their products. The end result is that many people spend large amounts of their time trying to figure out how to spend the little bit of money that they earn. Some people do this with an obsession. Even before they have earned the money, they have spent it on things that they have been convinced they NEED. (notice I didn’t say want. In mild cases, they have consciously decided that they want something, but in many cases the marketing was so good that they believe they need it.)

Eating Out:
We spend more of our money every day on eating out than we ever have in the history of mankind. (hunting and gathering, as they did many centuries ago does not count as eating out). 25% of all retail establishments in the U.S are for eating and drinking. There are more than 650000 restaurants in the U.S.. Americans eat almost 30% of their meals away from home each year. In 1996, Americans spent 44% of their food dollars eating out. Not only are we spending a lot of our money eating out, we are also filling ourselves too full with what is served. Restaurants, on average, always serve up at least double what you should eat on a plate. All is not lost. Use the same discipline that you apply to your finances and save half for later. You can average down the cost of each meal by doing this.

Electronics:
I’ve said it before. I’m guilty of being sucked in to the electronic marketing grinder. I have far too many electronics in my home. I’m embarrassed to even tell you what the computer to user ratio is in my house. I use the defense that it’s what I do for a living, and is helping me use PC’s to improve my skill set. It’s just an excuse.

Open up the Sunday paper and count how many ads there are for electronics. In a quick scan of my latest paper I found:

Best Buy
Circuit City
Dell (Apparently they are trying to increase traffic to their site)
Office Depot
Staples
Fred Meyer
CompUSA
Magnolia Hifi and Video

8 different companies all trying to sell me electronics. Some used cartoons in their ads, some embedded the latest movie images on the screens of the electronics in a cross branding effort. None of them sparked anything in me and caused me to go down to the store. I did enjoy dreaming about buying a few things though…..

Home Improvement:
Many people will tell you that you can’t go wrong dumping money in to your house. I tend to agree and disagree. Targeted improvements have been shown to increase the value of your house. Kitchens and bathrooms are the best places to make improvements. I’ve found that simple inexpensive improvements can make a world of difference. For those people that are doing large improvements to their homes, it’s important to survey the neighborhood and make sure that you don’t “over improve” your house. It’s not hard to invest more money in your home than you could sell it for. Your house isn’t the only thing that is involved when calculating the true market value of your home. The neighborhood you are in (think location, location, location) also impacts it tremendously. What are other houses in your neighborhood selling for?

Who is contributing to your desire to invest in your house? Well, the do it yourself improvement stores certainly aren’t trying to talk you out of it. I only found 3 ads in the Sunday paper that were trying to get me to buy things for the house. But there are others that would like to see you invest in your house. Banks are always sending me mail telling me that there has never been a better time to pull equity out of my house to fix it up. I continually get flyers in the mail from lots of different local contractors for just about any service you can imagine. I estimate that I get no less than 4 roofing flyers, 2 home heating duct vent cleaning, 3 carpet cleaning flyers, 4 house painting flyers (it’s Summer), 1 siding contractor flyer, and 2 air conditioning flyers each month.

What can I do:
To protect myself from all of this marketing, I try to consciously seek out something when I want to buy it, rather than sit back and wait to be convinced by someone who wants my money. My general rule is to seek out at least 3 options on any major purchase to be sure that I find the best possible price. To get a sense of whether it’s a good deal, I also check to see if there is one for sale on Ebay, and about what I expect the final price on the auction will be. (Or I wait for the auction to end). My point is that I try not to let someone tell me what I should buy, but rather make the decision to buy something myself.

The only problem with my plan is that they are getting in my head. I’m sure of it. As proof of this, just ask me how the theme song goes for a particular product. I’ll bet I know the tune.

My wife and I spent a week down in New Orleans awhile back. I had heard that crime was a bit more prevalent down there than it is in the Northwest so I was on edge a bit. We had a rule that we didn’t stay out after dark because we were doing all of our walking in the French quarter, or close to it.

When we got there we did see some signs warning tourists that the French quarter was considered a high crime area. Now, I don’t want to paint too ugly of a picture because there are tons of great people there, but there did end up being a fair amount of what I’d call “opportunists”. Due to my rain soaked skin color (aka PALE), I stood out like a sore thumb. (my wife did too).

Anyway, on a few occasions, we were approached about giving people money, which by the way, happens in the northwest too. On one particular evening, my wife and I were walking along bourbon street, peering in store windows of places that we wouldn’t have dared gone in. (Okay, I may have dared to go in if I was with all of my college buddies and had been taking advantage of the many types of cool refreshing beverages that are served on Bourbon street).

As we walked along, it started to get dark so we decided it was time to head back to the apartment that we were staying in for the week. About halfway down bourbon street, a man approached us and said, “Bet you five dollars I can tell you where you got your shoes”. Now, I’m not stupid. In the history of mankind, I don’t think a hustler has ever made a bet he didn’t know he was going to win. I said, “No thanks” and tried to walk around him. He had managed to very skillfully move us a little closer to the wall through his feet movements and I found myself with nowhere to go. It quickly became obvious to me that the easiest way out of the situation was to just take the bet and lose. For a split second I thought to myself, “There is no way he would possibly be able to tell me where I got these shoes. Hell, I can’t even remember”. So I said, “Okay, tell me where you think I got my shoes”. He looked at me like I was the dumbest person on the planet and said, “You got em on your feet, now give me my $5.”