Everybody Loves Your Money

For those of you that would love to have a Snuggie for Christmas but just don’t feel like parting with the $13, I’ve got a hot tip for you:

Take any old fleece robe that you have in your closet and put in on backwards. Presto! It’s a homemade Snuggie.

Happy Thanksgiving!

As the holiday season begins, I find myself feeling very thankful for a number of things. First off, I’m very, very thankful for my wonderful wife and amazing daughter. I’m also thankful that we have a roof over our heads, food on our table, and jobs to keep us humming along. I think this season feels much more real in terms of truly understanding what we all should be thankful for.

As we look past Thanksgiving, it’s shaping up to be another Christmas season that is squarely focused on retail sales and how much stuff people buy. For us, it will be another season of trying to minimize the focus on “stuff” while we try to enjoy our families and friends. Of course, we’ll have our weak points and spend a bit more than we should as we get swept up in the frenzy but I think we’ll do okay.

In order to try to set ourselves up for success this season, my wife, daughter and I sat down and listed all the people that we plan to buy presents for and then listed the dollar amount we want to stick to for each. By doing this we will have a clear budget to work from which should help us control our spending and keep our bank account in good shape. As usual, we will not be using ANY credit to buy gifts. We will charge the presents on our Costco American Express but will pay the balance off at the end of the month so that we don’t pay any interest charges and still get to take advantage of the cash back that they offer.

Will we be participating in the after Thanksgiving sales? While I’ve seen a few deals that are rather tempting, I won’t be getting up early to go stand in line anywhere. One example of a tempting deal is LCD tv’s. The prices on Black Friday are rather shocking. We are still using the same old 32″ tube TV that came with our house. Frankly, I’m kind of hoping it will die soon so that we can justify finally getting a new flat screen tv. I guess it’s a good thing that the tv has continued to work because prices have come down so much, we’ve saved a ton of money by not buying one until the last possible moment. So, unless the tv decides to blow up in the next day or so, we’ll probably keep our focus on buying just the gifts that are on our list.

Anyway, I hope that you have a Happy Thanksgiving and don’t get too sucked in to the Black Friday feeding frenzy.

I’ve been lightly following Nicolas Cage’s money problems over the last few months. It’s always a little bit surprising to see someone who has clearly made many millions over his lifetime deal with such large financial problems that he’s forced to sell many of his assets.

When you look at the assets that he has acquired, it starts to become pretty clear why he’s in financial difficulty. Here are just a few of the things that Nicolas Cage has purchased:

Two castles
15 palatial homes
A number of yachts and Rolls Royces

I can only imagine how much he has spent furnishing all those houses and paying the maintenance costs on so many assets. It’s easy to see how the money could run out. If he could have just limited himself to one castle, 7 or 8 homes and scaled back on the total number of boats and cars, maybe he wouldn’t be having to sell some of these assets during an economic downturn where he is faced with getting far less than he paid for them.

Anyway, here’s an article that talks a bit more about his situation:
http://money.cnn.com/2009/11/17/pf/Nicolas_Cage_lawsuit_manager.cnnw/index.htm

I apologize for the lack of posts lately. I’ve been very busy at work making sure that I keep my spot on the competitive “large institution” roster. There has been a ton going on at work and it’s only going to get crazier as we end the year.

On the home front things are smelling rather porkish. We knew it was only a matter of time before we started coming down with swine flu as it worked it’s way around our 1st grader’s class. It finally hit. My daughter is sitting on the couch getting to watch more TV than usual and is in remarkably good spirits considering she’s running a 102+ fever. We are watching her closely for any signs of more dangerous symptoms. All in all, I’d say it’s rather stressful. It’s times like this that I’m very grateful to be employed with good health insurance. I’m starting to feel a little under the weather as well and my temperature is fluctuating between normal and 100 degrees. My hope is that we can stagger the sickness enough that one of us will be healthy to help the others.

On the financial front, we are trying to buckle down on our spending. We really haven’t tightened up our spending nearly as much as I wanted to. Things seem to just keep coming up. I’m a bit ashamed to say that we ended up buying a new Honda CRV for my wife. We weren’t eligible for the cash for clunkers and it had already expired. We did our best to minimize the cost but in the end, it was definitely not the best transaction of our lives. We looked for used CRV’s but the prices were amazingly close to new prices. We’ll definitely keep the car for a LONG time and ultimately I think our daughter will drive it (in 10 years). I’ve also been needing new tires for my 2000 Toyota Tacoma. I priced them out and the cost was going to exceed $500, even at Costco. I decided to keep my eye out for used wheels and tires on Craigslist, and after about a month of looking, I finally spotted the ones I wanted. I was able to buy newer, larger wheels that I really like, with tires that have about 60% tread for $325. I will sell the old wheels and tires on Craigslist for about $150-$200 which I’m hoping will bring the total cost down to about $125. That will get us by for a couple more years so I’m happy.

I’ve also been watching the market with a close eye. I’m convinced the market is overpriced. There are just too many variables in the economy that aren’t performing well. With that opinion in mind, I’m now putting more money in cash (in my 401K) and have moved a bit of my existing holdings in to cash to reduce my risk a bit. For the most part, I’m just dollar cost averaging every two weeks but I am “playing” with about 10% of my total account value by trying to time the dips a bit. I have had a few trades over the years that really benefited my account balance by trying to recognize macro economic hits to the market where good companies got thrown out with all the others. Obviously it isn’t smart to try to time the market, but my past performance keeps me interested in using a small portion of my 401K balance to take advantage of large dips or other major changes in the market.

The only other thing worth mentioning is that we are planning on setting aside the total amount we are going to spend on Christmas for 2009. We have put together a list of people we will be buying something for and the dollar value that we will use. That has given us a firm goal to keep our spending in check. My wife and I are also planning on only buying each other necessity items. She needs some new shirts and I could use a new coat and I’d like a new garden hose nozzle in my stocking. This definitely won’t be the year for excessive “wish list” items.

The New York Times has an absolutely top notch interactive feature that lets you look at unemployment rates for various demographics. While I sometimes find myself getting a bit stressed at how high the unemployment rate is, when I punch in my age, sex, race etc, I find that my unemployment rate is 3.9%. While that makes me feel a bit more at ease for myself, the fact of the matter is, our economy is in a world of hurt right now with the general unemployment rate over 10%.

Anyway, I highly recommend checking out the link:
http://www.nytimes.com/interactive/2009/11/06/business/economy/unemployment-lines.html

Update:
As I try different variables in the tool, it’s absolutely SHOCKING to see how much the unemployment rate varies by both race and sex. If you are African American, male, between 15 and 24, and have not finished high school, your unemployment rate is 48.5%. White males in the same category are at 25.6%. That is horrible. One other observation, is that people who completed college are faring much better in this economy. They have the lowest unemployment rates of all groups with most in the 3.X% range.