- the minus sign blues

You Need an Emergency Fund. Now.

2008-11-03T03:51:00.000-08:00

All too often than not life has a sense of irony. Or at the very least kicking you when you are already down for the count, just to make sure you're getting the full experience. As the recent economic downturn has taught us, everything fiscal is linked on an intimate level to everything else. A poor housing market will drag down the retail industry, which drags down the manufacturing industry, which raises prices on consumer goods, which feeds back to the retail industry and so forth.

As such you should be prepared for the worst case scenario. In turbulent times a relatively insignificant problem with your finances can spiral out of control, leaving you in a situation wherein you have to take on more debt than is healthy. Take the current situation for example. The folks losing their homes right now fall into two categories. Those who planned for the worst, but clearly didn't have a realistic image of a worse case scenario and those who did not (or were unable).

Regardless of which category these people fall under, it's a pretty terrible time for them. But straying away from predatory lenders aside, they had the opportunity to prepare for the crisis back when times were good. All they had to do was squirrel away some of their income.

An emergency fund is apart from any other. A vacation fund is drained every year, likely. A retirement fund is only touched (hopefully) in preparation for your golden years. A college fund is emptied during several years after high school. You don't touch an emergency fund. It remains unmolested until the worst case scenario happens.

Whether that's a death of a spouse, the loss of a job or some other disaster is immaterial. It's there for you in your time of need and not your time of want. A lot of people skirt around the issue, claiming that it's easier to live off of credit cards or small loans until everything is back on track. Which is true, in part. A credit card can stave off the power going out or the car being repossessed.

What it can also do is enslave you for a number of years if used improperly. Suddenly that $150 spent on your Visa to keep your heat on for another two weeks balloons into $300 as it becomes increasingly interest laden. Now add groceries, rent, car payments, insurance, the phone bill and the power bill. If your financial situation does not improve you're on the fast track to bankruptcy. A single month of living purely on credit can take a really long time to pay off, depending on the interest rate involved.

An emergency fund is not only always there for you (unlike credit, which may dry up due to inactivity, poor management or poor economy), but it works for you. If dwelling within a savings account at your local bank or credit union it'll earn you interest instead of the other way around. So suddenly your $1,000 worst case scenario cash becomes $1,100 and so on.

A lot of people suggest somewhere between 3 - 6 months of income packed away for an adequate emergency fund. I think this number is just about right, especially considering the most common need is due to sudden job loss. A job, especially in a poor market can take a long time to find. And even then you might need to take a cut in pay to keep food on the table.

But I like to take it a couple of steps further than that. People are fickle and emergencies come in many varieties. The car needs a costly repair, you have an accident while uninsured, your dog needs surgery because he ate a particularly unhealthy diet of sneaker and Christmas tree ornament. So in any given year there are bound to be a couple of fully justified reasons to dip into the emergency money.

I like to suggest several savings accounts that you regularly contribute to until they've reached a predetermined ceiling and all together they should equal roughly 3 - 6 months of your current income, matched if your income raises.

Job: A savings account established in the event of your company going under, being laid off of you being fired. This should arguably be the biggest fund at your disposal due to the fact that loss of primary income shuts down the flow of money.

Also keep in mind certain factors such as your industry. If you're employed in a volatile niche such as real estate you're going to need a bigger fund because hard times will likely be longer. If you're employed in an industry that has a great demand for workers, such as nursing you can afford to redirect some of your money elsewhere.
Car / House: While these can of course be divided if needed, they go hand in hand. This account should be roped off for the harder times involving your home and car. While insurance typically handles most things, some states don't require insurance. And some insurance plans only cover a tiny fraction of possible scenarios.

Imagine your car's muffler rusts out due to inattention. Or you find yourself driving over a couple of cases worth of broken beer bottles leaving a party. Or maybe your roof develops a pretty steady leak and needs repair (and mold mitigation.)
Pet: The hardest thing a pet owner has to do is put down their companion because they can't afford to have a costly, live saving surgery performed. Think of how many hours of enjoyment and love your dog, cat, ferret or bird has given you over its life time. Now imagine how gut wrenching it'd have to be to put it down because your credit has dried up and you don't have the means to help it.
Health: Hopefully you have insurance, but even if you do there are many costs involved. Co-pays, tests, studies and medication will wind up costing you a lot if they come out of left field and are unaccounted for in your weekly budget.

Using the logic that you're young and thus won't need very much medical care doesn't carry much weight. Especially if you find yourself falling on a patch of ice and breaking your ankle or getting into a car accident.

While it's impossible to save up enough to cover every medical emergency, a couple of thousand dollars will more than cover the co-pay you may have to pay if you need an emergency room visit and a barrage of x-rays.

Not only will different accounts help you keep yourself organized, but it'll also prevent you from dipping into your emergency fund more than you need to. If you're not used to dipping into the pet fund (which you hopefully won't be) you'll be less likely to access it in less than critical times. Any the good thing is if a really terrible disaster is there and you need to use your best judgment, you can still liquidate any account for any need.

Your fund should also remain available at a moment's notice and should not be tied to anything volatile. It shouldn't be invested in the stock market or stuck in a 6 month CD. A regular savings account is more than adequate for most people.

Not only will it be there for you when you need it most to lend you some flexibility, it'll give you peace of mind when you don't. Which is crucial, especially in dark economic times.

Independently Employed: Straight talk

2008-10-30T07:50:00.000-07:00

I'm starting a business venture with a friend of mine. I have a significant amount of marketing and writing experience and he probably is coding a web enabled version of HAL. It's a small web design operation by the name of Cail Design. We know were starting in a pretty terrible market, but we're confident we can get the project running on all cylinders in a respectable amount of time. Why? Because we've both been independently employed in the recent past.

We know what to consider when it comes to plans and contingencies. And we're also used to working in self starting environments. But all too often people see the tag of "self employed" and imagine a wholly different picture. One filled with a conspicuous lack of alarm clocks, noon breakfasts and leisurely trips to the bank to cash in inordinate sums of money. I elaborated on a number of myths and misconceptions a couple of months ago here. But then I elaborated on social misconceptions and practicalities. I didn't really touch upon the pros and cons of working independently outside the realm of promised corporate paychecks.

While there are a number of pros and cons to consider before you begin your solo adventure, there are a number of cold, hard facts that are neither negative or position that should be examined nonetheless.

Taxes: You cannot avoid taxes. If you try you're going to wind up burned. So throughout your first year of being self employed keep a lot of records. More so than you think you need. Track how many hours you work, how much you make, how much you drive for your business, everything.

Not only will this help you figure out how much profit you're pulling in but it'll also allow you to contribute some of your income to a bank account reserved just for Uncle Sam.

I lucked out. My first year of being self employed started in the middle of fall. By the time tax season rolled around I only needed to contribute under $1,000 in my tax return. While I hadn't been saving especially for it, I was able to afford the drain on my bank account.

If you're married it might be a good idea to file jointly. Especially if your missus or mister has a conventional occupation that they typically receive a tax return for. You'll be able to either reduce or eliminate the amount you need to shell out at the end of the year.

If your self employed nature involves a lot of billing, either inbound or outbound it might be a good idea to hire an CPA to assist you in your venture.
Hats: Being self employed in any industry means you're going to have to wear a couple of hats. This can be a good thing because you may find a wide array of things you weren't aware you were good at. It can also be a bad thing because you will inevitably wind up doing something you're not too keen on.

Regardless you have to be prepared for it. Simply neglecting things that lie outside of your realm of expertise isn't going to get you anywhere. You have to be your own boss, but also your own secretary, tech support and peon.
Motivation: Your motivation switches gears when you become self employed. Neither positive or negative, regardless of your industry you're going to notice a significant change in your outlook and behavior. Most people find themselves a lot more motivated because they notice a direct correlation between work put in and money earned.

But a select few individuals learn quite quickly that the unmotivated, slack off time checking personal email on company payroll is going to be sorely missed.

That being said there are a number of distinctly negative things about being your own boss. I touched upon this a bit in my previous article, but somethings bear repeating and elaboration.

Your credit score hurts: This one blind sided me completely when I first abanadoned my 9 - 5 job in favor of a more liberal atmosphere. If you are responsible for your own income banks are less likely to lend to you because they consider you a higher risk than someone who has been employed by a Fortune 100 company for 15 years.

So you may wind up paying slightly higher interest rates than you did before. A good way around this is to keep a healthy savings account and just practice sound personal finance. If married, one of you may want to keep a conventional job just so you can apply for loans jointly and keep those interest rates low.
You lose "bennies": Say goodbye to the company insurance plan, paid holidays, over time, sick days and pensions. Living the American Dream means you have to become the essence of America, capitalist. If you're self employed you're going to have to pay for your own health insurance, contribute to your own retirement fund and generally take good care of yourself on your own dime.

While this is liberating and allows for a great deal of personal choice, occasionally that 401k matching your old company offered is missed.
Slacking off is not an option: If you slack you're only hurting yourself and your employees. Period. Your revenue is directly tied to your productivity. In some jobs it's possible to stare at your monitor all day or check Twitter, get paid and no one will be the wiser.

While you're self employed you're able to choose whether or not you want a long lunch, but most often than not you wind up working through it and then some.
Industry collapse: If you're working full time for a bank and it suddenly goes out of business and kicks you out on your rear, the federal government is there for you. They'll help you get back on your feet with unemployment funds.

There is no bailout for Joe Smith, Realtor. If the real estate market tanks (like it is) Mr. Smith is caught in the cold with only himself to rely on and the hope that he'll be able to recover. Self employed people are very vulnerable to fluxuations in the economy, so a heavy duty emergency fund is not only important but required.
Not being able to self start equals fail: There's more to being your own boss than not having a manager shout at you. You literally have to be your own boss and some people find themselves unable to do this.

Most people need occasional guidance, motivation and support an authority figure provides. If you're on your own time clock you need to be able to motivate your self, start projects and direct others. Because no one is going to tell the boss what he needs to do, when to do it and how to do it.

But of course the benefits occasionally have to out weigh the negatives. Otherwise no one would run micro to small businesses at all. It'd simply be impractical. I've found that the benefits far out weigh every other consideration. And even though I've had to take the bad with the good I've found it to be more than worth it.

Freedom: This is the flipside of my negative point about self starting. If you are the type of person who can work on their own without any direction, you'll almost always succeed at what you set out to do. Granted, the business may come before you most often than not. But you can influence the business to cater to your own personality, making an all nighter at the office seem like a breeze.
Income: Sure, industry collapse can spell disaster. But industry expansion means profit. If you're working hard in an environment that is favorable to your industry, you're going to be the first to notice a bigger paycheck.

If you were employed under someone else you'd find yourself getting a raise, but nothing as substantial as they're making in a good market.

And since you're in direct control over your earning power you know that every hour you invest is an hour closer to a great vacation, a new home, or a bigger retirement fund.
Flexibility: Being independently employed gives you a tremendous amount of flexibility. The smaller the business the better. This means that if your partner is away on business you are able to arrange your schedule to accomodate child care, errands or house chores.

And if required it allows you to be a stay at home mom or dad. Even if you can only do it in a part time capacity you'll save a bundle on child care costs and spend more time with your family.

....and of course if you're not into that you can arrange your schedule so that you're always "very busy."

Being self employed is by no means easy. But it can have fantastic benefits if you're well informed on your industry of choice as well as the pros and cons of being your own boss. While I would not suggest it for everyone I meet, I do believe that everyone is capable of at least making a go at it. Any specialty can be adapted, just some more than others.

Itty Bitty Homes: Promoting a frugal life style

2008-10-28T05:56:00.000-07:00

Alternative housing has been an interest of mine for several years now. I don't know why the subject appeals to me. Maybe it's just a breath of fresh air after constantly seeing row after row of more or less cookie cutter homes in my neighborhood. Or maybe the life style of those who typically dwell in them is so unique and rare.

I wrote an article on eco-frugal homes about a year ago here on the minus sign blues. I really enjoyed researching and writing it. But I neglected something that's a bit less eco-frugal, but not so much to warrant it being barred from a discussion. The Itty-Bitty home. They come in all shapes, sizes and building materials. From ISBU styled homes made of steel shipping containers to more conventional wood and nail creations, just built on a tiny scale.

If you live in an itty bitty home you're the polar opposite of most people. You've thrown off most of the shackles of materialism and embraced a low square footage life style. You don't wind up collecting useless junk simply because of the fact that you just can't. You don't have enough storage space to hold onto your woefully out of date 1976 collection of Encyclopedias or that "antique" kitchen table that's more or less collecting dust in the basement. It's a clean life style. I'm convinced that this is very cool, although I do admit it's fairly hard to imagine myself becoming that type of person.

It's take a fair bit of work to shoe horn myself into this type of life style. But I have to admit that I've changed a lot in the past couple of years. Our credit card debt has taught me that living close to the edge isn't very fun most of the time. But it's also taught me to be a bit more humble as far as my expectations go. That things, while pretty freaking awesome, are not what define a person. And someone's earning power occasionally correlates with the decline of one's morality and self control.

So who knows. Another year and a half in debt might teach me that yes, small and humble (but comfortable) might be the way to go as far as a home goes. I certainly never wanted a McMansion, but I think my requirements for a home have changed substantially.

Itty-Bitty style homes are occasionally portable simply because of the fact that it's quite easy to slap some wheels and a towing hitch on something so light and tiny. But they come in a variety of shapes and sizes from a wide array of builders. They're gaining popularity. Not just among retired snowbirds and nomads, but people looking for permanent residences on their own lots of land. Some of these folk even call the suburbs home year around and just prefer to keep their interests vested in other endeavors.

For example, if you live in an itty-bitty style home you don't have to worry about heating a lot of empty space and disused guest bedrooms in the depths of winter. Or cooling 4,000+ square feet in the middle of summer. You just have to worry about a relatively small space. And since they're typically constructed from specialized builders who have a lot of experience in this small subniche you're going to get the best insulated new construction possible.

Since these homes are typically built with efficiency in mind they usually come equipped with wood pellet stoves, which have also been gaining popularity in the recent months as fuel prices reached record highs (although they've since for the most part dropped with the rest of the market). By no means do they all require wood pellets, though. Propane is another commonly used fuel throughout this niche. While not nearly as popular (or arguably cheaper) propane is a widely availible, relatively clean burnig gas that you can purchase anywhere from Costco to most local gas stations.

And depending on the style of construction you use, small wood burning fireplaces are also quite possible. While I'm not a fan of wood stoves (chopping wood and regularly stoking a fire throughout the night is not my idea of fun), they're by far one of the cheapest methods to heat your home. So long as you own your lot of land, an axe and know how to spot a dead free standing tree you have a ready supply of free fuel.

While burning hardwood may not be terribly environmentally friendly, it's my opinion that it's better than purchasing heating oil (which requires an industrial refining process) or more electricity (which in all likelihood is produced by a coal fire plant). So it's the one of the lesser of necessary evils.

Of course regardless of the fuel used to heat an Itty-Bitty home you're going to use a lot less than any conventional style variety fresh off of the market. If you're a hardcore green oriented person, these are also a perfect match to an alternative energy life style. Depending on your locale and means they're perfectly adapted for solar (passive or direct), wind or hydro. Since they're so small and built efficiently a lot less power is required to keep it lighted. Their footprint takes up so little room you can easily mount solar panels elsewhere on your lot in a sunny, but out of the way location.

As far as space goes many of them are surprisingly roomy given their tiny dimensions. If you purchase plans from a respected firm that specializes in the field of small home construction you'll find that most things in the home serve more than one purpose and are built with their size in mind. By no means is it common to have full dishwasher, sink, restaurant sized fridge, six burner stoves and microwaves large enough to cook a Thanksgiving day turkey but most are built with the average person in mind and as such have ample room for the required appliances needed in every day living. It's common to find full sized refrigerators tucked into surprisingly efficiently locations, or stoves placed in just the right location.

Most also take advantage of vertical space, which is sorely under used in many conventional style homes. Cathedral ceilings may be nice, but are ultimately unnecessary. The average person is no taller than 6 feet, so anything beyond 8 feet is completely wasted space.

Loft bedrooms and second floor living spaces are incredibly popular, as well as folding or collapsing staircases. These all make well use of rising heat, keeping it close to the ground to maximize efficiency. It also keeps clutter away from the main level and promotes a sense of privacy to certain areas of the home, something that newcomers to the style believe is lacking upon initial investigation. Few people like guests sitting on a futon that also happens to be the their master bed.

The vast majority of special built small scale homes certainly come with running water, water heaters and electricity. Although occasionally they may be a bit unconventional compared to what most people are used to on a regular basis. Since space is of the utmost concern small toilets may be used, sinks with built in wall recesses and stand up showers typically replace bath-shower combos. But this also opens up a potential money sink. When your special built wall recessed sink is broken, who are you going to call? Will the average plumber be able to fix such an unorthodox contraption? Or how hard is it going to be to find an especially small toilet if the one the house was built with suddenly stops working properly? Will this special toilet cost more than the average run of the mill one you can find down the street at Lowes or Home Depot?

Although the cost for smaller homes are by far significantly lower than average home prices. Simply because of the fact that less labor is required to construct a smaller space, which also means there are less building materials used. The average home runs about $25,000 to $40,000. Which may sound like a lot, but that's the typical down payment for a more conventional home, which usually run $200,000 to $300,000. With the money saved initially (in loan costs, not counting reduced energy and heating bills) you can afford to purchase an especially nice lot of land to place it on. Or invest the money that you'd otherwise be spending on a $1,500 to $2,500 a month mortgage into a retirement fund.

While I don't believe I don't have it in my to make my first real home something from TumbleWeed or one or their competitors, it's certainly an interesting idea. Perhaps when I'm in a better financial position it'd make for a nice vacation home or something to consider when I'm ready to "upgrade" after building some equity in my first home.

Sources, credit and further reading:

Becoming an entrepreneur: How to avoid disaster

2008-10-27T06:58:00.000-07:00

I read an inordinate amount of things from online. While I do frequent one or two social networking sites (Facebook and LinkedIn mostly), the vast majority of my reading is made up of blogs somewhat tied to personal finance. I frequent a number of high volume blogs, but I find the more interesting and quirky stuff comes from stay at home mom's and debt laden college students looking to share their stories and maybe get a couple of AdWords click throughs to line their pockets. These people typically have well below 100 readers.

The most common theme I seem to find is a strong desire to make money through unconventional means, like blogging or starting a small business. While I believe these people have their hearts and minds in the right place, you inevitably see a wide array of failed plans, plots and schemes.

This is a shame. These one person microbusinesses run from desktop computers and raw ideas are not necessarily bad. All too often people just make a couple of cardinal mistakes and let their potential fall to the wayside. While these microbusinesses may not exactly earn these folk a $100,000 a year income, they could make a poor situation a little more bearable and foster a sense of intellectual curiosity that could potentially lead to self improvement. I've convinced myself through research and positive feedback that my newest endeavours won't fail due to negligence.

Here are a couple of points I've seen made in the past and some I've made myself.

Time: A lot of small time entrepreneurs have lots of ideas. Ideas can be thought of in a wide array of situations. On the bus, while in the shower or while doing a particularly mind numbing work related task. This is great, but if you feel you need to allow an idea to grow the primary ingredient is time.

You need time to flesh out ideas without distraction. You need time to set up the framework of your microbusiness venture. And you need to sit down with pen and paper and work out a timeline.

This is how microbusinesses fail the fastest and hardest. If you don't have enough time to maintain an endeavour such as a microbusiness, you wind up wasting the hours you initially invested in it to begin with. Not only that, but you find yourself disheartened against future experiments.

So when you start a small money making project, make sure you start as tiny as possible so you don't become overwhelmed.
Capital (money): This is the life blood of any business. And you'll need a lot of it if you intend on starting your own hole in the wall restaurant or retail space. But the good thing about being a small time entrepreneur is that you don't really need it. A lot of people don't realize this and wind up investing a fair bit of hard earned money into a venture that will ultimately fail.

Try your best to invest as little money as possible in the beginning. Utilize tools already at your disposal, you'll find a surprising number of them. If you need business cards for your brand new apartment decorating business, don't have them professionally made. But instead use some card stock and your old laser jet printer that's been sitting in the closet for three years.

If the venture ultimately fails and you invested little to no money, you'll wind up in a better position to try another idea out in the near future both mentally and fiscally.
Motivation: This is a finite resource. You start with a lot of it but eventually your supply becomes depleted.

It's easy to become disheartened when you don't see immediate success. Or your immediate success turns out to be a bust. If you're going to do anything, remain as motivated as humanly possible. If you plug away at something eventually it'll play off, no matter what is it.

If you have a partner, meet with them frequently to discuss possibilities. If you don't, discuss the situation with a friend you know will support you. Set small and realistic goals you know you'll be able to meet with a little work and celebrate them.
Research: All too often not enough of it is done. Do a lot of it and do it weekly. It's nice to have the time to build your newest eco-friendly creation, the intelligence not to spend $5,000 advertising it right away and the motivation to make a thousand of them, but if you don't do your homework you'll inevitably find yourself abandoning your venture. Whether your items or services are over priced, don't fill an immediate need or may not be as clever as you think you'll find all three of your most precious resources depleted.
Promotion: You need to be seen. Humans are hardwired for networking and if you're working under the radar you're not going to find any success in any microbusiness. All the time, money, motivation and research in the world isn't going to do you a lick of good if you toil in the dark.

Promote yourself and your project. It can be just to family and friends if you want, or you can take out a newspaper ad. But the important thing is to be seen.
Failure: Sometimes it is inevitable. But that's okay. Failure is part of life and just because your microbusiness didn't take off now doesn't mean it can't take off six months from now. And it certainly doesn't mean you should forgo future experiments with earning an extra little income on your own.

Sometimes the situation is beyond your control. But it's always a learning experience for next time.

If you have additional points to make, post them in the comments and I'll place a permanent link to your blog in my side bar.

Monster.com: Aptly named

2008-10-24T19:32:00.000-07:00

Maybe it's because of my recent past and trouble with the credit industry. Or maybe it's because I tend to cheer for the underdog in any given situation, or maybe it's because I really hate nonpassive advertising. But I've grown to hate monster.com with a zeal and passion that likely rivals that of a madman.

The concept behind it is simple. Provide an online market place where people can find the perfect job for themselves and apply at home at their leisure (perhaps in their underwear). There are a number of competitors, but Monster.com has done a superb job at cornering this niche in the realm of online cash cows.

This system is sponsored by a number of passive advertising methods, such as banner ads. This in itself is fine. But they also don't do a terribly good job at screening those who apply for access to your personal information. Pretty much any entity legitimate or not can access your resume, contact information and marketing preferences instantly provided they fork over a roll of cash to Monster.

This is an enormous problem. Granted, a large array of legitimate recruiters trawl Monster every single day looking for their next marketing director, registered nurse or marine biologist. But it seems an increasing number of shady pyramid scheme oriented folk are right alongside them, peeping at your telephone number, email and home address.

My situation several months ago was simple. I was looking for a part time job to replace an increasingly unpleasant retail position. I was religiously reading the classifieds, scanning craigslist and sifting through monster's established want ads.

I receive a call completely out of the blue from the assistant to a "Mr. Wolf." This Mr. Wolf saw my resume online, explained this lovely young receptionist. He was very interested in my credentials and would absolutely love to see me the very next day for a job interview to discuss the day I'd be able to start work.

I was excited for a split second before the skeptic in me took hold. That's not how things work in the real world. The offer sounded too good to be true. I inquired as to where he saw my resume, as his company name did not match any I had recently applied to myself. She quickly and discreetly mentioned a rigorous screening process, but that they saw me on Monster.com.

This in itself was odd, considering I had made a new profile live mere hours prior. But I made an appointment politely regardless. I immediately jumped in front of my computer, loaded their company website, logged onto scam.com and searched.

Their website was suspiciously vague about their industry and their hiring process. I dug and dug. I discovered that the company as a whole was owned by a Fortune 500 corporation, but it was as close to a pyramid scheme as you could be without being explicitly illegal. The job that I had been "cherry picked" for was an insurance salesman (I had no experience in the insurance industry, nor sales). Which is in itself fine, but research revealed that not only would I have to live wholly on commissions, but those responsible for bringing me in will always, no matter what receive a significant cut out of every sale I make, regardless of their involvement.

Dozens of former folks duped by this scam told tales of "one on one interviews" consisting of little more than a receptionist pitching a rah-rah-rah speech to 20 or more applicants in tiny conference rooms. Several former employees told of hidden licensing fees in the thousands of dollars, months until "residuals," high pressure office environments and pretty much endless cold calling.

Needless to say I blew off the "interview," deciding to not waste gasoline. Thinking that was that I simply continued about my business until recently. I discovered a coworker had the exact same experience. No experience in sales, no experience in insurance, a call from the blue immediately after posting to monster, an immediate interview. It turned out to be the same Mr. Wolf, but his experience happened several years prior to mine.

Talking to the missus about the issue revealed the exact same thing had happened to her.

In itself, this was fine. We were all smart enough to smell a scam and dodge it. But what if we were really desperate? What if we let wishful thinking cloud our judgment, because we were so desperate to escape a poor situation? We'd be stuck in a paper moon situation either cold calling with no hope of immediate pay or hiring people so we could leech off of their hard work, like Mr. Wolf.

How many people had been suckered into this scam, either too desperate or inexperienced to spot a quasi-illegal money sink? Mr. Wolf has quite the apt last name. He is a predator and he preys upon those who need the most protection. And Monster.com facilitated his disgusting mobius operandi. It'd be one thing if he really was cherry picking those with "experience" in sales or insurance. But he isn't. He's casting the widest net possible and luring every new comer to Monster into the gaping maw of his organization. And he was doing it, quite clearly for a number of years.

I complained to Monster, citing my research and the testimonials of my coworker and wife. Not only did I not receive a timely response, but I didn't receive one at all. Not even a prepackaged automated "Sorry. We're looking into it." I complained again. Still no response. I'm still waiting, Monster.com. It's been four months and six emails.

Am I surprised? No, not really. I'm not even that angry that it happened to me. It wasted a total of fifteen minutes on the phone and some research. What really irritates me is that this guy has likely duped people in my neighborhood. Good people who just don't have all the common sense in the world, or maybe fell victim to him on a day he happened to be on a roll. This is especially important in this kind of market.

Who's to say that stable jobs haven't been left over this guy and his lure? In especially desperate times people become more and more frightened. Maybe you're looking for a more secure position, looking to bail from an ailing industry. Or maybe you've been laid off and you need to pay the rent RIGHT NOW. When people are scared judgment tends to take a backseat. But it's critically important to keep a skeptical mind, especially when your career is on the line.

I'm not saying to blow off everything on the internet. Far from it, it's one of your most powerful tools in looking for a new job. But take it with an extra grain of salt than you would something from a newspaper. And for god's sake, research anything that looks fishy.

Further reading on Monster.com, job scams and general things to look out for:

Good progress so far

2008-10-20T19:41:00.000-07:00

It's been a little while since I've updated the debt counter in the right hand column of MSB. Last week we received the majority of our statements and I've compiled a list of what's been paid in full, what's been reduced substantially and what's been knocked out of the park.

I've also reexamined some of our more crucial finances for my own benefit. While I don't believe this is a catch all and it isn't exactly a super detailed look at the world of our personal finances I believe it sums up the recent past, present and near future fairly decently.

The Cards:
- American Express: Amex is no more. The two accounts that have given us the most hardship and heart ache are now a thing of the past. Over the spring and summer we funneled well over $3,000 at our two previously delinquent American Express accounts. They are now paid in full and we have canceled our memberships.
  
  Good riddance.
  
  Our experience with Amex was a weird one. We were first contacted in regards to our Green card account. These ruthlessly trained outsourced folk in India with strange accents and very white names. They were extremely pushy, manipulative and very obviously trained to deal with deadbeats. We refused to deal with them, opting to ignore their calls and make out payments directly to Amex online.
  
  Amex blue was a wholly different story. Maybe because it's a better card, or our balance was substantially higher. We were contacted by a very polite gentleman 45 minutes away. He explained our options, what he could do and allowed me to feel like a respectable human being. Needless to say we made extra efforts to pay off this debt as soon as we could. Two completely different sides of the same coin. But I'm glad they're out of the picture.
- Macy's: The Macy's card was a relic from our last spend happy Christmas. I used it to purchase a beautiful sapphire bracelet (that was subsequently lost) for the missus. This was paid off immediately after American Express was put to bed. It was our lowest balance account and allowed us to feel like we were really on a roll.
- Lane Bryant: Our next lowest balance credit card. This will be the next one to go as soon as we can scrape together enough money to blow it out of the water. The balance is only a puny $238. We could in theory kill it anytime we want, but with winter coming we prefer to err on the side of caution and allow our bank account to remain fat, at least until the first snow.
- Bank One: Our next lowest balance credit card. Standing at around $1,000 it probably won't last very long once we focus our attention on it. While the interest is fairly small in comparison to say, our Bank of America account we'll be happy to see it gone.
The Banks:
- The Old: While our old bank offered the staple services that typically keep every day users happy (online banking, relatively plentiful branches and ATMs, etc) their customer service department handled an issue quite poorly and as such disenfranchised us as happy clients.
  
  Long story short it took an absurdly long time for a check to clear. Due to a web interface that was hardly clear, a single small check was bounced.
  
  The bank was kind enough to swallow half of the bill because of their murky web interface. But this occurred on an especially tight week. We have little to no margins. Their inability to reimburse us the full amount caused a chain reaction of bounced payments to rack up, leaving us with a lovely +$300 fee.
  
  Unsympathetic customer service representatives who refused to budge an inch on anything drove us off.
  
  The account is still active, but we've since moved to another bank. Once we're satisfied all is quiet our relationship will be terminated.
- The New: We found lovely little credit union to handle all of our business. Their web interface is more secure, clearer and while their branches are relatively scarce they're not too out of the way for us.
The Funds:
- His: I've experienced a raise in pay of about $4,000 to $5,000 from this time last year. I'm working a bit more, but it's for our best interest. We ultimately want to purchase our own home, so it's doubly important for me to remain focused on the prize. Unfortunately (or fortunately?) this additional income will be immediately funneled toward our outstanding debts.
- Hers: The missus has made substantial career advancement and will make another in the new year. It's forced her out of the house the majority of the week and her job requires frequent air travel. But it's a thousand fold better than her previous occupation. Both in terms of enjoyment and monetary compensation. This increase in income should more than double the speed at which we pay off our debts.
The Cars:
- His: We had to put some energy into it lately for it to pass an inspection. But thankfully the problem was due to a factory recall and it was fixed free of cost. We're at around 30,000 miles. Which means I've put about 23,000 on it in the two years I've had it.
  
  It's running fairly well. It gets decent gas mileage and gets me where I need to go. Payments are modest, but still have a long way to go.
- Hers: We had to pump $400 into it not too long ago, due to a shot alternator. While this car is substantially older than mine, it's also much closer to being paid off. We're looking at paying it off within a year from today. This will free up $3,000 the following year, pending additional repairs.
The Future Bumps in the Road:
- Taxes: There are only two things you cannot avoid in life; death and taxes. The only bump in the road that I can foresee is tax season.
  
  Due to my occupation I am required to pay my own taxes. This is great throughout the year as I receive my full paycheck with no Uncle Sam horning in on my action. This is bad in tax season, as I typically have to part with what I believe is a substantial amount of money.
  
  Last year was fine. I was only an independent contractor for a small portion of the year. What I had to pay was almost immediately off set by the economic stimulus package. This year will be a bit more difficult. I've worked a lot and made a lot.
  
  So Uncle Sam is going to be asking for a lot. This could reset our finances a substantial amount come tax time. We'll have to work at rebuilding our checking account so we can absorb the punch.

So, in short things are puttering along. We're moving at a respectable speed. Looking back on the progress we've made I'm proud of the amount we've grown and the sacrifices we were capable of making. Already we're far more responsible, fiscally conservative adults than we were just a year and a half ago. While it'd be nice to win the lottery, I'm no longer depressed about money.

It's just something that takes time, patience and a keen eye.

Home Composting: Preparing for an eco-frugal spring

2008-10-15T06:46:00.000-07:00

This year we maintained a relatively small garden. We were quite busy throughout the later spring and summer, but we managed to muddle through with it. The results weren't as nice as I was expecting, but we pulled a fairly decent crop of cucumbers, strawberries, butter crunch lettuce, hot peppers, green onions and various types of tomatoes. Our mini water melons and radishes were a complete bust, however.

In the end I'd say it wasn't cost effective. The produce was completely organic and home grown, but we would have spent less if we had simply gone to the grocery store. So in the end I had trouble justifying the experience. I'm not a big fan of mucking about out doors getting my hands dirty.

The biggest deal breaker was the cost of soil. We went through a surprising amount considering our total harvest this year. I'd say this expense surpassed even seedlings. We used a variety of store bought soil, limestone, manure (bagged, not home produced) and local soil mixed thoroughly. This gave us pretty good results. But costs dictate that next year we'll have to be a bit more frugal when it comes to our gardening expenses, if only to justify the experience in my mind.

As such we've saved all of the soil from this year and started a small compost bin. If our math works out correctly we'll have more than enough to work with in the spring. It turned out to be surprisingly easy.

Select an area and method: There are two ways you can compost. You can either utilize the container model or an open pit design. We don't exactly need the amount an open pit compost pile would provide and we don't really have the space. So we utilized an old, disused plastic trash can. We perforated the bottom and sides to provide some (but not too much) drainage.

We could have bought a special composting bin, but that would have instantly broken our budget for next year. They get upwards of $100 for a couple of dozen gallons. At that point I might as well buy new soil.

Since even the best kept compost bin will likely start to smell significantly at some point we put it where we put smelly things, next to the trash cans.
Get the right mix: Composting is by definition decomposition and is a process by which living organisms break down organic matter. As such some chemistry is required.
- Carbon: This should make up most of the material in your compost bin. Some pretty handy sources are leaves, fallen branches (broken up), disused mulch, cardboard and newspaper. All of these are very easy to come by in your average suburban yard, especially in the fall.
- Nitrogen: You should have a fair bit of nitrogen producing material in your compost bin, but not too much. Some great sources are manure (bagged and sold at your local supply store, not home made), dead plants (such as your tomato plants after the frost) and yard trimmings (grass, shrub leaves).
Layer: Layer your compost material with moist soil but don't pack it down too tightly. This will prevent oxygen flow, which is crucial to the process.
Water: Air flow, heat and the composting process will consume water. If the pile becomes too dry the process will slow. On the flip side if the bin is not covered and becomes too wet (and lacks adequate drainage) you'll find yourself with a lovely smelling soup.

So make sure the bin remains moist, but not too moist. Treat it like you would a house plant.
Turning: Turning a compost pile helps distribute water and oxygen, ingredients that are crucial to the process. So use a shovel to turn the mixture up every week or so. It doesn't have to be perfect, but you'll help the decomposition process.
Mixing: When things begin to fall apart and intermingle significantly with layered soil your compost is ready. For best results mix it with used potting soil from previous seasons. You'll be conserving energy, money and resources.
Stay away: There are a couple of things you should shy away from when composting. These materials can ruin all of your hard work or at the very least delay your final results.
- Home "grown" manure: Unless you know what you're doing stay away from manure produced in your own home. This includes human and pet feces. In all likelihood this material will contain harmful pathogens. It'll also increase the smell factor by ten.
- Some kitchen scraps: Egg shells and potato skins are great for compost piles. Chicken bones, wing tips, fat from your t-bone and fish heads are not so great. Not only will this increase the smell of your compost bin, but you may also find yourself a favorite hot spot for local wild life looking for an easy meal.
- Some paper: While it may be tempting to throw that latest political mailer into a trash can full of rotting leaves and produce, steel yourself. Glossy paper and heavily dyed card stock will only poison your efforts. Newspaper is okay in small amounts, though.
- Tainted plants: Did your crop of cucumbers die from a mysterious illness or blight? Don't put them into your compost bin or you'll be in for a terrible surprise come time to utilize your compost. Like wise shy away from plants that have been treated with pesticides. You want bugs and bacteria now, introducing pesticides into the mix will only prolong the process.

Is this the final word? Absolutely not. There are a wide array of composting methods available to you. I found that this works best in a suburban environment where space and time are more or less at a premium. You can certainly scale this up to six or seven garbage disused garbage cans or dig yourself a shallow pit in your back yard if you were so inclined. You can even build an elaborate cinder block bin if you had the materials and desire for A LOT of soil.

But so long as you turn it once in awhile and don't accidentally drag it down to the curb on garbage day you'll have a superior source of soil come next planting season.

Cheap fast food. The best, the worst.

2008-10-14T03:37:00.000-07:00

I fully admit that over the summer I may have indulged a little more than I should have regarding eating out, specifically fast food. I know there are health and quality concerns that need to be considered, but I consider it one of my precious few luxuries. Even while indulging, I tried my very best to stick to a reasonable budget. When I was with the missus this was difficult, as when we eat out we tend to make it a full meal. But after a number of hard mornings at the office I became quite adept at satisfying my hunger with minimal damage to my budget.

There are certain places to eat for certain things and while sometimes you have a craving you just can't shake, most often than not you can have a filling lunch for two dollars or so, if you pick your poison wisely.

Some places are better to eat at than others when it comes to a limited budget, as I'll explain below.

Subway: This popular chain has released a new ad campaign, selling $5 foot long subs. This seems fairly reasonable at first glance and it is in the end of things. But in comparison to a lot of other fast food franchises, it isn't terribly great. You're restricted to a set number of sandwiches, and Subway isn't known for piling on the ingredients. After tax you are probably ringing up a fair bit above the advertised $5, especially if you buy a bag of chips and a fountain drink.

Healthier than most other fast food chains, but by far not the cheapest.
Dunkin Donuts: Dunkin's has entered the realm of fast food not terribly long ago with their flat bread sandwiches and personal pizzas. But in comparison to other chains they're neither cheap or filling per dollar spent. Delicious? Perhaps. Worth it? Not really.

Money is best spent here with a Munchkin, Small Coffee Combo. Stay far, far away from the budget breaking Coolattas.
McDonalds: The double cheese burger reigns king at McDonalds when you're looking for the cheapest, best thing on the menu. Typically selling for $1 it's a pretty good deal. Before you unwrap it and sink your teeth into it's greasy, condiment flavored interior. Any given bite of this baby will either taste like beef-like-substance bread or ketchup.

The four piece nugget is quite delicious, but for a $1 you'll need two or three just to satisfy mild hunger.
Burger King: In my opinion Burger King is superior to McDonalds in all ways. This includes their value menu. The best item for your dollar? Undisputedly the Whopper Jr, of course. This tiny version of the whopper actually contains more than condiments, with the full lettuce, pickle, onion and tomato you'd expect on a cheese burger.

Besides that the value menu is pretty lacking. You have the standard chicken sandwich, fries and onion rings, but they're neither substantial or worth the money in a tight lunch budget.
Wendy's: Wendy's brings a lot to the table for the cheap grease seeker. It is typically my cheap meal ticket of choice in most situations. Wendy's bread and butter value menu product is the Junior Bacon Cheese Burger. While relatively small, two easily make a filling meal for just over $2.

Several new items to the value menu include a double cheese burger that is fairly decent in comparison to McDonalds and a Crispy Chicken sandwich that is best not discussed.

A small chili without cheese is likely the best value, ringing in at around $1.20.
Taco Bell: My holy grail for fast, greasy food on the go. The only reason why I'm not constantly shoveling this down my gullet is the lack of establishments in my area. The food is delicious, dirt cheap (likely because the contents are items that are essentially the cheapest on the planet) and quickly prepared.

The undisputed king of Taco Bell's value menu is the simple taco. Soft flour or crunchy corn you're not spending a cent more than $0.89 for this simple cheap meal. The Taco Bell menu is highly modular, so coupling a single taco with say, the $1.00 double beef burrito is quite easy.

That being said it's quite easy to be side tracked into purchasing one of the more expensive items, such as a Crunchwrap (up to $3) or a Gordita (up to $2.50).

Are there regional favorites like Jack in the Box, Sonic, Chipotle Grill, Checkers and their ilk? Absolutely. But I really can't offer an opinion on many others, despite their regional existence and lack of nearby locations.

Of course I'm in no way suggesting you eat at any of these establishments frequently. I typically limit myself to one excursion a week. Usually to Taco Bell. Used in conjunction with adequate exercise and a bit of self control the value menu at any of these establishments can be a welcome treat to the financially challenged individual.

Cut Costs This Winter: 5 Easy Tips

2008-10-09T14:00:00.000-07:00

This time last year the biggest thing on my mind was energy costs. Whether it be electricity, heating fuel, or gasoline for my tiny car the costs pretty much erode my fun money down to pretty much nothing. This issue is only made more critical in the winter, when my relatively poorly insulated, ancient home requires vast quantities of kerosene (because my fuel lines love to FREEZE) and electricity (because my heater loves to work, work, work).

This year, surprise surprise, I find myself in a better financial situation with a worse economy. Energy costs are considerably higher, making that extra change in my pocket more or less meaningless. So, needless to say the biggest concern I have this year is the same as it was last fall.

But there are some various things I've come up with to combat the encroaching frost that don't require much, if any investment in order to get a significant return.

Digital thermostat: A lot of homes, older ones especially, have old style dial thermostats. This is where you set a temperature (say, 70 degrees) and forget about it. Sure, you can adjust the dial at your whim. But it requires constant supervision if you wish to best optimize your heating plan.

For example, the house doesn't need to be toasty warm while you're at work. In order to accomplish these savings you'd have to turn down the thermostat every day before you walk out the door.

A couple of years ago we bought a digital thermostat. It cost us $20 and was dead simple to install. We simply unscrewed the old dial and screwed a couple of wires into the new box. Now our heater works in concert with our activities. Week nights after 10:00 PM the temperature drops to a more sustainable temperature. But the heater kicks right back on at 8:00 AM, when it's time to get up. This eliminates human error and insures we never have the heater running unless necessary.
Turning down the heat: It's a painful thing to do, and I swear it's probably changed me in some fundamental Batman villain way. But it works. Your house does not need to be kept at a roasty-toasty 75 degrees in the dead of winter. 68 will likely suffice just fine. Last year our thermostat didn't breach 65.

This year? I might even dip down to a lovely ambient temperature of 60 during the day and 55 during the night.
Focus the heat: This is especially true if you live in an older house with forced hot air ventilation, like my own. Or if you find yourself with more square footage than really required in the dead of winter.

You can find magnetic heater vent covers at your local hardware store. Simply place them over your heater vents and close off a couple of doors. We allow our summer living room (an addition) to fall well below freezing during the colder months. It has no pluming to worry about, is relatively poorly insulated and it goes unused anyway.

If you don't have forced hot air, look into disabling your radiators or closing your central air conditioning vents.
Strategically use space heaters: I'm not saying go out and spend $500 on space heaters and scatter them around your home. But strategically placed, 2 or 3 space heaters can mean the difference between $600 in energy costs for December or $300.

If you find yourself working from home a lot, place one if your office. If you have a relatively closed off living room, deploy one there. So long as you remember to turn them off when you're not around or conscious and use them as a supplement instead of a replacement you should notice a smaller energy bill overall.
Seal cracks, eliminate drafts: You'd be surprised at how many cracks and drafty windows the average home has. Beneath door jams, inside windowsills, unmoved air conditioners from bygone eras.

Try purchasing some weather sealant caulk from your local hardware store to seal infrequently used windows and back doors. You can even go so far as purchasing plastic sheeting (clear, so you can let sunlight in) to block off some especially drafty older windows. Close storm doors and windows. Utilize draft dodgers (neat little tubes of insulated filling) to prevent drafts under more frequently used doors.

So long as you use a little bit of forethought, research and common sense the approaching winter shouldn't be as bad as you think it's going to be, even with rising energy costs.

Avoid Getting Ripped Off: Buying High Ticket Items

2008-10-07T07:48:00.000-07:00

I married my long time love interest on August 2nd. We've been through a lot together and in a lot of ways we're already like an old couple. While we just got married we had been living together for years and before that we were in a relationship pretty much since early 2000. The word marriage wasn't so much important to us as the benefits of being married. We're both very nonreligious people, but the legal system is designed to protect those who share a union. Since she is now a federal employee and receives significantly better health coverage than yesteryears and I'm technically an independent contractor it was the only logical decision. So we had a tiny super cheap wedding.

The one thing that we decided to spend an appreciable amount of money on were our wedding rings. Being a salesman in a former life and having dealt first hand with a number of overly pushy commission based retailers, we weren't exactly looking forward to shopping. Picking them out, yes. We loved that part. But we loathed dealing with the phony in your face sales sharks who simply saw dollar signs.

We went into the situation with a mindset that we were not going to be ripped off. Believe it or not, we actually drew up a list beforehand to help us in our shopping excursion. These tips should work for any high ticket item, be it a computer, car or wedding ring.

Don't deal with sales people (at first): Yes, they're there to help you. But they also have their own bills to pay and their own agenda. Any advice they give you might be tainted with their own best interests in mind instead of yours. So research the field you're looking to buy into. Utilize the internet to narrow your selection and needs down to a general price range that you find acceptable.
Command respect: Don't let them do all of the talking. When you are finally ready to engage a sales person, do just that. Engage them in conversation. Ask intelligent questions as to the nature of the product you're thinking about buying. Make them explain themselves if they're not entirely clear. If you appear docile and meek you might just find yourself in the hands of something who thinks you're an easy paycheck.
Dress right: And by this I do not mean "dress for success." If you look like you're capable of dropping a lot of dough, you're likely going to give the sales clerk that image as a first impression.

So leave your expensive inherited gold watch, Coach purse, fancy leather jacket and other assorted bling at home. If you have one, put your wedding ring in your pocket. These are all things sales people immediately key in on.

Dress decent, but over all pretty casual. Like you were going to a movie with a couple of friends.
Bring a partner: Whether you bring your significant other or a friend, two heads are better than one. You'll have someone not directly invested in the purchase to bounce logical ideas off of. You'll also have someone to remain an outsider in case you start to be drawn into a sale that you may regret later.
Don't talk to your partner (too much): Whether you're shopping with your boyfriend, wife or best friend don't talk to them too much while the sales associate is hovering around you. Make sure you're both crystal clear on this subject. The last thing you want is your wife saying "You should get it, you know you want it." in front of an already pushy commission shark. You'll find yourself pressured from two sides, instead of just one.

Instead politely excuse yourselves to discuss the issue at a nice distance.
Be wary of expiring offers: Be careful associates informing you that "this bracelet is the last one we have.." or that "this sale is for this afternoon only." It's a common tactic to introduce time limits on things. It encourages impulse buys. Which is not what you want to do with a high ticket item. Take advantage of them, but don't do so simply because of the fact.
Don't be scared to walk away: Arguably the most powerful tool in your arsenal. Competition breeds low prices. We all know that a monopoly (the economic situation, not the board game) is a bad thing. Regardless of the item, you can probably find it elsewhere cheaper. The only thing that differs is the effort put into the search.

So if a sales person is pressuring you to make a decision before you've had time to logically think out the pros and the cons of the price, politely thank them and go catch a cup of coffee. The sales associate will know you're capable of walking out on an offer and you'll have time to logically think out the situation on your own terms. If you decide to go back both parties will be aware of just how far the other is capable of going.

This is not a catch all, but instead a general outline with a couple of things that can keep you protected. So long as you remain smart and don't allow yourself to be manipulated you'll be able to get your high ticket item at a fair price well within your budget.

My return to MSB, personal finance, general penny pinching

2008-10-06T13:43:00.000-07:00

I've returned to the minus sign blues after a fairly long (3 month) break. While I can't exactly come up with a fancy pants iron clad excuse for my long absence from the personal finance blog-o-sphere, I have to say that I'm returning fairly motivated to share my research and musings with those who may share my unfortunately predicament once again.

In short, I left partly because of time constraints and partly because I had less of a need to write. I started and maintained this blog for so long simply because of the fact that writing helps me organize my thoughts and logically arrange my emotions. It's a type of therapy for me. The warm summer air (and lack of heating bills) made my debt situation a bit more bearable. So I was able to enjoy life a little more and keep those unsightly invoices tamed.

That $500 a month reserved for kerosene went a long way to improving our quality of life and our checking account.

My little summer off was pretty productive. Both American Express cards bit the dust and their sky high interest rates are no longer of my concern. Several other low balance accounts were also terminated with extreme prejudice. Although I wish I could have earned more to put several others to rest, I'm happy with the progress we've made thus far.

But the leaves are beginning to stick to my windowpanes and more and more blankets are finding themselves piled on top of my bed. A recent examination of our finances reveals that once again because of the impending winter we must button up and live a bit less comfortably and a bit more frugally.

This means a serious return to personal finance research, penny pinching and staving off winter-mopeyness. It also fortunately means a return to blogging.

Expect to see some neat things here in the coming weeks and months. I have many things to read and write about.

Beat the heat without breaking the bank

2008-06-09T17:53:00.000-07:00

Record high temperatures have slammed into the north eastern United States with a fury. My weatherman is flirting with 100 degree afternoons now and it's not even technically summer quite yet. Right now sweat is pouring down my forehead and I'm armed with a personal fan and an enormous glass of ice cold cranberry juice.

And yet I dread laying down on sticky sheets trying to catch a couple of hours of sleep in this stifling, oppressive humidity. Less than a month ago I was shutting up all of the windows at night and turning on the heater just to keep the temperature of the house at a pretty chilly 60 degrees.

Needless to say because of the equally oppressive New England winters and the cost of running such behemoths many homes don't exactly home standard with central air. While it's true my household has a small air conditioner it's best suited for a single small room at best. And even then it causes our electricity bill to spike dangerously high. Something we clearly cannot quite afford yet.

So, whenever we possibly can we have been attempting to flee our home for cooler pastures. But it's been very difficult to stick to our winter budget in our quest to stay cool. We've gone through a little brainstorming session and we think we've come up with a couple of ways to keep our dollars safely nestled in our bank account and our heads from over heating.

In this post I'll detail frugal beach survival.

Food. Bring your own: We recently paid a visit to Lake Sunapee on a quest to see how badly we could burn our nearly translucent hides. (I'll give you a hint: Very badly.) The day was crystal clear and in the 90s. The beach was lovely and relatively sparsely populated. And considering the lake was covered with ice in April, the water was fairly warm. (55 F)

But it cost us $8 to park the car and $10 in gas to get up there. We expected these misfortunes, grinned and bore them. To cut costs we made our own sandwiches from scratch, filled water bottles with tap water and loaded up our cooler with ice packs. We knew it would be tempting to go for a slice of pizza or a hot dog from a beach side vendor, but it'd absolutely crush our budget just to fill our bellies.

So we steeled ourselves and committed to our sandwiches and tap water. With the money we saved in food costs we'll be able to pay a second visit much sooner than we otherwise would have been able to.
Commuting. Take some friends, share the burden: Gasoline prices are sky rocketing. So why not plan an outing to the beach with a couple of friends instead of just the mister or missus? If you have a fair drive to the local swimming hole, river, lake, pond or ocean and you know you'll be paying an arm and a leg for parking go ahead and stuff as many people in your car as possible.

Most beach goers go in twos. Double it and split up the costs accordingly. And hey, if you don't want to hang out with the people you shared a car with just go your separate ways.
Consider going somewhere more local: As a rule of thumb the ocean is almost always a busier and more costly spot to pay a visit. So why not stick closer to home and pay a visit to a local pond, lake or river so long as local regulations and conditions are permitting? You won't have to worry about crowds, the high cost of parking or getting all that sticky salt out of your hair at the end of the night.
Go for the long haul: My logic has always been if you're going to enjoy yourself really enjoy yourself. If you're paying an arm and a leg for gasoline, parking and food just to get a little bit of much needed sun, sand and relaxation make the absolute best of it.

Get there early in the morning, stake out a good spot and set up shop. Bring a book and a stocked cooler. Stay for awhile. Maybe even until the beach shuts down. Squeeze every penny of value from your trip.

If you feel tired of the surf, just take a nap.
Bring the right things: Ideally every beach trip should be prepared in advanced, preferably the night prior. To maximize your comfort level a couple of things are pretty much standard. Many substitutions can be made of the fly, however.
- Beach Blanket: Can be replaced with an old, clean bed sheet.
- Beach Towel: Easily replaced by irregular bath sheets.
- Shade: If the beach is open with little to no shade, consider buying a small sun shelter. If you don't have that kind of cash you can always nap under a light cotton over shirt and a baseball cap.
- Cooler: A must if you're planning on spending any appreciable amount of time on the sand. If you've recently lost yours to a tragic party accident a covered 5 gallon bucket with ice packs and a some manner of cover will suffice just fine.
- Sunscreen: Required. Skin cancer goes poorly in a country lacking universal health care with a weak currency. Pick yours up at your friendly local mega-mart or discount big box store (Sam's Club, BJs). Never buy your sunblock at a beach side store or a gas station. Your wallet will thank you.

So long as you keep your budget in the front of your mind and do a little thought before hand you can escape the brutal summer heat and have a little fun in the process, whether it's at your local pond or an expansive beach.

Do you have some tips for summer beach survival for the frugal fellow? Post them in the comments along with a link to your blog and I'll link back to it in my next post!

Misconceptions about working from home.

2008-06-03T19:28:00.000-07:00

I produce most of my income from the comfort of my home office. While it has been one of the best jobs I've ever had the good fortune of stumbling into, I'm often confronted by a number of people who have quite the inaccurate picture of what the home bound tele-commuter has to put up with on a daily basis.

There are a lot of people out there who seem to think that working from home is the best creation of man since pen and paper. I do agree, but I also concede to the fact that it is clearly not an ideal situation for most people. Of course each particular stay at home position varies from one another, but every single one carries several unifying traits and misconceptions that most people who have never done it have trouble understanding.

I'm going to try to break them down to the best of my ability. Tele-commuting can be both a blessing and a curse to the frugal folk of the world. It's important to weigh your options carefully before embarking on a rash career change.

You are NOT free from responsibility: While you don't exactly have to worry about an over bearing, zealous boss literally breathing down the back of your neck deadlines do exist in every industry, and they are no different when you have the good fortune of having access to your favorite recliner throughout your work day.

In many cases the home worker has to have a great deal more personal responsibility than the office bound employee. You have to manage your time exceptionally well and you have to know when enough screwing around is enough. There's no one around to give you a stern look from across the office. And there are a lot of distractions at home. It's easy to get lost during your lunch break.
You don't save as much as you think: I used to chew through thirty dollars a week in gasoline driving my little Chevy Malibu up and down the interstate on a total commute of seven to eight hours a week. I'd often go out to eat every week, and even when I didn't I likely had to purchase specialty food so I could eat on the run.

That changed when I started working from home. I started gassing up once every other week and all of my meals were made from scratch. Since I had access to my pantry and my kitchen I could make whatever I'd like. No longer did I have to chew through an epic quantity of hot pockets and soda.

But those savings were offset immediately. It costs a significant amount of money to work from home. Instead of running up the utility bill of a faceless office condo I found myself home 24 hours a day, racking up a good deal of my own utilities. The most expensive definitely being heating oil.
You people skills suffer: I've never pretended to be a people person. I'm a very quiet, private individual. I enjoy being alone most of the time and left to my own devices. But I even felt the crunch. Sure, conference calls and emails are a dime a dozen. But even the most anti social person on the planet will still get a little lonely.
People think you're always on the clock: Unless you keep strict office hours and routinely remind your less fortunate comrades of your set schedule, people are always going to think you're capable of doing "one more quick thing" for them before the end of the work day.

In a traditional environment once you've left the building, you're gone. People are used to the fact that if you're not there, you're not available. This goes away when you're on speed dial and your face is your email signature. I've often found myself working into the early morning on long projects.
People think you're always OFF the clock: Everyone you work with always thinks you're on the clock. But everyone you don't work with thinks your "scam" is the best thing ever. While it's true that working from home comes with a certain freedom to manage your time as you please you'll find yourself besieged with honey-do tasks and stern looks when the dishes are left unwashed throughout the workday.

Unless your partner and friends understand that you work just as many hours as they do (if not more) they're going to assume your life is nothing but beer flavored lunch breaks and Married With Children reruns.
Loss of connectivity gives you the chills: Last week I was busy working away when, boop, my internet connection died. With it went my broadband phone line and my digital cable. The cable I can handle.

If this would have happened in an office environment I likely would have shrugged, kicked up my feet and started to chat away with my coworkers. But when you're isolated from the whole your connectivity is your life blood. Sure, there's probably something you can do in the mean time. But what if it takes your ISP 24 to 48 hours to come out to your neck of the woods to resolve the issue?

Say hello to two full sick days used because of a burp in a fiber optic line a hundred miles down the road.
You need certain equipment: Chances are if you're on someone's payroll as a tele-commuter they're going to meet you part way with office supplies. But if you're self employed as a freelancer or if you own your own home business you're going to need to fork out some cash for certain necessities like high speed internet and a reliable computer. And even mundane junk like paper clips and thumbtacks.
Communication is sometimes... difficult: It's likely that if you're reading this it's easy to communicate with you through written word. But with a lot of people, especially older people not exactly proficient at typing, communication begins to break down. Often enough email is the life blood of the home worker. And when it takes someone two hours to draft a paragraph reply or can't be reached via telephone immediately things begin to grind to a stand still.

Is a stay at home job ideal in some situations? Absolutely. Can it lead to an incredible sense of self satisfaction and relaxed outlook? Definitely. Will it help the frugal fellow looking to line his pocket book and keep the costs of commuting at bay? Not always.

So long as the situation is carefully constructed anyone can work from the comfort of their own home successfully, if they have the right type of personality and know about the trials ahead of them.

How to successfully raid a farmer's market

2008-06-02T17:14:00.000-07:00

Spring is here and now we find ourselves flirting with the gorgeous girl that summer is, however fleeting she may be. Eerily pale New Englanders are beginning to stumble into the daylight, only to discover their chalky white skin will offer absolutely no protection against the growing day light. Floridians are slathering on the SPF 9,000 and Californians are now switching from red to white wines and from blue tinted sun glasses to the more stylish green.

I can say from first hand experience that last winter was hard and brutal. I thought I'd lose my mind on the fourth or fifth midnight furnace watch when the mercury started to dip below -15 F and our kerosene tank started to freeze. But if one thing kept be going through the long, hard winter it was the promise of one thing and one thing only.

Food.

In the frozen wasteland that is New Hampshire during the deep freeze of winter everything is either canned, frozen or imported from third world countries below the equator. Which is fine. I like being able to eat, even if it has to either taste like salty mush or come from Brazil with a price tag that'd put hard liquor to shame. But summer offers something different.

Summer offers a taste of local foods. Corn that hasn't traveled more than two zip codes and peaches that you might be able to see growing from the roof of your house. The recent Memorial Day weekend is the unofficial kick off for summer.

So when it's time to honor our veterans farmer's markets and fruit stands begin to set up shop. But this year is different. This year we're finding prices a bit higher than the previous. And with it some yankee traders may attempt to take advantage of fresh food starved, over zealous folk looking to sink their teeth into an affordable habanero pepper.

Some "local" farmers markets may very well be hocking the exact same imported wares that your mega mart was pushing on you during the winter months. Some may provide you with honest locally grown fruits and vegetables, but will put even the most conservative grocer to shame with crazy mark up and substandard quality.

Which is not to say that you should steer clear of the enigmatic farmer's market or roadside fruit stand. You should absolutely support locally owned businesses and reap the benefits of the fleeting summer months, so long as you follow a couple of guidelines.

Make sure you know what's in season: There's a reason why apples are dirt cheap in fall. That's when they're harvested in most areas, the market is flooded. The same goes for spring. Spring apples are imported from all over the world, so you may very well be paying more on shipping costs (and spent cargo plane fuel) than the actual fruit itself.

So do yourself a favor and look for items that are in peak season and stick to them. Do you desperately want an ear of corn in North Dakota, but it's only June 2nd? Chances are your product was flown it from Florida a month prior. Will it be edible? Sure. Will it be cheap? Not a chance.
Examine your surroundings: Sometimes you can judge a book by its cover. Are you shopping from a single lonely stand on the highway? Or are you shopping from a group of merchants set up in an empty lot, packed with customers? If business seems steady, the place seems clean and there are multiple vendors to choose from you've almost always found a winning market.
Stay away from heavily processed foods: I'm hardly a freegan. But there seems to be something wrong with buying a meat pie from the back of some guy's truck. Plus, buying processed foods takes the point away from the whole concept of shopping at a local market. Who's to say the potatoes and carrots in it weren't canned? Isn't it kind of self defeating?

That being said there's nothing wrong with buying some maple syrup candy for the kids or a couple of simple bread loaves, so long as they are not outrageously priced. Just remember, the more heavily an item is processed the higher price tag it's going to have.
Remember your normal budget: How much would you think a pound of peaches goes for at your local mega mart? Is it comparable to the price at your local fruit stand? If yes, it may very well be the same product that's been imported from who knows where.
Talk to those selling you your dinner: It'll do wonders. The Farmer's Market is supposed to be a friendly, casual atmosphere usually held out doors. More often than not the people manning the stands are the same people who grew the plum tomatoes you're looking to stuff.

Ask questions. What would they take home today? Where did this head of lettuce come from? How has the harvest been so far? You might make a couple of friends. And as a great man once said, "Friend's don't let friend's buy junk."
Come prepared: You're not exactly dealing with a Wal-Mart super center and the stand you're shopping from may not even have an electrical outlet to proces your fancy and likely unnecessary American Express card. So bring a fair amount of cash in small denominations.

And don't forget something to haul away all of your loot. Reusable canvas bags, backpacks and coolers with ice packs are all excellent items to bring to a farmer's market. Always bring more than you think you're going to need, you may very well find a great deal.
Steel yourself against things you might not really want: Just because you bring more storage space than you need does not mean you have to leave with sixteen pounds of ruby red grapefruit and four dozen years of corn. If the food is fresh and you find yourself wanting to overbuy, take a break. Buy a small quantity, have a snack and see if it's really worth it. You might find that you were a bit greedy. Or not greedy enough.

Just remember to make it an experience worth remembering. Make the trip an enjoyable experience with friends and family. Try not to quibble too much over price. You only live once, and winter is right around the corner. So get your fill while you can.

One down, ten to go.

2008-04-21T05:20:00.000-07:00

I'm quite happy to report that our American Express green card is now not only canceled, but completely paid off. Yesterday's online payment of $711 knocked it out of the park for good. This line of credit originally had one of our highest balances. This will free up an additional $700 a month to be used toward our next target, our American Express blue card.

Which will end all of our interactions with the soulless corporation known enigmatically as Amex for good. I intend to never take out another line of credit with them again. The way they manage their clients and their predatory card pushing practices has left an astonishingly bitter taste in my mouth. Granted, any person who is forwarded to collections is going to have a couple of nasty words to say, but in comparison to the rest of my lenders they are the bottom of the barrel. Even when I was able to pay my balance in full every month.

The game plan is to squirrel away another grand or so into our savings to build up a bigger emergency fund before bringing the hurt down on our remaining debts.

You're next, Blue Card. Get ready for the wood chipper.

A festival of fail: The IRS

2008-04-16T07:08:00.000-07:00

I have a morning routine. It involves a nice cup of coffee, a home made muffin (this week is Strawberry) and some TV time before the long, painful commute to work. Sure, the walk from my living room to my home office may seem short to some people. But several times I've stubbed my toe on the coffee table. Have you ever stubbed your toe? Time slows down and it hurts.

Before I get to work I typically check my RSS reader like an old man would read the morning paper. I subscribe to a number of personal finance blogs and it just so happened the headline of "Don't forget to sign your tax return!" jumped out at me yesterday morning. Why? Because indeed I do not recall signing my tax return. My accountant flavored missus did all the nitty gritty paperwork for me and I mailed them. But I never even saw the thing outside of an envelope, let alone sign it.

After some frantic research I discovered that it was okay, that the IRS would simply send me a request for a signature in a couple of weeks. It's just take longer to get my return. Which is totally acceptable under normal circumstances. However, due to my rocking job I am required to file as an independent contractor. So I have to pay Uncle Sam a cut of my income from the year.

And if my check is not postmarked with the proper SIGNED paperwork prior to the 15th of April, I'll have to pay interest until it's processed. Which totally sucks and totally my fault.

However after some quick thinking and a trip down the street to the post office, I was able to file an extension for the return that I mailed two weeks prior. On the very last day. Even though the extension will be received well after my tax paperwork, it'll cover my ass until they mail me back my inappropriately filled out form to sign.

So no fees or fines, I'll just be receiving my refund adjustment a little later than I should be. Which is an acceptable punishment, I think.

Funny thing, though. I check the balance on our checking account daily. Yesterday morning I had one or two things waiting to clear. This morning Uncle Sam took out his money. But it didn't have the normal clearing period of 1 or 2 days. It was immediate and brutal. Good thing I didn't count on the slowness of the USPS and slack off on depositing the require funds. I now have $60 to my name. Whew. Close call.

So the lesson for today is: Don't trust the USPS to take it's time, read your RSS reader on tax day and ALWAYS REMEMBER TO SIGN YOUR RETURN.

Sales: Likely garbage

2008-04-14T13:32:00.000-07:00

Often a slave to the retail industry since I first stumbled into the adult world, I've come to the frank and sudden realization that sales and rebates are almost always bad things. While hardly ever bad for the retailer, the consumer is all too often lulled into a false sense of self satisfaction before being clubbed in the back of the head with hidden fees, costs and other money grubbing garbage. While it's to be expected that retailers should try to improve their bottom line at all costs in order to remain in business, all too often is the consumer's ignorance preyed upon.

Let's examine a fictional chain of businesses. We'll call this national franchise Bob's Appliances. Bob, the owner of this franchise doesn't actually produce anything. He doesn't need to. The service his corporation provides is customer service, product knowledge and the convenience of having sixty blenders under a single roof for you, the consumer to gawk at and wonder which will produce the best milkshake.

So Bob purchases all of his wares directly from the manufacturer in large quantities. The manufacturer, knowing that Bob will sell through his stock quickly and place another order will provide him their merchandise at a fixed cost. Bob will then mark up the sales price so that when he sells a blender he'll be able to pay for things like shipping costs, rent and his vacation to Greece.

Which is understandable. Bob needs to do this in order to stay in business and pay his employees. But let's say Bob gets some competition. Larry opens up a rival appliance warehouse down the street and starts offering his blenders at a cheaper rate than Bob. He does this because he's a prudent business man.

He does, after all want to make a living. He needs to put his kids through college and pay for his wife's new rose bushes. Bob, worried about his own savings account starts dropping the prices of his blenders to compete with Larry's.

This all sounds great for the lucky sod who wants a cheap blender. But it's not terribly good for Bob and Larry. Soon they're selling blenders for pennies above the prices they originally paid for them. The manufacturer, worried that Bob and Larry are going to drive one another to the poor house and leave them with no middle man to peddle their blenders is left with only one recourse. They set certain guidelines their merchandise can be sold with. They politely inform Bob and Larry that unless certain conditions are met, they're going to stop selling to them.

This is where the manufacturer's "suggested retail" comes in. Suggested retail is, simply put the lowest any given item can be sold under normal circumstances and most major manufacturers practice this sort of behavior. Cusinart, All Clad, T-Fal, Krups, Euro-Pro, Kitchen Aid, Yankee Candle, et cetera.

This provides a boundary for Bob in the future. He knows that his competition can only go so far with its prices, which were kindly set by the manufacturer to assure that even at the minimum sales price some profit was to be had.

This balances things out a bit. But it opens up a whole other world of pain. Just how far should Bob set his prices above the "suggested retail" given to him? Twenty percent or five? Well, nine times out of ten it'll depend on what exactly Larry the devious competitor is up to. Which is probably a sale.

Sales do not break all the rules. They simply create the illusion of such. There are still price guidelines in place you just don't see how little retailers pay for the items they are reselling for you.

Imagine seeing a blender that's usually sold at Bob's for $100. But this week it's only $30. How can Bob possibly profit from this? Simple. He bought it for $5 and jacked up the price to make it seem like he's taking a loss by "practically giving" the blender to you. The suggested retail? Oddly enough, it's $20.

The biggest question I get asked is "When will this item be on sale?" The retailer I work for is thankfully somewhat sane, so my answer is always "Never. We have 'every day' low prices." Which sounds corny and makes people think they're being ripped off, but it couldn't be further from the truth. Sales create an atmosphere of misinformation about the actual value of a product. You shock the person with a borderline crazy high price and slap a sticker on it saying you're going to be a real swell person this president's day weekend and sell it for a quarter of that.

Not only is this manipulative, but in my opinion outright despicable. Especially when retailers go into overdrive and make it their business to have sales. They'll simply hold a sale every month and jack up their prices astronomically high the rest of the time. A prime example of this is Macy's and Kohl's. Not only does this make it impossible to shop when a sale isn't around, it also makes it impossible to shop when there is, simply due to the fact that it herds customers like cattle through the front door all at the same time.

The only exception to this it honest clearance sales after big, time sensitive events. Retailers are still making a profit on every sale, but they're genuinely motivated to move the product so they can make room for higher ticket items. This is why buying Christmas decorations on December 27th is smarter than December 1st. Or purchasing a humidifier in the middle of April is probably wiser than January 5th.

I'm not saying that one should forsake materialism because of asinine markup habits, but I am saying to be reasonable about it. Because in the end of things the amount you "saved" might not really be an appreciable amount at all when you think about it.

Selling your home: Top 10 things to do to get ready

2008-04-02T06:35:00.000-07:00

Let's say you really are in a dire financial situation. The best self help books out there (and even many of the worst) suggest one simple thing before elaborate budgets, job schemes and everything else. They tell you to spend less. Which is quite often a lot easier said than done. But it's possible. The scale is of course up to you, but one of the biggest things you can do to slow the bleeding of your pocket book is knocking a mortgage out of the park.

When you buy a home you typically apply for a home loan from a lender. This lender will pay the seller of the home their asking price and establish a line of credit with you, the buyer. You will then receive monthly payments from them just like you would from Visa or American Express. The amount you pay will of course vary depending on the price of the home, length of the home loan and interest you are charged.

Which is perfectly acceptable. But in a tightening economy sometimes it is necessary to trim the fat. Sure, you can trade in your elaborate BMW for a used Chevy Malibu. But sometimes when the going gets tough it may be prudent to sell your home and either find a cheaper one, or simply tough it out in an apartment for a little while.

The real estate market is in shambles right now. Many big lenders have simply imploded under the stress of so many foreclosures. Many more have stopped issuing new lines of credit altogether. And of the few that are still offering home loans, they're being a heck of a lot pickier about who they reject and who is approved.

Needless to say it's a double edged blade. During the time you may need to sell your home the most it's the hardest. But there are a couple of tricks you can do to get your home on the market and sold as quickly as possible, saving you mortgage payments, time and energy.

Price it right: The market cannot be manipulated. It is a simple case of supply and demand. When there is more supply than demand, prices drop. When there is more demand than supply, prices sky rocket. So even though your neighbor sold his home, which is identical to yours in every way two summers ago for $250,000 that does not mean yours will go for the same price.

So contact a realtor and ask about a cost market analysis on your home. Most realtors don't get paid until your home is sold, so the report should be free. Just don't lead them on.
Stay realistic: A real estate agent may give you a price that you don't like. Tough. While they may be off slightly it's probably a whole lot more realistic than your estimate. They are professionals. This is how they make their own mortgage payments.

An agent who panders to you and says they can sell your home for a lot more is typically someone to stay away from. Your home is going to be listed on the same market no matter who sells your property. It's in an honest realtor's best interest to give you an accurate price. The more realistic it is, the faster it sells. The faster it sells, the sooner they get paid. If it's too low, that'll reflect their commission negatively, too.
Stay away from the buyers: Let your realtor do their job. When a showing is scheduled on your home, get the heck out of dodge. Go for a cup of coffee. Take the dog for a walk. If you stick around and chat up the buyers you may let an insignificant fact slip that may hurt your bottom line if they decide to write up an offer. Or you may come off as desperate.
Don't be difficult: A lot of people see houses on the fly. Sometimes they may only want to give you a couple of hours notice before they want to see your property. Very rarely will they give more than 48 hours notice. So don't shoot down the middle of the week buyer who wants to check out your home at 7 PM because you're tired and it's 5:00. He may wind up buying your property.

Showings don't take more than fifteen minutes usually. You can manage.
Listen to feedback. No. Really. Listen: When someone sees your home through your real estate agent they're usually asked to provide some sort of feedback on how your home showed. Gather it and study it.

If a lot of potential buyers didn't like the dark color you painted your bedroom, repaint it. If they thought your lot was too spartan, plant some flowers. And don't be scared to emphasize the good too. If some buyers liked your hardwood floors, polish them. If they thought the breakfast nook was especially cute, put some fresh flowers on the table.

Remember, it doesn't matter what you think. Buyers are fickle and picky, you have to coddle to their general wishes sometimes in order to wash your hands of a home.
Use public open houses wisely: Open houses cost a lot of time and energy, so it's important to schedule them well. Not only does it destroy your day because you have to bust your hump cleaning and polishing before jumping ship, but advertising is expensive.

So a real estate agent isn't going to want to have one every weekend. Not only will they have to sacrifice a day off, but they're going to shell out a couple hundred bucks to get the word out. All on the chance that someone might show up.

So plan them for weekends that are looking relatively warm and sunny. Stay away from weekends with sporting events, holidays or attractions. If everyone is watching the superbowl or attending the county fair, no one is going to be paying your home a visit.
Use broker open houses wisely: A broker's open house is just that. It's where your realtor invites all of his cronies to your pad to check it out for their buyers. It's a powerful tool, but keep somethings in mind.

Broker open houses usually only happen to the best priced and maintained homes on the market. Why? Because it's a chance for potentially every real estate professional in the area to critique your home. If they don't like it, they're not going to suggest it to their buyers.

They're also usually in the middle of the week. No one wants to sacrifice their weekend just to stand around a some stranger's house on the off chance they might know someone who might be interested. So make sure you're able to clean house in the middle of your work week.

They're also usually somewhat catered. Everyone loves a free lunch. Food acts as bait. So offer to help your real estate agent with food costs and ideas.

Make it count, because you'll probably only get one broker's open house. Once everyone has seen it, they won't want to see it again.
Make an awesome first impression: Stupid little details impress people. Even the details that aren't going to stick around after you pack up and move. So consider fresh flowers on the dining room table, keeping the house immaculately clean inside and out and making sure there's as little clutter as possible.

If you need to pack some things or put some stuff in storage, so be it. You're going to have to move it eventually anyway.
Keep pets out of the way: Sometimes a showing will happen in the middle of the day while you're at work. That's usually fine, if you don't have any pets. But what if you have a dog or a bunch of cats running around? What if one of them gets outside because of an ignorant agent?

Whenever a showing is about to occur or you're going to leave the house for the day, secure your animals. Confine the cats to the guest bedroom with some food, water and a litter box. Crate your dog, et cetera. And make sure everyone knows about them. It's helpful for a buyer to know that you have a lab crated in the basement, but he's really friendly. Or you have a pug locked upstairs that loves to bark, but wouldn't hurt a fly.
Consider every offer, no matter how pointless it seems: Let's say someone likes your home. So they write an offer and send it along. They may ask for a substantially lower selling price, or that you pay for their cost of moving.

There's probably a reason why they're doing that. Maybe your home is a little over priced. Try to negotiate. You'll be surprised how many people reject contracts on their home because of a couple of thousand dollars, but wind up staying on the market for months and end up paying way more than that in mortgage payments and price reductions.

Selling a home now is harder than ever. But if you stay focused and cut the sentimental value out of the equation you'll successfully wash your hands of your sky high mortgage and a lot of your financial woes.

Buying your home: Top 10 things to do to get ready

2008-03-25T06:18:00.000-07:00

The biggest purchase any given person on the street is likely ever to make will be their home. Most people will never even imagine shelling out for an investment property or purchase any appreciable amount of stock. Which is fine. Some people just don't want to be bothered with big, sometimes unwieldy investments. They just want to work a nine to five job and put away a good chunk of their income toward retirement and enjoying themselves. And so long as they manage their finances properly, their financial lives will typically long outlive the foolish investor.

So, your very own home. It's the American dream. I know that at this point in my life it's the one thing I want the most. There's a good reason why a lot of people shell out a lot of cash on their homes, they spend a lot of time there. Your home is your castle, your sanctuary after a hard days work. If you own it, you can do with it whatever you'd like. Paint it whatever colors you'd prefer, furnish it with whatever furniture you find the most comfortable and decorate it however you want.

In the real estate industry I see a lot of clueless first time buyers. This serves to simply irritate everyone nine times out of ten. The buyers get frustrated because people are talking over their heads, the real estate agents get frustrated because they have buyers trying to behave in ways that are unrealistic and the lenders get annoyed because they're not getting their money when they're supposed to because everyone is all confused and frazzled.

When you're doing something for the very first time it's okay to be a little ignorant. But whenever you're getting ready to purchase a home it's always prudent to know as much about the subject as you can possibly know. You try to be savvy when you're buying a car, right? Well, even the most expensive car is about thirteen times less costly than the dumpiest single family home. And when the going gets tough, an expensive car is far easier to get rid of than an over priced home.

To make it short and sweet, a bad buy on your first home can ruin you for years if a couple of things go wrong. I've drawn up a short list of points you should keep an eye out for, but it's always a good idea to ask a local realtor in a no pressure situation, or check out the appropriate book at your local library.

Don't screw around. Get a real estate agent and stick with them. Real estate agents don't make a dime unless you find something to buy. And even then it's a commission check from the guy selling the property. It is in their best interest that they find a fair price for you.

Driving around looking for "For Sale" signs isn't going to do you any good. You won't have anyone to represent your interests. So you're far more likely to get ripped off by the guy selling the home. Real estate agents are trained professionals. They know what needs to be done in order to make a fair sale. They know to ask about home inspections, conditions that may be concealed, tax rates, whether or not the price is accurate, et cetera.

In short, it'll save you time and money. Would you enter a civil lawsuit without a lawyer?
Real estate books are crap. You see those glossy little books sitting outside grocery stores, chuck full of homes. Yeah, they're garbage. Why? They're published once or twice a month. A month is a huge time frame in an industry as fast moving as real estate. Homes get price changes, sell, expire, get withdrawn, go under contract, get renovated and changed all the time. I used to manage several real estate book accounts. By the time the book was in print, half of all the properties showcased were typically either sold or appreciably changed in some way.

They only serve to make sellers happy. That's it. Nothing else. Don't waste your time.
If you have to look all by your lonesome, use the internet. Use realtor.com's search engine if you're looking within the United States. Don't bother with the search engines maintained by the real estate books, they're not going to be any more up to date than the paperback books.
Consider your savings account. You're going to need to make a down payment in some form in order to qualify for any type of loan that isn't going to rake you over the coals. It's a simple fact. It's usually a good idea to save up twenty percent of the amount you are looking to spend. This won't be going to the guy selling the home, his real estate agent, or yours. It will be going to the bank that you're getting a home loan from.
Consider what you can afford for a monthly payment. If a house has a price tag of $250,000 you're not going to pay that and that alone. The vast majority of people get home loans. That means you're going to have to pay interest until the home is paid off in full. It's almost exactly like a car loan.
Consider what you can afford for taxes. Owning private property means paying taxes. Taxes are paid yearly to the town or city you live in. They pay for things such as waste water treatment plants, police and schools. Very few people realize this fully before signing a binding contract. Taxes are typically paid yearly. So living on the outskirts of a ritzy town may sound appealing in theory, but you're going to be shelling out more than your fair share of hard earned cash. Before considering a purchase, call the town hall in question and ask them for their tax rate.

Tax rates are usually per $1,000 dollars. So, if the tax rate in Lazytown is $25.05 and your home is $100,000 you'd simply divide 1,000 into 100,000 and get 100. Then you'd multiply that by the tax rate, $25.05 and you'd get $2,505, which means you'd have to pay $2,505 annually to Uncle Sam.
Don't get emotional. Keep it loose and easy. If you find a home you absolutely must have, you're far more likely to be manipulated and wind up paying more than you really should have to. If the seller isn't willing to compromise enough to make you happy, walk away from the sale.

Nothing is final unless your name is on paper.
Wait it out. The market fluctuates. Right now as you may have heard the real estate market is tanking in the United States, due to some rather unsavory activity on the part of shady banks. This means the market is what they call a "buyers market." Buyers have the advantage because there are far more homes that need to be sold than there are people willing to pay for them.

This means competition. And if you're looking to buy a home, it's your best possible scenario.

In a buyers market homes are more likely to either be fairly priced, or below market value. People are also far more willing to compromise should you bring an offer to the table that suits your best interests more, versus their own. But even in a market that's declining, there's always a couple of extra bucks to be saved. As a rule of thumb, late fall is when prices typically start to fall even further.

People want their homes sold before the holidays. But people don't want to buy, because they're busy with the holidays. So it's a win-win situation. You'll get your lowest prices of the year around late winter and early spring. Why? Because the properties on the market are probably still left over from the fall and winter. They've been on the market for months, and their sellers have probably authorized a number of price changes.

Your real estate agent can find out just how much the price of any given home has fallen since it's been on the market.
Consider a bank owned property. There have been a lot of foreclosures all over the United States. These are homes that people couldn't afford when their shady banks got over zealous about their monthly payments.

Banks are in the business of selling loans, not homes. So while you can't exactly see a bank and talk to a bank like you would a normal, average Joe looking to sell his home you're far more likely to get a better deal. Why? Banks want to wash their hands of the property. They want it gone and out of their mess of problems as soon as possible. This doesn't mean you need to attend foreclosure auctions, but keep an eye out for newspaper ads that contain the following language: bank owned, reo owned, real estate owned, foreclosure, foreclosed, lender owned
Be wary of "concessions." Occasionally someone selling their home will offer "concessions" to potential buyers. This sometimes mean they'll pay condo association fees for your first couple of months, they'll pay your first years taxes, they'll pay for your moving costs, et cetera. They're doing this because they want to sell the property, but don't want to really lower the price a substantial amount.

Like a "sale" at your favorite retail outlet this can be good. But it might mean the home is over priced to begin with.

So long as you do your research, get a respectable real estate agent on your side and take your time to make a decision you'll wind up with the best possible home you can manage with as little possible hurt to your bank account.

Hobbies for the frugal

2008-03-21T10:28:00.000-07:00

Everyone has at least one hobby. Something they really enjoy doing that doesn't really have a practical and every day purpose. I've met people who like collecting retro video games, people who make beautiful music and people who love putting together elaborate model trains and villages.

The problem is, when money gets a bit tight the hobbies are usually the very first things to go, even before free time and food. Which is a shame. Hobbies define who we are. It adds a little bit of character and color into our lives. Which is exactly what most people need when they find themselves strapped for cash.

But hobbies don't necessarily have to be costly. Sure, a lot of the good ones are. But there are many things that you can do to occupy you body and mind other than mindless toiling under the gun of making an extra dollar.

Here are a couple of small suggestions. But this mind is by all means not a tell all list. There's an infinite number of things you can do to occupy yourself. You just need to be a little creative.

Read
So long as you're not married to any given series of books or costly periodical reading remains one of the cheapest pay for hobbies imaginable. You can find any given book type under the sun at your local library. And if they don't have it, they can order it for you.

If you must permanently possess a piece of literature you can try any number of used book stores, thrift stores or book sales. Many of these places also carry older magazines. While the pop culture periodicals are probably pretty worthless you can always find those that cannot be made obsolete with time, such as National Geographic.
Paint
Acrylic paint, brushes and unfinished wooden doohickeys are surprisingly cheap at general craft stores. Despite my manly prowess, I've found myself on occasion painting pretty pink jewelry boxes with bumble bees and hearts. You can find a surprising amount of unfinished items, too. Everything from boxes to coat racks to chairs and wooden toys.
Gardening / Yard improvement
When I hear the word "yard work" I cringe. But I have to admit that after I quit my complaining I actually really enjo y getting outside and scotching my pasty white skin beneath the blazing New England sun. After spending a whole winter couped up in a tiny house with debris gathering on the yard it's good to clear some leaves and brush sometimes.
Hiking
If you don't live in the very center of a heavily urbanized area, chances are there's some mighty fine hiking within a half an hour of your home. So long as you have a good pair of boots, a rucksack and a water bottle you're more than capable of getting outside and enjoying some fresh air.

If you need a little help in finding some local trails, try TrailFinder which is maintained by the American Hiking Society. The resource even provides locations for additional outdoor activities, such as dog hiking, biking, fishing and camping. If you're willing to shell out a hundred bucks or so on a GPS, you can always try Geocaching, too. After the original investment in the GPS device there's no direct cost involved.
Bird watching
Whether you're lazy and prefer to do it on your back porch with a glass of ice tea and a bird feeder or a bit more proactive with a pair of binoculars and hiking boots bird watching won't cost you a time if you're frugal about it.

And if you're looking for something a bit more elaborate than stale bread in the backyard, unfinished bird feeders are pretty cheap. As are mixed seeds and hummingbird nectar.
Some sports
Hockey is a bad hobby for the frugal fiend because of all the equipment involved to do it safely. Not to mention the cost of using a skating rink. But basketball, soccer, baseball, softball and touch football all just pretty much require a ball and maybe a bat.
Stargazing
In my driveway on a clear night it's hard to make out much in the sky. A couple of the better known constellations, maybe Mars of Venus. There's a fair bit of light pollution, so stargazing is pretty difficult.

But if I drive 15 minutes down the road to a cemetery in my local state park all of that fades away and suddenly I can see more stars than I ever could have imagined. I did this with the last lunar eclipse. Stargazing itself is always free. It's even better if you can find a pair of binoculars from another era and blow off the dust.

Regardless of what you'd like to do it's always important to keep a hobby while in financial straights. It'll serve as a release valve for all the stress that's sure to come with living on a paycheck to paycheck lifestyle.

The Sewing Kit: Your best friend

2008-03-18T07:27:00.000-07:00

Let's face it. When our clothes get a little worn out and torn the vast majority of us create a new oil rag, chew toy for the dog or contribute to our daily landfill allowance. Clothes in this era are mass produced by industrial machines and foreign labor. They are relatively cheap and not exactly designed to last forever. But when you're on a fixed income and paying off your heating bill looks a little better than buying a new pair of work slacks, it's time to bust out the best friend and frugal fiend can favor, their sewing kit.

I learned to sew probably like most everyone else. In high school home economics, with a grumpy woman who looked older than the White House. And while I did forget a substantial amount of what the woman taught me, such as how to make a simple budget, I somehow retained the ability to possibly sew. Granted, I'm not going to be busting out designer jeans anytime soon. But you'll sure as heck bet that I'm going to keep that polo shirt that's missing a button or a jacket that has a torn pocket.

You can by sewing kits from any number of department stores. A lot of them are pretty good, too. They tend to be small and compact with a good and secure place for every bit of thread and needle. Which is a must, considering you can't exactly use it if you're missing half the pieces. But any good sewing kit can be made at home. And if you have all the material to pull one together, why bother to buy one?

Any half decent sewing kit will contain:

A sturdy and secure case, box or tin (To keep everything together.)
2 pairs of scissors (Cheap-o paper scissors and fabric shears.)
5 - 10 sewing needles (You don't need special fancy needles. Medium sized are all you're going to need for general repair.)
10 - 15 straight pins
1 seam ripper (For fixing mistakes, removing labels, patches, et cetera.)
Several spools of sewing thread (While it'd be ideal to have every color under the sun you only need to stick to some basic colors. White, black, gray, red and blue. Most small repairs will be in relatively hard to spot locations anyway.)
A pin jacket, cushion or book (So you don't stick yourself accidentally.)
An assortment of buttons (For replacing lost ones. Most clothes with buttons keep a spare sewn into a hem, use the seam ripper to tear them out.)

If you want to go nuts you can include lots of fancy tools like a hand held sewing machine, measuring tape, marking pencils and special types of fabric shears. But those are the basics that you're probably going to need on any given day.

Arming yourself: A federal job

2008-03-16T08:14:00.000-07:00

When you boil personal finance down to the bare bones there are two very obvious ways to increase your over all wealth. The first and most obvious is to spend less than what you earn. This can easily be achieved by simply installing some self restraint in your shopping habits and developing some sort of budget, even if it is rough. A lot of people focus on this aspect as it will bring the most amount of success in the shortest amount of time. Which is great. But what if you've already done that and your bank account is still hemorrhaging like nobody's business?

If the first option fails you can always fall back to the second bare bones option. It is simply to increase the amount you earn annually. Whether it be a second (or third) job, a raise or a brand new primary occupation.

Admittedly this is the most difficult part, especially with the economy in the shape it's in. Everything from retail to real estate is feeling the pinch of the almighty dollar's decreasing value. Sure, people are definitely hiring. But they're being a lot pickier about the over saturated market. A lot of other people are looking for jobs too, whether they have a sub prime mortgage or they're irresponsible college kids coming entering the work force with American Express on their backs.

But you can get a cup of water, even in the driest well. You just have to wade through the mud to get to it. You just have to remain persistant and ruthless in the pursuit of a new occupation should you decide to get one.

Let's examine the missus, shall we? She's in her mid twenties and has a dual major in education and accounting. Currently she is employed at a full time job that pays her a little over $12 an hour. We've been looking to get her a better paying position in a field she'd appreciate for nearly half a year now. We've gone through three reams of resume paper, countless stamps, 25 Sunday papers and she's wasted most of her vacation days to attend interviews for everything from entry level positions with small businesses to senior analysts with the state government.

She even put her time in with two staffing agencies. Professional job hunters who red penned her resume to make it the best it could possibly be. Either she was outright rejected or lured along with the hope of a new position with second or third interviews. But nothing really materialized in a price bracket that would be worth moving to.

Needless to say it was an exhausting, depressing experience for the both of us. But one evening while she was toiling away at her second job slicing pizzas one of her former college professors stopped in for a piece of pie. They got to chatting. The missus asked for a letter of recommendation. The professor said she'd be glad to provide one, but had she heard of working for the federal government?

At this point we had been applying for state jobs as well as to the private sector. We figured it just another resource. So I burned some time and did a little bit of searching. I found everything from $8 an hour grunt jobs working at cafeterias to $100,000 annual jobs controlling entire departments. We found a couple of jobs that fit her experience and education and applied.

The most painful experience out of it was the waiting. She waited a whole month for an interview. Then another whole month to hear if she got the job or not as they checked her record for any smudges. Then another full week to call and ask if it'd be possible for her to start in three weeks time.

The US federal government, as you would imagine is a bureaucratic mess. But she was finally accepted. She will be receiving a $15,000 more at this new job versus her old one. She will also receive superior health, vision and dental benefits. And since it's a public sector job she's essentially tenured after a year's time. There is also a clear and easy pay grade system, so she can calculate exactly how much she'll be making in two years time.

While I'm not exactly sure how well other federal institutions treat their employees, if you're looking for a new job anyway, it's definitely worth a shot. Especially if you have an education or a good amount of private sector experience under your belt.

Sure. It'll probably be a longer process to score one of these jobs versus something straight out of the employment section of the newspaper. But with the potential to get something with such great benefits? It's definitely worth it.

Low impact, woodland home and community

2008-03-11T20:04:00.000-07:00

A couple of weeks ago I produced perhaps my most popular piece of writing on - the minus sign blues to date. In it I provided a little bit of a cross section on eco-frugal homes and how one can feasibly live within reasonable comfort without laying waste to 3+ acres and constructing some elaborate McMansion with central heating and sky high energy demands.

Since the date I published it I've received nearly 3,500 hits specifically to that article from various sources that range from Google searches to indie architecture blogs. In fact I've gathered a number of readers specifically from this article. Several of whom have rather politely asked me to post a bit more frequently about the subject that drove them to my little niche in the eco-frugal blogosphere.

Oh yes. Even I use trendy terms sometimes, however much as I like to appear to go against the grain.

So a couple of days ago when I found these little gems on a low impact, woodland home in Wales, I was instantly interested. While this very economical style of home wasn't elaborated on very much in my original post, it is more or less an earth shelter style of home with a touch of strawbale construction thrown in for good measure. Even if it's gone off a bit into the deep end and become a bit greener than it's more conventional counterparts the spirit is more or less the same.

While most of my economically and environmentally friendly homes are just that, they all pale in comparison to this home's simplicity and staggering ability to keep it local, cheap and beautiful. A lot of others still maintain a fair bit of third party contractor work and good old fashioned cement, brick and bolts. Not this one.

It was constructed over a four month period by a man and several friends, none of whom had any training in architecture, construction or masonry. And better yet, they were able to do it with mostly all local materials. The material they did have to purchase only came with a price tag of a mere £3000. If my calculations are correct, that comes out to a little over six thousand U.S. dollars.

Which by the way, is less than half of the suggested cash down payment on most single family homes over here in the states.

While this is probably a little bit more rugged than I'd be comfortable living in at the moment with its compost toilet, ground cooled fridge and total dependence on solar power, it's a neat concept and it just goes to show you how really frugal you can be when it comes to your place of residence and still be supremely comfortable.

But what really piqued my interested was what I found while exploring their website. They are involved in a rather brilliant project in South West Wales that goes by the enigmatic title of "Lammas." Which is not a single eco-frugal home, but instead a whole community dedicated to this unique, low impact life style. Think of it like a condo development for the greenest frugal folk you can imagine. Situated on about 70 acres the association will include several homes, a community center and a campsite for those interested in being looky-loos for the not so rich and not famous.

Even a small mini-series has been produced that details the ins and outs of starting, maintaining and finishing such a novel project. It's really worth a second look if you're interested in this sort of thing. Even if you're not, maybe you will become so.

The dreaded homelunch

2008-03-09T11:21:00.000-07:00

There was a time when I used to work in an office environment for nine hours a day, five days a week, fifty one weeks a year. It was a pretty grueling experience to say in the least. My days were made up of high pressure deadlines, keyboarding and a fair amount of incompetent technophobes yelling at me because they couldn't exactly wrap their heads around the whole purpose of having secure passwords and anti-virus software.

Needless to say the best part of my day was almost always the lunch hour. Sixty sweet minutes of peace and quiet to do with what I please and enjoy a nice meal. And with the missus in the next office over we could take a leisurely break together. And maybe vent at one another as to why, exactly our boss felt the need to be such an arrogant waste of skin.

Because it was a busy office environment in an area populated by office buildings, real estate brokerages and banks there was a dangerous temptation. It was called "the strip" and it was glorious. A mere sixth of a mile down the busy seven lane artery that could have passed for a major highway were more places to eat than stars in the sky. Everything from the usual fast food garbage to upscale twenty dollar sandwiches. If you felt like anything at all on any particular day of the week, you could find it, order it and consume it in less than an hour.

And man, oh man. Would that seven lane motorway clog like a low flow toilet at 11:55 every weekday, without fail.

I'm pretty ashamed to admit that we'd waste a good $60 every week on lunch. That's more than half of our current food budget for two full weeks, breakfast lunch and dinner included. We did this for more than half of a year. Our rough estimates put this at around $1,500 of pure excess. Sure, the food was marvelous and the stress relief was great. But not only were we wasting an extraordinary amount of money, our waistlines were also exponentially increasing. I gained 30 pounds at that job, due to eating out and sitting on my ass all day, typing.

Now that I work from home for the vast majority of my work week I have full access to every household appliance in my home in addition to my fridge and pantry. Lunch is no longer a problem. There's no temptation to go out, as I live in the boonies.

But I did start to get serious about being frugal before I left the office grind. While there was still a little bit of excess involved, it was far more manageable. Here are some of the tips and tricks I experimented with.

Don't change your life style all of a sudden
If you're used to eating out, you're going to get withdrawals it you all of a sudden stop and switch to the loathed Peanut Butter & Jelly sandwich at your desk. Going out for Thai with your work buddies is far more appealing.

So continue to do it, but work on scaling yourself down. Form a rough budget and evaluate your performance on a week to week basis. But don't get depressed if you go over budget once in awhile.

Start bringing your lunch on your less stressful days and enjoy a nice time out on the more head grinding days. Eventually over time whittle it down so you only go out one or two days a week.
Remove temptation
It's depressing to see a group of your coworkers go out to your favorite lunch canteen. It's downright torture to see (and smell) them get delivery. Curb your potential torture by taking your lunch break earlier than most of your peers, if possible. Leaving the building altogether works well if you don't mind being a little antisocial. I used to bring a good book to my car and read in the spring and summer months.
Snack
Okay. Not all of us can be antisocial nerds and read under a tree when the clock strikes 12. Let's say you need to go out on a daily basis, if only to chat with your friends and coworkers and get a little bit of socializing in.

Have a snack about an hour before lunch time and order something relatively small when you do go out. Since you won't be famished, you'll be less likely to order something off the menu that could feed a cow.
Don't drink soda
Soft drinks like Pepsi and Mountain Dew are mostly carbonated water. Which is essentially tap water with a bit of gas dissolved into it. I once knew a woman who managed a restaurant for a number of years. She informed me that soft drinks have an enormous third party markup. It costs the average restaurant about $0.03 to provide you with a frosty cold Pepsi. Which is why most establishments tend to offer free refills. Likely because they're charging you about $2.00 for something that costs them three cents. The same is more or less true for coffee.

So if you find yourself as a fast food joint or elsewhere, simply drink water. You'll be cutting down on empty calories and saving yourself a bit of money.
Utilize the microwave
Microwaves are more common than toilets nowadays. There was a time when I lived off of Hot Pockets. Granted, they were still incredibly unhealthy and still cost me $2.50 a box, but that sure as heck beat going to McDonalds and buying a $6.50 double quarter pounder.

You don't even have to buy microwavable convenience meals. Microwaves in the work place allow you to bring pretty much anything you can fancy for lunch, be it left overs from the night before or something you whipped up that morning.
Utilize icepacks
Say you're on the run more often than not and a microwave is not always an option. There's nothing chaining you down to just sandwiches. So long as you have a lunch bag and an icepack there are a number of things you can eat cold and on the run.

Some ideas include:
- Pasta Salad
- Chicken Salad (Maybe with left over chicken from the night before?)
- Gazpacho
- Waldorf
- Veggie Wraps
- Fruit Salad
- Left over pizza (I prefer it cold, honestly.)
- Left over fried chicken (Fried chicken is excellent cold, that's way it makes excellent picnic fodder.)
- Potato Salad
- Tortilla chips and salsa (or Spinach dip)
So long as you can dice it and shove it inside of a tortilla or a tupperware container, you can bring it and eat it cold.
Set aside dinner portions
Regardless of what I'm having for dinner on any given night I try to put an extra portion into a piece of tupperware before I sit down to eat. This could be anything from mashed potatoes of taco filling. This stops us from eating it and it gives me something to work with for the next day's lunch.

There's no rule saying you have the have an exact duplicate of your previous night's dinner. Roast chicken can be diced up and put into a salad. Taco filling can be mixed with rice and corn. Roast beef can be sliced thinly and placed into a wrap. Mashed potatoes can be mixed with cheese and sour cream, et cetera.
Don't underestimate the power of carbs
I love carbohydrates. They're tasty and extremely filling. Whenever I work outside of my home for a long period of time, I always bring some seasonal fruit and a slice of breakfast bread with me. The breakfast bread will keep me filled for a long time while I bust my hump. The same is true for any complex carb, be it pasta, potatoes or a big hunk of pumpernickel.

So long as you make an honest effort to try to curb your unhealthy and wasteful lunch habits you'll succeed, if only a little bit at first. But it's not incredibly difficult.

Top 5 best herbs for the frugal family

2008-03-04T05:48:00.000-08:00

Fresh herbs are by far the most expensive piece of produce pound for pound that you'll ever likely buy on a semi-regular basis. With good reason, too. They're capable of turning just about any bland and mediocre meal into one that you're going to remember for quite sometime. Which is a very important, especially when you're on a tight food budget.

A lot of people buy their herbs dried, or worse yet, in the produce aisle at their local mega mart. This is a shame. Sure, dried herbs are great. But a lot of their essential oils have evaporated in the drying process, and even more lost during their journey to the store and a potentially long stay on the grocer's shelf. And fresh herbs are expensive. They should be. A lot of time and energy went into keeping them alive all this time just so you could pluck them up on a Sunday afternoon for your pasta sauce.

So the solution is simple. Grow your own. Seeds are cheap and herbs require very little maintenance once started. The only thing you need to worry about is getting the biggest bang for your buck. These can of course be grown outside should you have that privilege, but most herbs are quite content to sit in a sunny windowsill inside.

So I've compiled a short list as to the top 10 you should be concerned about if you find yourself with a new green thumb and on a tighter budget.

Basil
Description: Basil is a dark leafy green plant. The plant itself is flowering, producing tiny, sweet smelling white flowers. It's seeds are tiny and dark green to black in coloring.
Dishes: Pasta sauce, pesto, zucchini, salad and pizza
Tips: Needs a very sunny area to grow properly. Like most herbs, the cultivated product can be a little bigger than bite size. Clip only as needed from the plant and mince the leaves very finely. Add toward the end of the cooking process as basil itself is pretty delicate and may lose its flavor if too much heat is applied. Basil is crammed full of antioxidants!
Chives
Description: Chives are actually part of the onion family. They appear when fully mature as hardy and tall grass with a light to medium green color. They are a flowering plant and produce small purple flowers.
Dishes: Roasted, mashed and baked potatoes, salad, dip, salsa and pasta sauce
Tips: Needs a very sunny area to grow properly. When using, snip one stalk off as close to the base as you can and mince it. If you need more, repeat the process with a second stalk. You'll get a surprising amount for very little of the plant, so don't be over zealous when it comes to using.
Bay
Description: Bay is grown from woody stalks. The actual leaves themselves are large and pale green, with a lighter underside.
Dishes: Soups, stews, stock, and sauces
Tips: The bay plant doesn't need so much sun as it needs air. Make sure it's in a well ventilated area. When cooking, bruise the leaf and add it in the beginning of the cooking process whole. Fish it out before serving, as biting into a mouthful of foliage may not be the best experience. Bay itself is aromatic and slightly bitter.
Rosemary
Description: A small, woody plant that produces small evergreen like needles when fully mature. The plant itself produces tiny periwinkle colored flowers.
Dishes: Cornish hens, steak, fresh water fish, brisket, lamb, soups, stews and stocks.
Tips: The essential oils in rosemary can irritate the skin. So be ginger when you clip what you need from the plant. The plant itself needs a moderate amount of sun. Before cooking, bruise the clipping and add at the start. Like basil it should be fished out before serving.
Sage
Description: Pale to medium green, long and wide leaves. Flowers with large, bell shaped purple flowers. The plant itself is woody.
Dishes: Pork, chicken, goose, turkey, stuffing
Tips: This plant's name literally means "to heal" and has been known to treat a large variety of ailments such as digestion and depression. The plant itself tolerates dry air very well, but needs plenty of sunlight to thrive. Like rosemary and bay, sage leaves should be bruised, added during the start of cooking and fished out prior to serving.

Of course there are plenty of other herbs and varieties out there that you can try yourself. But whether it's thyme, tarragon or flat leaf parsley they'll go a long way to stretching your food budget just a little bit more.

Stretching food

2008-03-01T07:33:00.000-08:00

Most people like routine and schedules, especially when it comes to their food. I for one love trying new and different things, but nine times out of ten I typically gravitate toward the dishes I've grown to love. These include tacos, chicken cheese and broccoli, roast chicken, calzones and chicken stew. So when the going gets tough people tend to start to get nervous, thinking they don't have anything to eat in the whole household.

Say it's the end of the month. You pantry and fridge are pretty barren. There's really nothing you can throw together that'd form something you're used to. A lot of people at this point, if their budget was not set completely in stone, would go out to the corner store and buy a couple of things. Or they'd order take out. Or, heaven forbid, they'd go out to eat. Situations like these seep into budgets and crack them wide open.

When someone cries that they have nothing to eat in their household they're usually far from the truth. Even the most impoverished family is going to have some essentials that can make a surprisingly satisfying meal. Sure. It may be completely true that there isn't a lot of particularly anything, but that can always be remedied by some basics every household is usually going to have.

Canned soup
Need to feed three or more with a single can of soup? Easy. Add 1/3 more water to in your pot than recommended before adding one or more of the following: White rice, noodles, broken spaghetti, beans, lentils, canned veggies (peas, corn, et cetera), diced carrots, diced potatoes or left over meat. Season with a little extra salt, herbs and spices to combat a watered down taste.
Chicken
Have a single frozen drumstick and you're looking to make a dinner for two out of it? No problem. Cut the meat off of the bone and stir fry it with: Canned, frozen or fresh vegetables, canned water chestnuts, canned bean sprouts. Add spices and soy sauce and serve over rice or noodles.
Beef
Have some left over pot roast or a steak you're looking to make a big meal of? Skewer medium sized chunks between large cut vegetables like bell peppers, onions, mushrooms, tomatoes, zucchini and squash. Marinade in an acid liquid (citrus works great) and grill. Serve with a side of rice and beans.
Sandwiches
Have all the ingredients for a nice round of sandwiches, no only two slices of bread? Toast the bread lightly, cut it into cubes and toss it into a bowl with all the ingredients, diced finely. Serve it like a salad.
Fruit
Not enough fruit to make a decent snack? Throw it into the blender any or all of the following: Ice cubes, yogurt (single servings work just fine), ice cream, orange juice, tofu, carrots (you read me right), oatmeal (yes), and milk. If you still don't have enough you can always serve it over ice cream with nuts.
Potatoes
Planning on baked potatoes for dinner, only have one left in the whole house? Dice it and roast it with olive oil and vegetables. Add cheese to make it something special. Parmesan works great.
Eggs
By far the easiest to stretch. Looking to make breakfast for the family, only to find out you have half the eggs you need? Scramble them with half as much milk. Add anything under the sun. Left over chicken, cheese, vegetables, mushrooms, bacon bits, potatoes. You name it, it'll taste awesome inside of an omelet.
Tortilla chips
Mix a small amount of melted cheese, beans and salsa together to form a satisfying queso. Add left over meat. Want more of a dinner out of it? Add shredded lettuce and you'll have a fully balanced meal.

Have your own ways to stretch your food dollar just a little bit in the face of a sudden crisis or guest invasion? Post in the comments and I'll link back to your blog in my next post.

Spring is coming: Top 5 easiest plants for the frugal family

2008-02-29T06:15:00.000-08:00

So you plan on starting a little garden to help reduce your grocery bill. Or maybe you're just looking for a fun way to spend a couple of hours in the sun with your family. Or maybe you're overly concerned with exactly how organic is organic these days. Or maybe you're just a little nutsy and you're incredibly worried about unlabeled GE food stuffs creeping up onto your grocers food shelves without you knowing about it full well in advance.

Great! But there are some guidelines you should follow. If you're an experienced gardener, you know what you're doing. You'll be growing corn, apples, lettuce, carrots and watermelons and feeding the whole block with friendly donations. But a lot of us, either through the ignorance of inexperience or being strapped for time need to keep it simple and easy. We need to do some easy things on our fire escape, deck or patio.

Far too often I've seen inexperienced neighbors go for a project that ultimately fails because they lack the time, energy and knowledge to go after it with the right tools and mindset. The project likely yields little to no bounty and they end up with a lot of wasted time and energy. Maybe a sunburn, too. You'd be pasty white after six months huddled next to a furnace, too.

So I've drawn up a short list. All of these plants require little maintenance, cost and knowledge to produce impressive harvests. I've also taken nutrition and quantity of harvest into account. While eggplant and mushrooms are great tasting and really simple to grow, they don't exactly give up a whole lot of vitamins, minerals and calories.

Get these as seeds and start them yourself or get them from a garden supply store as seedlings in a months time. But either way keep a budget in mind, both money and time wise. Never bite off more than you can chew or you'll just end up wasting your hard earned money and time off!

Strawberry
Description: There are a boatload of varieties available in both seed and seedling form, but the type you should probably be looking for as a frugal gardener should be the "surecrop", "garden" and "wild" variants. They'll produce berries that are much smaller to the ones you're used to seeing at the mega-mart, but chances are you'll find them a hundred fold better tasting. They're relatively hardy, small plants. They produce tiny white flowers and self pollinate. But there's nothing wrong with a healthy bee population.
Planting time: Early to mid spring
Harvest time: Mid summer
Tips: Don't go crazy on the soil. Strawberries like light, loose soil with plenty of room. So before transplanting to an outdoor garden make sure to loosen up the surrounding soil with a spade. Strawberries like frequent watering, so if you live somewhere besides Florida or Washington, you'll need to keep an eye on them as the spring rains dry up.

Birds and squirrels love strawberries too. While I don't mind sharing, you may. To help preserve your harvest once you begin to see tiny green berries, run some chicken wire above the plants with at least an inch or two of breathing room. That'll prevent beaks and little hands from grabbing your hard work.
Tomato
Description: Undoubtedly one of the most favorite patio foodstuff plants in North America. Tomatoes come in a whole boatload of varities. Plum, beefsteak, antique, cherry, heirloom, big boy, golden rave, rossa, et cetera. All are excellent and easy to grow. But if you're a first timer, you probably should stick to the smaller, more well known types. Good starters include cherry and grape tomatoes.
Planting time: Mid spring to mid summer, mid spring being the best.
Harvest time: Mid to late summer, late summer being the best.
Tips: Give young tomato plants lots of support with tomato cages (bought from gardening stores) and trellises. Tomatoes like lots of sun, so make sure to put them in the sunniest spot of your garden where they can receive 7 or more hours daily. Plant them into very moist, warm soil with lots of organic matter. For more tips see wikihow.
Radish
Description: I used to hate these little roots as a kid, but now I absolutely adore them. They're sweet, they're spicy. They're crunch, but they're crisp and moist. There are only a few mainstream types of radishes, but they're all more or less the same difficulty level.
Planting time: Early spring or mid fall
Harvest time: 25 - 35 days after planting
Tips: Radishes like cool, but not cold weather. So spring in New England is the perfect time to start these bad boys. They like to be planted in very loose soil with a good amount of organic matter like leaves or compost. Plant as many of these as you can, their fast turn around rate will likely give you the best return on your investment. For more tips see eHow.
Carrots
Description: Like the radish, carrots are roots and prefer to grow in cooler climates. While all types are very hardy, weather resistant and taste great the "Red Core Chantenay."
Planting time: Early to mid spring
Harvest time: 50 - 60 days after planting.
Tips: Carrots may be very hardy buggers, but keep them wet as fluctuating water levels will cause the carrots to crack. To harvest, simply grab the plant and pull it out of the ground. If washed and trimmed of leafy greens carrots keep for months in the vegetable drawer. They are also excellent freezer fare, if kept in air tight freezer bags in the very back. For more tips see eHow.
Herbs
Description: Will of course vary greatly!
Planting time: Indoors, anytime. Outdoors? Mid spring for most.
Harvest time: As needed!
Tips: Herbs are by far the easiest plants you can grow and they can be kept year around if you have a sunny windowsill. Since they're not going to produce any vegetables, fruits or berries you only have to worry about watering them and making sure they don't go to waste. By far, if you're looking for a return on your investment, these are your best bet. Fresh herbs at the mega mart can get up to 5 bucks a bouquet.

Good types to start with include rosemary, sage and thyme. They also typically tend to be the most expensive if bought at the grocery store. All are excellent with meats and fish. If grilling, throw some sprigs or leaves on the coals and close the lid.

So long as you keep a realistic attitude and a watchful eye you can get some great results with a little bit of hard work and diligence. Just go into the venture with expectations kept and check and you'll likely come out with a freezer full of food to get you through next winter!

Spring is coming: DIY Countertop Greenhouse

2008-02-28T07:28:00.000-08:00

March is right around the corner and the days are getting warmer and warmer. And while even as I speak snow is falling outside my home office window, I know that soon all of this dreary white weather is going the way of falling leaves and foliage. People who are serious about gardening in my neighborhood typically gear up this time of year, starting their seedlings in front of sunny windowsills and cleaning out the potting sheds.

I've had some conversations with my neighbors. We're all more or less in the same boat of being financially strapped. I've heard time and time again that they're planning on really getting serious with a garden this year to reduce their bills.

A lot of frugal folk like to promote the idea that growing a lot of your own food can help reduce your over all grocery bill at the end of the month. I don't exactly subscribe to this ideal quite yet, but I think it's an interesting premise. The main problem I see with it is I believe a lot of people see the costs of seeds, the cost of produce at the mega-mart and draw the obvious cost connections in their heads. A single seed packet may cost $1.00 and contain enough for 50 tomato plants!

But I think far too many people neglect to take into consideration the other costs of growing your own produce. A short list includes:

Tools (spades, hoes, rakes, watering cans, et cetera)
Water (especially if you live in a drought prone region)
Soil and nutrients (especially if you live in less than ideal growing conditions such as the middle of Arizona or northern New England)
Pestic
Potting accessories (Pots, seedling pots, trellises, et cetera)
Time (time is money, after all)
Seeds / Seedlings

At this moment in time I think that growing your own produce costs pound for pound the equivalent of buying it at your local produce stand or mega-mart. Which is not to say that I'm against home gardening to shore up one's food budget. I'm just saying that one has to enter the situation realistically without expectations of a greatly reduced grocery bill.

If you're planning on gardening this coming spring, I don't think frugality should be at the front of your mind. I think the gardener should be more concerned with the experience and the ability to control the quality of the food than anything. Not to mention that you're decreasing your carbon footprint a considerable amount if you're not buying as many food stuffs that come in via gas guzzling tractor trailers.

Plus, if you're one of those organic nuts you can assure yourself that your tomato, even if it might not look terribly pretty, was grown with as little impact on your garden space as possible.

The growing season is tricky, however. Especially in the northern United States, the time when you should have seedlings ready to go into the ground, there's still a couple of inches of snow covering the ground. So what I've found it that a lot of people set their future meals in front of drafty window sills and hope for the best. Which gives them a head start on the season, sure. But not nearly as much as they should be given.

Which is why I began to research small, compact greenhouses. I'm not talking about the variety that I'll construct in the backyard with lumber and sheets of very expensive glass, but small, self contained units that would only hold one or two plants. Something that I can easily carry out onto my deck on sunny, warmer days and take in at night. Or put in front of a sunny windowsill on especially cold days. And since a greenhouse is by definition an enclosed space, I won't have to worry about my cats getting a little hungry.

My logic is it'll be far more economical to construct several of these versus one large unit. And since it won't be exposed to the elements, I won't have to worry about weather proofing it. Which would add a hefty price tag to just about anything. Sealant is expensive. Once the fear of frost has completely left the picture, a small unit can be easily stored for next year and the plants transplanted to a proper garden.

In my travels I found this lovely little creation. Made out of a small amount of lumber, some Plexiglas and a couple of screws it hardly disrupts a tight budget at all, costing less than $20 to construct from start to finish. And if you're the type of household who typically has stuff from excessive years laying around, you might not need anything at all. Off the top of my head I can confirm that the only thing I likely need to construct one of these beauties this instant is a couple of sheets of Plexiglas and maybe a couple of hours to myself to get started.

Maybe some heavy duty band aids for when I invariably injure myself. And apology flowers to the neighbors, for the loud swearing that would likely ensue immediately afterward. Which can be grown in the thing that caused the swearing in the first place. See? It's a lovely cycle.

So will I be growing things this year? Yes. Our garden already has a large number of bulbs, chives, strawberries and flat leaf parsley ready to resprout. And I will be growing some one shot stuff like tomatoes and peppers. But I'm not expecting miracle yields to put me on the fast track to easy street. I'd be happy if I break even. I think that's good enough.

Borrowing from friends and family

2008-02-25T12:43:00.000-08:00

I was watching one of the multitude of doomsday documentaries out there a couple of weeks ago on The History Channel. Within the documentary they examined the psychological affect of an "end of the world" scenario on the average John and Sally Smith. It dealt more or less with how they'd respond to knowing that the world was undoubtedly and unavoidably coming to some sort of end. There were a few responses that cut against the curb, such as "I'd party and never stop!" or "I'd pray!" But the vast majority of people (something like 85%) chose the obvious, and in my opinion, wisest road.

They said when polled that they'd spend their last remaining hours or days with their friends and family, in the comfort of their own homes. The poll surpassed nationality, race and creed. It seems most people, regardless of their upbringing would prefer to spend time with their close friends and family if for some peculiar reason the cosmos spat out a "The End" card for our planet.

The answer is pretty obvious and dull, but the message it conveys says a lot about our society. We're social animals built for a social world. It's why humanity can construct tools like jackhammers, supertankers, space shuttles and cherry pitters. We feel the most at ease and comfortable if we're near the rest of the pack. We have someone to watch our backs if the going gets rough. Everything in our lives is in someway connected to our closest social interactions, so it kind of makes sense that personal finance, being what it is relied heavily on our interactions with the rest of the family group.

You trust your friends and family, probably implicitly. The feeling is quite likely mutual. I'm not talking about Larry in the next cubicle over that you trade email addresses with, but mom, dad and grandpa, your best friends, your siblings. You trust that they would never do you any sort of harm that wasn't in your best interest and they likely feel the same way about you. That is after all what being a family is supposed to be.

So when you're navigating the world at large and you encounter a little difficulty, it makes sense to return to the people you feel most comfortable with. If you're in the middle of a disastrous break up, it's a good thing to ask for your best friend's advice. If your house burns down in the middle of the night, mom and dad likely have a pull out couch for you to crash on until the house insurance pays off.

Or when you hit the iceberg of epic debt, it makes sense to ask Aunt Susy (who has a house in the Hamptons) if she can spare a couple of bucks to help you out. Right?

Wrong. I subscribe to the philosophy that one should never, ever borrow any appreciable amount of money from a friend or family member. Unless the circumstance is extraordinarily dire (like you need to be bailed out of jail, or you have an attorney knocking on your door), it should never even be considered an option.

It's true that friends and family are there to help you out when times get rough, but far too few people realize how much strain a personal loan between friends can cause. I blogged about a similar circumstance a couple of weeks ago in regards to the dangers of co-signing on home, car or a small business loan. While the subject of borrowing money is a lot more subjective than co-signing, the underlying facts remain the same. You are putting someone you care about the most in a compromised situation.

They may quite willingly shell out the dough or dish out an autograph for the bank. And you may fully expect to return their favor in full. You might even plan to give them a little interest for their trouble. But what happens when the unexpected occurs? What if immediately after borrowing $5,000 from Aunt Susy your office down sizes you?

Sure, good ole' Aunt Susy won't expect the money back after you've lost your job. But what if after that your car needs a new set of tires? The unexpected happens on a daily basis and you may be fully justified in not being able to pay the loan back. But Aunt Susy doesn't see that. She'll pick up on the major things, but not the daily brick-a-brak of daily life. It's hard to blow off a car loan. If you're a couple of days late they start angry calls, charging fees and fines and sending collection letters. But chances are if Aunt Susy doesn't see a dime she'll stay quiet for a long time because of the pre-existing relationship.

And when she speaks up? Oh boy, she's probably been bottling it up for quite sometime. When it comes to borrowing money from friends and family, both parties must be prepared to either lose the money or lose the relationship.

There's absolutely never a guarantee that'll ever happen, a relationship ending over money. But does it sound terribly difficult to imagine? Most marriages that collapse under their own weight do so over money. Is a relationship with one's best friend or brother that much different?

News: Below 30,000 in the hole!

2008-02-22T05:53:00.000-08:00

A short time ago you may have noticed a momentary lapse in my blogging. This was due to my not having time to eat or sleep, let alone manage a personal finance blog effectively. I was essentially busting my hump at one of my jobs. It's the time of year for inventory at Bed Bath and Beyond, so my services as a sleep deprived counting money were required for the good of the company. It's okay, there were only four snow and ice storms while we were commuting 2 - 3 hours at a time.

I ended up working an enormous amount of overtime and scoring quite the spicy check. As such we were able to throw a little bit extra at our debt last Sunday. And despite a timing war with our checking and savings accounts, causing a couple of overdraft fees we managed to throw a full extra thousand dollars at our American Express green card.

That'll shut the credit collectors up, I think. Let "Sarah" in New Delhi mull that over next time she decides to call and bug me.

Which brings us to roughly 29k in the red. That's quite the improvement from our original figure of 35k a relatively short time ago. There should be an even more drastic reduction in two months time. And beyond that my income will hopefully be increasing two fold, due to the busier spring real estate market.

So here's to busting your hump and having only a pretty pay stub to show for it!

Chase: Damned if I do, damned if I don't.

2008-02-20T07:18:00.000-08:00

My household handles all of its finances every Sunday evening after dinner. At this point in the week all of the direct deposits and checks have usually been cashed and we've received all of the bills we're going to be paying that particular week. So we get together in front of the warm glow of the computer monitor and throw an Excel work book onto the fire.

The Sunday before last our lovely and elaborate budget informed us that we were supposed to be sending out one of our car payments that particular week, that of our 99' Mercury Sable. So we rifle through the mail and come up with nothing from Chase, the bank who handles that particular automobile. We have the money, we have the check, we have the stamp. But no bill. So, thinking that it simply went out late we vow that the instant we receive the bill we will pay it and send it on its merry way the very next morning.

At this point it is worth mentioning that this is the only way we can pay intelligently. There is a fee associated with every other payment option. We'd absolutely love to pay our statement online and save them the cost of paper. It'd get them the money faster and save everyone mail costs. But nooooo, they want to charge $15 for every online transaction. That's an extra $540 on a three year loan!

Suffice to say the statement does not arrive. Last Sunday afternoon the phone rings.

MSB: Hello?
Chase: Hello! May I speak with [pause] Mr. Gawdbwa?
MSB: I'm Mr. Godbois, yes.
Chase: Sorry about that, sir. This is Billy from Chase Auto Finance. My system is telling me that you're past due on your 99' Mercury Sable payment. I'm calling to rectify this issue for you.
MSB: We were aware we owed you our monthly payment, but we never received our statement.
Chase: Has this happened in the past, sir?
MSB: Our statement usually arrives later than we'd appreciate, but no. This is the first time that we've failed to receive it.
Chase: Oh! I'm so sorry. My terminal is saying we mailed it, but I'll mail out another invoice right away. You'll have it within 2 - 7 business days.
MSB: Thanks... I appreciate it.

Keep in mind this fine gentleman said 2 - 7 business days to receive another statement. This is all he mentions. He does not offer to waive the fees associated with other payment options so we can get the money to them at that instant, he does not mention incurring late fees on the account and he sure as heck does not mention our account being forwarded to collections.

Today, Wednesday afternoon our phone rings again.

Chase Recording: Good afternoon. Please wait while I connect you.
[2 minute pause]
Chase Recording: I'm sorry. I'm still trying to connect you.
[2 minute pause]
Chase Recording: -rying to connect you. Please hold, we know your time is val-...
[30 second pause]
Chase: Hello?
MSB: Hello.
Chase: Mr. Ghadbwo?
MSB: .... Mr. Godbois, yes.
Chase: Hello. My name is Rowanda. First I must assure you that this conversation will be recorded for quality assurance purposes and this is an attempt to collect a debt.
MSB: .... that's fine.
Chase: My terminal is showing that you are delinquent in your account, for your 99' Mercury Sable. I'm looking to secure a payment.
MSB: ..... (I'm a little taken back) I spoke with an associate Sunday in regards to my not receiving my statement.
Chase: Yes, sir.
MSB: He said we'd receive a new statement within 2 - 7 business days.
Chase: Yes, sir. We have not received your payment.
MSB: ... (a pause while I look at a wall calendar) It is Wednesday, February 20th. I spoke with this gentleman late Sunday afternoon.
Chase: (sounding a little annoyed) Yes. Sir.
MSB: Considering Sunday was not a business day and neither was Monday, due to it being President's day weekend, how is it physically possible for you to mail me a new invoice, for me to receive it, pay it, and then mail it back, and for you receive it, cash the check, and mark it in your system as paid, all within two business days. When you are located where?
Chase: Phoenix, Arizona.
MSB: Right. Do you see where I'm coming from?
Chase: Yes. Sir. Your account is still delinquent. You incurred a late fee today of $12.95. I'm looking to secure payment.
MSB: You're charging me $13 for not paying an invoice I never received, as well as for an invoice that in all likelihood is still in Phoenix, Arizona. Correct?
Chase: $12.95, yes sir. I'm looking to secure payment.
MSB: That's fine.
Chase: My records show me that on December 2nd you asked about setting up an online payment plan?
MSB: Yes, but I decided not to. Because it'll cost me $15 on top of the $12.95 I apparently owe Chase.
Chase: (a little laugh) I can secure payment over the phone, sir.
MSB: On December 2nd I asked about that as well. That also costs $15.
Chase: Sir, you will incur fines if your account remains delinquent. In 10 days your late fees will be $60. These cannot be waived.
MSB: I have every intention of paying. But isn't Chase putting me between a rock and a hard place? I have three payment options, all of which result in me paying more than my monthly due, all because you failed to send me my first invoice. And then, completely understandably, failed to send me my second invoice and receive it within a day and half.
Chase: I'm not twisting your arm, sir. I'm just doing my job. I understand.
MSB: I know, I'm sorry. But is seems that your employer is, no?
Chase: ....Yes, sir.
MSB: Can I just send my own check and reference my account number, instead of waiting for a replacement invoice that may never appear?
Chase: One moment.
[Puts me on hold for 5 minutes]
Chase: Sir? Yes. (she provides me with the address and my account number, but warns me not to do this sort of thing regularly, I should always mail my payment coupon in with my payment)

So what lesson does one learn? Well, besides the obvious "don't ever do business with Chase Auto Finance again" conclusion, one should be quite vigilant about paying invoices that do not exist.

And what did I find in the mail today, moments after it arrived? My original statement, fresh from the mailman. I'm sure I'll receive it's replacement sometime in April.

Charities

2008-02-19T10:50:00.000-08:00

When I was a good deal younger I spent my fair amount of time watching television, like any normal child. Sure, the vast majority of the programming I was interested in wasn't exactly normal for a kid who should have been watching Transformers or Tiny Toons, but television is more or less television when you boil it down to photons and electrons, isn't it? I watched a lot of entertainment geared toward those much older than I. Documentaries and news programs were pretty much standard, very rarely did I ever opt to flip on a cartoon instead of say, The World Before Man: The Cambrian Explosion.

Which is fine. My parents didn't seem to terribly mind me being exposed to educational material on a daily basis, and it did help my grades in the end of things. But it meant that I was exposed to a large amount of advertising geared toward adults of the intellectual variety. Which meant scores of banks, software and travel advertisements.

But on occasion I'd see an ad depicting a lonely, starving and filthy child in a third world country and a large, white, fat man begging you to shell out a couple of bucks a day to pay for the little kid's booster shots so he can be healthy enough to write you a thank you letter in broken English. I'd occasionally ask my mom if we could sponsor a child in Malaysia or Chad, or where ever the big, fat white people decided to beg from, while holding a shivering, starving child.

The first several times she brushed it off, telling me that maybe for my birthday she'd surprise me, or that she'd talk to my father about it. But nothing really materialized out of my pestering. I never received a letter with a postage stamp from Burma or Costa Rica. We never put an expensive toy in the Toys for Tots bin at the grocery store. At the most we'd donate a couple of cans of soup at a food drive, but that was pretty much it. So I kept asking.

One day my mother and father sat me down, put on their parenting hats and gently informed me that we couldn't do what I was asking for. Why? I asked, more curious than anything. Who didn't want to help those less fortunate? Were they some sort of monsters? Or were they just incredibly selfish?

Well, my mother began. We can't afford to.

Can't afford to? We couldn't afford to buy one toy for the big box outside the grocery store? Or one coat for welfare?

No, my father began with a sad little laugh. You'd probably see it next time we go "shopping."

I was too young to really realize what my father meant back then. I was just a stupid little kid. So I left it at that. I only really realized what they meant as I grew up and began to become more observant of the world around me and how most of my class mates were different. Their parents didn't shop with brightly colored stamps. They always had newer, less worn in clothing. Their holiday presents were much more elaborate than anything I'd ever experienced.

The truth of the matter was my parents were dirt poor almost all of the time. We shopped with food stamps, we received federal food stuffs, my holiday season was populated by Toys for Tots and we "shopped" for my winter coats at our local welfare office. Despite both being fully employed year round, my parents were always struggling to be in the black at the end of the month.

The only time I saw anyone in my family give to a charity was when my father died. My since disowned "aunts" decided to donate $100 in my father's name to a diabetes foundation, instead of helping my struggling mother pay for his funeral (at the time, unknown to me my mother was very much in debt, due to my father's expensive medical issues).

So, suffice to say donations and charities are still a sensitive subject for me. I really don't like giving or receiving pity or handouts. It leaves a bad taste in my mouth, like admitting defeat, or that one party is inferior to the needy group. As arrogant as I may be, I don't like to think I'm better or inferior to anyone else. But it's been seared into my mind.

The moment I left the nest I became bogged down in my own financial woes and it's continued to this day. I've only started to work myself out of the enormous multi-generational slump. To this day I've never really given charity more than a couple of dollars a whack, and even then I feel forced and awkward. Like I'm a bad person if I avoid eye contact with the old army vet looking for handouts outside of the grocery store. Or screening my calls because the local police department needs money to host youth activities.

Which is not to say that I'm against charity. Quite the contrary, I'd love to help the local SPCA or help diabetes research, or provide some manner of relief to those in situations I've found myself in. I just don't like being approached and being put on the spot and guilt tripped while I barely have enough as it is.

But at what point is it wise to start channeling a portion of my income into a worth while cause? When my debt has been entirely eliminated? But at that point, wouldn't it be more wise to invest the same amount of money, so I'm capable of donating even more in the future? And what would do the greater good, giving gift cards to grocery stores to the homeless, or kibble and blankets to the SPCA? Or a big check to the Wildlife Conservation Fund, but be unable to see the results and potentially risk it being lost to administrative drivel?

Tax Rebate Calculator

2008-02-15T07:01:00.000-08:00

I subscribe to a great many financial advice blogs through my RSS reader. This morning while reading my daily allotment of news and recent happenings I came upon J.D.'s post at Get Rich Slowly in regards to an economic stimulus tax rebate calculator.

I've gathered that a lot of people are curious as to just how much money they're going to receive from this little piece of legislation. Heck, more than half the hits I've received from Google in the past three weeks have been people searching for more information about the topic and what, precisely is the deal with all this money potentially coming this way.

As far as I'm aware this is probably the most accurate calculator to determine how much of a refund you're going to receive. If anyone has a better one, please feel free to share.

Taking your car the extra mile

2008-02-14T07:31:00.000-08:00

When I read this article I immediately was reminded of the old Married... With Children episode where Al's trusty Dodge's odometer rolled over the million mile mark to zero. The joke was that Al's much beloved car was all that he could afford, so he ran it ragged forgoing all comfort, "common sense" and repairs. This sounds pretty in character, considering his son Bud often described on how to live frugal, such as making a hearty soup from the remains of an M&M found under the fridge.

While I don't think I'll ever let myself reach that level of destitute, and with all comic relief aside, Mister Bundy's logic seems to have played out well in reality.

About a month ago I blogged about what a steady discipline can do when it comes to buying and leasing new cars and the kind of money someone can save if they simply buy a car and go against the popular trend of buying another one immediately after paying it off. Sure, I'm absolutely certain that Frank Oresnik had to put his fair share of repairs into the '91 Ford pick up that he so loved. Heck, he had so many oil changes (300+!) that the plug on the drain pan had to be rethreaded a number of times.

But the pick up served him well. It's maintenance costs likely never exceeded what it would have cost him for monthly payments on a newer model. It really does to show you what kind of abuse, wear and tear many automobiles are designed to really take before shutting down altogether.

Junk Mail

2008-02-12T13:10:00.000-08:00

There are probably very few advertisement mediums loathed more than unsolicited email. They waste time, energy and inbox space to an extraordinary degree. Not to mention that a good number of them can serve as embarrassing billboards to your unhealthy habits and vices, should someone peep over your shoulder while you're rifling through your email.

It's become such a nuisance that Fortune 500 companies have broken into the brotherhood of money because of their elaborate spam eliminating mechanisms. Corporations invest millions on weapon grade spam filters and governments have invested even more in tracking down and punishing those who would dare defile our virtual mailboxes with smut, offers for prescription drugs and stock "advice."

Even in the age of six gigabyte inboxes and spam filters intelligent enough to run a small nation's power grid, people still whine and complain about one or two flirtatious advertisements slipping in under the radar. I believe this is a little absurd. Unsolicited email does indeed drain a lot of money from our pockets, both willingly and unwillingly. But there's an even greater danger out there than that.

Unsolicited postal mail. On any given day, chances are you will receive far more cold hard, physical junkmail than you will its virtual counterpart. Think about it. Which one upsets you the most? The one that you can quite easily delete in a fraction of a second, or the one composed out of non biodegradable dyes and the shredded remnants of a Maine forest? You'd be surprised at the number of people who wouldn't chose the ladder.

Why is this? Because we've grown accustomed to unsolicited snail mail showing up in our mailboxes day after day after day. It's been going on for decades upon decades. Unsolicited email on the other hand has only been around for a relatively short time. We've become complacent with paper junk mail, essentially rolling over while the wave over takes us. Because after all, all we have to do is toss it in the trash and that's the end of it. But what happens to it after that? Will we haul the trash bag to the curb and pay the sanitary worker to haul it away for us? Will it sit in a landfill for the next ten years, releasing those lovely dyes into an already struggling wetland?

Or will the odd piece of junk mail catch our eye and lure us into making a purchase we never thought of, don't need and don't really want? Living an eco-frugal life style is difficult. It's nigh impossible when you're lost in a sea of brightly colored pamphlets, made of the pulped remains of a maple tree, commanding you to spend sixteen low, low payments of $19.99 for a new recliner. With no interest for one year nonetheless!

I recently received an offer for a Mastercard. The card itself was rather mediocre with its crummy interest rate and rewards program. But I had opened it on a whim. Within it, quite to my horror I found a significant quantity of the application already filled out for me, in a nice printed font. I guess they figured it'd encourage me to sign up, since all I had to do was plug in a couple of fields and off it went.

But the problem was, many of the prefilled fields contained personal information. Such as my home phone number, my birth date, my mother's maiden name, the last four digits of my social security number and a whole slew of other sensitive bits. What if I had thrown this out without opening it and some unsavory character found it? Granted, it's not outright identity theft, but it would have given a potential crook a lot of material to work with, should I become a target.

Suffice to say, junk mail is dangerous. It's wasteful, leads to unnecessary spending and can be a potential platform for identity theft.

How do you stop junk mail before it hits your mailbox? Easy.

Everyone under the sun will sell your contact information. Whenever you fill out anything from a warranty card to a donation pledge write "Do not sell my address" in clear print somewhere visible on the card, envelope or invoice.
When filling out warranty cards, do not fill out "voluntary" questionnaires that involve your income, age, race and other easily sold market niche preferences. They don't need the information to provide you with support should their product decide to become faulty.
Credit card corporations sell your contact information more than they sell credit card subscriptions. When signing up for a new card inform the representative that you only wish to receive your billing statement, nothing more.
America Online is still clutching to the old days of mailing you upgrade and free trial discs. Call 1-800-605-4297 to opt out.
When donating money, filling out a warranty card, or filling out any other piece of information that you suspect may be sold without your consent, make a deliberate error. Add an incorrect middle initial, switch "drive" to "street" on your address, spell your first name in a strange fashion (i.e. Johnny becomes Johnee, et cetera.). Keep a spreadsheet as to what you do and what junk mail you receive. You'll be able to figure out who is selling your address the most so you can rectify the issue.

Are you already receiving your own fair share of unsolicited snail mail? There are a couple of ways to get out of the vicious cycle. And a few less than useful ways that'll make you feel a little better about the situation.

Contact the DMA (Direct Marketing Association) and opt out of mailers.
Cross out the bar code and your address on the offending junkmail. Write "Refused: Return to sender" on it and put it into the out bin.
Open the offending junk mail. If it's a credit card offer or magazine subscription they will include a prepaid envelope to mail any associated paperwork back. Stuff the envelope with garbage (such as other pieces of junk mail) and send it back. They'll be forced to pay postage. While they won't stop, if you send them back regularly you'll cost them a significant amount of money in postage.

Have some other ideas as to how to handle junk mail? Post it in the comments section!

Video Roundup: Credit, debt and the whole shebang

2008-02-01T06:42:00.000-08:00

There was a period this winter when I simply did not watch television. Which is not to say that I'm one of those folk who like to pretend that I'm awesome because I prefer books and newspapers. But because of two very important factors sort of beyond my own control.

When we were living beyond our means we signed a contract with our cable provider and the good folks at TiVo. So we've been unable to cut those expenses completely from our budget. We signed a binding contract informing them that we'd pay a certain rate. If we broke it we'd incur all sorts of lovely fees and fines, which essentially would make the whole cancellation process moot. I love television, cable and having a DVR. But it's spoiled me a little.

Now I cannot stand watching commercials. So when our TiVo started to malfunction and not record properly, I found myself at a loss. I could watch straight television. But who has time to sit through commercials and arrange their schedule to catch programs? Not me, that's for sure. Working two jobs made it nigh impossible to watch anything besides the morning and evening news.

So we simply stopped watching television. Then we rediscovered the brilliance of having a broadband connection. Soon I was watching full length documentaries on Google Video and all my favorite programs from the network websites. Our living room for half the year is a 3 season porch, so eventually we just stopped going into the living room, leaving the TV in the cold. Another reason not to watch television.

Now that we've moved the television to our winter living room and fixed the TiVo I often find myself watching internet programming more often than not. Since I'm nerdy you should know for certain that I'm going to watch documentaries most of the time.

Here's a short list I've compiled in my journeys that coincides with the niche this blog occupies. I've found them invaluable, I think you will too.

While they're all very informative and a good way to spend a couple of minutes Destination Debt is probably the best out of them all, detailing how predatory and manipulative credit card corporations can be, especially to college students. Sounds kind of familiar, doesn't it?

Arming yourself: Buying or leasing?

2008-01-30T05:42:00.001-08:00

At the present there are two ways for you to obtain a car outside of a shady newspaper advertisement with some residential address or a "for sale" sign in someone's passenger side window. You can either intend to buy the car outright either with cash or some sort of financing agreement or combination there of, or you always have the option to lease an automobile.

When you outright buy a brand new car you sign a great deal of paperwork and either fork over a certified check for the full amount of the car, or you provide a relatively small down payment and arrange for some sort of financing agreement with a major lender. Leasing is a whole other matter that has it's pros and cons. Is it right for your financial situation? And what is leasing, anyway?

When a car leaves the lot, it loses value. It may be a brand new car with a grand total of zero miles on the odometer. And even though it's essentially the same car a mile down the road, minus your butt imprints on the driver side seat, it's essentially used. It cannot be sold again as a new car. It undergoes something called depreciation. No matter what you do, no matter how well you take care of the car, you cannot reverse the process.

When you lease a car, you're not paying for the value of the car. Nor do you ever actually own the automobile outright. You're essentially paying the depreciation value plus a small interest charge so someone else can resell the car when you're done with it without incurring some sort of financial loss. When your lease is up, you turn in the car to the company you're leasing it from and shop for a brand new one to replace it.

Both buying (with and without financing) and leasing have definite advantages over one another, advantages that you should certainly take into consideration before arranging to replace your transportation. The over all monthly payments may be relatively small compared to the over all value, but a car is likely the second largest purchase after a home that most people will ever make in their financial life time. It can make or break most people, so it's important to figure our what decision is best for you.

Let's examine some of the advantages and disadvantages.

Buying Advantages:

When you're done with your monthly payments, that's it. You completely own the car. You no longer have to worry about paying it every month. And chances are the car still runs pretty well with all things considered.
Since you own the car outright you can either save the monthly payments, forward it to your other debts, or purchase another car should you somehow find the need. This is a great option when a teenager reaches legal driving age, you can provide them with the 5 year old family car that's been paid off while you find something a bit sportier. Since most kids can't concentrate too much on a job, they'll only have to worry about their insurance payments and maintenance.

Buying Disadvantages:

Lenders will occasionally rake you over the coals with really crummy interest rates and fees, especially if your credit is a little less than stellar.
While the car should still be in more or less in working order when your loan is completely paid off, it'll still need more effort to keep it running than a brand new one.
If you loan is paid off, it's likely that your warranty (both dealer and manufacturer) have expired. So if something goes wrong, it's almost always going to be out of your pocket.

Leasing Advantages:

You always have a brand new car at all times.
You have the freedom to switch it up at will. With leasing it's fairly easy to turn in your Mercury Sable for a BMW roadster, should you suddenly find yourself with the means to support such a drain on your checking account.
You'll typically pay less on the same car on your monthly payments to lease versus to own.

Leasing Disadvantages:

You'll never own the car.
The language, terms and conditions used in lease contracts differs significantly from company to company. You will have to be extra vigilant whenever you sign the dotted line.
You'll have to pay attention and make sure you don't violate those terms. Typically leasing a car involves mileage restrictions, accident penalties, and a whole load of really special, neat stuff.
You'll always have to pay something

Of course when your lease is up you'll have the option to purchase the car you've been using, should you find yourself in a situation wherein you've fallen in love with that beautiful Mustang. Sometimes the purchase price is half the sticker price, sometimes more and occasionally less. In the end, the two kind of even out and become mutually good decisions if gone into with the proper knowledge and know how.

Regardless, you should always examine your current situation and foreseeable future to see what's right for you. But there is always another option. You don't have to buy a car, and you don't have to lease. You can do either or a combination thereof, as always it is your decision.

Shared Finances: Bad idea?

2008-01-28T07:45:00.000-08:00

I have a very good occupation in the real estate industry, despite the tanking market and avalanche of foreclosures. I work from home most of the time, I'm doing something I absolutely love to do and my clients are the best employers I've ever had in my life. I could easily live off of this job, even with part time hours.

But due to my financial situation that's not viable. I need to live and then some, to pay off American Express, Discover and Visa. I need a second, dirtier job in the retail industry. This is absolutely fine. There's nothing to be ashamed of if you're working hard toward a legitimate goal with a legitimate job. However, I've found it nigh impossible to simply get the job done. I'm quite the private person (believe it or not) in the flesh and I prefer not to divulge too much of my personal life, especially to those I work with on a regular basis. I don't want my colleagues poking into my dirty laundry.

A question I often receive is "So, you work part time here. What do you do for a living?" My answer is almost always brief and to the point. This is when people get far too curious for their own good and ask me why, exactly I'm working in a stinking retail position when I'm doing the kind of things I do for my primary occupation. Then the past financial problems get out into the open and that's it, game over. I am now qualified for their expert advice on how to handle my money. Which is completely fine, I absolutely welcome advice. I'm not that uncomfortable with the two separate worlds I live in merging.

But a problem occurs when those giving me financial advice are little to no better off than I. And in some instances quite worse off. I'm sure they have had their adventures too and know quite a bit about how to eek out a meager living in a tin can, living off of table scraps and dropped pennies like I have. But it's kind of like getting marital advice from a friend who's been divorced four times. You're sure they have a lot of experience, but it's probably the wrong kind of experience. The kind that deals with court papers and restraining orders.

Which is why I never volunteer advice in person unless it is asked for. It's far too easy to take my words far too seriously and follow them blindly. Which is great if it's the right advice, but a sure way to find oblivion if I've made a small mistake here or there. But I like giving advice over the internet, it lets me sort out my thoughts. And those who may read it will most often than not have access to the lovely Internet Encyclopedia at the same time, making it far easier to research my facts should a piece of my advice be found interesting. It's easy to provide hyper-links to alternative sources on a blog, but not so easy on the street corner.

The assistant manager at my retail job is the kind of guy who's been in my position before. He really likes to offer advice and stories on all of his adventures. He's been divorced at least once and has gone through the gauntlet that is the U.S. military. He's about 40.

One piece of advice that he's offered is that under no circumstance should my finances touch those of the missus. I should have a separate checking account, savings account, credit cards, car loans and if it comes to it, separate IRAs and CDs. According to him, even after marriage I should keep my financial independence alive in the event of the unforeseeable. While this makes sense in some respects, is it a good move? I have mixed feelings on the whole issue.

I've been with the missus for nearly eight years now, the better part of a decade. I've known her and my best friend longer than anyone else I've ever known, excluding my immediate family. And even then it's close to the line. Throughout our relationship we've never drawn a line between what is hers and what is mine. Everything has always been ours. We have a single checking account, a single savings account and we've cosigned on every car we've ever owned. We're even share most of our credit cards.

In my logic this makes perfect sense. Everything we buy is going to be used by the other person in some shape or fashion. If I purchase a video game, it's quite likely that she's going to get some game time in too. Or if she buys a piece of furniture I'm likewise going to enjoy it just as much as she is.

As such we've both contributed equally to our irresponsible spending in the past. There's no possible way to deconstruct our credit card debt and see who owes what, it's like a car wreck. Everything is smashed up against everything else. But if I were to make a fairly educated guess I'd have to admit that it'd be very close to equal. A lot of of it is from the era when we'd go out to eat 2 to 4 times a week. A good portion of it was gifts to one another, for the holidays, birthdays and anniversaries.

But even the miscellaneous stuff balances out. Sure, she'd spend $200 on clothes, but I'd purchase a ferret. Or she'd buy herself a pair of shoes and I'd buy a video game and a couple books.

So is it fair in the end of things to draw the line and say "This is yours, you pay the balance." even though that debt was in part due to my irresponsible habits too? Sure, we could take our total balances and just cut them each in half, say we're both equally responsible for our current debts, but in the future we're each on our own. But I think that attitude is a little childish. It's the equivalent of cutting a room in half with tape or a marker.

Furthermore, if we kept those habits up after we've paid off all of our debts who's to say some other nasty personality defects wouldn't rear their ugly heads? If everything I make is completely apart from hers, who's to say that I won't slip into the mindset of "It's my money, I can do what I want" and make purchases without consulting her? Right now every penny each of us makes is tracked. And we watch one another for irresponsible behavior. She'll balance out my book lust and I'll balance out her clothes lust. But if our finances were separated, there'd be no balance.

Could we simply be responsible adults and manage our own finances apart from one another? Absolutely. We've learned a lot by being thrown into the fire that is credit card debt. But why remove a mechanism put into place that can only help and balance our spending habits? Why should we share everything else in life but not our money? Shouldn't we be fully responsible for one another? Isn't it her responsibility to make sure I don't make foolish decisions? Isn't it my responsibility to make sure that she doesn't do something damaging to her credit?

Sure. It'd be a messy business splitting everything up in the event that our plans fell through. But isn't planning such an event inviting disaster to occur? I think so. As such, for the foreseeable future our finances will remain meshed in such a way that there's no telling who made this and who owes that. I like it this way.

Refund Adjustment: Now pretty much a reality

2008-01-25T17:17:00.000-08:00

President Bush and Congressional leaders reached a surprising bipartisan agreement today in regards to the economic stimulus package that has been floating around for the past couple weeks or so. While I do have a great deal of invested interest in this whole thing getting up in the air and moving (i.e. I need free money really bad), I still don't agree with the over all logic behind the whole thing. It's yet to completely pass, but the president is expected to sign it in sometime in the middle of February. No one expects anyone else to suddenly flip out and paper clip a proposal to deep fry any puppies or anything.

Both parties have butted heads together and seemed to have come up with a compromise that screws over the poor and the rich equally. While I can say I'd rather the democrats have gotten their way in full, it's a pretty fair compromise in the end of things, I think. I'm quite surprised at the speed at which they come to an agreement, though. There are a great deal of things that both parties get all hot and bothered about, but finances seem to irk pretty much everyone, from democratic representatives to republican over lords.

Which goes to show you that a lot of people pretty high up on the food chain are getting really antsy about the possibility of a recession setting in. Or the one we're in right now entrenching itself even further, should my belief be vindicated.

Republicans dropped their proposal to have this refund adjustment contain some language that'd allow businesses to reclaim taxes they've already paid. While this doesn't really affect the common Joe directly, I think in some indirect way it will. They've have been shouting for more benefits within this package that'd increase the capability of businesses to hire new, decently paid employees. While it doesn't concern me what so ever as I have two rather stable jobs, I do think this compromise will dent their plan, if only slightly. And when it comes to the economy, it doesn't matter how many people are out there buying stuff, if no one is there to sell it the whole thing goes caput.

Democrats surrendered their terms in regards to their desire to increase food stamps and unemployment. I would have really liked to see this squeak in under the wood work, not because I qualify for either, but because in a bad economy a significant portion of people do and it'd be nice to know they're doing a little bit better, especially considering their refund adjustment is going to be rather puny in comparison to someone pulling in six big figures a year.

So what does this mean in the end of things? The package has been balanced out to such a degree that businesses don't have a tremendous incentive to hire new, decently paid employees. Which leaves a fair quantity of people unemployed, who are getting boned on unemployment assistance and food stamps.

Okay, so maybe I'm exaggerating just a little bit. But you probably get the jist of what I'm trying to phrase. Everybody wins, so everybody loses.

The package will provide up to $600 to millions of wage earners, and up to $300 for each child dependent on a wage earner. Which isn't terribly shabby at all. If it gets into the works as quickly as it is expected we should be seeing our checks in the mail in time for 4th of July barbeques.

I'm going to funnel every single penny of mine straight at my credit card debt and not look back and think of all the pretty things I was supposed to spend it on. What do you plan to do with your adjustment? Will you put it into your savings account? Maybe put it toward a small CD? Or will you do something a bit more ambitious and use it to buy some shares of stock? Or will you be a good American and do what we all want to do the most, go shopping?

Refund Adjustment: A reality check

2008-01-23T04:47:00.000-08:00

The news is crammed full of naysayers and political pundits all talking about the strength of the U.S. dollar, or lack there of. Whether you're listening to the radio, television or reading financial news on the internet there's an elaborate picture being painted by everyone with access to a microphone and a throat lozenge. And it ain't too rosy of a picture, either. The economy is essentially a stuck pig. We're furiously bleeding precious life all over our snorting neighbors. (Sorry, Canada and Mexico. We hope you're not squeamish) And all the squealing and thrashing in the whole world isn't going to help.

I'm talking about a recession. Not about the one that a lot of naysayers say that can quite possibly happen in a year or two, but about the one we're in now. We have a serious problem and there is very little we can do about it if we're simply denying the problem has ever existed.

What's interesting is that a significant amount of people who at shouting at the top of their lungs, saying that there isn't that big of a problem are suggesting another round of tax refund adjustments, calling it a "boost to an inherently strong economy" and a "shot in the arm, to prevent a downward trend in the future." Problem is, there isn't a possible downward trend. It's a flaming death spiral and it's happening today. There's a point where sticking to the grind stone just looks foolish.

Too young to remember the last round? Or maybe you weren't qualified to receive one? It's a very simple, easy to understand process after it's all been boiled down. Essentially a tax refund adjustment is the U.S. Treasury cutting you a check for "free money" in the hope that you'll spend it on something to stimulate the economy. Something like a television or a new diesel swilling, CO2 coughing heavy duty truck. Complete with cup holders large enough to accommodate the fattest and thirstiest soda sucking American.

There's a huge housing crisis and while real estate agents and brokers involved in the REO industry are doing pretty swell, the average American Joe is left with a crazy expensive dwelling that he owes more on than what it's worth. Gasoline and heating fuel costs are sky rocketing like nobody's business, which is in turn driving food and consumer goods prices up and up.

Not to mention the fact that a good percentage of energy produced in the United States is fossil fuel based. So energy rates are on the rise, too. Their twisted, obtuse logic is that nobody has money to spend on stuff. Give them money for stuff and the economy will somehow fix itself through sheer will power.

I'll be the first one to admit that I'd love a refund adjustment. I can think of a hundred things to do with it without really getting into the nitty gritty aspects. There are so many diverse ways to deal with a check for $500, $1,000 or more. Sure, there are going to be a lot of people who get their check, cash it in and run to Wal-Mart to buy a nifty new fishin' boat. But there are some underlaying problems that make this plan essentially moot, however great it sounds.

The third world is going to benefit more. The United States doesn't produce a whole lot of consumer goods these days. But we sure as heck buy a lot of them. This leads to a trade deficit with countries like China, Japan, Korea and Mexico. An energized consumer market in the U.S. may help the economy a little, what with retailers charging markup and states imposing sales taxes.

But the real winners are going to be the major manufacturing nations out there, our biggest trading partners. Because whether or not we like it, the lower middle class folk like to shop at Wal-Mart. And Wal-Mart is China's third largest trading partner.
People are hurting, bad. I'm not sure about you, but if I received a check for a free $500 I'm not about to go out and buy something, much less American made. Why? I'm dirt poor. And because of my previous lack of responsibility I've been thrown through the fire. I know what to do with the money, oh yes. But I'm not going to spend it on anything that's going to help the nation.

Here's a short list of potential candidates I've drawn up.
- Rent
- Groceries
- Gasoline
- Kerosene (for furnace fuel)
- Credit card debt
- Car loan debt
- A savings account (in case I lack money for the above mentioned in the future)
- A certificate of deposit
None of these will help the U.S. economy. I need rent money far more than a new toaster.
The IRS is busy as it is. Tax season is coming up and the IRS is going to be as busy as ever with tax returns and figuring out how much they owe you or you owe them. Giving them an additional thing to do will not only delay normal tax returns, but amount owed as well, for those folk lucky enough to owe Uncle Sam something.
It's the wrong time of the year. Sure, a fair number of people go out and buy junk in the early spring. But it pales in comparison to the amount people spend in late fall and early winter, due to the encroaching holiday season. Giving people money outside of a spend happy season only leads to them saving or squandering it.
When it's the right time of the year, it'll be too late. The economy is tanking right now. If a supposed solution is delayed until a time where people will likely spend it on consumer goods, the economy will be even worse off. This'll increase the chances that the Average Joe will opt to be responsible and either save it, or pay off some of the accumulating bills.

This isn't by any means a partisan attack. I'm not attacking "spend happy" Democrats or "tax breaks for the rich" Republicans. I'm attacking the policy that many support, regardless of party. Would I be angered if I received a refund adjustment? Absolutely not. Will it be best for the nation if I do get one? Absolutely not.

We'll just have to wait and see what Uncle Sam approves.

Arming yourself: Take a page from the credit collectors book

2008-01-21T06:54:00.000-08:00

Any heavily indebted situation comes with the rather ugly baggage of dealing with credit collectors. While it's always best to pay everything off immediately and in full there are times when life simply doesn't work that way. You don't always have unlimited money at your disposal. It's quite possible that occasionally in your journey out of debt you'll hit a snag and find yourself out of ammo early in the month and find yourself forced to miss a payment or two.

Whether it's because you were sick the previous week and missed work, or you had to buy a new water heater the end product is the same. You missing a payment and someone noticing. If you ever find yourself depressed, thinking no one cares, try missing two payments to American Express. You'll quickly find they're very "concerned."

The day after your missed payment was due certain mechanisms begin to go to work in the background. While they vary slightly from corporation to corporation, they essentially boil down to:

Grace period: Creditors know the mail isn't perfect. So they'll likely stay quiet the first couple of days after your missed payment, hoping that it's just unprocessed or will arrive shortly.
Internal Investigation: Your account is flagged in a computer as being late. An auditor will review your file at a glance and determines whether or not it's worth sending you to collections. If you've been a loyal client in terms of making your payments on time, they'll likely extend your grace period. If you are consistently late or regularly blow off payments all together, you'll be moved to the next step immediately.
Internal Collections: Your account is referred to employees within the company who specialize in collections. These people may be altogether unsavory folks, or polite representatives. They're likely of the same nationality as you (i.e. you haven't been referred to an outsourced person, yet). Most of the time they're just giving you a courtesy call, reminding you that payment was due.
External Collections: This is where most people begin getting worried and angry, where the stress builds up. If you miss several payments, your creditor may hire a third party vendor to collect your owed money. While you still owe your creditor the money, they don't want to waste their time and energy on you any longer. These are the folk hired by your creditors to get the money train moving again.

I've found that it's nigh impossible to find a third party collector that isn't almost entirely outsourced. The vast majority seem to employ vast quantities of Indians. But some employ nationalities you wouldn't think would be good outsourcing candidates. Like Ireland, Mexico, and Canada.

Which is not to say that Indians and the Irish are bad people, but occasionally the vendor will invest in bad quality land lines and speak with an accent. This makes the process very difficult.
Selling of your debt / Litigation: The last step. It goes no further than this. This is where your creditor writes you off as a total deadbeat. Depending on the amount you owe they'll do one of two things.

The most likely is selling your debt to another corporation. They'll essentially sell your payment to another corporation for a part of your amount due. So if you owe $2,000, the other creditor will buy the right to collect that sum in full for something like $1,000.

The second (and more painful) option at your creditors disposal is the litigation process. If you owe a lot, they may be within their rights to hire a semi local lawyer to drag you to court. Your original creditor still handles your account, but they really want their money. Enough to hire a $200 an hour lawyer. It's more of a scare tactic than anything, but there's a very real danger of being taken to court. As it marks your last chance to resolve the issue, this is where you should play along if you've let it get this far.

Whether it's internal, external or selling of your debt the people you speak with on the phone are going to use some specific pieces of language to obtain what they want. Their goal is to make you trust them so you'll get the money moving again. Or if that doesn't work, intimidate the hell out of you so you're too terrified of what might happen to keep withholding payments.

If you owe money, your best option, under every circumstance is to pay it back. No matter what step in the process you're in. It doesn't matter. Even if they're the minimums. Even if it's less than the minimums.

Do whatever you can that you can handle. Why? Because if you ever do make it to the litigation process the judge will see that you're at least making an effort. He'll be a lot more partial to your situation if he sees you can't pay it all, instead of you just not wanting to pay.

As such, all my advice below this point assume you're doing just that. These are some favorite tactics I've picked up in my journeys. They don't represent a full list, but rather the most obvious and common.

"Oh, believe me [obvious statement]" "Oh, trust me, [obvious statement]": This is the most transparent ploy it's almost laughable. This is where they attempt to build a rapport with you by showing you that yes, indeed, they are an intelligent and trust worthy person. Because they know stuff! But in my experience it just fails and makes them look like amature con-men. Why? Because the facts are so obvious.

They'll use lines like "Oh, believe me. I don't want your money for myself. I'm just doing my job." Or "Oh, trust me. This is your best option is to pay this debt."

You know these things. They're hoping that you'll draw a mental connection between obvious, self evident facts and your designated representative.

How do you turn the tables? Use the same language back. Tell them "Oh, believe me. I want to pay this debt off in full. Trust me, I really appreciate your efforts."

When you do this you're essentially telling them that you can't bullshit a bullshitter. Pardon my language, but I think that's the most appropriate term.
"You've made a commitment to [statement]": Whether it's "to pay this in full" or "that you'd]send payment by x day" the end result is the same. They're reminding you made a legal obligation or a personal promise that you've now broken, or are on the verge of breaking.

Which is all well and good. But chances are if you're doing the best you can manage, that's the best you can manage. Remind them that yes, you apologize, but occasionally unexpected things come up. That you're doing the best you can possibly do given the circumstances.
"Well, I did you this favor by [fact]": They're trying to tap into your underlying morality here. They're essentially saying that since they were gracious and good enough to cut you a little slack, that you should make up for it by doing whatever little thing they want you to do.

A prime recent example is my American Express Green Card. Amex has forwarded my account to a third party collector. I still owe American Express the money, but they're paying a corporation with a generic name and Indian staffers to get me moving faster on payments.

Which is impossible, because if I was capable of moving faster I would be. But that's besides the point.

They somehow got a hold of my cell phone number. I use it heavily for work and I don't need a collector harassing me on the go, so I told them (not ask) not to call my cell phone (as they frequently were doing). It is everyone's right to refuse to be contacted via any telephone number. I informed them that they may only contact me by mail or by my home telephone.

They apparently considered this a "favor" on their part. It wasn't. It was a legal obligation. Chances are if they've done you a "favor," it's something they're legally required to do. Treat it as such.
"What do you want to do, then?": This is often used when the telephone conversation is nearing its end. It's a simple question. But a lot of people I've talked to always find it a difficult one to answer. I don't, simply because of the fact that I've planned my financial recovery extensively. I know what I want to do. Most often than not it involves staying the course.

Answer honestly, but above all else never say "I don't know." You're putting yourself at a disadvantage. You're showing them that you're weak and can be potentially manipulated. If you really don't know what the best solution is, simply say "I need to talk to my significant other before making any financial obligations." Or "I need to consult my checkbook and budget." Because at that point you do.

If you need to put the ball back into their court. If they're unhappy with your answers, ask them "Well, what would you like me to do?" If their answers are reasonable (and not the obvious "Pay this amount back in full, right now over the phone"), take it under consideration.
Using the opposite sex: I'm often a very laid back, well composed guy. It takes a bit to make me lose my cool. But this genetic named, Indian staffed corporation employed by American Express always has difficulties with me. I'm always fairly polite, but I don't move an inch unless the missus and I have had a chance to discuss the issue jointly and their proposed action benefits us in some way. I'm a stubborn rock when it comes to that.

Why? Because they're pushy and arrogant. Because they call on the cusp of illegality. Because they brazenly try to force the missus into decisions without consulting our budget or me. Telling her that "it's best we handle this right now without any further delay."

It's not even my card. They were so difficult to deal with she had to essentially make me power of attorney so I could take that stress away from her. And the worst part of it all? We're paying above our monthly minimums consistently and on time. And they're aware of this.

Because of my difficult relationship with them I am contacted without fail by females. These women all have Indian accents and cookie cutter, Americanized names like "Sarah Jones" and "Jane Smith" and "Sue Jones." Apparently it's a very common surname in India, Jones. Who'd of thought it?

And the missus? All calls for her are from "John Smith" and "Peter Johnson" and "John Williams." I'm not sure what they're looking to accomplish. Maybe they feel I'll be more likely to "compromise" if I'm speaking with a woman. At the least less likely to tell her to screw off and stop harassing me because I'm doing nothing wrong.

How to combat it? Simply be aware of the fact that's what's happening. Monitor your responses and make sure they're not altered because of a sultry/strong voice.
Over the phone checks: I'll often get asked to "secure payment" over the phone. I'm regularly assured that they'll be electronic checks post dated to whatever day I'd like. Problem is, I'm not comfortable giving out my checking information over the phone to a company who has in the past been pushy and manipulative. Go figure.

How to combat it if you're not comfortable either? If your amount due hasn't been sold to a third party simply ask them "So, if I sent my payment in full to [insert creditor] they'd shred the check?" They'll answer with "No, of course not." followed by a long winded rhetoric about how you're valued and respected. What they're looking to do is gather some information that they can give your creditor so they can get paid.

So pay your creditor as much as you can, on time and directly. Whether this is over the phone with their official 1-800 number, online, or through paper checks it doesn't matter. Eventually they'll get the idea that their affiliate isn't doing anything and they'll instruct them to cease the harassment

No matter the amount, the type of debt owed, or the nature of the collector always keep in mind that each and every response, question and statement you make is being recorded and flagged appropriately. So be polite while retaining some strength and remain if only a little unaccommodating. So long as you're firm and intelligent in your dealings with credit collectors, you won't have to worry about them for very long.

Eco-friendly, frugal homes

2008-01-18T07:33:00.000-08:00

About a week ago I showed a different side of myself here on - the minus sign blues. I made a mini post about some earth friendly housing constructed out of recycled, steel shipping containers.

I'd like to return to that subject briefly. I think with the housing market and economy the way it is, a lot of people are looking for interesting ways to settle down and not break the bank while they're at it.

The green movement is a very important one with a very worth while cause, but I think the biggest advantage of living green is simply due to the fact that it's just cheaper most of the time. Whether it's consuming less gasoline or not having to shell out $5 for a non biodegradable plastic tube filled with tap water, it just appeals to more people.

Suffice to say there are quite a number of eco-folk looking to save a buck.

As such alternative housing seems to attract me for some particular reason. The more bare bones and frugal, the more I get into it. Which is not to say that my first planned home is going to be a hollowed out tree festooned with solar panels and wind turbines, but I'd eventually like an interesting home that is both eco-friendly and cheap to maintain.

But there are still a fair share of people buying cookie cutter McMansions. Most of them with faux stone facades, fake farmer's porches, large furnace-busting cathedral ceilings and elaborate stainless steel kitchens. All for the low, low price of $399,999. Which is a shame, I think. It's quite easy to spend half of that on something with a bit of character and simply save one's self a tremendous mortgage.

But let's take a look at the some of the eco-friendly, frugal homes those up and coming trend setters are trying to get the ball rolling on.

Container Homes
Like giant, recycled legos I have to admit that shipping container construction is the method I'm the most interested in on a pure intellectual level. They're simple and easy to understand by themselves, but can be linked together to form something elaborate and beautiful if the right hands are at work.

If you have not read my mini-post on ISBU Construction you'd know that I barely touched upon the subject. Which is a total shame with all things considered.

The United States as well as a number of other western nations import far more goods than they export. And due to the low labor costs in many developing, industrialized nations (such as China), steel shipping containers are actually cheaper to construct than to ship back. As such they clog U.S. ports as they are most often than not abandoned after their first load of iPods or wheel chairs. They're written off and sit in all their potential glory unused and largely forgotten.

So this is recycling to the extreme. Shipping containers can be molded into just about anything, due to their high stack ability, secure construction and optimized space. And while they're made out of a highly conductive material they can be quite efficiently insulated by use of a neat ceramic.

Since they're designed to weather the high seas strapped on top of huge cargo ships, they're also very resistant to weather and are quite water tight with little to no modification required. The best part? They can often be purchased used from major transportation companies for as low as $900 a piece. Which allows you to pump a big portion of your housing budget into refitting it to make it a bit more livable and less bare bones. Several can be used in conjunction to form any type of multi-leveled dwelling with zero use of lumber.

The disadvantages are few. While there are a number of reputable contractors that specialize in this medium of construction they are not too common. These contractors will also need the services of special labor, such as welders, crane operators and tractor trailer trucks (for delivery). This can get fairly costly, but pale in comparison to the costs of construction a lumber house with similar square footage.

Earthbag Homes
Earthbag construction is very straight forward and simple to understand. It's been becoming increasingly popular in the south western United States for some years now, but there are still a fair number of people who have never heard of it. You essentially take polypropylene (a type of plastic) bags and fill them with a mixture of dry, local earth, clay and sand. You then coil and stack them up into something that can accommodate a fair sized family before covering it all in a type of water tight plaster.

After that point it's only a matter of installing some non intrusive plumbing, heating and electrical work.

Since it's constructed more or less wholly out of local, easy to find materials you don't need to waste gasoline, energy and manpower bringing in tractor trailer trucks holding massive amounts of lumber, likely clearcut from a 3,000 year old Maine forest. All you need is pretty much the bags and a good lot of land.

Because they are made almost entirely out of earth these buildings are remarkably well insulated and are often situated to take advantage of passive solar heat by facing an eastern direction. The same is true if you're worried about the summer heat. If you've ever been in a basement (or a cave) in the dead of summer, the mechanism is the same. The walls of the home hold a lot of energy before giving it up and keep an even temperature even on the hottest days.

My only concern is that many local zoning boards are not up to speed on the whole eco-friendly dwelling movement. As such it's often a sad occurrence that they're rejected for construction simply because of the fact that they're not entirely traditional. So before you get too excited make sure to check with your local ordinances to make certain you'll be given the correct permits in a timely fashion. There are professional firms out there specializing in earthbag construction, so contacting one of them may be your best bet, even if you plan on it being a DIY project.

Straw bale Homes
When I first read about straw bale construction I immediately thought of The Three Little Pigs and the poor little piggy caught inside of his straw home when push came to shove. But as I continued to research the subject I became increasingly interested in the subject of using them as a construction material instead of animal bedding and bonfire fodder.

The name is a little misleading and the subject as a whole requires a little bit of deeper thought. Straw bale homes are not constructed entirely out of cubes of hay stacked on top of one another in some elaborate fire trap waiting to happen. But instead they are used as a compressed filler inside of a lattice work of steel or lumber framing before being covered with papercrete (imagine the love child of paper mache and concrete) or a plaster very similar to the variety used in earthbag construction.

Straw on its own is a waste product. It's left over from the cultivation of barley, wheat and flax used to feed cattle. After the harvest it is usually burned, releasing all types of delicious carbon into the air. A small amount may be used as animal bedding in smaller mom and pop run farms, but the vast majority is nothing more than a waste product.

It's a great insulator and surprisingly fire resistant when compressed and coupled with papercrete or plaster. One contractor specializing in straw bale construction reportedly carried out fire and wind tests rating it as fire safe up to 2,000 degrees Fahrenheit and stable in 100 mile per hour wind speeds. In comparison to a wood structure which lights up at 500 degrees, there's a big misconception about which structure is the more fire prone.

The negative aspects are few, but understandable. Because of the perceived lack of stability and match like flammability certain states prone to wild fires have banned straw bale construction outright. Others who have not gone so far are extremely skeptical and may run you through the gauntlet should you decide to construct your next home in this manner.

But the cost of production is often well less than half that of a traditional home per square foot. Is having to jump through a couple of hoops worth saving $150,000+? I think so.

"Earthship" style Homes
Pictures have been floating around on television and on the internet about this one for decades.
They're pretty out there are far as construction goes, but they are still worth elaborating upon.

The Earthship concept was created by a gentleman by the name of Mike Reynolds in the 1970's. Mr. Reynolds was looking for a variety of home that that would be self sustainable, constructed out of largely indigenous materials and life "off the grid" as it were. Earthship structures are typically built to utilize passive solar heat, much like an earthbag home. But instead of plastic bags coiled upon one another and coated in thick plastic, earthbag homes for a step further in the eco-friendly direction. They utilize used tires honeycombed together in giant horse shoe shape.

The tires are packed with dry earth and compressed by hand using sledge hammers and rams before being coated with a thick layer of water tight plaster to add an extra level of insulation. Internal, non load bearing walls are constructed out of used bottles or cans suspended inside concrete. While not required for their successful operation, many earthship homes are designed to operate purely by internal means. Which essentially boils down to pure solar / wind turbine power and an elaborate water collection and reclamation system.

Since it's more or less made out of plaster, garbage and a small amount of lumber, costs are slim to none for the adventurous would be home owner willing to get a little dirty. Permits are actually fairly easy to obtain for this type of construction so long as you don't have close minded neighbors.

The downside? Because they were originally designed to be built in the hot and dry south west United States a lot of home owners don't consider all thermal options. As such many northern earthship designs sit on uninsulated slabs and actually have a huge problem with lack of heating. But if properly planned these can be an extra hippie-esq eco-friendly home, should you choose it.

Earth Shelter Homes
It's exactly how it sounds. If you're a fan of The Lord of the Ring's you'll immediately recognize this medium of construction as that employed by the adventurous little halfling-esq Hobbit folk. Certainly one of the more picture-esq varieties of eco-friendly construction Earth Shelter homes do not necessarily have to look like they were born of story books and block buster films.

Earth Shelter homes utilize the practice of adding earth to external walls to add an additional level of thermal mass to reduce heat loss and to maintain a stable indoor temperature. They can be made using any of the above mentioned construction archetypes or something wholly different. These types of homes can be above ground, domed structures with earth piled on top, recessed into a small hill (either man made or not) or placed inside of an excavated pit.

Earth shelter homes can vary between small, self sufficient cottages to large, sprawling mansion complexes spanning acres. A prime example this variety of home used to the extreme is Bill Gate's home in Medina, Washington. But despite the scale of construction, the underlying principles, technique and general problems remain the same. Most homes using this medium of construction are typically heavier than their counterparts, due in part to the weight of the earth and water proofing measures that must be undertaken to prevent internal leakage and rotting.

While initial costs for the average sized above ground home may be comparable with it's earth shelter cousin there is a definite benefit once the dwelling is occupied due to reduced energy consumption in the form of heating and cooling.

Problems occur only when poor planning and unskilled contractors are involved, but they mostly include poor air quality and water seepage. As such it is crucial that these factors are taken into account. Often enough they can be offset by a coupling of water hungry vegetation (if the climate supports such plants), an open floor plan and good water proofing. Like most homes not situated on stilts, the local water table should be investigated before any construction begins. Flooding during heavy rains in never a good way to brighten one's day.

Sure. These homes are a bit outside the box and require a little extra effort on behalf of the home owner. But all of them are in one way or another eco-friendly and frugal at the same time. Not to mention the fact that they're most often than not completely one of a kind and require little more than an already allotted house budget and a small lot of land.

Did you enjoy this eco-frugal post? Catch up on the rest - the minus sign blues has to offer!

Money: Can it buy happiness?

2008-01-16T04:33:00.000-08:00

It's easy to get into the mindset of desperately wanting something. I've fallen into that groove once or twice in my lifetime. It seems whatever occupation I hold I want something to do with it. When I first started out at Bed Bath and Beyond I wanted a set of All Clad cookware (price tag: $600), and when I started in the real estate industry I wanted a home more than anything (price tag: $250,000+) in the world. Even to the point of driving those around me crazy.

It's a good thing nobody listened to me, I shudder to think of my financial position had I bought a home I couldn't afford on top of my credit card debts. We probably could have, too. What with all those shady lenders pumping out mortgages like they were penny candy.

We in the western world live in a very materialistic society and whether it's a new car, a pair of jeans or a burger at Wendy's it all boils down to how much dough we have in the banking account.

So the end product often is not desire over things, but quite logically desire over money. When you're in financial straights it's simple to dream about the day you'll have enough money to buy and sell the folks who are giving you nasty collection calls. All your problems all of a sudden go poof, they disappear into void that was your former life.

But does that remove the underlying problem? Would more money solve the fact that you likely lived beyond your means in the past, or does it inflame the issue? Does more money really mean more happiness? It seems that a lot of people believe so, what with all the get rich quick schemes, dead end garage power businesses and blogs with little or no direction but a whole mess of ads.

People like to think they've been forged through the fire of being poor, a hundred times more responsibly than they were prior. I wager that responsibility doesn't stick around for very long once six figures start getting thrown around.

I submit that yes, it does bring happiness. But only to a certain point. A little money to an excruciating poor person will bring an inordinate amount of happiness (compare giving a bum 50 dollars to giving the same dollar value to someone who makes $150,000 annually), but after awhile the numbers begin to lose mental value.

After a specific dollar value the average Joe and Sally Smith type of folks end up with Clampett's Syndrome. A whole lot of money with the same mannerisms and attitude.

Not to mention the fact that people with serious money dysfunctions to begin with tend to repeat their mistakes, only on a much larger and potentially disastrous scale.

If you're already poor and in debt it's hard to make crippling decisions. You can't lose a lot of something you don't have.

It's hard to get pay off $35,000 with an hourly 9 to 5 job. Think how insanely difficult it would be to pay off $90,000. Or $200,000. At that point bankruptcy begins to look a lot prettier.

How much is enough? For me, I think $15,000 would be adequate. Roughly half I currently owe to various creditors. Would I like more? Of course. Am I capable of handling more? Absolutely.

But it'd be enough. I'd get a taste of that shiny brass ring, bring a tremendous amount of joy into my life (which it is sorely lacking) but still allow me to take responsibility for a good part my actions. I'd still be capable of knowing what it's like to be in a bad situation. I'd still learn a lot about handling my money. My life style would not change, but it'd bring me happiness.

I'm comfortable with that.

What are you comfortable with? Are you currently struggling with money issues? Do you have your fair share but would feel safer with more? Please post and share your thoughts.

Arming yourself: The Debt Snowball

2008-01-14T07:05:00.002-08:00

Throughout my financial travels I've encountered a lot of advice. Most of it has been propagated by bloggers and financial planning portals, but a fair bit of it stems from financial self help books that I've borrowed, caught snippets of online or have been given.

The advice varies from fantastic to simply wretched. But I've never encountered something as controversial and interesting as the debt snowball. There are a lot of people who swear by it and state that it's saved their financial lives. But on the surface it appears to be a rather simple plan outlining how one is better off potentially paying lower interest rate credit card balances first instead of the other way around.

The opposite, more traditional method seems to be the most logical.

Order your debts in descending order from highest interest rate to lowest
Pay minimums on all debts, no matter how small the balance
Throw everything you can possibly manage at the highest interest rate until it's sleeping with the fishes
When the highest interest rate balance has been knocked out, focus on the next debt

It is after all what most good, nonprofit consumer credit counseling services do the second you walk into their lobby with a heavy stack of bills. So it stands to reason that it's the right thing to do. It'll save you more money over the long term.

But the debt snowball approach doesn't seem that logical at all.

Order your debts in descending order from lowest balance to highest.
Pay minimums on all your debts, no matter how high the interest
Throw everything you can possibly manage at the lowest balance until it's sleeping with the fishes
When the lowest balance has been knocked out, focus on the next debt

This is the point. Humans are not logical creatures the majority of the time, nor are we very patient. It's extremely difficult for someone to stay the course, especially if they see little or no progress immediately. Plans that require a lot of time to unfold and show results are typically plans that end up in the rubbish pail rather quickly.

The debt snowball takes this into account. It's main driving principle is that you're tired of all the collection calls, nasty letters and angry lenders. So you want results and you want results now. It uses this energy and directs it at your problem.

So instead of feeling like you're always on the defense, you feel like you're aggressively tackling your problems. You feel as if you're now in control of something, where as before you were merely muddling through.

Chances are you have one or two rather small balance credit card debts if you're in financial trouble with the big four (American Express, Discover, Visa and Mastercard). Mine has been a measly $200 department store credit card I obtained from Macy's two years ago to receive a discount on a sapphire bracelet.

The missus also has one in her name. A Lane Bryant card for a puny $330. Since these balances are so low, their minimums were $10 to $30 a month. It'd still take forever to pay them off.

If we employed the debt snowball method of paying off our balances, we could have seen two positive results immediately. There's no question that we could have paid off $530 in one swoop if we weren't directing every spare penny at our highest interest credit cards.

It would have given us some positive feedback to fuel our future efforts.

Beyond those two? The next lowest balance is a Bank One card for $1,368.86. That seems like a lot, but now that we've eliminated $530 of our debt we can direct all that Macy's and Lane Bryant energy at it. It'd be paid off within three months, maximum.

After that we'd have even more a month to attack our next highest balance. And so on.

We're going to begin our implementation soon. We've researched the matter and we've both agreed we're the type of people who desperately need the positive reinforcement that a debt snowball will provide us with. Not only that, but it'll give us goals to strive for.

Our game plan is as follows:

Order our credit card debts from lowest to highest balance
Commit to monthly minimums on everything to prevent further stains on our credit report
Commit to our budget, including debt related agreements we've entered into
Pay off the smallest balance first before even thinking about the second smallest balance
Repeat until every last penny is paid for in full.

If we follow this model we'll have six of our eleven credit card debts knocked out by this time next year.

Versus three out of eleven if we follow the more traditional model.

So if you think the idea is a good plan for you, research the issue a bit more. If you think you're the type of person who'd benefit from this alternate model of paying off your debts, do so. Tell me how it works out for you.

Further reading:

Have you employed this method in the past? Do you have some criticism about this solution? Say so in the comments and I'll link back to your blog in my next post!

Doing your reading: An important step

2008-01-11T18:35:00.000-08:00

We all dread signing contracts. They usually mean we're going to be spending an inordinate amount of money on something. Without question, this is the most dangerous situation you can ever been in, at least in the world of personal finance. You're signing a crucial document that may or may not be able to break you.

Whether it's for any type of loan, a savings account or a credit card you're asked to authorize certain legal mechanisms. Most of these mechanisms are legal requirements put into place by Federal and State agencies to protect both parties involved. As such, most contracts are designed to both fulfill a legal obligation (i.e. binding you to a deal) and explain itself in full, elaborate detail. They're often highly technical documents and a lot of people often find themselves at a loss.

They take one look at an intimidating wall of text, lists and addenda before shuddering. Which is an absolute shame, because that terrifying piece of paper holds your fate. It may be uncomfortable and tedious to look through it word by word, but it is your responsibility as a consumer to do just that.

Which sounds like common sense, right? It's an accepted fact that reading any contract before putting pen to paper is not only a good idea, but suicidal otherwise. So then why do so few people do it? Can you think back to when you applied for your last credit card? What about your last car?

Did you read the contract in full detail? Or did you get the jist of it from your significant other? Or did the sales representative fill you in on the meat and potatoes? Chances are you settled with the far more comfortable option of nodding and grinning. If not, power to you. You've set a very positive example.

If you did nod, grin and autograph with only a slight understanding of the terms and conditions, I'm not out to attack you. I've done it myself on many occasions prior to present. It's far too easy to appear you know what's going on and just do what you're told.

But consider some of the things attached to most loan contracts.

Loan amount, interest, finance charges
Down payment amount, requirements and information
Payment schedule, late payment charges
Refinancing options or lack there of
Early payment penalties
If collateral is being offered, what it is
What happens if you fail to consistently make payments
If you have to pay collection costs, towing fees (for a defaulted car) or trash out fees (if a defaulted home)
If the lender is within their rights to seize other assets should you be unable to may consistent payment
Terms of the security of the loan

That's a lot of critical information. But let's say you trust the profession who's presenting you with an elaborate contract. Let us say he's your best friend and you've known him for thirty years. He'd never put you into a position to screw you over.

Even if the terms of the loan are favorable for you, did you ever consider misprints or typos? Depending on the flexibility of the contract it's quite possible it would be riddled with typos. Sure, simple typos like "paymnt pln" are relatively benign. But who's to say the individual working on the contract prior to your arrival wasn't rushed? Who's to say they didn't mix up two unrelated documents and instead of your nice 3% annual interest rate you're now stuck with 10%.

Or instead of the proper mailing address there's a 1 in front of your street number and all your mail is actually going to the anti social guy down the street, including payment coupons.

Or maybe you didn't think it possible for a shady bank to seize your car after only two missed payments.

The same is true to a slightly lesser extent with credit cards. Consider these usually universal bits of data typically included on any given credit card application:

Annual fee
Annual Percentage Rate (APR) for purchases and balances
Whether the interest rate if fixed or variable
Interest rate and how much higher it can get if you are a bad customer
Minimum payment percentage
Credit limit
Penalties, fees and actions that can be taken with missed payments
Penalties, fees and actions that can be taken with exceeded maximum spending limits
Fees and actions for cash advances

My advice? Obtain any piece of paper you are required to sign at least one day in advance so you can read it over and check for errors and things you do not fully understand. This will allow you to do it at your leisure in a comfortable environment, instead of at a table full of angry lenders. And never sign documents that contain blank spaces in the body unless it's been written in with pen by an individual you can shake hands with.

Not only is it your right to take as long as you need to examine a legal document, but it is also your right to have it explained to you in full detail. So ask questions until your mouth is dry if need be.

Any individual not willing to allow you to read over your contract in full is attempting to hide something. As such you should always take your business elsewhere, even if it means a slightly higher interest rate or larger down payment.

Just remember the hardships you've had in the past and remember, you don't want to repeat those months/years. Do you?

Arming yourself: The car

2008-01-09T05:10:00.000-08:00

This short series will likely consist of between 4 - 5 posts spread out over the course of several months. All will deal with ways to aggressively solve your money problems. Some of them are designed more for your mental well being than anything, which is admittedly a big part of the problem. But some of them will be a bit more practical, while others take a more "out of the box" approach.

If you're in the process of paying off your debts there is bound to be a point where you are capable and willing of switching into an aggressive mode to finally put those outstanding balances to rest. When you enter into this arena you're going to need a couple of tools of the trade to grease the wheels of economics.

Up until now you've managed your budget to varying degrees of success, you've cut your expenses back and you're monthly payments are starting to tip above the minimums. Now is the time to start bringing the hurt to those scary numbers.

A tool often over looked by those within financial crisis is the car. A car loan will likely be the second largest loan the average person will take out during their life time next to a home mortgage.

Both loans are typically secured debts, unsurprisingly. Simply put, a secured loan is one you enter into wherein some form of collateral is offered. This is to assure the lender that if you are unable to make successful payments, they have a shiny new toy they can resell to pay off your delinquency.

Because of this fact, the car and home mortgage are payments that likely take precedent over everything else in your life. For good reason, too. You don't want to lose your car or your home and you don't want that terribly ugly "repossessed" mark on your credit report.

But wouldn't it be nice to knock one of them out of the park? Paying off a $250,000+ home loan while you're in the hole is likely impossible. But car loans are a different story. It's substantially less than a home loan.

Depending on your model, credit score, interest rate and payment plan your monthly payments can average between 200 to 500 dollars every month. If you were able to reclaim that money, it's just like getting another job. You have an extra $6,000 a year to throw at your creditors.

So, do just that. If it's within your means and the remaining balance on your car isn't sky high, focus on it. Pay it off as soon as you can. When your monthly statement comes in, tack another $100 onto each check you cut. Even more if it's even remotely feasible.

And after it's paid off, drive it until the wheels fall off.

A lot of people are programmed to start shopping for a new car after their old one is paid off, or heaven forbid, before their old one has been completely paid off.

Sometimes this is necessary. Often it is not. Car loans are relatively short term, typically only 2 or 3 years. This is not the life time of an automobile. Chances are the dealer you trade it to is going to resell it to some poor guy after it's been cleaned and tuned up.

This is the point where people sigh and say: "But I won't have to worry about repairs on a new car.."

Which is a very valid point. But if you pay off your car completely and it is fully in your name, you don't have those ugly monthly payments any longer. You have less debts attached to your name, and thus your credit score increases.

So, as long as your repairs do not meet or exceed your previous monthly payments, you are saving money. You can then use that extra cash to pay off some of your other debts

Shelling out $500 to a repair shop may seem like a lot, but you're likely not going to be doing that every month. And since you have direct control of the vehicle, if for whatever reason it begins to cost more in maintenance that you're comfortable spending, you're completely free to trade it in for a new one.

Arming ourselves for the new year

2008-01-07T16:53:00.000-08:00

We've made it a weekly ritual, sitting down in front of the computer with our budget spreadsheet, checkbook and mail pile on Sunday evenings just after dinner and The Simpsons. We've been very good about discussing our future spending habits and how we're trying to remedy our current crisis. I'd like to think we've both learned that we can trust one another now with the checkbook.

We've learned a lot over the past several months. It's been a very difficult time. I'd be lying if I said I wasn't often depressed about the status of our bank account at the end of the week. But we've studied our trends, the subject we've gotten ourselves into and our capabilities and I must admit that we're now a lot more prepared.

I've torn through quite a number of blogs, personal finance sites and books on the subject matter.

I'm convinced that we're capable, both mentally and financially to begin to really attack our debt on a very aggressive level. Up until now we've been tolerating our situation and dealing with it on a day to day basis. But it's been mostly a defensive stance, only taking on each blow as it was thrown at us.

We've drawn up a rather ambitious plan to get ourselves back on track so we can reach our ultimate goal, qualifying for a home mortgage so we can finally have a home, instead of just a place to live.

We've crunched the numbers and we've come to the conclusion that it's possible with a lot of hard work and conservative living it's possible to have more than half of our debts paid off within 1 year's time. After that things should fall into place a lot faster, some estimates putting it at another half year. This is a far cry from the three year estimate I scribbled on the back of a piece of scrap paper three months ago.

I'll be elaborating a bit more on some of these subjects in the coming weeks, but I think I'll outline the basics of our plan. Do you have some advice? Constructive criticism? Post in the comments and I'll link back to your blog in my next post!

Here's the low down in more or less sequential order:

Clear the battlefield: Our nonprofit Credit Counseling Service has served us pretty well during the past three quarters. They've managed to get all but two of our creditors off of our backs, they've lowered our interest rates and they've greatly reduced our finance charges. We're no longer scared to answer our telephone for fear that it's American Express looking for their monthly dues.

However, they're taking their own cut of our monthly payments and while it's a mere drop in the bucket compared to the over all balances they've been paying for us, we can use that money to better ends.

Furthermore, they've created a buffer between us and our finances. This was absolutely the plan in the beginning of things, they were a great shield when things were very hectic. But now that we're ready to begin to rain the hurt down upon our debts, they're only going to get in the way.

My experience with them leads me to believe it's a good solution, but only if you have no better alternatives and only for a short period. This will put us in the right position to launch a full scale assault.
Gather ammunition: We currently have two jobs a piece. One that's fairly tolerable and brings in the money (desk jobs) and one that sucks, but helps pay the bills (service jobs). We're going to continue this trend to the best of our abilities. And while it may mean a couple of sleepless nights, it'll mean we're that much closer to our goals.

Conservative number crunching reveals that they will provide us with an extra $9,100 if we keep them for one year. That's just under a third of our current debt.

We're also aggressively searching for a new vocation for the missus. She has a dual major in education and accounting, so she's capable of earning a significant amount more than she's currently pulling in with her primary occupation.

We're also on the look out for even more sources of income. I have a couple of leads and plans, but they need to be investigated and finalized.

We received a huge tax refund check in the mail a couple of weeks ago. We're planning on putting most of it into our savings account so we have some sort of safety net should be slip and fall, but it'll go a long way toward our end goal.
Arm ourselves and attack: We've discussed the matter extensively and we've opted to employ the "debt snowball" approach in our efforts, as devised by Dave Ramsey. I've heard nothing but good things about this approach from my fellow debt laden bloggers and the over all plan seems quite simple.

I like simple. Occam's razor rocks.

Essentially, the plan is that once we gain direct control of our finances we'll pay everyone their monthly minimums and focus our efforts on the lowest balances instead of those with the highest interest rates.

The underlying logic is that we'll see results immediately and it'll give us specific one-at-a-time goals. It'll give us direction. Which makes sense, because we had no goals, direction or results when we originally found ourselves in our mess.
Rebuild: Our credit score has suffered in the wake of this mess. Once our remaining balances reach a yet to be determined critical level, we'll begin the process of rebuilding our credit scores.

We will accomplish this by:
- Obtaining our credit reports and finishing off any missed creditors and disputing any false claims.
- Aggressively paying off one our cars (likely mine) to eliminate a monthly payment.
- Possibly taking out a small, secured loan.
- Canceling all but one or two credit cards, opting to keep the very best after all things are considered.
- Using the credit card(s) heavily, but responsibly. This means never carrying a balance.
I know I've sworn up and down about how horrible they are, but I believe it'll go a long way to rebuilding our credit. The literature I've read seems to suggest that simply having one or two cards with zero balances will do its own fair share, too.

The plan is to stick to a tight budget and funnel every dime into our checking account, even after we've eliminated most of our shackles. We will then make our purchases (groceries, gas, et cetera) and pay off the balances IMMEDIATELY through use of online payment options.

Since we'll never carry a balance, we'll never have to pay interest. This will have to be monitored very closely, as to not repeat past mistakes. But I feel confident we're capable of it.
Planting the flag: After everything is said and done, it'll be time to shop around for a mortgage plan and find the nice home we've been dying to have for such a long time. I'm employed in the real estate industry, so this likely won't be very difficult at all.

Is a year and a half too liberal of an estimate? I don't seem to think so, especially if we stick to our budget and play it safe. We make a significant amount more than many of our peers and our expenses are considerably lower as well.

Here's to my celebration post in July '09!

In Soviet NH, cold beats heater.

2008-01-05T09:35:00.000-08:00

I don't typically blog about myself and my adventures in frugality here at - the minus sign blues. I'm not entirely certain as to why. It may be because I'm more concerned about teaching others to not repeat my mistakes. Or it may be because I feel like any personal details of my life I may divulge may seem like a half hearted attempt at whining and sympathy fishing.

Regardless, this is not the case with this post. If it seems like it is, I apologize. I'm only recently recuperating from the ordeal. The subject matter is on topic of a debt laden situation and frugality, I assure you.

For the ill informed, I'm currently living in a "luxury" trailer park. The parents of my finance own the trailer itself and up until three or four years ago, lived here. They've since constructed their own home out of state and left their daughter in charge of the household.

The trailer park is decent. There's a lot of space in between lots, and it's quite clean and crime free. The people are typically quiet and reserved. It's not your standard image of a trailer park in Alabama or West Virginia. But the rent is the only reason why we stay here. In our debt laden situation we cannot simply afford not to. We spend $450 a month, including water. That's half the price of the worst apartments in the area. Which by odd happenstance, disallow pets. It's simply unacceptable. So we've opted to keep our pets and throw that extra $400+ a month that we have toward our debts.

But we occasionally run into problems with the trailer. Especially in the winter. As some of you may have read a couple of weeks ago, our water heater died.

It started Wednesday night. New Hampshire threw a whole mess of cold weather at us quite recently and Wednesday night is dipped to a mind numbing -10 F. Our furnace runs on kerosene and we recently filled it (to the tune of $550..). So we thought we'd be fine.

When the sun set and the cold began to really settle in, I noticed the furnace was having a hard time staying on. It'd power up, blow hot air through our ventilation system, gutter and then die. It eventually just refused to work altogether, causing it to drop 2 degrees in the trailer every fifteen minutes.

We tried everything. Restarting the thermostat, bleeding the line, cleaning the air filter, making certain we really did receive our fuel delivery. Everything failed. The cold wouldn't be just an inconvenience. It could be a serious disaster, if not for us for our pets.

We eventually came upon the terrible truth. Because it was so cold the fuel line from our external tank froze.

As my best friend brilliantly put it:
"In Soviet New Hampshire, cold beats heater!"

At this point it was nearly 11:30 PM. We were cold, frustrated and tired. We could have called an HVAC Technician to the tune of $350 and an hour wait, just to get him out here to look at the problem. We knew the lines were frozen, it was simple logic to figure out what we had to do. We had to warm them up.

So I donned my make shift astronaut suit. I was clad in:

Three layers of pants (pajamas, khakis, jeans)
Four layers of shirts (t-shirt, sweater, hoodie and jacket)
Two pairs of socks
Earmuffs
Gloves
A Hello Kitty hat (as my own remained elusive)
A scarf

I ventured out into the dead cold night with my tiny flashlight, super long extension cord and Hello Kitty Hair Dryer. I trudged through my backyard, which was quite pitch black and covered in four feet of snow.

With the wind whipping , my eyes watering and my asthma seizing up my lungs I dug out the fuel tank, unfastened the fuel line box and witnessed my enemy. A two foot long piece of copper tubing, laden with frost.

So I laid down in the snow, busted out my hair dryer and set it from "Good hair day" to "Bad hair day."

I nestled up against the tank for 45 minutes, running the hair dryer on its hottest setting. In desperation I took off my gloves and laid my hands directly on the tubing itself, hoping to impact some sort of additional heat into it. Just imagine it. A full grown man, coddling a piece of copper tubing with a Hello Kitty hair dryer and matching hat at one o'clock in the morning.

Slowly, eventually my finance in the house bled the fuel line, hit the restart button on the furnace and it roared into life.

So, unable to feel most body parts, covered in snow from head to toe and wheezing quite severely I went inside, took a blistering hot shower (it was actually luke warm, but it felt as if I was being boiled alive) and went to bed at 1:45 AM.

The next day was even colder, but the furnace seemed fine. I took another shower, got ready for work and left the house. In my infinite wisdom I forgot to leave the water running on a trickle.

Needless to say the pipes, in blazing sunlight (yet somehow still hovering at 2 F) seized up and froze solid. Since our water pressure sucks there weren't any burst pipes, we were just without running water.

Fast forward 12 hours, it's night again and dipping even lower than it did the previous night. The furnace is struggling again. It eventually gutters and dies. At 10:30 PM the exact same scenario plays out, complete with Hello Kitty. This time I bring a towel to lay on.

The missus goes to bed, but I stay up for a little while longer. You know, just in case it decides to freeze up again.

At the stroke of midnight it gutters and fails again, defying my internal attempts at restarting it. So I venture out once more and spend another 45 minutes in the middle of the night, at -10 F temperatures with the wind whipping snow at my cutesy hair dryer, mocking it.

After 45 minutes of willing in to life, I go inside and restart the furnace. It works swimmingly.

But it keeps faltering. Not outright dying, but you can hear it struggle. So, I find myself in a dilema.

Do I go to bed and risk the furnace shutting down at 3 in the morning? Or do I He-Man it through the night?

Needless to say the decision was hard, but in the end I chose to stay up. Good thing, too. It failed again at 2:30 AM.

I caught up on a lot of paperwork. About an hour before I had to get up for work I passed out on the couch. I awoke to find the cat smelling my face.

Apparently all that time outside laying in frozen dirt and snow imparted some scent that the cat found intriguing.

At this point it was Friday morning and time for my post. So, needless to say that didn't happen. So, I struggled to make it through the past several days. But I saved myself $600+ in emergency HVAC Tech calls, as he would have done exactly the same thing. I slept in something fierce today, so I'm pretty recharged.

It's supposed to be freakishly warm the next week, so hopefully I'll be able to save on fuel costs and manage to sleep at night.

The water came back this morning, too. Good thing, the cat won't leave me alone.

Be frugal by staying healthy.

2008-01-02T09:10:00.000-08:00

Health care is a complex issue in the western world, especially within the United States. It's a very big, expensive subject that a lot of people don't really pay attention to all that much. Sure, if you're following the presidential race even remotely you know it's talked about a lot. And a good number of people like to pretend that it's an important issue.

But more often than not this is just to save face, the issue is given plenty of time, but not quite enough thought that it really deserves in the end of things.

People talk about it a lot, but like education and fiscal responsibility, nothing really materializes out of it. Which is a shame, because it's an issue that every single human being has to deal with on a daily basis.

Because of the aging baby boomer population, the medical industry is exploding. Nurses, doctors, technicians, pharmacists and every kind of support personnel you can imagine are in high demand. This means a lot of new, relatively highly paid professionals in the industry need to be paid.

This means rising costs. Which is fine if your budget is large and your bank account is even larger. But lower middle class John and Jane Smith often find themselves in a crunch. Sometimes medical treatment is completely unavoidable, sometimes it's not per se, but it's definitely needed in a maintenance fashion.

Even with insurance and careful planning medical costs alone are enough to bust a meticulously planned and followed budget wide open. This is why it's not only economical to keep yourself running on all cylinders, but common sense.

If you find yourself in a debt laden situation it's even more dire. Every penny needs to be thrown at the growing monster in your closet. You can't be bothered to throw money at a medical bill, or on over the counter medications week in and week out.

So stay frugal by keeping yourself healthy and happy. Here's a small, concise list I've drawn up for myself to keep my money out of the doctor's pocketbook.

Do you have a unique way to cut costs by living healthier? Post in the comments section and I'll link back to your blog in my next post!

Eat better and greener, but cheaper: Eating organic sounds great, but it's going to weigh down your grocery bill. If you're willing and capable of eating all organic food, go for it. I'm neither willing or capable of spending that kind of money for that narrow of a product niche.

Make a list of your weekly food requirements. Now check off the ten most expensive things. Now check off the ten most consumed things. Chances are you don't need those twenty things to get you through the work week and into the weekend. Some of the cheapest foods are the best for you, and some of the most expensive are the worst.

Some of the cheapest and best include unprocessed rice, whole seasonal fruits and vegetables and bulk nuts.

Your grocery store likely stocks a surprising amount of local produce. If it's local and on the shelves, chances are it's fresher, cheaper and better for you than anything shipped in from Chile or Vietnam.

When you buy processed foods you're paying more for the processing than the foods themselves. You're paying for them to be ground up, mixed with a bunch of crap, wrapped in non biodegradable plastics and shipped to you.

With whole foods and produce you're only paying for them to be picked and shelved.

And do I really need to elaborate as to why skim milk is a better alternative to Pepsi?

If you're eating foods that are as a whole better for your body, your body is going to have the ammunition it needs to ward of disease.

And hey, if you're eating right you hardly need to spend all that money on vitamins and supplements, do you?
Don't skip meals: It's easy to do, especially if you're living on a fixed budget. But you'll quickly find yourself either digging into a convenience food half way to your next meal (which is an unexpected cost and likely not too healthy), but you'll tire a lot more easily. Your body will begin to burn materials that take a lot more energy to burn.

And if you're working overtime to appease American Express, you're going to need every ounce of energy you can muster.
Cut caffeine and nicotine out of the picture: Some people can't live without coffee or their cigarettes. Which is a shame, because at that point they're an addict. Cigarettes cost an enormous amount of money, especially if you're a heavy smoker.

And while caffeine may on occasion give you the boost you need to get through yet another 16 hour day, it's usually buddied up with lots of refined sugars (which will promote future dental work) and fattening substances (which will reduce your energy in the long term). Neither of which are really desirable bed fellows.
Exercise: It doesn't have to be a lot and you don't have to become obsessive about it. And no, I'm not going to suggest you get a gym membership or any special type of machinery to promote positive habits.

Those things cost money. Which is fine, they're good products and services. But the point behind this article is to live healthier to prevent you from spending money.

Simple exercises will keep you occupied and burn excess calories. Take a walk around the office once every hour or so. Do some light yard work on the weekend. Wash your car by hand.

I live in an area with community mailboxes, at the bottom of a hill. It's a good walk.

It doesn't have to be a lot, but the more you move around the better you'll feel.
Sleep more: And whenever possible. Your body and mind needs to stay rested in order to perform the reasonably complex tasks that bring in the dough every week. So stay rested and relaxed above all else. Especially if you're working a second job.

Take a power nap on your lunch break, go to bed slightly earlier if possible, take a nap when you get home.

You're not going to want to do anything, including work, if you're exhausted all the time.
Wash your hands, reasonably: I'm not asking you to become a germaphobe and wash your hands every five minutes. That'll leave you defenseless for when you actually do catch a superbug, as what happens to most people during flu season.

But occasionally washing your hands will reduce the chance of nagging illnesses that may cause you to miss a day or two of work. Even rinsing your hands is better than nothing. But don't over do it.
Stay hydrated: Keep a reusable water bottle around you whenever you're in one place for a reasonably long time. Like at a desk or a cash register. Keep it full of water. If you keep yourself hydrated, you're less likely to splurge on a $2 soda from a vending machine every other day. It'll also help with your digestion and weight loss, should you need it.

If you really can't stand drinking water, try drinking unprocessed fruit juices. Good things to look out for are not from concentrate, no added sugars, %100 fruit juice and unblended juices.

I'm not suggesting a whole life style change by any means. But if you stay ahead of the game you'll keep yourself up and running, and earning those much needed paychecks.

Discrimination: Cut it out

2007-12-31T06:24:00.000-08:00

Imagine you find yourself one day sitting down at a bank, dressed quite professionally with a beautiful leather portfolio in hand. You have a detailed business plan prepared to offer the loan officer. You've spent months on your small business model and quite frankly, you believe you can just swing it. This plan will make you rich.

All you need is some starting capital. A little cash to grease the wheels of business so you can start getting to work.

The loan officer sits down in front of you, takes a quick look at your loan application and cracks a smirk. They look up with a bemused expression that screams "You're kidding me, right?"

But why? Your credit is superb. You're an intelligent person, fully capable of making adult decisions.

The loan officer chuckles a little bit.

"You're kidding me, right? You're way too old to learn this stuff."

You're livid. You can't believe what you're hearing. How can something be so bigoted, close minded and small? And isn't it against the law to behave in such a fashion?

You're right, loan discrimination is quite illegal.

That is, when it's directed at you from someone else. You're on your own when you impose it on yourself. You'd be surprised at the kind of limitations people put on themselves simply to get out of having to do something that's just a little uncomfortable.

They think they're too old to relearn their own finances. Or maybe they're not smart enough. Or they're the wrong gender. Or that the spouse will take care of the issue.

These people just nod and go along with everything an authority figure says. But truth be told, if you're capable of living on your own, you are capable of handling everything from a monthly budget to a small business loan.

Humans are incredibly adaptable creatures. We can learn and relearn a multitude of things right up until the thinker stops churning, and there's nothing stopping you from doing just that. It doesn't matter if you're just entering the world of personal finance, or you're 78 and your spouse (who handled every detail for the past 50 years) has just passed away. It doesn't matter if you're a high school drop out, if you work minimum wage or if you're a man or a woman.

You wouldn't stand for discrimination against you, yet a surprising amount of people impose it on themselves on a daily basis. They chuckle and dismiss critically important tasks simply under the proverbs "You can't teach an old dog new tricks" or "I'm no mathematician, numbers make me uncomfortable."

It's not so terrible for these people if they have someone with their best interests in mind, a spouse or relative who handles all the dough. But it's the equivalent of someone spoon feeding them.

They are not adults. They are fully grown humans. I should know, I was one not too long ago.

It also leads to a dangerous situation when this personal finance manager isn't around. The self discriminated individual develops a "Yes" syndrome. They've trained themselves to believe that they're incapable of handling money out of a day to day basis. And they've ignored everything the spouse or relative has been doing because of the simple fact that they haven't needed to. So they don't know anything.

And when someone who does know the ins and outs confronts them, rather than asking embarrassingly obvious questions, they simply nod, sign and say "yes" over and over again. This is incredibly dangerous because (a) contracts signed by someone too ignorant to read and understand them fully are still valid and (b) the authority figure going on and on about the highly technical subject of finances has their own best interests in mind, not the signers.

More people need to adopt the modus operandi of refusing to be embarrassed. When someone explains something highly complex and technical and asks "Do you understand?" it is imperative that the truth be told.

They're paid to explain these things. And if the subject is still not understood after their explanation, they did not do their job well. Ask again. And again if necessary. Require a full understanding and explanation, always. It's even more crucial if you're putting pen to paper and signing a contract. It sounds extremely obvious, but it's so easy to gloss over it and sign just to get the lender to shut up and stop your embarrassment.

But in the end of things it is your responsibility and yours alone to educate yourself. And if discrimination doesn't fly with you, stop imposing it on yourself.

Don't get angry. Negotiate.

2007-12-29T08:34:00.000-08:00

There are very few things that can ruin someone's day more than a loan rejection. Whether it's for a small business, car or home it's pretty disheartening to be told that while it's nice that you'd very much like one, you're either too poor, too financially irresponsible, or not trustworthy. Because after all, if you're applying for a loan the chances are you really want something. Without it, it's likely not going to happen.

At this point this is where people get a little emotional and say somethings that are not very appropriate and professional. Maybe some of these words are directed to the loan officer. Or their mother. Which really isn't entirely fair. They're only doing their job. You're the one with the bad credit.

When it comes down to it, whether or not you succeed is a numbers game. They're only the face in front of the machine to make you feel more comfortable signing an extended contract with the bank.

But they are also there for another reason. They're there to negotiate should the need arise. While it's very unlikely they're looking out for your best interests it's always possible to reach a middle ground. Whether or not it's unfavorable for you is quite another story. But that's why you need to pay close attention.

Say the lender sits across from you and flat out tells you, in a deadpan voice:

"You've been rejected."

While it is evident that this individual lacks customer service skills, it doesn't mean they're always unwilling to work with you. Ask them why you've been rejected. Is it a simple income issue? Is it your over all debt? Or is a somewhat foggier issue, like you haven't been on the job quite long enough?

Here are a couple of compromises that you can put on the table should you find yourself in just that situation.

Get another employer: Would the loan officer be willing to bend a little bit more on your proposal if you obtained some extra monthly income?
Increase your down payment: Simply put, the larger your down payment the more likely it is you're going to get a loan that's favorable to your situation. So if getting another job isn't going to fly, offer a larger down payment. Use your second job to save up more money. See if you can borrow some from friends and family.
Borrow less: You've been rejected for a $250,000 home loan. Well, is it possible you can suck it up and find another home that may be a better deal? Would the bank be willing to lend you $200,000? Maybe $175,000?
Get your employer on your side: Are you being denied because of a perceived lack of job security? Depending on if that's true or not, get a letter from your employer stating your job security and future prospects if they're willing. If your filing for a loan with your significant other it may be a good idea to get one from their employer, too. Consider this a job interview, you want good references.
Spend less: Are you being rejected because you have too many existing loans out there? Can you deal without some of them? What if you sold your boat that you still owe $5,000 on? Can you sell it for $7,000 and use that cash to pay off the loan?

What about your car? Can you trade it in for a less expensive model that'll lower your monthly payments?

If after all of this the final answer is still "no," don't be disheartened. If you're really set on obtaining your loan, visit another lender. And another if need be. Someone may look on your application with more favorable eyes.

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How to improve your credit score

2007-12-26T07:41:00.000-08:00

So you've had a less than stellar couple of years. Maybe you were irresponsible with your finances. Maybe a life altering emergency came out of the blue and threw your life into disarray. Or maybe you've even married someone who happens to not like paying their bills fully and on time. It happens to everyone once in awhile.

Even though you're a better person because of it, those misadventures are still going to be an ugly stain on your credit report. How long? Well, it'll of course depend on how bad the situation really got and exactly what happened, but chances are it's in the neighborhood of 7 years. Maybe even longer if something exceedingly stupid happened.

That's a long time. If those credit report stains occurred when you were 23, they'll still haunt you until you're in your 30s.

Even if your balances get paid off in full, on time (eventually...), the period you were delinquent in will still haunt you. Simply being late on payments is enough.

So truth be told, if the blemishes on your credit report are factual (meaning you actually did blow off paying American Express for 8 months), there's no way to remove them. Sure, there are a number of shady corporations out there who claim to make your credit report squeaky clean. But they're not even going to want to talk to you before they have a hefty consultation fee in their pocket.

And guess what? That's all that's going to happen, you giving them your money. They'll say they'll make everything better, but they won't. If you have bad credit for whatever reason, no one can eliminate your history.

You earned that metaphorical scarlet letter, and you're going to have to wear it until it either disappears after 7+ years or you're going to have to take matters into your own hands. Right now.

The latter is of course the most preferable.

So how does one go about proving themselves to be a good little consumer, worthy of a mortgage, car or small business loan? I've come up with a small list of things to improve your score. This is by no means a tell all of tell alls. There are many ways. You'll never be stuck in the same spot forever. There are always steps you can take to repair the damage, even if you can't erase it altogether.

Have I missed something? Say so in the comments and I'll gladly link back to your blog in my next post!

Deal with your current problems: Deal with all outstanding debts as quickly, politely and efficiently as humanly possible. Funnel every spare dime into this task. The longer you put off a payment, the more damage you're causing. If possible (and only if possible) consider paying off your big financed debts with more than your monthly due. In example, you owe $500 this month on your car, but you still have $8,000 left until the car is fully paid off. Send them $650 for this month if you can spare it after your other expenses and savings account.
Keep your job: Few people realize this, but your employment is also taken into account when you apply for a credit card or loan. Ideally lenders look for 1+ years of employment at a place of business. This shows them you have job security and you'll be able to make your monthly payments on time.

A good trick for this if you regularly find yourself out of work (i.e. you're an independent contractor, you work seasonally, your job market is experiencing a downward trend, et cetera) obtain a part time job and stick with it.

Even if you work 5 or so hours a week on occasion, you'll still be able to put it down as income. And once you hit a year you'll be golden, so long as you stick with it.
Stay put: Another aspect that's looked at when you apply for a credit card or a loan is how long you've lived at your current residence. Has it been 18+ years? Has it been a week? A dirty trick those with serious issues like to pull is racking up a debt and then skipping town.

So the longer you've lived someplace the better of you'll be. Just remember to pay your rent / mortgage on time while you're at it. They may contact your landlord / lender to verify your status.
Enroll in a secured credit card program: I cannot stress this enough, do not even consider this until you are looking to rebuild. If you have an addiction to plastic, credit and impulse buying, wait until you've over come those demons before even thinking about this. While it's harder to get yourself into trouble with this, it is still possible.

In a nutshell, a secured credit card is a lot like renting an apartment. You pay a security deposit in addition to some (usually small) annual fees. The amount of your security deposit directly reflects your credit line. If you mess up, poof. Your deposit has been funneled into your payment and your credit line is zero.

Credit companies offer this specifically for people looking to build or rebuild their credit. It allows you to show yourself capable of acting responsibility with less risk to the lender.

Just remember to pay off your balance in full every month. And shop around for the secured credit card that suits you best. (Read more...)
Take out a small secured loan: A secured loan is essentially the same as a secured credit card, just bigger. Just remember, the bank is giving you a chance. Don't ruin it, or you'll find yourself without the collateral (your car, home, boat, et cetera) and another bad mark on your credit report. (Read more...)

Always pay your balance due in full, on time without fail. This will do wonders for your credit score.
Pay off all of your debts: Yes. Even the ones who have written you off as a deadbeat. Your efforts will be appreciated and they will reciprocate by improving your score.
Consider keeping some credit cards: After everything is said and done and you've definitely over come your spending demons, consider keeping a couple of the better credit cards active with zero balances. This may help.

But to remove all possibility of abuse keep them at home, away from the computer.
Double check your work: After you've handled everything obtain a copy of your credit report (preferably for free). You can do this if you've been denied for a loan or a credit card by contacting the rejecting party and requesting it within a reasonable time frame. They must comply. This is U.S. law.

Or you can visit www.annualcreditreport.com. This website is run by the three major credit reporting corporations. You may obtain a copy of your report for free, once every 12 months.

Look it over. Do you see anything that's odd? Mistakes are not unknown. Someone may share your name, your identity could have been stolen at some point, your guardians could have unethically used your name in place of their own, et cetera. Dispute the inaccuracies. Rectify those you've missed.

It's quite surprisingly not a large hurdle to over come. You just have to apply a fraction of your brain power and time to the subject and you'll be on easy street should that be your destination.

Blog News: More visitors equals new design

2007-12-25T10:29:00.000-08:00

Encouraged by the large quantity of individual hits I've been receiving (both one timers and repeated subscribers) as well as the number of ad clicks that's been charged to my Google Adsense account I'm proud to announce the redesign of - the minus sign blues.

I've installed a whole new look to the blog, and added a more detailed debt counter within the navigation menu. You may have caught a hint of this in the recent past, but now it's come into being fully, and it's here to stay.

By simply visiting this site you're helping me work myself out of this ugly situation. This project started as a place to organize my thoughts and provide some sort of therapy. It's become so much more than that.

If you've enjoyed my writing thus far and feel the need to contribute something back, please feel free to spread the word. I'm here to help.

Lenders: Not the money police

2007-12-24T11:28:00.000-08:00

You can get a loan for virtually anything you can imagine. Homes, snowmobiles, cars, sheds, if you can name it someone out there is willing to cut you a check for it, so long as you pay them back with a nice, healthy interest rate.

This is not necessarily a good thing. It more often than not breeds irresponsible spending. Think of most of the reasons why someone would need to take out a loan. Chances are the list you'll compile, whether it's short or six pages long will mostly contain items people want, versus need. A vacation to Caribbean, a new boat, a second home in the mountains, et cetera.

It may be a bad connection to draw, but I like to think of it as a toddler being denied a toy until after he finishes his vegetables. He wants the toy now, and often enough he'll try to get it and throw the consequences to the wind.

So what if his parents punish him for making a poor decision?

But you're not a child and lenders are not your parents. This is not how the real work works. It is not the responsibility of the loan officer to be the money police. They're in business for a reason, to take your money so they can pay their own bills.

It doesn't matter what type of loan you'd like to take out. Irresponsible or not, if you have the credit history to back up your claim that you're fully capable of paying it off you're going to get the loan.

As long as your monthly debt does not exceed 50% of your net income or 35% of your monthly gross income, 9 times out of 10 your loan is going to be accepted under one term or another. Sure, you may end up paying a pretty high interest rate. Or you may be advised to refinance this or that. Sure, the loan officer may have personal reservations about giving you a loan for $5,000 so you can go on a ski vacation with your fiance.

But business is competitive. They know that if they reject your request you're more than likely just going to drive down the street to another, maybe less credible bank.

Which admittedly is the most likely scenario. So as long as you do not pose a significant default risk the money is yours.

But if you have the credit history to back up the fact that you'll repay the loan, what's the big deal?

It's not a big deal per se, but it puts you into a situation where you could potentially harm yourself severely. The lender isn't going to look out for you. That's not their business. They're not your friend. They don't care about you. They only care about being repaid.

It's your business. In the adult world of personal finance no one but you is going to look out for your best interests. Your lender, whether it's a bank or a credit card is not going to make sure you have a comfortable emergency fund or research the fact that while your employer of ten years is a really nice guy, he's about to declare bankruptcy and lay you off.

There is only one way to avoid getting yourself into trouble, but thankfully it's easy. If you don't need it (i.e. a car to get you to work, home repairs to keep you under a roof), don't borrow it.

Instead do what you did when you were a little kid, save. You remember that, don't you? The world of a child finances, scraping together every nickel and dime so they can afford something small and mundane, like a lego set.

The same logic carries over to the adult world. If you instead put your money into savings account not only will you not have to pay finance charges, interest rates and worry about the unforeseen (being laid off, medical issues, a car accident, et cetera) but you'll also get a small amount of interest from the savings account itself. So you'll end up with more money than you started with.

Sure, it's a piece of common sense, but it bears repeating. The most important aspects of one's personal finance is typically the easiest to understand. So long as you logically examine your wants and needs with a grain of salt, you'll do fine.

Juggling Jobs: It's okay

2007-12-21T06:37:00.000-08:00

I've found this is true time and time again as I speak with my fellow indebted bloggers and readers. They're struggling to come up with enough money to pay all the bills coming from every which way, but they're doing it at the cost of their mental well being. They hate their jobs, but they feel they can't really afford to quit simply because of the fact that would mean even more money issues. They're getting large quantities of stress from both directions. While this can be motivating in the short term, it's really not a healthy way to live in the long term.

Everyone seems to think that you have to have a full time job and everything else has to be supplemental. That's not true one bit!

Consider me six months ago. I had a full time, well paying desk job. But I hated everything about it. I hated my boss, I hated the environment I was in, I hated the 35 minute one way commute, I hated the stupid little nit picking stress it caused.

But it paid pretty well. It was the best paying job I'd ever had. But it wasn't enough. So I returned to the drudgery of retail as a part time night job. But that didn't fix things at all. I went to my second job every night mentally exhausted. It only caused more stress, and more stress into a dire financial situation is a deadly combination.

So what did I do? I found a higher paying job that provided less hours, but I got to work from home. I bumped up the hours at my retail job that was right around the corner from my home and I put in my two weeks notice.

I'm in no way advising that you leave your current full time employer right at this moment if you're stressed beyond belief. But if you are, I'd definitely advise you to use some critical thinking about the issue.

Here are some points to keep in mind:

Later benefits: Job juggling 2 - 4 part time jobs may lead to benefits at a later date. You always have a form of backup if you find yourself unemployed at one. If you only work one job and you get laid off, you typically have to scramble for two weeks to find another source of income.

The logic also works in reverse. It also gives you the financial freedom to simply dump one job if it becomes too much of a drain on your mental well being.
References Galore: If you're a hard worker a number of part time jobs versus one full time job may lead to an expanded resume and references sheet in the future so long as you keep them in your field of expertise (if you have one.)

Remember, being a shift manager at Wendy's may not sound glamorous, but it gives you the ability to say you have managerial experience when you apply for something a bit more to your liking.
Benefits: Many part time employers don't offer benefits to their employees. Does this worry you? It shouldn't. You just have to look a little harder. Here's a small list of part time employers that do.
- Hospitals
- Colleges / Universities
- Lowes
- Home Depot
- Starbucks
- Fedex / Fedex Kinkos
- UPS
- DHL
- Costco
- Barnes and Noble
- Borders
- Trader Joe's
- JC Penney
- Walgreens
- Target
Keep in mind that you can quite likely find many more mom and pop places that offer a benefits package to part timers in your local area. The fact that no part time position will come with benefits is a myth.
Offsetting lower wages: It's likely that if you take on part time jobs you're more than likely going to take a hit in pay. That's fine. Some ways to offset it (and actually save / earn more in the process) are:
- Save fuel. If you're used to a 30+ minute commute, restrict your new multiple job hunt within a smaller circle. Try to plan it so you only work one job a day and that job is within a 15 minute commute.
- Save expenses. A lot of people go out to lunch with their coworkers. Cut back. Bring your own lunch. Or work while eating if possible.
  
  I skip lunch at my second job as much as possible.
- Stay relaxed. The hustle and bustle of your new multi job life style may get to you. If you're working more than one job a day, try to schedule your commute plus a small decompression buffer in between. Bring a book or magazine and give yourself a couple of minutes to rest before jumping into the fire again.
  
  Consider a quick nap if possible.
  
  You're doing this for a reason. It can pad your pockets more and provide you with a sense of self satisfaction, but only if you let it.
- Don't get in a rut. Again, you're doing this for a reason. Pick jobs that benefit you, not the other way around. Apply for jobs that you enjoy, or get a hidden benefit out of.
  
  For example, many food service jobs offer free meals to employees. (A quick point on this, you might not want to find yourself employed at your favorite place to eat. After 6+ months of working there you'll likely get a little tired of the menu. I'm not allowed to eat at Subway simply because of this. ) Many retail jobs offer hefty discounts on merchandise. Some may provide you with a useful skill you can add to your resume. Keep your mind open.

So long as you play your cards right you can greatly reduce the stress of your work life so you can focus on more important things (like paying that Discover bill). I know things may seem bleak, but you're not chained to any one job. You're free to do what you please, just make sure that coincides with an intelligent and well thought out decision.

You know you have a problem when..

2007-12-19T09:55:00.000-08:00

A surprising amount of people have addictive personalities. They just tend to gravitate toward and focus on specific things. These things may give them enormous amounts of joy, or they may just take the edge off of life. It of course depends on the person, their addiction and their surroundings.

It isn't necessarily their fault. Addiction is often hard wired into someone's personality. So it may just be the type of person they are, and hell, their addiction can just as easily be benign versus disastrous.

And addiction doesn't necessarily have to deal with drugs or alcohol. Sure, those are the most common and dangerous. There is a chemical dependence involved. But often someone will just have a mental addiction. Something materialistic that drives their rush, a little shiny hand to throw a little switch in their brain.

I've met people addicted to coffee, diet coke, food in general, exercise, children's toys and books. They're items they cannot live without, and when they reach rough times these vices become bleeding arteries.

It's the same case with people addicted to credit cards. These people, partially through environmental reasons (i.e. lender advertising) and partly through their own deficient faculties (i.e. "I really, really like QVC...") often find themselves in trouble time and time again.

It's my hope to compile a short, concise list in today's post to assist those who may not yet recognize they have a credit problem. Some of these may seem obvious and some may require you to think a little harder. Such is typically the case.

Have a point you'd like to add? Comment and I'll link back to your blog in my next post!

You know you have a problem when...

You spend more than 20% of your income (after taxes) on your debts.
You apply for another credit card because your credit line is not high enough on your existing card(s).
You find yourself paying the minimum amount due more than once within five billing cycles.
You've used your credit cards to pay for basic necessities (rent, utilities) not out of simple convenience, but because you lack the funds in your checking account.
You've used your credit card to pay off another credit card.
Lenders begin calling your home looking for their money.
Lenders begin calling your place of employment looking for their money.
Credit collection agencies begin calling your home looking for your lender's money.
Credit collection agencies begin calling your place of employment looking for your lender's money.
Attorneys begin calling your home looking for the credit collection agencies. Et cetera.
Your car loan lender calls up out of the blue and asks you what your typical work hours are and where you typically keep your vehicles.
QVC is on speed dial.
A major online retailer (amazon.com, ebay.com, et cetera) is your home page.
You are denied for a loan. If you did not have a problem, you should have no problem obtaining a substantial loan.
You find yourself without utilities for short periods of time, because you failed to pay and they were disconnected.
You've rationalized your excessive spending in any of the following ways:
- Life isn't worth living if you can't enjoy yourself.
- I need it (You need precious few things, it's more likely that you want.)
- Only this one more time. (Saying this implies that even in your own mind you've established a repeating pattern.)
- But it's on sale. (Something, somewhere is always on sale.)
Fights have broken out in your relationship over irresponsible spending.
You've been in a relationship that has ended over irresponsible spending.
You find yourself being kept awake at night because:
- You bought something you regret
- You regret not buying something earlier in the day
- You don't know how you're going to survive the next work week
If asked to name everything you've bought with your credit, you fail to remember much of your spending.

Of course these are just a few of the tell tale signs. There are many more, and while you may have found a couple of these points do apply to you, you may not necessarily have a spending problem. But if you're looking for ways to determine if you do, that's likely reason enough.

A savings account: Because life likes to mock you

2007-12-17T08:43:00.000-08:00

(Been a long day? Don't feel like reading? Want - the minus sign blues on the go? Click here to download and listen to an mp3 of this post, read by yours truly.)

Graphic and ominous image aside, I'd like you to take a journey with me. A tool I often like you use here on - the minus sign blues is the human imagination. It's such a powerful instrument to get ones point across if it is actively stimulated.

So, imagine something for me, will you? I can't possibly ask you to close your eyes, but you get the concept. Right?

You and your partner in debt have just put your heads together. You've finally joined forces to eliminate your money issues. You're getting tough on the issue at hand. There's budgeting in one direction, paying off credit card balances in another, and a whole mess of self satisfaction.

You think you're doing pretty good. Creditors have stopped calling for the most part, you don't worry yourself sick in the middle of the night and best of all, you feel a sense of self respect you haven't felt for a long time. You feel like you're a responsible adult now, not just like you should be one.

One frosty cold New England morning you wake up, flip the coffee machine into the "on" position and head on down to the bathroom for your shower. Groggy eyed you turn the water on to a pretty hot setting. It's very cold in the house.

You disrobe, shiver and step into the shower.

The next split second is one part sheer, eye wided shock, one part epic shrinkage and one part very loud vulgarities.

Your water heater is dead. You don't have the money for a new one.

Welcome to my world two weeks ago.

Every single financial help book details this extensively, but it bears repeating. It doesn't matter what it is, always contribute some sum to a savings account. Out of every single paycheck, whether it's $10 or $100 or $1,000.

Our problem was not one of total ignorance, but of bad timing. We've recently regained control of our finances and with it we've begun making semi-regular contributions to our savings account. The problem is, disaster stuck us when we were nearly as vulnerable as we could have been.

Consider it a kick to our gut as we were struggling to stand up.

It takes time, patience and discipline to maintain a savings account. This is especially true in the face of epic debt and some very large, angry minus signs. You're often tempted to dip into it to come to zero yourself out at the end of the work week. But if you absorb anything from this blog at all, let it be this.

But no matter how scared straight we've become with our finances, that hardly helps us now. And sure, we may have a couple hundred dollars in the account. But what does that pay for? Maybe a single rent payment, or two months groceries.

Certainly not $5,000+ for a new water heater and installation, and with our credit problems already as bad as they are, can we afford to make our big red number 40k instead of 35k? Absolutely not.

Planning for the future is an essential aspect of our survival. We would have had more in the account had we not dipped into it to meet a credit card payment or two. Suddenly a late charge doesn't seem terribly bad.

Fortunately we had relatives to come to the rescue. It's been a rough couple of weeks with frosty cold showers, but we should eventually get our new water heater.

But what if we didn't have anyone willing to foot the $5,000+ bill? What if it was something a bit more life threatening than a water heater melting down?

What if it was a car accident, or a sudden loss of employment? What about a house fire? We're going to call this a warning shot across our bow. The cold showers should serve to wake us up, both physically and metamorphically.

We were not prepared. Are you?

I hope so.

Pay for things in hours, not dollars.

2007-12-12T18:09:00.000-08:00

I touched on the fact that credit cards breed a disconnection with one's finances in an earlier post. While I did explain at length that it is typically a good idea to pay for things with other, just as conventional methods (cash, debit, check) there are a couple of other ways to go about limiting yourself if you find yourself subconsciously (or consciously..) vacant when it comes to your spending habits.

It's a trick a lot of expensive self help books like to mention, but I've yet to see it published online. Mind you, I'm sure it's floating around on the internet somewhere. The problem is finding it. So I thought I'd make it accessible to those who may happen upon this post.

Sometimes cost means a lot, sometimes it doesn't. I believe there is a cut off point, hardwired into each individual's brain where a cost simply stops registering an emotional reaction. I like to call it the "common sense over-reaction." Your brain simply goes kaput once numbers start registering high enough.

This can and will occur, even if the individual is shelling out single dollar bills for a new plasma screen TV.

Let me elaborate.

Assuming you have some financial freedom that allows you to spend some of your hard earned money how you like, you'll often find yourself making compromises to yourself or your other. Consider it a misdirection.

Let's construct a scenario. You're shopping for a new television at Best Buy. You walk the infamous line of dolled up entertainment centers blasting out Toy Story on HD Surround Sound. You need a new TV, and you can luckily afford a pretty good one.

You see a lot of costly set ups. One's for $650 with free delivery, one's $990 with bundled surround sound, one's $2,500, but it comes with a sweet little DVR and a $100 gift certificate.

So you examine all of your options and you pick the first one. It's a pretty nice television and hey! you get something free!

Sure, you probably made one of the more responsible picks. But did you really register how much $650 dollars really is? Sure, it was the cheapest. But it was also right next to sets that went all the way up to $2,500.

To steel your heart and desires a little, consider your income and apply it to any large purchase. Instead of $650, calculate how many hours you're going to need to work in order to pay for that television.

For the sake of having a round number, let's say you make $10 an hour. That means you're going to have to work 65 hours in order to pay for that television in full. That's about two work weeks. Before income taxes. Before sale taxes. Before interest (if you pay on credit, shame on you).

Consider what you do for a living. Whether you're a handyman or a tech support representative, do you really want to bust your ass for two weeks for a single really cool television? Is it really worth it?

It's certainly your money. You may do whatever you like with it, but all of a sudden $650 looks like a lot more now, doesn't it?

The same logic applies if you make double that. Consider you make $20 an hour. Maybe you want a fishing boat. Well, before all of the other associated costs, would you be surprised to know that a $6,000 dollar fishing boat with trailer costs you over two months of pay? Is it worth it? Maybe. Maybe not.

It's a fun little trick to apply to other things you may buy, too. How many hours of toiling away at the office in order to go out to dinner to spend $50? How many weeks spent selling vacuum cleaners to get that beautiful new snowblower?

And hey, if it helps you at least once, it's worth the consideration and a little bit of simple math.

The Holidays: Good gifts for them.

2007-12-12T07:12:00.000-08:00

Welcome to part 2 in the epic debt holiday tip list. So we've explored good gift ideas for you and yours, however much you'd prefer iPhones and Coach purses, you must admit the ideas were fitting.

But now it gets easier. I've found that it's a whole world of difference getting someone something cheap and asking for someone to buy you a cheap gift.

No matter how poor you are, holiday shopping is occasionally required. Whether it's to obtain access to a Yankee swap wherein free food is served, or to please your significant other come holiday morning. The whole world can't stop simply because Discover is having a happy holiday with your paycheck. And happy they are.

By no means is this a complete list to shopping cheaply. Have a couple of additions? Post in the comments! I'll link back to your blog in my next post!

Put more thought into gifts: A cheap thoughtful gift is often worth more than an expensive thoughtless one. Now that you're poor you need to consider the person you're shopping for a bit more now. You'll appreciate it come your bank statement and they'll appreciate it come their witness.
Book Gift Sets: For the recipient that likes to bake/cook frequent library book sales, discount department stores (Building #19, Dollar Tree, Family Dollar, et cetera) and try to pick up a discontinued cookbook. That in itself is a little spotty, so dress it up a little. How? Well, if the subject of the book deals with cooking with chocolate, buy a bag of baking chocolate. If the subject of the book deals with soups and stews, buy a dollar store ladle and skimmer.

The same is true with most other interests. Do they enjoy dogs? You can probably find a cheap dog training book and a cheap, good looking collar if you look hard enough.

Pairing the gift with the person's personality, plus multiple small and themed gifts will often result in delighted surprise.
Bake cookies: Are you decent behind the stove? No? Is your significant other? Okay, that works too.

Holiday themed cookie tins, ribbon and cookie essentials are cheap. So a couple of days before the big day, bake up a batch of their favorite cookies. Whether it's oatmeal raisin, peanut butter or chocolate chip everyone has a favorite cookie. Trust me on this one. And the best part of it all? The materials you do need pretty much come straight from your food budget, if you need any at all. For an extra level of flair make them memorable by making them enormous.

Most kitchens have flour, sugar, vanilla extract, baking powder and a rolling pin. So what's keeping you?

Do they like brownies more? Essentially the same stuff, get to cooking!
Candy Jar: Whether you already have the supplies at home (ideal), or if you need to go out to a craft store, this idea is still easy and cheap. Buy assorted, individually wrapped candies of a variety the recipient will like. Good ideas include peppermints, kissies, caramels and bubble gum.

Now make a decorative jar, wrap it up and wham.
Planting kit: Have someone who has a green thumb? Build them a planting kit, something they'll be able to use come the warmer months. You can buy seed packages at Home Depot for $0.50 a piece, small terra cotta planters for $1.50 a piece, and you can likely find some cheap gardening supplies at your local dollar stores. Try a spade or a small watering can.

Want to add a little extra, personal flair? Craft stores such as Michael's sell small sets of paints and wooden accessories. Paint the terra cotta planters and make a couple of small planter signs saying such things as "Basil" and "Man Eating Patuna."
Themed Gift Basket: So you know the person you're shopping for pretty well? Make a gift basket for them. Reuse an old basket you have sitting around the house or purchase one cheaply at a dollar store. Now fill it with discount bin and dollar store items the person will like.

Ideas can include soaps, lotions and bath salts or hot cocoa packets, marshmallows and peppermint candies.

These are of course the tip of the iceberg. But with a little thoughtfulness and a couple of bucks in spare change, you can survive the holiday season without coming off as a total cheapskate.

Co-Signers: Don't drag them down with you.

2007-12-10T12:17:00.000-08:00

Co-signing is when two or more people enter into a loan together for the purpose of paying it off jointly in the near future. On the surface it seems pretty mundane and every day. The word itself crops up often enough to make it a household word, right? It's at least as common as the words mortgage, co-pay or liquidated assets.

So it doesn't seem like that big of a deal when a bank asks for you to obtain a second (or third) person to co-sign on a future loan. This could be for your small business, home repairs, a car. Anything really, so long as it can be tacked onto an interest rate you can typically get a loan for just about everything. So you don't think twice about it before going off to pester a relative or friend to just sign a little piece of paper to get the ball rolling.

And hey, you're likely going to ask someone you trust, right? Someone you respect as a person, probably a close relative like a sister or a father. Or a close friend, someone who knows you're a good person at heart.

So they jot down their signature, a date and a social security number. They enter into a binding contract with a corporation whose business is to, gasp, make money. They nod dimly at the grim bank agent explaining the nitty gritty details behind the contract.

Your friend or relative knows you need their help, so even as the bank agent explains the situation they just nod dully, keeping you in mind. After all, they've known you for years. You'd never get them into trouble, right?

Wrong.

The situation is simple. If a bank is asking for another individual to co-sign on your potential loan, they believe you are incapable of paying it off. After checking out your credit history, income and other outstanding loans they come to the conclusion that you cannot possibly pay them back in a timely manner.

They are likely a large, multinational corporation who specializes in lending. They have legions of employees and third party vendors at their disposal. They are in the money industry and if they are in business to offer you the loan to begin with, chances are they are very, very good at it.

They don't want to turn away a willing client. Clients pay the bills and keep their CEO fat and happy in the Hamptons. So if they're outright rejecting you without another signature, there is good reason.

They're looking to cover their own ass because they feel you will fail.

Listen to them. Chances are if you're in a dire financial situation it is for good reason. This is not to say that you're a bad person because you were rejected for a loan, just bad with money. Use it as a learning experience, not as fodder for self pity.

It's one thing to enter into a risky situation for your own benefit if you are the only person at risk. But it's quite another to enter into a risky situation for your own benefit at the expense of your relative or friend.

The bank is asking for a co-signer so they have some insurance you're going to pay your bills on time. And if you fail, through whatever reason, your co-signer is going to have to pick up the slack. All of a sudden they're going to be awash with your dirty laundry.

And hey, if they can't pay, guess what's going to happen to their credit report? It's going to tank. You're going to be spreading your own misery to someone you care about. Someone who just wanted to help you out because they cared about and trusted you.

Keep this in mind when you see the words "co-signer required".

It appeared on your contract for good reason, so investigate it. Obtain a copy of your credit report. You can do this for free, by law, once every 12 months. You can read up on the issue at the Federal Trade Commission's page on the subject here and obtain a copy of yours here.

Once you have your credit report, investigate it. You're going to come across the reason why the bank is requiring a co-signer fairly quickly, whether it's your outstanding credit card debt, your low income job, or your four car loans.

But instead of hunting down your best friend, rectify the issue completely before attempting to reapply for the money you requested earlier. And at that point only enter the agreement by yourself, or with your spouse. If it's for personal use, it should be personally paid off, don't you think?

Recycling: Likely unnecessary

2007-12-08T06:54:00.000-08:00

Willow made a very valid comment in the consolidation versus counseling thread that I just so happened to notice. My apologies for the delay in a link. You can't go wrong with financial management and food, I'll tell you what.

A couple of days I was listening to NPR during my little commute to work. The host was interviewing the founder and CEO of Stonyfield Farms, Gary Hirshberg. The corporation is a relatively environmentally concerned organic yogurt manufacturer. They're really into recycling their containers. But kind of recently they up and decided to simply stop selling their yogurts without plastic lids.

The lids were recyclable and made of recycled materials. So why would an environmentally friendly company go ahead and make the decision to stop using recycled materials?

Simple. Because even though the lids were recyclable and made wholly of recycled materials, their existence was wasteful and attached to a large carbon footprint. Confused? Let me elaborate. I'll get the cheap skate stuff in just a moment.

Whenever something is manufactured it produces something called a "carbon footprint." This essentially is the amount of carbon that was pumped into the atmosphere to produce it. This includes transporting raw and finished materials (by land, air or sea) and the actual production of the item.

So what, you think. Recycling helps the environment!

True. But only on items already existing in the environment, if it reduces production of that same item later on. It takes more carbon emissions to recycle something. You need to transport it to the recycling center, you need to process it, and you need to transport it to its final destination. And you need to do it safely. No way around it, recycling still produces pollution while attempting to reduce it.

The logic of Stonyfield Farm? Emphasize on the first R in Reduce, Reuse, Recycle. Not too many people realize it's in that order for a good reason. It's the cheapest, easiest and most logical order.

If you reduce your needs you're actually doing more to the environment than you are when you reuse something. And when you reuse something you're doing more for the environment than you are if you'd recycle something.

People tend to simply latch onto the recycling itself because it looks pretty. People get to see you do something helpful, and you get to feel better about yourself.

The same is true of those in unsavory financial situations.

How? Well, carbon emissions come with a price tag. Whether it's gasoline in your car, the soda in your can or your bottle of Gatorade, it's going to cost you something. A lot of people save their recyclables in the hope of cashing them in for a return on their spending. But they fail to realize they would have helped themselves and mother earth even more simply by just reducing their needs to begin with.

Let's examine some recyclables, shall we?

Cans: These carry one of the highest return investments imaginable. You suck the sweet, sweet nectar out, crush the can and throw it into a garbage can for the recycling center. You might make $0.02 per can. That's great, but you probably spent $0.50 or more on it to begin with.

If you reduced your needs and instead drank a glass of water or fruit juice instead, you not only would be saving money, but reducing pollution. Not to mention it's probably healthier for you than anything that was in the can.
Glass Bottles: The logic for bottles is exactly the same as it is for cans. You're going to get a return on your recycling bottles, but if you had simply refrained from purchasing the glass to begin with in lieu of something else that was cheaper and used less materials in its construction you'd save even more.
Plastics: Depending on the grade and quality of the plastic, simply fall back to the next R, Reuse. Sure, you made the mistake of buying a bottle of water for $2.00. Instead of moping about, depressed at your own stupidity, just reuse the bottle. Fill it with tap water.
Paper Products: While possible to reduce (stop buying magazines), reuse (scrap paper), paper products typically wind up being unavoidable. So you're typically forced to fall back on recycling.

This is fine. Sometimes you need a newspaper, or printer paper. And junkmail is all too common, isn't it?

But have you considered reusing it differently instead? No, I'm not talking about scrap paper or tomorrow's luxury dinner. Pulp it and make your own.
Assorted bits and pieces: There are other, more complex bits that are recyclable as well. Take those on a one on one basis. Some can turn you a return on your investment.

Ink cartridges can be returned to major retail outlets for recycling. Some providers offer discounts on future cartridges if you recycle enough. The same is occasionally true for computer equipment and cars.

While recycling can earn you a return on your original investment, try to rethink the situation. Sometimes you'll find that reducing your needs and reusing material is far more beneficial to everyone, including your wallet, than recycling.