2008 was a pretty darned good year all told for my family and me. Financial total wise, it was not a banner year, but that is because the entire market retreated heavily in 2008. The housing market is down significantly, and some might say rightly so, but it’s still not pleasant to think that an asset you hold is down in value. No, the reason why 2008 was a banner year in our household was that, for the first time in many years, our total savings rate increased, and it increased significantly.
At this time last year, we paid off our mortgage for our house, with the goal to take that house payment money and save it, not inflate our lifestyle and buy more stuff. Looking back at what the market has done this year, it turned out to be one of the luckiest moves we ever made. We've never for a second assumed this was some skillful financial decision; I just felt anxious about not being able to save money for the future, and thus made the decision to sell off my shares of Cisco and Synaptics (the only single stocks I still owned) to completely and totally get us debt free, everything including the house. From there, I made the decision to invest going forward in broadly diversified mutual funds through my company’s 401K plan, through mine and my wife’s ROTH IRA’s and through our children’s 529 plans.
The biggest win for 2008 was the fact that we fully funded a six month emergency fund and determined an absolute threshold value (more than the threshold means we can take that money and invest; fall below the threshold and all investing outside of funding an employer match for 401K stops until the threshold is reached again). In addition, we also maxed out one ROTH IRA, are close to maxing out a second ROTH IRA (we still have until April 15, 2009 to do so), and contributed an additional 9% of gross income to our 401K plan. Looking back, we managed to average a savings rate of 25% of gross income every pay period. Again, that was boosted significantly by the fact that we were no longer making a house payment.
So in the closing days of 2008, things we determined we did well were:
• making an evolving budget and fine tuning it each month
• living primarily on the “envelope system”, where we used cash to make most payments for expenses during the month
• developing a grocery plan that allowed us to significantly trim our grocery bill (truth be told, we could probably do even better if we got truly aggressive on this front, but we're doing way better than we used to :) )
• keeping and monthly funding an escrow account of our own to allow us to pay for recurring expenses (car repairs, insurance, taxes, etc.)
• utilizing a “blow money” system for each of us to allow for some spending freedom (each of us got about $120 per month that we could use as “no questions asked” money to spend)
• budgeting for Christmas this year and making a hard determination that we were not going to go beyond a certain amount of money
• taking advantage of a Health Savings Account with high deductibles to lower our health insurance premiums considerably (even though we spent more cash of our own each visit, our total costs for the year were less than we spent last year with the premium structure the way it originally was)
• we only had to dip into our emergency fund once the entire year (to fix our oven which had a burner go bad)
• we downsized a lot of things that took up a lot of space and gave us more control over the areas where decided to keep things (hnothing worse than going out to buy something you need, knowing full well you have it somewhere, but no clue where it might be because of too much stuff in the way!)
• refinishing our deck and painting the exterior of the house ourselves, while a lot of work to do, was a huge net savings over hiring a professional to do it. This has also given us some confidence in tackling some additional projects in our house on our own.
All of which led to our being able to bank 25% of our gross pay on average in 2008.
By contrast, there were a few areas where we decided we could do better:
• there were a number of “surprises” that seemed to pop up on a recurring basis (things that, try as we might, we just didn’t see coming, or they suddenly got thrust on us and required that we spend to cover them). Last year, we made a point to write down any “gotcha” that we had to deal with, and this coming year, we plan to continue to do the same, and compare it to last years “gotcha” list. If we see it’s about to happen again, we know it’s something we need to plan for and apply to the regular spending escrow account. We realize we can’t plan for every eventuality, but many months of data help to determine true anomalies and which areas really should be worked into the ongoing budget.
• there is still a lot of “stuff” that we have that is really of questionable utility value, but I’m still leaning on the side of “oh no , I can’t get rid of that”... but each time I approach these areas, I get a little better and a little more realistic. Not to mention, I’d also like to see some monetary return for some of these items should I sell them. My “Shedding of Innocent Stuff” section of this blog was developed to help me do exactly this :).
• in 2009, I want to make our household finances 100% transparent, where all of us (including the kids) have a true understanding where the money goes and why. This way, it’s my hope that the whole family can pitch in and help make the decisions about what we can do and how to manage our home. Now that tools like NetworthIQ and Quicken Online are readily available (and free to use), this should be relatively easy to accomplish (of course, the devil is always in the details, ain’t it :)?).
• In 2009, I want to encourage my children to make some concrete plans regarding their own money that they earn, and how they would like to donate, save and spent it, with a goal of all the kids at the minimum making a commitment to tithe 10% regularly, save 40% and feel free to spend the remaining 50% if they so choose.
So those are my concrete financial goals for next year, which can always be associated with the more amorphous goals of “earn more money” and “save more money” that everyone always makes. It’s my hope that following through on the areas we did well in 2008, as well as using the action plan we have for 2009, we will be able to do both :).
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
Monday, December 29, 2008
Wednesday, December 10, 2008
Madd Money: The Economics of Snowboarding
As we enter the middle of December, I have both feelings of anticipation and a sincere need to do a personal gut check… this is my favorite time of the year, the months between December and April. It’s snowboarding season in my area, or at least it is struggling mightily to become such (not much snow yet, but we are hopeful).
The act of snowboarding and the price of snowboarding have changed dramatically over the past decade and a half. Back in 1993, the classic “day trip” of the average Bay Area snowboarder was easily under $100.00. That would be a day trip of just myself, driving from the San Francisco Bay Area, paying for gas, packing my own food for the trek, purchasing a basic ticket, riding a full day, and then driving home at the end. Due to the nature of my home and my family, multi day trips are a rare occurrence in my reality. The average tank of gas cost somewhere around $23 (multiply that times two, realistically), and the average lift ticket ranged anywhere from $24 to $40 if you really wanted to splurge at a fancy place. this pricve of course expands when you factor in family members who also come along for the ride.
Today, even with the slide in gas prices of late, an average tank of gas costs about $35 (times two) and good luck finding a ticket that’s not bumping up around $40 even at the smaller ski and riding areas. Places like Squaw Valley and Heavenly Valley have become true luxury visits (and at almost $80 a lift ticket, I need a real good reason to go there now, like a truly spectacular event).
Still, my family enjoys snowboarding, and it’s a sport that I truly adore and love. So what’s a man to do when he digs riding but wants to maximize the ride while also maximizing the value? Is it possible?
The answer is yes, but it requires a little bit of creativity, flexibility, and shedding of attitudes in many cases. The first place to start is gear. Now I’ll be the first to admit, having been a competing racer and freestyle rider for several years, I have had my share of “gear snobbery”, and when you are racing or otherwise looking for a competitive edge, yes, there may well be value in nit picking over the minutiae of the gear that you use. However, for most everyday average riders, the difference between a mid-level board and a top-flight flagship board is not detectable. Paying $200 or $300 more for a professional grade competitive board may make you feel better, but mechanically, it’s not going to make a noticeable difference (the one place I differ on this philosophy is with boots; if you are going to splurge on any piece of gear, the difference of $50 to $100 when it comes to a pair of snowboard boots can make a world of difference. Still, a good boot fitter can make a pair of mid level boots every bit as fabulous as a top tier pair of pro endorsed boots for considerably less).
When it comes to clothing, you want to dress for the purpose, and OK, if you want to have a little fun and express yourself, go ahead. Still, with a little searching, you can get very good quality gear (jackets, pants, thermals, 2nd layer, gloves, hats, etc.) for reasonable prices, and sometimes, if you look during the off season, you can get tremendous deals on gear at the end of the season. Not such a great approach for growing kids, but for adults, that’s really the best time to buy. There are also a number of clearance places that deal with just overstock snowboard and skiing outer gear. One of my favorites is a place in Santa Clara called Wintersport Warehouse. You can get some great deals on gear especially towards the end of the season.
One of my favorite social exercises is the “gear swap”, where you go to an all day event at a place that sells gear, usually in their side yard or back parking lot. Bring your equipment and check it in along with a price you are willing to let the gear go for. You can also designate whether or not you would be open to trade. For kids equipment, this is probably the best place to go, because the equipment being offered for swap is often kids gear that has been outgrown. Check your local shop and see if they have any information on whether they will be offering a gear swap or if they know of another vendor or group that does (these don’t necessarily have to be stores that do this. It’s just as likely you may see a high school, community college or church do the same thing).
Lift tickets are priced at a premium to those who are the casual riders who go at the busiest times (Friday or Saturday). If you can make arrangements to ride midweek, you can often save as much as 50% off a weekend ticket. If you are a regular rider who is willing to commit to a single mountain, the season pass *can* be a good deal, but you have to weigh in the true cost of such an item. Most mountains require you to ride about eight total days for the cost of the pass to break even, though many mountains offer better deals if you are willing to purchase a pass earlier in the year. I’ve had experiences with season passes, and if I lived closer to the mountains, I’d definitely take advantage of them, but seeing as I live about three hours away, the benefit is less of a bargain. Many stores offer discount tickets, again a bigger discount the farther in advance you purchase them. It also works to your advantage if you go at no peak times of the year (read: holidays and extended weekends). This is fine with me, as I am not a fan of big crowds and big lines. Spending even more money to get less riding in, not a benefit.
Finally, depending on your flexibility, if you are a lone rider, you may find that leaving the driving to someone else may be the best option. There are often shuttle services where you can stow your gear, get on a bus, and let someone else handle the driving. The average seat on one of these deals is about $48.00. For a lone rider leaving San Francisco, that’s a pretty good deal, all things considered. The down side is that there are usually only a few resorts that they go to, and often the bigger, higher priced places. Still, with the savings on gas, you can often still pay for the higher priced ticket and come out ahead than going it solo (plus saving wear and tear on the car). More than two people going up, however, it makes more sense to drive up on your own and split the costs.
I plan to keep a close eye on the costs associated with this season as it ramps us. For me, the quality of the riding time matters more than all of the other costs, but lets face it, watching costs and keeping expenses low translates to more riding time for the money, and frankly, I can get behind that goal very easily :).
The act of snowboarding and the price of snowboarding have changed dramatically over the past decade and a half. Back in 1993, the classic “day trip” of the average Bay Area snowboarder was easily under $100.00. That would be a day trip of just myself, driving from the San Francisco Bay Area, paying for gas, packing my own food for the trek, purchasing a basic ticket, riding a full day, and then driving home at the end. Due to the nature of my home and my family, multi day trips are a rare occurrence in my reality. The average tank of gas cost somewhere around $23 (multiply that times two, realistically), and the average lift ticket ranged anywhere from $24 to $40 if you really wanted to splurge at a fancy place. this pricve of course expands when you factor in family members who also come along for the ride.
Today, even with the slide in gas prices of late, an average tank of gas costs about $35 (times two) and good luck finding a ticket that’s not bumping up around $40 even at the smaller ski and riding areas. Places like Squaw Valley and Heavenly Valley have become true luxury visits (and at almost $80 a lift ticket, I need a real good reason to go there now, like a truly spectacular event).
Still, my family enjoys snowboarding, and it’s a sport that I truly adore and love. So what’s a man to do when he digs riding but wants to maximize the ride while also maximizing the value? Is it possible?
The answer is yes, but it requires a little bit of creativity, flexibility, and shedding of attitudes in many cases. The first place to start is gear. Now I’ll be the first to admit, having been a competing racer and freestyle rider for several years, I have had my share of “gear snobbery”, and when you are racing or otherwise looking for a competitive edge, yes, there may well be value in nit picking over the minutiae of the gear that you use. However, for most everyday average riders, the difference between a mid-level board and a top-flight flagship board is not detectable. Paying $200 or $300 more for a professional grade competitive board may make you feel better, but mechanically, it’s not going to make a noticeable difference (the one place I differ on this philosophy is with boots; if you are going to splurge on any piece of gear, the difference of $50 to $100 when it comes to a pair of snowboard boots can make a world of difference. Still, a good boot fitter can make a pair of mid level boots every bit as fabulous as a top tier pair of pro endorsed boots for considerably less).
When it comes to clothing, you want to dress for the purpose, and OK, if you want to have a little fun and express yourself, go ahead. Still, with a little searching, you can get very good quality gear (jackets, pants, thermals, 2nd layer, gloves, hats, etc.) for reasonable prices, and sometimes, if you look during the off season, you can get tremendous deals on gear at the end of the season. Not such a great approach for growing kids, but for adults, that’s really the best time to buy. There are also a number of clearance places that deal with just overstock snowboard and skiing outer gear. One of my favorites is a place in Santa Clara called Wintersport Warehouse. You can get some great deals on gear especially towards the end of the season.
One of my favorite social exercises is the “gear swap”, where you go to an all day event at a place that sells gear, usually in their side yard or back parking lot. Bring your equipment and check it in along with a price you are willing to let the gear go for. You can also designate whether or not you would be open to trade. For kids equipment, this is probably the best place to go, because the equipment being offered for swap is often kids gear that has been outgrown. Check your local shop and see if they have any information on whether they will be offering a gear swap or if they know of another vendor or group that does (these don’t necessarily have to be stores that do this. It’s just as likely you may see a high school, community college or church do the same thing).
Lift tickets are priced at a premium to those who are the casual riders who go at the busiest times (Friday or Saturday). If you can make arrangements to ride midweek, you can often save as much as 50% off a weekend ticket. If you are a regular rider who is willing to commit to a single mountain, the season pass *can* be a good deal, but you have to weigh in the true cost of such an item. Most mountains require you to ride about eight total days for the cost of the pass to break even, though many mountains offer better deals if you are willing to purchase a pass earlier in the year. I’ve had experiences with season passes, and if I lived closer to the mountains, I’d definitely take advantage of them, but seeing as I live about three hours away, the benefit is less of a bargain. Many stores offer discount tickets, again a bigger discount the farther in advance you purchase them. It also works to your advantage if you go at no peak times of the year (read: holidays and extended weekends). This is fine with me, as I am not a fan of big crowds and big lines. Spending even more money to get less riding in, not a benefit.
Finally, depending on your flexibility, if you are a lone rider, you may find that leaving the driving to someone else may be the best option. There are often shuttle services where you can stow your gear, get on a bus, and let someone else handle the driving. The average seat on one of these deals is about $48.00. For a lone rider leaving San Francisco, that’s a pretty good deal, all things considered. The down side is that there are usually only a few resorts that they go to, and often the bigger, higher priced places. Still, with the savings on gas, you can often still pay for the higher priced ticket and come out ahead than going it solo (plus saving wear and tear on the car). More than two people going up, however, it makes more sense to drive up on your own and split the costs.
I plan to keep a close eye on the costs associated with this season as it ramps us. For me, the quality of the riding time matters more than all of the other costs, but lets face it, watching costs and keeping expenses low translates to more riding time for the money, and frankly, I can get behind that goal very easily :).
Monday, December 8, 2008
Taking on "Personal Management": Can Scouting's "Big Bear" Help Adults, Too?
As a Scoutmaster, I've found it interesting that there are three badges that tend to gum up the works for boys that want to progress from Life Scout to Eagle Scout, and routinely, it tends to be at least one of these three badges that cause the greatest amount of perceived hardship for scouts. These badges are:
Family Life
Personal Fitness
Personal Management
Having been a scout leader and a merit badge counselor for close to fifteen years now, I know why this is the case. Each one of these badges requires an up front commitment, a pretty significant one at that. In addition, each one requires that you commit to a lengthy follow-through, and then tracking that follow-through for three months. In almost all cases, it's this tracking for the long term that gets most boys down and frustrated. Still, for many boys, conquering these three badges makes a huge difference, not just in taking command of the Eagle Scout process, but in taking command of life in general.
As I was reviewing with my son the components of the Personal Management badge, I came to the stunning realization that many adults that I know do not have much knowledge of, nor do they actively understand, the concepts that are presented in this badge. As I was looking to see if there was some "Madd Money" topics I could talk about and discuss, I realized the whole merit badge pamphlet, while not ideal in every aspect to what *I* would personally teach or espouse (but pretty darn close overall), it's a terrific primer and fodder for conceivably many posts.
Thus in the course of the next few months, I will be going through each one of these topics, not as a way to rewrite, revise or critique the book, but to give my own take on the topics as presented, and perhaps ways where I might differ in approach. Most likely, though, I'll probably share my own experiences working with this badge and what opportunities for growth can be found within its pages. Moree to the point, I'm hoping to spur on some discussions with my son, as he needs to complete this one, too, hopefully in the same time period (as well as Personal Fitness; Family Life we have covered ;) ). So look for the Personal Management topic to appear under a Madd Money entry in the future. What's more, I'd like your feedback on this particular topic and your own approach to it.
Monday, November 24, 2008
Madd Money: The Challenge of Unique Blogging
OK, I confess, I am really a man of very limited individual ideas. Almost nothing I write about stems from any terribly unique or creative space. Most of the time, a blog post is spawned because someone else has posed a question, or has written about something similar. Every once in awhile, I get on a high horse about something because an activity in my own life has spurred me to think about something, but honestly, there’s very little out there that I am writing about that hasn’t been covered by a bout a zillion other bloggers (and yes, I know, there aren’t really a zillion bloggers out there ;) ).
I try my best to not deliberately filch other people’s posts, but I have to be honest... Many times an article or a day’s post is spawned because of another blog that I read that has a similar idea. My post a few days ago about sharing conversion moments was a direct development of my reading J.D. Roth’s “Get Rich Slowly” blog. His post wasn’t about conversion; it was about talking to parents and other about making sound financial choices, and how that can often be a difficult thing to do. In these cases, I want to make sure that I do not take any undue credit for something that isn’t really an original idea; I gave J.D. credit for the ideas because, really, his article spawned my own.
At the same time, I’m looking to try to find my own voice, and my own way of reflecting things that interest and intrigue me. Still, even when I do run across or consider something on my own, it’s a good bet that someone else has also already covered it. I find Dave Ramsey and Eric Tyson to provide what amounts to excellent yet slightly differing opinions on Personal Finance. I’ll be the first to admit that these two men and the principles they have written about are where much of my philosophy of investing stems from. There are many times where I realize that my sharing any kind of “wisdom” related to the Personal Finance could also be better served by my just saying “look, do a search for Dave Ramsey and Eric Tyson. Read what they have to say!” Of course, the same could be said for Trent over at Simple Dollar or J.D. at Get Rich Slowly. If they are covering all of this stuff already, why would anyone want to read what *I* have to say about any of this?
It’s taken me a while to understand this, but the reason I read Trent and J.D. and other bloggers is not for their ground-breaking knowledge or unique principles… I read them because they are very much like me… everyday, regular, non professional people interested in finance, that look to their own behavior and actions, and share their own experiments with others. In many cases, this sharing may show good choices, or it may show bad choices. Inevitably, though, it shows their choices in a way that allows me to see how everyday real people with real families and real issues deal with things. Trent is in Iowa, J.D. is in Oregon, so their take of course comes from the part of the country they are from. I’m from the San Francisco Peninsula, so of course my take comes from where I call home. Much of the country, and those who might read my words, may not find much inspiration from what I may say, because they don’t have the challenges I face living in the San Francisco Bay Area… but there are those that do live here, so its possible that my take on these things may have some impact after all :).
I try my best to not deliberately filch other people’s posts, but I have to be honest... Many times an article or a day’s post is spawned because of another blog that I read that has a similar idea. My post a few days ago about sharing conversion moments was a direct development of my reading J.D. Roth’s “Get Rich Slowly” blog. His post wasn’t about conversion; it was about talking to parents and other about making sound financial choices, and how that can often be a difficult thing to do. In these cases, I want to make sure that I do not take any undue credit for something that isn’t really an original idea; I gave J.D. credit for the ideas because, really, his article spawned my own.
At the same time, I’m looking to try to find my own voice, and my own way of reflecting things that interest and intrigue me. Still, even when I do run across or consider something on my own, it’s a good bet that someone else has also already covered it. I find Dave Ramsey and Eric Tyson to provide what amounts to excellent yet slightly differing opinions on Personal Finance. I’ll be the first to admit that these two men and the principles they have written about are where much of my philosophy of investing stems from. There are many times where I realize that my sharing any kind of “wisdom” related to the Personal Finance could also be better served by my just saying “look, do a search for Dave Ramsey and Eric Tyson. Read what they have to say!” Of course, the same could be said for Trent over at Simple Dollar or J.D. at Get Rich Slowly. If they are covering all of this stuff already, why would anyone want to read what *I* have to say about any of this?
It’s taken me a while to understand this, but the reason I read Trent and J.D. and other bloggers is not for their ground-breaking knowledge or unique principles… I read them because they are very much like me… everyday, regular, non professional people interested in finance, that look to their own behavior and actions, and share their own experiments with others. In many cases, this sharing may show good choices, or it may show bad choices. Inevitably, though, it shows their choices in a way that allows me to see how everyday real people with real families and real issues deal with things. Trent is in Iowa, J.D. is in Oregon, so their take of course comes from the part of the country they are from. I’m from the San Francisco Peninsula, so of course my take comes from where I call home. Much of the country, and those who might read my words, may not find much inspiration from what I may say, because they don’t have the challenges I face living in the San Francisco Bay Area… but there are those that do live here, so its possible that my take on these things may have some impact after all :).
Saturday, November 22, 2008
A Cause for "Conversion"?
Have you ever found yourself discovering something that makes a difference in your life? Something that, once you embrace it and you decide that “yes, this is something I can relate to” it changes everything that came before and profoundly alters the way that you look at life afterwards? Most people have these experiences many times in their lives. It can be as simple as discovering a new band that speaks to you in a special way and your appreciation for music is changed. It can be discovery of a new hobby or sport. It can be taking on a new career. For many, it can be making a determination to embrace their faith (or completely convert to another one). In fact, that’s the key word in most of these conversations, the idea of “converting” or being a convert.
Many times, we only use this word in the religious sense. A convert in the religious sphere is an easy thing to understand. When someone is born Jewish but later joins the Catholic Church (just using that as an example, no special reason, really) we say that that person is a “convert”. Likewise, my church (The Church of Jesus Christ of Latter-day Saints) also refers to all new members that were not born into the church as being “converts” when they are baptized. However, I think this term gets underutilized in this light, as it’s not an identity, but a process, and it’s a process that happens in many different places, activities and stages in life.
When we have any doubts, it helps to actually decide what a word means. Thank you, dictionary.com. CONVERT is a Latin word based on the word roots CON meaning “to” and VERTERE, meaning “turn around”. Thus, the word Convert implies more than just a change or a modification; it requires a physical interaction, one where a person, entity or thing has to actually do something to make the change.
Many things in my life can be said to be “conversion” moments for me. I consider myself a convert to the Church of Jesus Christ of Latter-day Saints, even though I was born into the church (I specifically consider myself a religious convert because I made an express decision at the age of 25 to specifically and purposefully life a religious life to the best of my ability). To some, I would really be considered a “reformed” Latter-day Saint, but I actually had to make a legitimate change in life, motivations and actions, a literal turning around, so I think convert still applies.
I am a convert to the sport of snowboarding. I made a conscientious decision to learn to ride, purchase the gear, and practice the sport until I became proficient at it. What’s more, I embraced the lifestyle and ethos of boarding. Now, I did not cease to be a skier in 1994, since I still know how to ski, and I can easily still pick up skis and go down the hill on them if I choose. However, I don’t, mainly because a day on skis is one less day on a snowboard, and frankly, that would make me sad (LOL!).
Some would say I am a convert to the practices of Native American tribes as relates to dancing and the knowledge I have gained concerning them. There is no mistake that I have been motivated to action to learn them, practice them and embrace the messages and inspiration they contain.
I also consider myself in a way a “convert” to the way that I handle my personal finances, in the sense that I do look to and apply principles I have learned from key sources (it almost sounds quasi-religious to say that I am a “Ramsey” follower or a “Tyson” follower, but it’s not a far stretch to say that the principles I have learned from Dave Ramsey and Eric Tyson are the ones I most often espouse and follow when I talk about or manage my own financial life).
Any change that “motivates you unto action” is ultimately one that gives a person a sense of power; it puts you squarely in the driver’s seat. Sometimes these changes can be so powerful and moving, they can be accomplished in a single day. Some, on the other hand, may take time and long periods of actual planning and deliberate execution. Ultimately, you reach a point to where you control the game, and that feeling of control is just plain awesome!
It’s not at all surprising that those of us who have these conversion moments want to share them with others. Of course, we are often disillusioned at times like this because, frankly, not everyone shares the same level of passion or enthusiasm as us about all of the things we are passionate about. This is true even within endeavors we have common ground with others.
Be it snowboarding, religion, The Total Money Makeover, or my irrepressible love of all things Yoko Kanno, I know not to be all that surprised when others look at me like I’m are a lunatic (or more often just politely humor me and my position). I may think what I have discovered is the greatest thing since sliced bread, but other people may be in different places about their habits and actions, whatever they may be. Sharing what we have learned or what we enjoy gets tricky in these spots, and it’s important to understand why. Some things hit people at an intensely personal level, and shake-ups of those paradigms can be deeply unsettling. It’s for this reason I tend to be careful when I talk about religion or personal finance, since it’s something so intensely personal and central to ones identity. I’m much less careful or concerned when I talk about activities, such as sports like snowboarding or activities like listening to music. The closer you get to ones own personal behavior and integrity (meaning what ultimately makes them tick), the harder it becomes to talk about change.
So how does one go about sharing their “conversion”, whatever it may be? J.D. over at “Get Rich Slowly” addressed this when it came to talking to family members about personal finance, but I think these ideas he described (with some tweaks from yours truly) work in all areas where we want to share what we are passionate about, even when it enters a sphere of “personal space” that may not be wholly welcome or desired by others:
First, Lead By Example (or Be the Example). The key take-home from this is that our actions speak way louder than our words do. Practice what you preach, and let others do the same thing. If you are exceptionally happy, successful, uplifted, cheerful, or otherwise engaged and such involvement intrigues others, people are going to ask what you are up to and what you are doing.
Next, Be Open to Answering Questions (but Just the Questions). I know that I am the type of person who, when someone asks what time it is, I tend to explain how a clock works (LOL!). If someone asks you about a hobby or activity you like doing, make a point to answer their question and answer it directly. Don’t assume they want to know more than the question they have asked. Try to be direct and answer just what they have asked. This has two benefits. First, it allows you to be a quick resource for the information they are after, and you can be seen as reliable. Second, this approach usually invites more questions. Again, do your best to answer just the question (don’t be cagey or evasive, but just focus on the questions asked)
Finally, Be Willing To Drop Subtle Hints. When I try to describe snowboarding to friends who don’t ride, I can either run down a list about the reasons I enjoy it, or I can suggest we go up to the snow together and just enjoy the day. Usually, I make it a point to pack an extra board and boots (this is not so effective if the person you are with isn’t the same size, of course). This way, the skier can see what I enjoy about my sport, it may lead to another round of questions, but most importantly, it gives them an immediate opportunity to try it out for themselves if they are so inclined.
Regardless of what we do and regardless of what the topic, activity or lifestyle is, most people don’t want to be “preached to” (well, my experience tells me that most people don’t want that; some do, but they seem to be a very small minority (LOL!) ). We want to feel like we are sharing a conversation with an equal, with a friend, with a colleague, and in that environment, we feel as though we can take to heart what the other person is saying. Whenever “preachy” attitudes or feelings (intended or not) come out, it creates an imbalance. Gone is the mutual respect and attempt at understanding, now it’s a matter of “I’m right and you’re wrong” or “this worked for me, so *you* need to do it this way, too!” Take the time and make the efforts necessary to be an equal to others, and you will not be one who is seen as looking to convert others to your way. Rather, you may find people converting to your approach and efforts on their own. Same desired results, way more enjoyable process :).
Many times, we only use this word in the religious sense. A convert in the religious sphere is an easy thing to understand. When someone is born Jewish but later joins the Catholic Church (just using that as an example, no special reason, really) we say that that person is a “convert”. Likewise, my church (The Church of Jesus Christ of Latter-day Saints) also refers to all new members that were not born into the church as being “converts” when they are baptized. However, I think this term gets underutilized in this light, as it’s not an identity, but a process, and it’s a process that happens in many different places, activities and stages in life.
When we have any doubts, it helps to actually decide what a word means. Thank you, dictionary.com. CONVERT is a Latin word based on the word roots CON meaning “to” and VERTERE, meaning “turn around”. Thus, the word Convert implies more than just a change or a modification; it requires a physical interaction, one where a person, entity or thing has to actually do something to make the change.
Many things in my life can be said to be “conversion” moments for me. I consider myself a convert to the Church of Jesus Christ of Latter-day Saints, even though I was born into the church (I specifically consider myself a religious convert because I made an express decision at the age of 25 to specifically and purposefully life a religious life to the best of my ability). To some, I would really be considered a “reformed” Latter-day Saint, but I actually had to make a legitimate change in life, motivations and actions, a literal turning around, so I think convert still applies.
I am a convert to the sport of snowboarding. I made a conscientious decision to learn to ride, purchase the gear, and practice the sport until I became proficient at it. What’s more, I embraced the lifestyle and ethos of boarding. Now, I did not cease to be a skier in 1994, since I still know how to ski, and I can easily still pick up skis and go down the hill on them if I choose. However, I don’t, mainly because a day on skis is one less day on a snowboard, and frankly, that would make me sad (LOL!).
Some would say I am a convert to the practices of Native American tribes as relates to dancing and the knowledge I have gained concerning them. There is no mistake that I have been motivated to action to learn them, practice them and embrace the messages and inspiration they contain.
I also consider myself in a way a “convert” to the way that I handle my personal finances, in the sense that I do look to and apply principles I have learned from key sources (it almost sounds quasi-religious to say that I am a “Ramsey” follower or a “Tyson” follower, but it’s not a far stretch to say that the principles I have learned from Dave Ramsey and Eric Tyson are the ones I most often espouse and follow when I talk about or manage my own financial life).
Any change that “motivates you unto action” is ultimately one that gives a person a sense of power; it puts you squarely in the driver’s seat. Sometimes these changes can be so powerful and moving, they can be accomplished in a single day. Some, on the other hand, may take time and long periods of actual planning and deliberate execution. Ultimately, you reach a point to where you control the game, and that feeling of control is just plain awesome!
It’s not at all surprising that those of us who have these conversion moments want to share them with others. Of course, we are often disillusioned at times like this because, frankly, not everyone shares the same level of passion or enthusiasm as us about all of the things we are passionate about. This is true even within endeavors we have common ground with others.
Be it snowboarding, religion, The Total Money Makeover, or my irrepressible love of all things Yoko Kanno, I know not to be all that surprised when others look at me like I’m are a lunatic (or more often just politely humor me and my position). I may think what I have discovered is the greatest thing since sliced bread, but other people may be in different places about their habits and actions, whatever they may be. Sharing what we have learned or what we enjoy gets tricky in these spots, and it’s important to understand why. Some things hit people at an intensely personal level, and shake-ups of those paradigms can be deeply unsettling. It’s for this reason I tend to be careful when I talk about religion or personal finance, since it’s something so intensely personal and central to ones identity. I’m much less careful or concerned when I talk about activities, such as sports like snowboarding or activities like listening to music. The closer you get to ones own personal behavior and integrity (meaning what ultimately makes them tick), the harder it becomes to talk about change.
So how does one go about sharing their “conversion”, whatever it may be? J.D. over at “Get Rich Slowly” addressed this when it came to talking to family members about personal finance, but I think these ideas he described (with some tweaks from yours truly) work in all areas where we want to share what we are passionate about, even when it enters a sphere of “personal space” that may not be wholly welcome or desired by others:
First, Lead By Example (or Be the Example). The key take-home from this is that our actions speak way louder than our words do. Practice what you preach, and let others do the same thing. If you are exceptionally happy, successful, uplifted, cheerful, or otherwise engaged and such involvement intrigues others, people are going to ask what you are up to and what you are doing.
Next, Be Open to Answering Questions (but Just the Questions). I know that I am the type of person who, when someone asks what time it is, I tend to explain how a clock works (LOL!). If someone asks you about a hobby or activity you like doing, make a point to answer their question and answer it directly. Don’t assume they want to know more than the question they have asked. Try to be direct and answer just what they have asked. This has two benefits. First, it allows you to be a quick resource for the information they are after, and you can be seen as reliable. Second, this approach usually invites more questions. Again, do your best to answer just the question (don’t be cagey or evasive, but just focus on the questions asked)
Finally, Be Willing To Drop Subtle Hints. When I try to describe snowboarding to friends who don’t ride, I can either run down a list about the reasons I enjoy it, or I can suggest we go up to the snow together and just enjoy the day. Usually, I make it a point to pack an extra board and boots (this is not so effective if the person you are with isn’t the same size, of course). This way, the skier can see what I enjoy about my sport, it may lead to another round of questions, but most importantly, it gives them an immediate opportunity to try it out for themselves if they are so inclined.
Regardless of what we do and regardless of what the topic, activity or lifestyle is, most people don’t want to be “preached to” (well, my experience tells me that most people don’t want that; some do, but they seem to be a very small minority (LOL!) ). We want to feel like we are sharing a conversation with an equal, with a friend, with a colleague, and in that environment, we feel as though we can take to heart what the other person is saying. Whenever “preachy” attitudes or feelings (intended or not) come out, it creates an imbalance. Gone is the mutual respect and attempt at understanding, now it’s a matter of “I’m right and you’re wrong” or “this worked for me, so *you* need to do it this way, too!” Take the time and make the efforts necessary to be an equal to others, and you will not be one who is seen as looking to convert others to your way. Rather, you may find people converting to your approach and efforts on their own. Same desired results, way more enjoyable process :).
Thursday, November 20, 2008
Madd Money: Buying Who We Believe Ourselves To Be
Over the years, I’ve had a chance to look at and see the areas that I spend my money on, and what areas really matter to me and what ones don’t so much. I think it’s interesting to see what holds our attentions and our passions, and how, at least with me, there are clear trends and clear periods where certain aspects of my life are literally defined by the things that I own, purchase or otherwise accumulated.
My first wave of “rampant consumerism” was, without a doubt, my period in high school where I decided to try my hand at being a model. In addition to pictures, I actually made, for the first time, a conscious decision to “invest” in clothes and in a look that would carry over to my “career”. Looking back, it was a bit silly and a bit extreme. For a time, I actually allowed myself to be swayed by the labels I wore. I willingly incurred debt and spent way more than I needed to on clothes that could easily have been had from different sources and, realistically, looked exactly the same. That’s the 40 year old me speaking, of course. At the time, when I was 16, I had a very different mindset, and I felt somehow less of a person because I didn’t spend $175.00 for a Guess Denim and leather jacket (this was in 1984, I don’t even want to think what a jacket like that would cost today!).
My second “identity expense” period was, without question, my time as a musician. This was when I really went into overdrive and purchased just about *everything* on credit. This was a period of my life when I couldn’t fathom the idea of waiting for something. If I wanted it, I wanted it now, or I needed it now. I truly looked at life as a matter of not “how much” but how much a month, and can I handle it?” Opportunity costs for the future was a very foreign idea to me. My attitude was one of “it’s just money, I can make more”. Today, I see the remnants of all that purchasing, some of it very tangible (like my equipment) and some of it ephemeral and long gone… stage clothes, for example… I realized when I looked at old pictures that the only two things that I have left from that period of time that I wore are a broken off piece of Amethyst crystal that used to be part of a bolo tie, and a bone bead hat band I used to wear. As a way to “break with the past”, I made a choice to disassemble that hat band and I refashioned it into a bone choker for my son, which he now wears when he does Dance Team or ceremonial appearances with Order of the Arrow. Recordings of my bands material is now up on myspace, so in that sense, the money that I (we) paid to make those still reaps some small dividends, in that people nearly twenty years later can hear what we once did. All else, though (the flyers, the travel, the “schmoozing expenses”, etc., it’s all gone in the vapor of time, and in many ways, exists no where else other than my memories and a lot of old photographs.
My third “big wave” came when I decided to compete as a snowboarder. Now, understand, I use the term rather loosely here. Shaun Palmer and Craig Kelly never had a thing to worry about from me (LOL!). Still, I wanted for a time to be a part of the snowboarding world (and during my years as a competitor in the USASA and as a writer of the “Geezer X Chronicles”) I had that chance. This was during a period of rapid expansion and growth of my company, and I was reaping the benefits of such a life. To that end, I wanted to be philanthropic and I also wanted to experience the best of what technology was available at the time. When I tell people that I at one point in time was buying ten boards a year, they look at me incredulously (and I can’t say I blame them). To be fair, many of those boards ended up being donated to learn to ride programs, and I even used a board as a bargaining chip to help a boy earn his Eagle Scout award (first and last time I ever did that (LOL!) ). I realized that I was at a stage in my life where I felt that, somehow, I could “give back”, but at the same time, enjoy the fruits of what I was doing to their fullest. What’s proven to be interesting over the past several years, since I retired from competition, is that my favorite and most used pieces of equipment are not the top flight flagship items, but the “rock board” I bought for $100 just so I had a “beater” to drive in less than optimal conditions. That “beater” is now ten years old, and it’s till my most used and favorite piece of equipment. I went through a spate of purchases for clothing related to snowboarding (oh, you have no idea just how much my identity was tied to this sport for so many years) yet the pants and jacket I wear most often were the ones given to me by two dear friends as a way of appreciation for donating snowboards as a raffle item to their series. It’s for this reason that I will not part with them or replace them until they physically wear out. The clothes are just that, they are a jacket and a pair of pants… but it’s the connection to the people that gave them to me, and what that relationship meant (and still means) to me that cause me to still wear them nearly ten years later.
Today, Scouting is far and away my biggest series of ongoing expenses, and that makes sense, because outside of my being a husband and a father, my strongest piece of “external identity” is that of a Scouter. It is in many ways my finally coming to grips with the work that I want to have define me and stand as my overall legacy of my time here on Earth. The old Forrest Whitcraft quote comes to mind here… “A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove...but the world may be different because I was important in the life of a child.” Ultimately, that is what defines me, and it explains a lot why that is where the bulk of my discretionary money goes.
The things we spend our money on are ultimately reflections of who we are and what matters the most to us, if we are willing to step back and take a cold, hard look at it. We don’t really spend our money as mindlessly as many think. Most of us actually spend our money with great purpose and intent, even if we’re not 100% sure what that intent actually is. Thus, to really grab that tiger by the tail and ultimately gain control of it, spend some time and decide what your money and where you spend it actually says about you… and be prepared to question your findings, because you may ultimately decide that, while your stuff many not literally define you, it can speak volumes about you. Make commitments to either embrace or change those attributes and purposes, and your relationship with money will also most certainly be effected.
My first wave of “rampant consumerism” was, without a doubt, my period in high school where I decided to try my hand at being a model. In addition to pictures, I actually made, for the first time, a conscious decision to “invest” in clothes and in a look that would carry over to my “career”. Looking back, it was a bit silly and a bit extreme. For a time, I actually allowed myself to be swayed by the labels I wore. I willingly incurred debt and spent way more than I needed to on clothes that could easily have been had from different sources and, realistically, looked exactly the same. That’s the 40 year old me speaking, of course. At the time, when I was 16, I had a very different mindset, and I felt somehow less of a person because I didn’t spend $175.00 for a Guess Denim and leather jacket (this was in 1984, I don’t even want to think what a jacket like that would cost today!).
My second “identity expense” period was, without question, my time as a musician. This was when I really went into overdrive and purchased just about *everything* on credit. This was a period of my life when I couldn’t fathom the idea of waiting for something. If I wanted it, I wanted it now, or I needed it now. I truly looked at life as a matter of not “how much” but how much a month, and can I handle it?” Opportunity costs for the future was a very foreign idea to me. My attitude was one of “it’s just money, I can make more”. Today, I see the remnants of all that purchasing, some of it very tangible (like my equipment) and some of it ephemeral and long gone… stage clothes, for example… I realized when I looked at old pictures that the only two things that I have left from that period of time that I wore are a broken off piece of Amethyst crystal that used to be part of a bolo tie, and a bone bead hat band I used to wear. As a way to “break with the past”, I made a choice to disassemble that hat band and I refashioned it into a bone choker for my son, which he now wears when he does Dance Team or ceremonial appearances with Order of the Arrow. Recordings of my bands material is now up on myspace, so in that sense, the money that I (we) paid to make those still reaps some small dividends, in that people nearly twenty years later can hear what we once did. All else, though (the flyers, the travel, the “schmoozing expenses”, etc., it’s all gone in the vapor of time, and in many ways, exists no where else other than my memories and a lot of old photographs.
My third “big wave” came when I decided to compete as a snowboarder. Now, understand, I use the term rather loosely here. Shaun Palmer and Craig Kelly never had a thing to worry about from me (LOL!). Still, I wanted for a time to be a part of the snowboarding world (and during my years as a competitor in the USASA and as a writer of the “Geezer X Chronicles”) I had that chance. This was during a period of rapid expansion and growth of my company, and I was reaping the benefits of such a life. To that end, I wanted to be philanthropic and I also wanted to experience the best of what technology was available at the time. When I tell people that I at one point in time was buying ten boards a year, they look at me incredulously (and I can’t say I blame them). To be fair, many of those boards ended up being donated to learn to ride programs, and I even used a board as a bargaining chip to help a boy earn his Eagle Scout award (first and last time I ever did that (LOL!) ). I realized that I was at a stage in my life where I felt that, somehow, I could “give back”, but at the same time, enjoy the fruits of what I was doing to their fullest. What’s proven to be interesting over the past several years, since I retired from competition, is that my favorite and most used pieces of equipment are not the top flight flagship items, but the “rock board” I bought for $100 just so I had a “beater” to drive in less than optimal conditions. That “beater” is now ten years old, and it’s till my most used and favorite piece of equipment. I went through a spate of purchases for clothing related to snowboarding (oh, you have no idea just how much my identity was tied to this sport for so many years) yet the pants and jacket I wear most often were the ones given to me by two dear friends as a way of appreciation for donating snowboards as a raffle item to their series. It’s for this reason that I will not part with them or replace them until they physically wear out. The clothes are just that, they are a jacket and a pair of pants… but it’s the connection to the people that gave them to me, and what that relationship meant (and still means) to me that cause me to still wear them nearly ten years later.
Today, Scouting is far and away my biggest series of ongoing expenses, and that makes sense, because outside of my being a husband and a father, my strongest piece of “external identity” is that of a Scouter. It is in many ways my finally coming to grips with the work that I want to have define me and stand as my overall legacy of my time here on Earth. The old Forrest Whitcraft quote comes to mind here… “A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove...but the world may be different because I was important in the life of a child.” Ultimately, that is what defines me, and it explains a lot why that is where the bulk of my discretionary money goes.
The things we spend our money on are ultimately reflections of who we are and what matters the most to us, if we are willing to step back and take a cold, hard look at it. We don’t really spend our money as mindlessly as many think. Most of us actually spend our money with great purpose and intent, even if we’re not 100% sure what that intent actually is. Thus, to really grab that tiger by the tail and ultimately gain control of it, spend some time and decide what your money and where you spend it actually says about you… and be prepared to question your findings, because you may ultimately decide that, while your stuff many not literally define you, it can speak volumes about you. Make commitments to either embrace or change those attributes and purposes, and your relationship with money will also most certainly be effected.
Monday, November 10, 2008
Madd Money: Feel Like An Idiot For Following the Rules?
I try my best to steer clear of politics in general since:
a. I’m somewhat non-partisan; I’m an equal opportunity cynic to both major parties, though my registration and general sympathies are as a Democrat (and a moderate one at that)
and
b. I tend to believe that we as people have way more power over our own lives than any politician or government entity.
However, I’m looking around at the way things have transpired in the past few months, and the largesse that is being offered (which we as taxpayers are footing the bill) to individuals and institutions, and I’m getting to be more than a little bit frustrated at a few of these turns of events. See, it’s interesting that the government is rushing to the aid of people and institutions who effectively cooked their own goose, whether through ignorance, negligence or greed (probably a combination of all three). I’m not a completely heartless or clueless git; I realize that not doing anything could cause major repercussions in both the domestic and world economy. Yet I find it ironic that people who made a bad deal and are now suffering for making a bad deal are looking at getting some “relief”, while those of us who worked hard, played by the rules, and lived within our means the whole time will get nothing, nada, zilch, butkis. In fact we will have to bear the burden of these people's mistakes!
Back to the “I’m not stupid” part (well, I pretend to not be, but jury is still out as to whether or not that statement is entirely true), I happen to be in a lucky situation. First, I was fortunate in that I was able to make a large enough down payment to have a small mortgage and, second, through various means over the past ten years, I’ve been able to pay it all off. What that means is that I have 100% equity in my house. However, I don’t treat my house as an “equity position” or an “asset”, I treat it as exactly what it is, paid-for shelter for me and my family. That’s its worth, and what it is worth in the marketplace on any given day really doesn’t matter too much to me. What does matter to me, though, is that, even though I own the house free and clear, I could have it taken away from me if something doesn’t happen. That is, if I lose my job and can no longer afford to pay my property taxes (kinda’ sucks that I can own my own home free and clear but still have to pay rent to the government, and they can take my home if I can’t or don’t pay it).
Even though I have a fully paid for house, I can’t just sit around and be complacent; if I lose my job and cannot get another one sufficient to pay my property taxes, I could lose my home. For those curious, I bought my house in 1999 at the peak of the dot-com boom, after a run-up of housing values, but nowhere near the psychotic level of run-up that followed the dot-com bust. Translation: my property taxes are substantial, and take up a good percentage of my take home pay. I still count on having a job to keep the roof over my head, and when all is said and done, I’d like to keep that job.
Whether or not I like the bailouts of Wall Street, Detroit, homeowners or people with credit card debt that they cant pay for anymore, I have one thing going for me that they do not have, and that’s an almost total lack of anxiety of my own situation. Sure, I was responsible and I took care of my own house and didn’t spend beyond my means (actually, that’s not entirely true, but I’ll save that confession for another post coming soon), but we made it a point to pay for things with assets we had on hand rather than rack up debt. We made a massive down payment for our house that we saved a decade to produce, and we took a mortgage that was no more than twice my annual earnings and that could be paid back with no more than 25% of my monthly take home pay (as related to a fix rate, 30 year mortgage… you know, the rate that was once upon a time touted as what a responsible borrower would take and no more). Yes, people will be getting help. Yes, they may see some debt forgiveness, and yes, they may walk away from some obligations. Many will also walk away from these obligations in a state they probably wouldn’t want to walk away as: ruined.
That’s a word that doesn’t get used much anymore in our politically correct climate of today, but my grandparents used that word a lot, and I still know what it means. To be ruined is to have your credit, your reputation and your name damaged. Credit ratings for anyone who goes through these plans will be trashed for years. Their own reputations may take a hit because of this. Once upon a time, when a man was determined to be "ruined", he often saved face by committing suicide. Now realize, I’m not heartless (really, I swear!), and I'm hardly advocating anyone off themselves for geting into a bad financial situation, but it contrasts the fact that, for many, one’s name and one’s word are less valuable than they used to be. So yes, I guess I won’t be getting any help or any “bailout” from the Government over this, and frankly, that suits me just fine.
Still, before I get too high on my horse and run the risk of being hoisted upon my own petard (wow, now *that's* mixing metaphors, baybee (LOL!)), I just have to remind myself that, if we get into a spot where unemployment runs rampant, and I find myself out of work because of no bailout, with little hope of finding additional work, and I have to give my house up because our system is so broken that even those of us who played by the rules and honored our obligations can’t even pull it off... well, I guess I’m willing to swallow that bitter pill. I come from a line of family that put a lot of emphasis on “protecting one’s name”, and as for me and my house, we intend to continue playing by the rules, meeting our obligations wherever they may exist, and doing all we can to hang on to “our good name”. Here’s hoping that the current round of unpleasantness and the less than pleasant approaches to solving it allow the majority of us to do exactly that.
a. I’m somewhat non-partisan; I’m an equal opportunity cynic to both major parties, though my registration and general sympathies are as a Democrat (and a moderate one at that)
and
b. I tend to believe that we as people have way more power over our own lives than any politician or government entity.
However, I’m looking around at the way things have transpired in the past few months, and the largesse that is being offered (which we as taxpayers are footing the bill) to individuals and institutions, and I’m getting to be more than a little bit frustrated at a few of these turns of events. See, it’s interesting that the government is rushing to the aid of people and institutions who effectively cooked their own goose, whether through ignorance, negligence or greed (probably a combination of all three). I’m not a completely heartless or clueless git; I realize that not doing anything could cause major repercussions in both the domestic and world economy. Yet I find it ironic that people who made a bad deal and are now suffering for making a bad deal are looking at getting some “relief”, while those of us who worked hard, played by the rules, and lived within our means the whole time will get nothing, nada, zilch, butkis. In fact we will have to bear the burden of these people's mistakes!
Back to the “I’m not stupid” part (well, I pretend to not be, but jury is still out as to whether or not that statement is entirely true), I happen to be in a lucky situation. First, I was fortunate in that I was able to make a large enough down payment to have a small mortgage and, second, through various means over the past ten years, I’ve been able to pay it all off. What that means is that I have 100% equity in my house. However, I don’t treat my house as an “equity position” or an “asset”, I treat it as exactly what it is, paid-for shelter for me and my family. That’s its worth, and what it is worth in the marketplace on any given day really doesn’t matter too much to me. What does matter to me, though, is that, even though I own the house free and clear, I could have it taken away from me if something doesn’t happen. That is, if I lose my job and can no longer afford to pay my property taxes (kinda’ sucks that I can own my own home free and clear but still have to pay rent to the government, and they can take my home if I can’t or don’t pay it).
Even though I have a fully paid for house, I can’t just sit around and be complacent; if I lose my job and cannot get another one sufficient to pay my property taxes, I could lose my home. For those curious, I bought my house in 1999 at the peak of the dot-com boom, after a run-up of housing values, but nowhere near the psychotic level of run-up that followed the dot-com bust. Translation: my property taxes are substantial, and take up a good percentage of my take home pay. I still count on having a job to keep the roof over my head, and when all is said and done, I’d like to keep that job.
Whether or not I like the bailouts of Wall Street, Detroit, homeowners or people with credit card debt that they cant pay for anymore, I have one thing going for me that they do not have, and that’s an almost total lack of anxiety of my own situation. Sure, I was responsible and I took care of my own house and didn’t spend beyond my means (actually, that’s not entirely true, but I’ll save that confession for another post coming soon), but we made it a point to pay for things with assets we had on hand rather than rack up debt. We made a massive down payment for our house that we saved a decade to produce, and we took a mortgage that was no more than twice my annual earnings and that could be paid back with no more than 25% of my monthly take home pay (as related to a fix rate, 30 year mortgage… you know, the rate that was once upon a time touted as what a responsible borrower would take and no more). Yes, people will be getting help. Yes, they may see some debt forgiveness, and yes, they may walk away from some obligations. Many will also walk away from these obligations in a state they probably wouldn’t want to walk away as: ruined.
That’s a word that doesn’t get used much anymore in our politically correct climate of today, but my grandparents used that word a lot, and I still know what it means. To be ruined is to have your credit, your reputation and your name damaged. Credit ratings for anyone who goes through these plans will be trashed for years. Their own reputations may take a hit because of this. Once upon a time, when a man was determined to be "ruined", he often saved face by committing suicide. Now realize, I’m not heartless (really, I swear!), and I'm hardly advocating anyone off themselves for geting into a bad financial situation, but it contrasts the fact that, for many, one’s name and one’s word are less valuable than they used to be. So yes, I guess I won’t be getting any help or any “bailout” from the Government over this, and frankly, that suits me just fine.
Still, before I get too high on my horse and run the risk of being hoisted upon my own petard (wow, now *that's* mixing metaphors, baybee (LOL!)), I just have to remind myself that, if we get into a spot where unemployment runs rampant, and I find myself out of work because of no bailout, with little hope of finding additional work, and I have to give my house up because our system is so broken that even those of us who played by the rules and honored our obligations can’t even pull it off... well, I guess I’m willing to swallow that bitter pill. I come from a line of family that put a lot of emphasis on “protecting one’s name”, and as for me and my house, we intend to continue playing by the rules, meeting our obligations wherever they may exist, and doing all we can to hang on to “our good name”. Here’s hoping that the current round of unpleasantness and the less than pleasant approaches to solving it allow the majority of us to do exactly that.
Thursday, November 6, 2008
Madd Money: What's Helped Save You the Most Money?
Trent over at The Simple Dollar had an entry yesterday about describing the most concrete things that he has done to save money. I liked his answer, as it's one that I can totally relate to and agree with: use the public library instead of going to the book store and directly purchasing books and DVDs. For Trent, this was a concrete example that passed on some tremendous savings to him. He described an $80.00 per month book habit that was reduced to close to nothing (I can't say the service is 100% free because the public library is one of those things that our tax dollars pay for, so we do have a direct payment plan into access at our public library, we just don't know how much of it actually goes there :) ). While I do not have that big a habit, I most certainly had a love affair with book shopping at Barnes and Noble, with fits and starts and bank statements with the store's name emblazoned on it.
Over the last several months, I decided to give the public library a lot more of my reading and DVD viewing business, and the results have been tremendous. Our expenditures on books and DVDs has gone *way* down. Now granted, the library doesn't have every movie or every book I want to examine, but they sure do have a lot of them, and many times I get to see books or DVD's I'd otherwise never have considered. It's too early to say for sure how much we have saved, but judging from the lack of purchases from Barnes and Noble over the past few months, I would say we've probably "saved" at least $300 dollars.
That got me thinking more about Trent's article and trying to figure out concrete things that I have done to help me save money. This is by no means an exhaustive list, but just some areas I personally have seen a difference in both changing my habits and being aware of what I am doing. In some cases, it has allowed me to apply money to different areas where I hadn’t before:
1. Clothing: I’ve made the decision to go with as much of a minimalist wardrobe as possible. Thus, I’ve tried my best to imagine living for two weeks out of a suitcase without option for doing laundry. Whatever can fit in that suitcase, that’s my wardrobe (and that includes two suits that normally don’t get used for anything else other than attending church and church service opportunities, but that’d enough to justify both of them). To this end, I try to pick items that have a classic quality to them and will be able to be worn for many years without retooling or restyling. Net result is that, each year, I spend no more than $500 total on clothing, and some years I spend even less. Also, I tend to look for items that, while not necessarily the cheapest, I have a good feeling will actually last me a long time.
2. Food: I almost never eat out while I am at work. I very nearly always take care of my own food, either from home or shopping in a store to have staple items available. Granted, there are the times the company springs for food, and I certainly take advantage of that (LOL!), but I make it a policy to shop as little as possible when I’m downtown. Also, I'm trying to really make a point of spending the least amount of money possible of food items that just I consume. Thus, when I go grocery shopping for items to make meals out of, I almost always buy generics, I but items in bulk , and I do my best to combine them and set them aside to be used when I need them. I'm also cutting down on meats and other expensive foods, and going with more vegetables and lover priced alternatives. I like to have a varied diet and want to have some fun with the food I eat, but I've realized I don't need to go overboard on expensive meats, as there are often good low priced alternatives.
3. Entertainment: I’ve definitely pared down this area considerably over the years. I used to be the first in line to grab up several video games that I know I’d love to play… problem is that, much of the time, I’d never get around to playing them. I have several games that are on my “to do” list, and have been there now for close to three years. I’ve heeded this attribute in myself, and I’ve decided to be *very* hardcore about the games I buy. Now, if there is no immediate time frame to play it, I don’t buy it, no mater how rare or unique I think the game might be. In general, if I’m not going to play it for a year, it’s likely to be a title I can pick up used at the local game store. Also, as one who loves video game strategy guides (more for the back story and the additional art galleries related to the titles rather than for the specific strategies offered), I’ve made it a point to also scale back here. I only buy the guide if, indeed, the game in question has enough additional artwork and back story items that I will, indeed go back to it again and again to enjoy those things. Otherwise, if I truly only want game hints, I use sites like GameFAQs to fill that need now. DVDs now mostly come courtesy of my public library.
4. Work and Commute: I am overjoyed that I made the decision a number of years ago to work in San Francisco. While I still have commute expenses, they are considerably less than when I used to work in San Jose or Redwood City. My drive to my train station is 4 miles round trip, and on some days, that’s the only driving I do. Were I to live in an area with flatter terrain (my house happens to be near the top of a pretty substantial hill in my town ), I’d totally consider commuting by bike to and from the train station. Perhaps that’s in my future one of these days, but I’ll need to get into better shape first (LOL!). the fact that I use the Bart Smart Card, which is attached directly to my company’s transportation Flexible Spending Account, also helps to insure that I have tax-free funds to help pay for the commuting.
5. “Keep Us Honest” Accounts: I’ve found that having set these up and sticking to them religiously to be a very valuable thing for us to do. Our ROTH IRA’s, my company’s 401K’s and our children’s 529 plans are all areas that we invest in each pay period, and we make it a point to keep to our agreed-to percentages. We have not automated this process yet, because we want to make sure that we are all clear on the fact that we are adding the amounts that we agree to and that we are comfortable with for these purposes. What’s great about these accounts is that, once the money is in there, we can’t get to it unless its for the defined purpose (college for the kids) or we reach the appropriate age for retirement fund distributions.
Some of these are actual concrete steps taken to help us save money and hang onto more than we spend. Some of these areas are actually more psychological and behavioral rather than just a list of tips to do to save money. Of course, may times, that’s exactly what we need to make the changes necessary. By making sure that we are aware of what we are doing, and are in the correct mind set to do what we want to do, but be open to ways where we can do what we want without having to pay a premium for the experience. So let me know… what are some of the things you have done, whether it be psychological or totally physically tangible, to help you save more of your money over time?
Over the last several months, I decided to give the public library a lot more of my reading and DVD viewing business, and the results have been tremendous. Our expenditures on books and DVDs has gone *way* down. Now granted, the library doesn't have every movie or every book I want to examine, but they sure do have a lot of them, and many times I get to see books or DVD's I'd otherwise never have considered. It's too early to say for sure how much we have saved, but judging from the lack of purchases from Barnes and Noble over the past few months, I would say we've probably "saved" at least $300 dollars.
That got me thinking more about Trent's article and trying to figure out concrete things that I have done to help me save money. This is by no means an exhaustive list, but just some areas I personally have seen a difference in both changing my habits and being aware of what I am doing. In some cases, it has allowed me to apply money to different areas where I hadn’t before:
1. Clothing: I’ve made the decision to go with as much of a minimalist wardrobe as possible. Thus, I’ve tried my best to imagine living for two weeks out of a suitcase without option for doing laundry. Whatever can fit in that suitcase, that’s my wardrobe (and that includes two suits that normally don’t get used for anything else other than attending church and church service opportunities, but that’d enough to justify both of them). To this end, I try to pick items that have a classic quality to them and will be able to be worn for many years without retooling or restyling. Net result is that, each year, I spend no more than $500 total on clothing, and some years I spend even less. Also, I tend to look for items that, while not necessarily the cheapest, I have a good feeling will actually last me a long time.
2. Food: I almost never eat out while I am at work. I very nearly always take care of my own food, either from home or shopping in a store to have staple items available. Granted, there are the times the company springs for food, and I certainly take advantage of that (LOL!), but I make it a policy to shop as little as possible when I’m downtown. Also, I'm trying to really make a point of spending the least amount of money possible of food items that just I consume. Thus, when I go grocery shopping for items to make meals out of, I almost always buy generics, I but items in bulk , and I do my best to combine them and set them aside to be used when I need them. I'm also cutting down on meats and other expensive foods, and going with more vegetables and lover priced alternatives. I like to have a varied diet and want to have some fun with the food I eat, but I've realized I don't need to go overboard on expensive meats, as there are often good low priced alternatives.
3. Entertainment: I’ve definitely pared down this area considerably over the years. I used to be the first in line to grab up several video games that I know I’d love to play… problem is that, much of the time, I’d never get around to playing them. I have several games that are on my “to do” list, and have been there now for close to three years. I’ve heeded this attribute in myself, and I’ve decided to be *very* hardcore about the games I buy. Now, if there is no immediate time frame to play it, I don’t buy it, no mater how rare or unique I think the game might be. In general, if I’m not going to play it for a year, it’s likely to be a title I can pick up used at the local game store. Also, as one who loves video game strategy guides (more for the back story and the additional art galleries related to the titles rather than for the specific strategies offered), I’ve made it a point to also scale back here. I only buy the guide if, indeed, the game in question has enough additional artwork and back story items that I will, indeed go back to it again and again to enjoy those things. Otherwise, if I truly only want game hints, I use sites like GameFAQs to fill that need now. DVDs now mostly come courtesy of my public library.
4. Work and Commute: I am overjoyed that I made the decision a number of years ago to work in San Francisco. While I still have commute expenses, they are considerably less than when I used to work in San Jose or Redwood City. My drive to my train station is 4 miles round trip, and on some days, that’s the only driving I do. Were I to live in an area with flatter terrain (my house happens to be near the top of a pretty substantial hill in my town ), I’d totally consider commuting by bike to and from the train station. Perhaps that’s in my future one of these days, but I’ll need to get into better shape first (LOL!). the fact that I use the Bart Smart Card, which is attached directly to my company’s transportation Flexible Spending Account, also helps to insure that I have tax-free funds to help pay for the commuting.
5. “Keep Us Honest” Accounts: I’ve found that having set these up and sticking to them religiously to be a very valuable thing for us to do. Our ROTH IRA’s, my company’s 401K’s and our children’s 529 plans are all areas that we invest in each pay period, and we make it a point to keep to our agreed-to percentages. We have not automated this process yet, because we want to make sure that we are all clear on the fact that we are adding the amounts that we agree to and that we are comfortable with for these purposes. What’s great about these accounts is that, once the money is in there, we can’t get to it unless its for the defined purpose (college for the kids) or we reach the appropriate age for retirement fund distributions.
Some of these are actual concrete steps taken to help us save money and hang onto more than we spend. Some of these areas are actually more psychological and behavioral rather than just a list of tips to do to save money. Of course, may times, that’s exactly what we need to make the changes necessary. By making sure that we are aware of what we are doing, and are in the correct mind set to do what we want to do, but be open to ways where we can do what we want without having to pay a premium for the experience. So let me know… what are some of the things you have done, whether it be psychological or totally physically tangible, to help you save more of your money over time?
Monday, November 3, 2008
Madd Money: Sending Your Kids to a Community College First?
I started off my college years at a Community College in Pleasant Hill called Diablo Valley College. For the record, I hated my first years there, but that's because I approached it all from the wrong attitude. I always thought that good, smart and rich kids went to four years schools. Stupid, lazy and poor kids went to community colleges. Looking back, I now realize that I was really stupid for thinking that way. Since my first years at Diablo Valley College, I've had the opportunities to attend two additional community colleges, one University of California extension and the competion of a bachelors degree program through University of Phoenix.
Much of our educational programming has been to look to the four year Universities first and foremost. This blog post intends to shake up that thinking and I'll present my reasons why I think we should.
Having now attended three different community colleges for various reasons (most of them having to do with proximity to work), I found that you can take some very good courses up front for very little money. The added bonus is that, in most cases, these classes are close to home, i.e. the family home. Why pay room and board, plus an inflated tuition fee, to take classes like Probability and Statistics, American History or Calculus? Why go away so that you can take Intro to C Programming, Macrobiology, Chemistry or any number of other early exploratory general education related courses? If one were to do a purely economic breakdown, four semesters at a well rated community college would perhaps cost about $2K when all is said and done, including tuition, books and miscellaneous expenses, compared with, potentially, $20K to $30K at a private institution (not counting room and board) or $10K to $15K at a state school (not counting room and board).
Community colleges allow the youth in question to still live at home and have a bit of a "maturation accounting" take place. In short, you can see if your kid is truly ready to handle being off on their own for an extended period. I came to the conclusion that the stupidest thing my parents could have done with me when I was seventeen was to send me off someplace all by myself without any controls or supervision. Of course, I might have made radically different choices, but I have a feeling my head wasn't in the game at that point anyway, so why send me halfway across the country to figure that out?
Since I am hoping that my son will be turning in mission papers after just one year in school, it seems to make sense to help him prepare at home, knock out the first year close to home, focus on his mission, have him come back from that experience, knock out any remaining GE requirements, and then transfer to the school of his choice at that point, where the full value of the school dollars will be going to the maximum of his determined educational goals. My daughters will not be considering missions until they are 21, which would be well into their Junior or Senior year of college, so this line of reasoning isn't as warranted.
Now, with all of this, there are other areas where I would absolutely suggest it is totally worth starting out at a four year institution, especially if the goal is to get a student into a Church School (yes, for me the draw of my children attending any of the Brigham Young University campuses or Southern Virginia University is entirely because they are schools run by and populated by members of the Church of Jesus Christ of Latter-day Saints). A large percentage of a BYU or SVU education is the various Religion courses, which, while offered in Instutute in many other campuses and through CES to students all over the country and the world, are not at the same level as what is offered at a true church school. Likewise, after a lifetime of living in an "outpost" related to the church, there's a genuine benefit to surrounding ones self with other members of the church (of course, this is a double edged sword. I used to believe that there were problems being near too few active Latter-day Saints. I've since learned there are plenty of challenges related to having too many LDS members surrounding you, too. I guess mileage varies on that particular issue :) ). There is also a tremendous value to networking with other people, and getting to know them and their life experiences, and on the whole, it may be best to have those life experiences be with members of the same faith, who share similar values, in communities that are, shall we say, less "tempting" than others (Provo, Rexburg, Laie, and Buena Vista are not exactly hotbeds of ribaldry :) ).
Ultimately, as I've explained to my kids, it all depends on what you ultimately want to do, where you ultimately want to work, and what you really care about when all is said and done. A college education and degree is not necessarily a fast path to a job. You *can* work just fine without one (I did for close to twenty years, though the first six were quite lean ones because I didn't know what I wanted to do. Once I got into tech and doing QA, then I was able to grab tight and develop like a maniac). There's no question that getting a degree helps give the person a well rounded education, and can help fill the gaps a practical, seat of your pants approach like I took produces.
In most careers, it doesn't matter where you start college, just where you finish. Nobody looks at your transcripts or resume and says "oh, look, you attended Diablo Valley College for your first two years of school. That's gonna' cost you, son!" No, they see "ah, Bachelors of Science from Brigham Young University" or "hey, you got your degree in Finance at U.C. Irvine", or in my case "cool, you got you BS In Information Technology through the University of Phoenix in 2005, good work going back and finishing that!" Interestingly enough, the president of my company found a lot of value in my story of how I learned and the schools I went to previously. He asked me what I did before 2003 through 2005, since the only education on my resume was my actual Bachelors degree. I told him the convoluted path, and the various community colleges I attended and what I studied at each. His answer was "you should include that! It shows that you've had a broad exposure to a lot of different educational experiences, and that's definitely worth commenting on.”
Unless you plan on going into medicine, law or some other very specialized career, where you graduate from is almost not relevant, provided it is from a properly accredited school. What is is the fact that you did graduate, and that you have a work ethic that can get you noticed. As to my son and daughters, I've already made it very clear what will influence the decisions as to where they go and when they go (an acceptance letter from a school of choice will not be the end of the discussion, not by a long shot). The first is their overall grades and the courses that they take along the way. The second will be their own personal financial and personal management acumen. Proof of sound personal management over an extended period of time will be a prerequisite to going away to school. Third will be the full time job they will take on starting the end of their sophomore year, which will be applying for scholarships by the truckload. I have my friend Scott to thank for this suggestion... he made it his full time job from the end of his sophomore year through the end of his senior year and beyond to apply for every conceivable scholarship he had the potential to apply for, somewhere in the thousands. The net result over the course of several years was the fact that he paid for both his bachelors and his masters degrees with scholarship money, as well as room and board for that entire time, and he never had to ask his parents for any money related to his schooling.
I have committed to paying for college to as much of the level as I can (and I think we can probably cover it for all of the kids when their times come) but I've decided that I'm not going to just foot the bill for them. I learned through my own father making it very easy for me to skate through school with no effort or stake required on my part that I didn't really appreciate it, and subsequently I didn't put much effort into it. When I went back to school in 2003, it was mostly on my dime; my Dad did give me some financial help, as he said that he helped all of his other kids through school and graduation, and he'd feel like a complete heel if he didn't at least give me the same level of help he gave them. While I took him up on that, the lion's share of expenses (including living off of my savings while I was in school) was handled by me, and boy was that motivating! I smiled from ear to ear when I gave a copy of my diploma to my parents that said "Graduated with Honors", partly because I achieved something I thought I couldn't, but more to the point, I put a lot of my own money and living into getting that degree. I've decided that the value of that is truly immeasurable, and I will require my kids to do something similar. So even though I could pay for their full school, I'm not going to.
If they perform like rock stars in all three of these categories, and they get into a church school and make that their #1 choice as to where they want to go, then we'll do that. Even then, however, I may well suggest a local approach first. Not because they are slackers or losers, but because it could be a tremendously frugal and practical way to achieve their goals with very little in the way of future debt, lost time and a firm knowledge in what they want to achieve.
Much of our educational programming has been to look to the four year Universities first and foremost. This blog post intends to shake up that thinking and I'll present my reasons why I think we should.
Having now attended three different community colleges for various reasons (most of them having to do with proximity to work), I found that you can take some very good courses up front for very little money. The added bonus is that, in most cases, these classes are close to home, i.e. the family home. Why pay room and board, plus an inflated tuition fee, to take classes like Probability and Statistics, American History or Calculus? Why go away so that you can take Intro to C Programming, Macrobiology, Chemistry or any number of other early exploratory general education related courses? If one were to do a purely economic breakdown, four semesters at a well rated community college would perhaps cost about $2K when all is said and done, including tuition, books and miscellaneous expenses, compared with, potentially, $20K to $30K at a private institution (not counting room and board) or $10K to $15K at a state school (not counting room and board).
Community colleges allow the youth in question to still live at home and have a bit of a "maturation accounting" take place. In short, you can see if your kid is truly ready to handle being off on their own for an extended period. I came to the conclusion that the stupidest thing my parents could have done with me when I was seventeen was to send me off someplace all by myself without any controls or supervision. Of course, I might have made radically different choices, but I have a feeling my head wasn't in the game at that point anyway, so why send me halfway across the country to figure that out?
Since I am hoping that my son will be turning in mission papers after just one year in school, it seems to make sense to help him prepare at home, knock out the first year close to home, focus on his mission, have him come back from that experience, knock out any remaining GE requirements, and then transfer to the school of his choice at that point, where the full value of the school dollars will be going to the maximum of his determined educational goals. My daughters will not be considering missions until they are 21, which would be well into their Junior or Senior year of college, so this line of reasoning isn't as warranted.
Now, with all of this, there are other areas where I would absolutely suggest it is totally worth starting out at a four year institution, especially if the goal is to get a student into a Church School (yes, for me the draw of my children attending any of the Brigham Young University campuses or Southern Virginia University is entirely because they are schools run by and populated by members of the Church of Jesus Christ of Latter-day Saints). A large percentage of a BYU or SVU education is the various Religion courses, which, while offered in Instutute in many other campuses and through CES to students all over the country and the world, are not at the same level as what is offered at a true church school. Likewise, after a lifetime of living in an "outpost" related to the church, there's a genuine benefit to surrounding ones self with other members of the church (of course, this is a double edged sword. I used to believe that there were problems being near too few active Latter-day Saints. I've since learned there are plenty of challenges related to having too many LDS members surrounding you, too. I guess mileage varies on that particular issue :) ). There is also a tremendous value to networking with other people, and getting to know them and their life experiences, and on the whole, it may be best to have those life experiences be with members of the same faith, who share similar values, in communities that are, shall we say, less "tempting" than others (Provo, Rexburg, Laie, and Buena Vista are not exactly hotbeds of ribaldry :) ).
Ultimately, as I've explained to my kids, it all depends on what you ultimately want to do, where you ultimately want to work, and what you really care about when all is said and done. A college education and degree is not necessarily a fast path to a job. You *can* work just fine without one (I did for close to twenty years, though the first six were quite lean ones because I didn't know what I wanted to do. Once I got into tech and doing QA, then I was able to grab tight and develop like a maniac). There's no question that getting a degree helps give the person a well rounded education, and can help fill the gaps a practical, seat of your pants approach like I took produces.
In most careers, it doesn't matter where you start college, just where you finish. Nobody looks at your transcripts or resume and says "oh, look, you attended Diablo Valley College for your first two years of school. That's gonna' cost you, son!" No, they see "ah, Bachelors of Science from Brigham Young University" or "hey, you got your degree in Finance at U.C. Irvine", or in my case "cool, you got you BS In Information Technology through the University of Phoenix in 2005, good work going back and finishing that!" Interestingly enough, the president of my company found a lot of value in my story of how I learned and the schools I went to previously. He asked me what I did before 2003 through 2005, since the only education on my resume was my actual Bachelors degree. I told him the convoluted path, and the various community colleges I attended and what I studied at each. His answer was "you should include that! It shows that you've had a broad exposure to a lot of different educational experiences, and that's definitely worth commenting on.”
Unless you plan on going into medicine, law or some other very specialized career, where you graduate from is almost not relevant, provided it is from a properly accredited school. What is is the fact that you did graduate, and that you have a work ethic that can get you noticed. As to my son and daughters, I've already made it very clear what will influence the decisions as to where they go and when they go (an acceptance letter from a school of choice will not be the end of the discussion, not by a long shot). The first is their overall grades and the courses that they take along the way. The second will be their own personal financial and personal management acumen. Proof of sound personal management over an extended period of time will be a prerequisite to going away to school. Third will be the full time job they will take on starting the end of their sophomore year, which will be applying for scholarships by the truckload. I have my friend Scott to thank for this suggestion... he made it his full time job from the end of his sophomore year through the end of his senior year and beyond to apply for every conceivable scholarship he had the potential to apply for, somewhere in the thousands. The net result over the course of several years was the fact that he paid for both his bachelors and his masters degrees with scholarship money, as well as room and board for that entire time, and he never had to ask his parents for any money related to his schooling.
I have committed to paying for college to as much of the level as I can (and I think we can probably cover it for all of the kids when their times come) but I've decided that I'm not going to just foot the bill for them. I learned through my own father making it very easy for me to skate through school with no effort or stake required on my part that I didn't really appreciate it, and subsequently I didn't put much effort into it. When I went back to school in 2003, it was mostly on my dime; my Dad did give me some financial help, as he said that he helped all of his other kids through school and graduation, and he'd feel like a complete heel if he didn't at least give me the same level of help he gave them. While I took him up on that, the lion's share of expenses (including living off of my savings while I was in school) was handled by me, and boy was that motivating! I smiled from ear to ear when I gave a copy of my diploma to my parents that said "Graduated with Honors", partly because I achieved something I thought I couldn't, but more to the point, I put a lot of my own money and living into getting that degree. I've decided that the value of that is truly immeasurable, and I will require my kids to do something similar. So even though I could pay for their full school, I'm not going to.
If they perform like rock stars in all three of these categories, and they get into a church school and make that their #1 choice as to where they want to go, then we'll do that. Even then, however, I may well suggest a local approach first. Not because they are slackers or losers, but because it could be a tremendously frugal and practical way to achieve their goals with very little in the way of future debt, lost time and a firm knowledge in what they want to achieve.
Tuesday, October 28, 2008
Madd Money: Three Cheers for the EMERGENCY FUND!!!
Anyone who knows me knows I’m a fan of the Ramsey Baby Steps, and the one that I’m the biggest fan of right now is his third Baby Step, where you fully fund an emergency fund with three to six months of expenses (we have taken it to the out edge and have six months of actual income set aside). The whole point for having the Emergency Fund is so that you have a rainy day fund, because, inevitably, it will rain!
It’s important to decide what actually constitutes an emergency. This is one of those grey areas; some people will only look at the life or death situations, and some are more liberal when it comes to defining an emergency. Well, Christina made the call that what happened this past weekend in our van constituted an emergency, and we acted accordingly. What happened was I brought five young men up to Cutter Scout Reservation for the Order of the Arrow Ordeal weekend. My wife’s van was the only vehicle that could seat everyone, but even with the van, everyone and their gear was piled in tightly. When we got to the twisty and winding part of Hwy 236 (the one leading from Castle Rock to Big Basin in the Santa Cruz Mountains), I heard one of the boys say “Excuse me, Mr Larsen, I think I’m... {SPLAT!!!}”.
Yep, one of the boys got carsick and let loose. The resulting smell caused another boy to get nauseous and lose it, but thankfully he lasted until I could pull over and get the van door open and him outside of the van. Needless to say, the rest of the ride up, even with as much of a clean up as we could do, was not pleasant, and while the boys spent the lion's share of the weekend participating in the various activities associated with Ordeal weekend, I spent my time pulling out seats and floor mats and scrubbing down all of the surface areas with hot water and TSP, while also using a tin full of white sage and burning it like incense in the car in the hope of killing the odor (white sage is used for purification in native american traditions... if anything needed to be purified, it was the smell inside of the van!). No such luck. We were able to mask it pretty well and the drive back was tolerable, but we kept the rear windows vented and the sun roof open the whole way home to bring in fresh air.
I had called Christina to warn her, and then held the phone a good foot from my ear to let her vent (this is her beloved van, after all, in which she has to drive kids various places, and carpool with… thus this was not good news to her at all). When I got home, and she got into the car to check it out, she said “I really appreciate you scrubbing down the car as well as you did, I know it wasn’t a lot of fun… but I can still smell it. I’m sorry, but we have to get the car detailed”. Fortunately, a good friend of ours (who is a Police officer in one of the nearby towns) told us of a place that does forensic level car detailing… meaning they often do clean-up of the police cars, which see their share of incidents involving not just vomit, but urine, excrement and blood… and sometime all four at the same time! Hey, if it’s good enough for Police departments, it’s good enough for us! Thus with that recommendation, we contacted them and asked them to do a number on the car, from stem to stern internally. I must admit, the car could have used this anyway, but this particular event pushed it from the "nice to do" category to "absolutely essential" one.
It wasn't cheap, but it was worth every penny. The good thing is, this is exactly why we have an emergency fund. Granted, it’s not really what I wanted to spend the money on, but then, when you have an emergency fund, it’s there for any situation you don’t really want to spend the money on. That’s what emergencies are! The great thing is that we will be able to just pay for it and then use our allotted for savings to refill the emergency fund. That’s one of our mandatory emergency valve rules; when the emergency fund gets tapped for any reason, and it dips below the agreed to threshold, all other savings and investment options are temporarily halted until we’re back to the desired threshold. The good news is, it looks like we will only need one pay period to get back to our agreed to level.
Today, I am singing some serious praises to the Emergency Fund. However, Christina is probably singing even louder than I am (LOL!). For the record, honey, I’m sorry, and I hope this will make up for it. From here on out, it’s a hard rule of two drivers, two cars, a door seat for every passenger… and Dramamine shall be consumed by everyone in the car before departure :). Let’s just say that this is one emergency I want to ensure *never* happens again!
It’s important to decide what actually constitutes an emergency. This is one of those grey areas; some people will only look at the life or death situations, and some are more liberal when it comes to defining an emergency. Well, Christina made the call that what happened this past weekend in our van constituted an emergency, and we acted accordingly. What happened was I brought five young men up to Cutter Scout Reservation for the Order of the Arrow Ordeal weekend. My wife’s van was the only vehicle that could seat everyone, but even with the van, everyone and their gear was piled in tightly. When we got to the twisty and winding part of Hwy 236 (the one leading from Castle Rock to Big Basin in the Santa Cruz Mountains), I heard one of the boys say “Excuse me, Mr Larsen, I think I’m... {SPLAT!!!}”.
Yep, one of the boys got carsick and let loose. The resulting smell caused another boy to get nauseous and lose it, but thankfully he lasted until I could pull over and get the van door open and him outside of the van. Needless to say, the rest of the ride up, even with as much of a clean up as we could do, was not pleasant, and while the boys spent the lion's share of the weekend participating in the various activities associated with Ordeal weekend, I spent my time pulling out seats and floor mats and scrubbing down all of the surface areas with hot water and TSP, while also using a tin full of white sage and burning it like incense in the car in the hope of killing the odor (white sage is used for purification in native american traditions... if anything needed to be purified, it was the smell inside of the van!). No such luck. We were able to mask it pretty well and the drive back was tolerable, but we kept the rear windows vented and the sun roof open the whole way home to bring in fresh air.
I had called Christina to warn her, and then held the phone a good foot from my ear to let her vent (this is her beloved van, after all, in which she has to drive kids various places, and carpool with… thus this was not good news to her at all). When I got home, and she got into the car to check it out, she said “I really appreciate you scrubbing down the car as well as you did, I know it wasn’t a lot of fun… but I can still smell it. I’m sorry, but we have to get the car detailed”. Fortunately, a good friend of ours (who is a Police officer in one of the nearby towns) told us of a place that does forensic level car detailing… meaning they often do clean-up of the police cars, which see their share of incidents involving not just vomit, but urine, excrement and blood… and sometime all four at the same time! Hey, if it’s good enough for Police departments, it’s good enough for us! Thus with that recommendation, we contacted them and asked them to do a number on the car, from stem to stern internally. I must admit, the car could have used this anyway, but this particular event pushed it from the "nice to do" category to "absolutely essential" one.
It wasn't cheap, but it was worth every penny. The good thing is, this is exactly why we have an emergency fund. Granted, it’s not really what I wanted to spend the money on, but then, when you have an emergency fund, it’s there for any situation you don’t really want to spend the money on. That’s what emergencies are! The great thing is that we will be able to just pay for it and then use our allotted for savings to refill the emergency fund. That’s one of our mandatory emergency valve rules; when the emergency fund gets tapped for any reason, and it dips below the agreed to threshold, all other savings and investment options are temporarily halted until we’re back to the desired threshold. The good news is, it looks like we will only need one pay period to get back to our agreed to level.
Today, I am singing some serious praises to the Emergency Fund. However, Christina is probably singing even louder than I am (LOL!). For the record, honey, I’m sorry, and I hope this will make up for it. From here on out, it’s a hard rule of two drivers, two cars, a door seat for every passenger… and Dramamine shall be consumed by everyone in the car before departure :). Let’s just say that this is one emergency I want to ensure *never* happens again!
Friday, October 24, 2008
Madd Money: New Hero Rides into Town... Meet Tightwad Tod
JD over at Get Rich slowly gets the props for posting about this guy first, but I have to say I love the premise and I'm looking forward to reading more from him.
Tightwad Tod is the blog of Tod Marks, a senior editor over at at Consumer Reports. While much of Consumer Reports site is paid content, many of the blogs are available for free, and Tightwad Tod's is one of the free ones :).
Tod Marks is a senior editor at Consumer Reports, and he's been writing about how to save money for 17 years. It will be interesting to see what he has to say, and what opportunities might come out of reading his suggestions :).
Tightwad Tod is the blog of Tod Marks, a senior editor over at at Consumer Reports. While much of Consumer Reports site is paid content, many of the blogs are available for free, and Tightwad Tod's is one of the free ones :).
Tod Marks is a senior editor at Consumer Reports, and he's been writing about how to save money for 17 years. It will be interesting to see what he has to say, and what opportunities might come out of reading his suggestions :).
Friday, October 17, 2008
Madd Money: In Praise of the TRACFONE
Today, cell phones are ubiquitous. I have made the acquaintance of many people for whom the land line is a quaint memory of their Pastoral childhoods, but was left behind with the changing of the century and millenia. Yes, I'm one of those archaic fuddy-duddies that still has a land line at home.
I'm still of the generation that hasn't entirely bought into the whole "life convergence" thing. While I have to admit the notion of having your camera, your phone, your computer and your MP3 player all on the same device may seem cool, it just strikes me as odd that anyone would willingly tie themselves down to an all-in-one solution rather than have components that can do the best job they may want them to.
See, to me, a cell phone is like an insurance policy. It's an OK form of communication, but it's not my only one, and I really don't use it all *that* often. Thus looking at these goofy contracts (well, goofy to me) that ask for anywhere from $50-100+ per month for two years or so seem insane to me. The idea of signing up for anything for that length of time, and committing that much each month makes little sense to me. What's more, I don't need every cool feature on the planet for a phone. I need something I can dial a number, press a button and talk to someone for the amount of time necessary. Then I hang up and can honestly go *days* between needing to use it again.
Fortunately, there's a device and service out there for people like me. It's called TRACFONE, and I am very much a fan. It's perfect for infrequent cell phone users, of which I most assuredly am. Between my home number and my work number, I really don't need to use my cell phone all that often. It's used for the occassional Scout outing when I need to coordinate something on the road, or for my various snowboard trips when I need to check in at home and tell everyone I made it OK. Otherwise, I can honestly go days without using my cell phone or receiving a call. Thus a model of a monthly charge doesn't make a lot of sense for me. TRACFONE operates on a model where you pay for your service and minutes up front, usually with a credit or debit card (both work fine), and the phone displays the "bank" of minutes you have. Usually I will buy 300 minutes at a time, and I will use the phone until those minutes are used up. Some active months, I may actually burn through those minutes, but in most cases, that bank of 300 minutes will last me three or four months (seriously).
I'll admit there's a bit of a premium for this model (I pay the equivalent of about $0.10 per minute any time I use my phone), but many months that works out to my effective cell phone bill being $3.00 to $6.00 per month. What's also cool about this model is that it's a great one to use for kids if you decide that they warrant a cell phone. My eldest child has a phone, and by design, his phone is also a TRACFONE, for the reasons I've described. Oh, there hasve been rumblings about this arrangement, make no mistake. See, TRACFONES are anything but sexy or cool. Well, that's not entirely true, you can buy some pretty cool phones through TRACFONE, but let's just say that *I* don't buy them. I get the bare bones models, and my son has a relatively bare bones model as well. He's even said he'd be willing to buy his own non TRACFONE phone... until I tell him that he'd also need to bank the two years worth of phone contract and monthly charges to use a phone that's not part of the TRACFONE network. He usually sulks at this realization, but it's helped him realize that there's more to a phone than just having the phone. He may thank me for this some day... but I don't anticipate that happening anytime soon. Right now, he still grumbles that he's the only Lame-O out of all of this friends who has one of these phones (LOL!).
If you are a phone power user, and it's your only existing line to the telephone network (no land line, etc) or you are into the ability to combine your voice mail, email, texting, camera and music into one device used ubiquitously, TRACFONE may not be much of a benefit to you. However, if like me a cell phone is just an occassional insurance policy, give TRACFONE and their approach some consideration. You may find it to be tremendously cost effective :).
Thursday, October 16, 2008
Madd Money: From "Saving Silver" to "Going Orange"
In the past several months, I have undertaken a different method of simplifying and organizing both mine and our family's finances. There are a lot of things that we want to do, and it seems there's never really enough to do everything we want to. That's certainly true if we react to everything in the classic 'I want it and I want it *now*!" mode of thinking we as a culture have grown accustomed to.
What makes things even more interesting is the line in the sand I and my family have drawn that says "We do NOT borrow money". Well, OK, that "line" is more of a hypothetical wish, in the sense that if I were to say we were absolutists on that front, our credit card would not exist and we would use a Debit Card for every single transaction... yet we don't, at least not yet.
Still, since I am "tremendously reluctant" to pull out a credit card to purchase things I don't know for a fact that I have cash for, I have taken on a number of interesting processes to help me get into a mode of mentally and physically saving for things I want to get. For the better part of 2008, I made a goal to save money so that I could get dance outfits made for Karina and Amber (see my previous blog entries for the Labor Day Pow Wow to see what a professional outfit designer can do that I can't do as well (LOL!) ). Every pay period, I was allocated a small amount of money that is referred to as "Blow Money". Both Christina and I have these amounts set aside for ourselves. These are monies that we can use to do just about anything, no questions asked. Everything else requires a budget line item or a family meeting to discuss and declare. Blow money is exempt from that process. To that end, I decided to dedicate a large portion of my blow money to creating the girls outfits. The question was, how could I help motivate myself to save that money?
I came up with the following. Every pay day, I went down to the post office just down the street where I worked, and I purchased a single postage stamp with a $20 bill. in return, I received a single stamp, change to round up to a dollar, and then 19 silver dollar coins. Each $20 bill was used to purchase one stamp. As you might guess, each pay period I came home with a substantial number of Susan B Anthony, Sacajawea and President dollar coins. They all went into the clear piggy bank that I had. Once the bank filled, I could progress on contracting the work to make the outfits. I started this process January 15, 2008 and ended it August 31, 2008. The net result was that I put away a lot of silver dollars. The interesting part of the experiment was that I discovered just how hard it is to spend that money once it's been accumulated in that manner (let's face it, you're not going to go grocery shopping with a pocket full of dollar coins; the embarrassment of pulling out so many of them at the check-out line is enough to give most people plenty of pause... and for that very reason, it worked perfectly :) ). Ultimately redeeming the coins wasn't that difficult, though it did require that I wrap the coins, put our account number on them, and then deposit them and wait three days for the deposits to be verified.
So on the whole, the experiment was a success, with two caveats. The first is that, as stated, the very act of getting that many dollar coins over so many months made me very reluctant to spend them, and also made for a hassle when it was time to actually deposit them en mass. The second is that, while the coins were sitting in my piggy bank, they collected no interest whatsoever. Now granted, the total amount of interest we're talking about here, and in the time frame, amounts to about what a Happy Meal would cost. We're not talking about major amounts of money. Still, I wanted to get at least a *little* return on the money I was squirreling away.
Enter ING DIRECT. They make it very easy to have the equivalent of my "dollar bank", and set things up in such a way that you can categorize how you want to order your funds, what goals you want to set, and their set-up is such that there is a time-delay before you can get to your funds; any deposits that are placed into an ING DIRECT Orange savings account are not available for witdrawal for five days. For my purposes, since this is an account that is set up for middle term savings goals (i.e. the item in question is something that will be purchased in a time frame ranging from several months to five years) I liked the idea of an account that required a little amount of time for you to process transactions. For me, the necessary "cooling off" period allows me to reflect and think about what I ultimately want to do. Since I almost never buy anything on a whim, the five days doesn't bother me. Add to the fact that ING DIRECT accounts pay interest comparable to many Certificates of Deposit, and, well, what's not to like?
Setting up the account was quick, naming it for a specific purpose is easy, and the interface to transfer funds is very simple to use. What's more, I just like being able to log into a bank and see an account called "Blow Money" :).
So for anyone out there giving consideration to setting up a high yield savings account, don't necessarily want to cut ties with their current bank, and if you find that you don't mind placing a little bit of "are you sure?" logic into the equation, then I wholeheartedly recommend "Going Orange". If you can't handle the built in delay in the system, well, I can honestly say that my "Saving Silver" approach proved to be pretty darned effective, too (LOL!).
Wednesday, October 15, 2008
Blog Action Day 2008: Using “Fast Offerings” to Fight Poverty
Today is Blog Action Day. The topic this year is poverty.
While my little blog is hardly a world player in the blogosphere, I like thinking about these kinds of questions, and trying to see what I can come with and what thoughts I might be able to provide to the discussion. Indulge me for a bit :).
As a member of the Church of Jesus Christ of Latter-day Saints, like most active members, I participate in two areas of financial responsibility and management as relates to my life in the church. All active members in good standing are expected to pay a full and honest tithe. There are many different interpretations regarding this, but for the sake of this discussion, I will just use my definitions and leave the debating as to their merits out of it. A full and honest tithe, in my world view, is based on my “increase”. When I realize an increase on something, whether that be the receiving of a paycheck, the selling of an asset with appreciation, or some aspect of my life where I receive something of monetary value that can be tangibly quantified as an increase, I pay 10% of the gross of that increase as a tithing. Since I became active again as an adult in the church (back in 1993) I have made this a priority in my life. In addition to this, there is also another aspect that I participate in, as do most members. Once a month, Latter-day Saints hold a fast, usually on the first Sunday of the month, and that fast is effectively the giving up of two meals for that day, and then donating the money that would have been used for those meals as a “Fast Offering” to the church.
I have a strong testimony of the value of both financial obligations, and I participate in both of them them willingly. While I think that tithing is a wonderful program, one that gives me a direct financial stake in the progress and mission of my church, it’s the idea of Fast Offerings that I want to suggest to the world at large as a concept to apply to the topic of “Blog Action Day” and addressing poverty.
Let me pitch this idea out to everyone, whatever your religious denomination or financial situation might be. Could you set aside a day each month, where you are able to agree that you will do without two meals? If the answer is yes, then think about what you would eat for those two meals. If you are naturally frugal and eat very inexpensive options at home, go ahead and add up what it takes to make those meals. If you like to eat out or have a zen for exotic or more gourmet style and priced foods, use that as your criteria. When you have done so and you have a dollar amount, commit to take the money you would have spent on those meals and donate it as a Fast Offering. LDS members already make this contribution each month directly to our church, and I personally feel really good about doing this, because I know that Fast Offering money is specifically set aside to help families in the church who are in need, whether it be to buy food, help pay rent due to a temporary crisis, or get much needed health care when those in need are unable to take care of it themselves.
For those reading this blog who are not LDS, could you do something like this? Absolutely! Even if you don’t want to donate the money to a church, consider donating it to a local homeless shelter or a food bank, or perhaps to another organization that you believe in that has made a stated goal of helping to fight poverty.
The beauty of the Fast Offering is that, with the exception of small children or those with medical conditions that would proscribe such a course of action, anyone can do it! It doesn’t matter if you are wealthy, decidedly middle class, or perhaps struggling to make ends meet; if you are one who can routinely guarantee three meals a day, every day, and a roof over your head, you are one who can participate in this effort. If you are one who cannot do that, or your situation is that you are *not* able to regularly guarantee three meals a day or a roof over your head, this is an example of a concrete action others can do that can directly help you!
I hear those who say “charity starts at home, and when I can take care of myself, then I can start worrying about other people”. While I understand the sentiment, I feel it puts the emphasis in the wrong place. When we approach the idea of charitable giving as something we will eventually get to when we can “take care of ourselves”, we ultimately find reasons to push out the day that we can actually give to others. When we make the point to give from the outset, even if we do not entirely know that we can cover ourselves, somehow the change in attitude towards giving to others first allows us to be better stewards of our own resources. Another way to put your own circumstances into stark relief… if you are curious to see where you stand statistically with the rest of the world, have a look at the Global Rich List. I found this to be *very* sobering... I put in my base salary, and discovered that, out of the 6 billion people on this planet, approx. 49 million people living today make more money than I do. Sound like a big number? It’s not… it translates to less than 1% of the world's population earning more than me. More than 99% of the world’s population earn less than I do!
To bring this into even sharper focus, how's this for consideration (also from the Global Rich List):
$8 could buy you 15 organic apples OR 25 fruit trees for farmers in Honduras to grow and sell fruit at their local market.
$30 could buy you an ER DVD Box set OR a First Aid kit for a village in Haiti.
$73 could buy you a new mobile phone OR a new mobile health clinic to care for AIDS orphans in Uganda.
$2400 could buy you a second generation High Definition TV OR schooling for an entire generation of school children in an Angolan village.
For some, it’s not necessarily that they don’t want to give, or that they aren’t willing to give, but they don’t quite know how to do it. I’ll be frank, if you are part of a church group, I would suggest making a point in your life to commit to paying tithing, even if you are a member of a church that does not actively do such a thing (I highly doubt a pastor or priest would turn down your desire to contribute :) ). If you are not actively involved in a church, take a look at the charities that matter to you, or find those organizations where you feel your dollars can make a difference.
If you do not feel comfortable with that type of amount up front, or you are unsure where to get those first dollars to contribute, I strongly suggest doing a “Fast Offering” as your first experience. Whatever denomination or lack thereof, whatever cause or goal you would like to associate with, this is an easy way that just about everyone can do something to make their stand and play a part. Seems like such a small thing, I know, but what if everyone did it? Do you think there'd be any real economic power in doing such a thing? Using the United States as an example... imagine if 300 million people, once a month, decided to forego eating two meals for one day, and then took the proceeds from that day of sacrifice and used that money with the express purpose of helping the poor, needy and most vulnerable. For the sake of argument, let’s just say that two meals was the equivalent of a breakfast plate and a happy meal at McDonalds (not recommending McDonalds for this exercise per se, but I can do quick math with those examples). In my area, the cost of those two meals turns out to be about $8.00 when all is said and done. That’s the equivalent of every person in America contributing $96.00 per year towards helping those who are hungry and in need. In raw dollars, 28 BILLION of them. Every year. Now that’s some power!!!
Will we ever see a day when poverty is not with us? Sadly, human nature is such that I would have to say no. At least not in the world we currently inhabit. My theology teaches of a time where Christ shall come to the earth and rule for 1,000 years, and during that time there will be no war and no poverty, and all will be whole. It’s a wonderful thought, but it’s not here today. My suggestion is that a Fast Offering is something everyone can do today, and they can make a habit of it that could profoundly affect the lives of millions. If you already do it, keep doing it. If you don’t, consider doing it. It could help draw us closer to that ideal of the millenium reign, and we can all say we had a hand in bringing it to pass :).
While my little blog is hardly a world player in the blogosphere, I like thinking about these kinds of questions, and trying to see what I can come with and what thoughts I might be able to provide to the discussion. Indulge me for a bit :).
As a member of the Church of Jesus Christ of Latter-day Saints, like most active members, I participate in two areas of financial responsibility and management as relates to my life in the church. All active members in good standing are expected to pay a full and honest tithe. There are many different interpretations regarding this, but for the sake of this discussion, I will just use my definitions and leave the debating as to their merits out of it. A full and honest tithe, in my world view, is based on my “increase”. When I realize an increase on something, whether that be the receiving of a paycheck, the selling of an asset with appreciation, or some aspect of my life where I receive something of monetary value that can be tangibly quantified as an increase, I pay 10% of the gross of that increase as a tithing. Since I became active again as an adult in the church (back in 1993) I have made this a priority in my life. In addition to this, there is also another aspect that I participate in, as do most members. Once a month, Latter-day Saints hold a fast, usually on the first Sunday of the month, and that fast is effectively the giving up of two meals for that day, and then donating the money that would have been used for those meals as a “Fast Offering” to the church.
I have a strong testimony of the value of both financial obligations, and I participate in both of them them willingly. While I think that tithing is a wonderful program, one that gives me a direct financial stake in the progress and mission of my church, it’s the idea of Fast Offerings that I want to suggest to the world at large as a concept to apply to the topic of “Blog Action Day” and addressing poverty.
Let me pitch this idea out to everyone, whatever your religious denomination or financial situation might be. Could you set aside a day each month, where you are able to agree that you will do without two meals? If the answer is yes, then think about what you would eat for those two meals. If you are naturally frugal and eat very inexpensive options at home, go ahead and add up what it takes to make those meals. If you like to eat out or have a zen for exotic or more gourmet style and priced foods, use that as your criteria. When you have done so and you have a dollar amount, commit to take the money you would have spent on those meals and donate it as a Fast Offering. LDS members already make this contribution each month directly to our church, and I personally feel really good about doing this, because I know that Fast Offering money is specifically set aside to help families in the church who are in need, whether it be to buy food, help pay rent due to a temporary crisis, or get much needed health care when those in need are unable to take care of it themselves.
For those reading this blog who are not LDS, could you do something like this? Absolutely! Even if you don’t want to donate the money to a church, consider donating it to a local homeless shelter or a food bank, or perhaps to another organization that you believe in that has made a stated goal of helping to fight poverty.
The beauty of the Fast Offering is that, with the exception of small children or those with medical conditions that would proscribe such a course of action, anyone can do it! It doesn’t matter if you are wealthy, decidedly middle class, or perhaps struggling to make ends meet; if you are one who can routinely guarantee three meals a day, every day, and a roof over your head, you are one who can participate in this effort. If you are one who cannot do that, or your situation is that you are *not* able to regularly guarantee three meals a day or a roof over your head, this is an example of a concrete action others can do that can directly help you!
I hear those who say “charity starts at home, and when I can take care of myself, then I can start worrying about other people”. While I understand the sentiment, I feel it puts the emphasis in the wrong place. When we approach the idea of charitable giving as something we will eventually get to when we can “take care of ourselves”, we ultimately find reasons to push out the day that we can actually give to others. When we make the point to give from the outset, even if we do not entirely know that we can cover ourselves, somehow the change in attitude towards giving to others first allows us to be better stewards of our own resources. Another way to put your own circumstances into stark relief… if you are curious to see where you stand statistically with the rest of the world, have a look at the Global Rich List. I found this to be *very* sobering... I put in my base salary, and discovered that, out of the 6 billion people on this planet, approx. 49 million people living today make more money than I do. Sound like a big number? It’s not… it translates to less than 1% of the world's population earning more than me. More than 99% of the world’s population earn less than I do!
To bring this into even sharper focus, how's this for consideration (also from the Global Rich List):
$8 could buy you 15 organic apples OR 25 fruit trees for farmers in Honduras to grow and sell fruit at their local market.
$30 could buy you an ER DVD Box set OR a First Aid kit for a village in Haiti.
$73 could buy you a new mobile phone OR a new mobile health clinic to care for AIDS orphans in Uganda.
$2400 could buy you a second generation High Definition TV OR schooling for an entire generation of school children in an Angolan village.
For some, it’s not necessarily that they don’t want to give, or that they aren’t willing to give, but they don’t quite know how to do it. I’ll be frank, if you are part of a church group, I would suggest making a point in your life to commit to paying tithing, even if you are a member of a church that does not actively do such a thing (I highly doubt a pastor or priest would turn down your desire to contribute :) ). If you are not actively involved in a church, take a look at the charities that matter to you, or find those organizations where you feel your dollars can make a difference.
If you do not feel comfortable with that type of amount up front, or you are unsure where to get those first dollars to contribute, I strongly suggest doing a “Fast Offering” as your first experience. Whatever denomination or lack thereof, whatever cause or goal you would like to associate with, this is an easy way that just about everyone can do something to make their stand and play a part. Seems like such a small thing, I know, but what if everyone did it? Do you think there'd be any real economic power in doing such a thing? Using the United States as an example... imagine if 300 million people, once a month, decided to forego eating two meals for one day, and then took the proceeds from that day of sacrifice and used that money with the express purpose of helping the poor, needy and most vulnerable. For the sake of argument, let’s just say that two meals was the equivalent of a breakfast plate and a happy meal at McDonalds (not recommending McDonalds for this exercise per se, but I can do quick math with those examples). In my area, the cost of those two meals turns out to be about $8.00 when all is said and done. That’s the equivalent of every person in America contributing $96.00 per year towards helping those who are hungry and in need. In raw dollars, 28 BILLION of them. Every year. Now that’s some power!!!
Will we ever see a day when poverty is not with us? Sadly, human nature is such that I would have to say no. At least not in the world we currently inhabit. My theology teaches of a time where Christ shall come to the earth and rule for 1,000 years, and during that time there will be no war and no poverty, and all will be whole. It’s a wonderful thought, but it’s not here today. My suggestion is that a Fast Offering is something everyone can do today, and they can make a habit of it that could profoundly affect the lives of millions. If you already do it, keep doing it. If you don’t, consider doing it. It could help draw us closer to that ideal of the millenium reign, and we can all say we had a hand in bringing it to pass :).
Tuesday, October 14, 2008
Madd Money: What Does it Mean To Be "Rich"?
I've got to tip my hat to J.D. over at Get Rich Slowly for prompting my thoughts on this topic (and yes, he also did a post today on this exact topic with this exact title... I never claimed I was terribly original :) ) but there have been a few thoughts rolling through my head regarding this, so I figured I could put my own spin on this topic.
It's easy to think that we have things tough because gas is expensive, food is expensive, living in the area that I do is expensive, and to bemoan the fact that "boo hoo, I can't go and do whatever I want to whenever I want to! If I was rich, I could!" Now, to be frank, I don't often have little pity parties like this for myself, but yes, there are times where I look at a goal in the future and just think to myself "this is just not going to be possible" and yes, I get a little self wound. It's times like these that guys like J.D snap me to my senses, or to borrow a line from Montgomery Gentry "I look around at what everyone has, and I forget about all I've got" (for those who know the rest of the song, I could just print out the rest of the lyrics, but what fun would that be (LOL!)).
Stepping back and taking an objective view... I have a family that is able to make ends meet on just my income. We have no debts. We own our home free and clear. Outside of income and property taxes, we have no other earthly obligations (I do have some Heavenly ones, though ;) ). We are able to, for the most part, live and make choices in our lives that allow us to do things for less than what we make, and we are able to save some of our income every pay period. Objectively speaking, I earn lower than the median average for households in my town (my choice, as we are not a two-income home, and we're cool with that), but we are in the top 25% for the US as a whole and we are (and this one freaks me out, to say the least) in the top 1% compared to the rest of the world population.
So what does it mean to be "rich"? Is it monetary purchasing power? Is it financial freedom? Is it having no obligations or dependence on others? I could argue that, on the balance sheet, while I may not make as much as many, I have managed to set things up so that I can live relatively independent from a need for money... let me make clear what I mean by that. I don't mean that I don't need money to live. Everyone does. What I mean is that our needs are actually much smaller than many other people that we know. Our house isn't the biggest, that's true, but it's large enough and comfortable enough to meet our needs, and it's owned free and clear. Our car's aren't the newest or flashiest, but they meet the requirements that we have for them, they are paid for and they have very minor upkeep needs. They don't necessarily get the greatest gas mileage, but they do pretty good for what they are. We enjoy a lot of activities that take place in our community that are of low or no cost, in many cases, and we do our best to be frugal and thrifty with our resources (note: frugal and thrifty means we try to make the best use and stretch our budget to get the best value out of things, not necessarily try to get the lowest price on everything... minor nit :) ). Thus, the actual income that is required to sustain us and carry us through is quite a bit less than many others that I know, which allows us to save and invest quite a bit of our income every month, and I feel very blessed to be in that situation.
So by these accounts, I should feel rich, I guess... but I don't. I'm not sure if it's because I've been so long accustomed to our consumer culture that I equate being rich with being able to go out and buy whatever I want to on a whim. Is that an accurate description? Or is there something more? Is the true meaning of what we refer to as "rich" better being described as being "content"? If that's the case, I think I'm closer to the word "content" than I am to the word "rich", but it's possible that they are both one and the same when you get right down to it. If you are content, you have a heart that is full. If your heart is full, you have room to give and care for others, when you can care for others, you have the ability to shape and effect the world around you, and when you can shape and effect the world around you in a good and positive way... isn't that sort of the whole point of being rich?
OK, I lied, I will close this entry by shamelessly borrowing from Montgomery Gentry, but please replace the word "coffee can" with "cookie jar" to be accurate (LOL!):
But I know I'm a lucky man
God's given me a pretty fair hand
Got a house and a piece of land
A few dollars in a coffee can
My old trucks still running good
My ticker's ticking like they say it should
I got supper in the oven, a good woman's loving
And one more day to be my little kid's dad
Lord knows I'm a lucky man
It's easy to think that we have things tough because gas is expensive, food is expensive, living in the area that I do is expensive, and to bemoan the fact that "boo hoo, I can't go and do whatever I want to whenever I want to! If I was rich, I could!" Now, to be frank, I don't often have little pity parties like this for myself, but yes, there are times where I look at a goal in the future and just think to myself "this is just not going to be possible" and yes, I get a little self wound. It's times like these that guys like J.D snap me to my senses, or to borrow a line from Montgomery Gentry "I look around at what everyone has, and I forget about all I've got" (for those who know the rest of the song, I could just print out the rest of the lyrics, but what fun would that be (LOL!)).
Stepping back and taking an objective view... I have a family that is able to make ends meet on just my income. We have no debts. We own our home free and clear. Outside of income and property taxes, we have no other earthly obligations (I do have some Heavenly ones, though ;) ). We are able to, for the most part, live and make choices in our lives that allow us to do things for less than what we make, and we are able to save some of our income every pay period. Objectively speaking, I earn lower than the median average for households in my town (my choice, as we are not a two-income home, and we're cool with that), but we are in the top 25% for the US as a whole and we are (and this one freaks me out, to say the least) in the top 1% compared to the rest of the world population.
So what does it mean to be "rich"? Is it monetary purchasing power? Is it financial freedom? Is it having no obligations or dependence on others? I could argue that, on the balance sheet, while I may not make as much as many, I have managed to set things up so that I can live relatively independent from a need for money... let me make clear what I mean by that. I don't mean that I don't need money to live. Everyone does. What I mean is that our needs are actually much smaller than many other people that we know. Our house isn't the biggest, that's true, but it's large enough and comfortable enough to meet our needs, and it's owned free and clear. Our car's aren't the newest or flashiest, but they meet the requirements that we have for them, they are paid for and they have very minor upkeep needs. They don't necessarily get the greatest gas mileage, but they do pretty good for what they are. We enjoy a lot of activities that take place in our community that are of low or no cost, in many cases, and we do our best to be frugal and thrifty with our resources (note: frugal and thrifty means we try to make the best use and stretch our budget to get the best value out of things, not necessarily try to get the lowest price on everything... minor nit :) ). Thus, the actual income that is required to sustain us and carry us through is quite a bit less than many others that I know, which allows us to save and invest quite a bit of our income every month, and I feel very blessed to be in that situation.
So by these accounts, I should feel rich, I guess... but I don't. I'm not sure if it's because I've been so long accustomed to our consumer culture that I equate being rich with being able to go out and buy whatever I want to on a whim. Is that an accurate description? Or is there something more? Is the true meaning of what we refer to as "rich" better being described as being "content"? If that's the case, I think I'm closer to the word "content" than I am to the word "rich", but it's possible that they are both one and the same when you get right down to it. If you are content, you have a heart that is full. If your heart is full, you have room to give and care for others, when you can care for others, you have the ability to shape and effect the world around you, and when you can shape and effect the world around you in a good and positive way... isn't that sort of the whole point of being rich?
OK, I lied, I will close this entry by shamelessly borrowing from Montgomery Gentry, but please replace the word "coffee can" with "cookie jar" to be accurate (LOL!):
But I know I'm a lucky man
God's given me a pretty fair hand
Got a house and a piece of land
A few dollars in a coffee can
My old trucks still running good
My ticker's ticking like they say it should
I got supper in the oven, a good woman's loving
And one more day to be my little kid's dad
Lord knows I'm a lucky man
Thursday, October 9, 2008
Madd Money: To All My Friends... PLEASE READ THIS BOOK!!!
Hello Everyone!
I've decided that, in the times that we live in, I will give a loud and public recommendation for what I feel will be the second most valuable book that one can apply to their life today and make dramatic changes (the first most valuable book I can recommend is "The Book of Mormon", but that's a much biger topic than what I can fit into a blog review :) ).
No, today, with our wild and chaotic times as they currently stand, I feel it absolutely essential that I tell everyone I know to READ THIS BOOK... Dave Ramsey's "The Total Money Makeover".
Yes, I freely admit, I *ADORE* Dave Ramsey and his advice. I think we have reached a time in our country's history where people *must* do all they can to make a commitment to do one thing, and that's do all that they can to live within their means and make an absolute commitment to GETTING OUT OF DEBT!!!
What's more, I think that every member of CONGRESS and both of our Presidential Candidates should commit to reading this book. In my personal, rather humble opinion, the best thing that this country and its inhabitants can do is learn to get off of the DEBT binge, put ourselves on a spending diet, plan and budget for real, and make a point to put hard work and diligent personal productivity first and, dare I say it "ACT OUR WAGE"!!!
The motto of this book is that we should "Live Like No One Else, So That Later, You Can Live Like No One Else". Imagine a world where people are not focused primarily on working to pay off credit card debts, student loan debts, car debts and mortgage debts. What kind of spirit would you bring into your workplace if you didn't have to work under those burdens? I can only speak for myself, as I am currently and hope to forever stay debt free, but it is a wonderful feeling. My hope is that *everyone* can feel that way.
An oft quoted phrase in my Church is that "if you have knowledge of something that you cherish and enjoy, wouldn't you want to share that with others?". It's the guiding principle behind why Latter-day Saints try to preach the Gospel and send missionaries out into the world. Well, I'm going to say that I feel the debt-free lifestyle is something I cherish and enjoy, and I want to share it with everyone as well. So consider this a heartfelt recommendation in the strongest of terms... if you are in debt and want to get out of it, if you want to get your hands on a very common sense, uplifting and yes, spiritually focused way to frame your debt issues and get your spending, debts and future investing power under control, I strongly urge you to read this book. If you want to fix the economy, start at home, and then work your way out from there. We are the change that we want to see, and the power is within US, not the U.S. Give it a read, check it out from the library, borrow it from a friend, whatever, but seriously, read the ideas, ponder the message and the principles, and then put them into action. You will not be disappointed.
Tuesday, October 7, 2008
Madd Money: You Fix YOU!
Every once in awhile, I'll come across something that just deserves to be repeated, and that I cannot add anything else to (and believe me, that's hard; I have an opinion on just about everything (LOL!)).
Yes, you may all fill in the "Yadda Yadda Ramsey Shill Yadda Yadda", but please read or (preferably) listen to this. And then apply the advice. I'm certainly going to try to give it my best shot.
Wednesday, October 1, 2008
Madd Money: THE COMMON SENSE FIX
I'm usually not one to SPAM people's emails with things that they are not already associated with me regarding (my scouting families know that I am an annoyingly compulsive emailer when it comes to Troop updates and happenings, but then they already know they're in for that). I'm not one who forwards chain letters, political requests, or any other "PASS IT ON" type of messages. If I ever do, I always BCC them so that others don't know who I'm sending the messages to. That doesn't mean that I cannot use my blog to post about something I care about and want to see others do something about. I've already stated my support for Proposition 8 and that I will vote for it on Election day, and I encourage everyone else to also vote their conscience on election day as well. What follows is not something that will wait until election day. We need to deal with it *NOW!!!
Here is the text of a letter that is being circulated called "THE COMMON SENSE FIX" as relates to the proposed bailout, and some suggestions as to alternatives. Please note that I did not write this, but I agree with just about everything that is in it, and frankly, I consider it a far better proposition than the ones that have been discussed in the house to date. Regardless of your political position or affiliation, I urge everyone to look at this and give it serious consideration. If you agree with the suggestions, send this letter (or word it your own way) to your Representatives and Senators. If you do not agree with the suggestions below, please contact them anyway and tell them what you would like to see done. The key is to SPEAK UP!
Finally, pray for them to resist a spirit of FEAR and to embrace WISDOM. Even if you don't like them or agree with them, pray for them and tell them you are praying for them. There is a spirit over this problem that must be broken. Also, most of the media personalities are afraid as well and that is affecting their reporting. Pray for fear to be removed from them; they are making this worse. While I know it's cliche to say that time is of the essence, in this case, it really is.
THE COMMON SENSE FIX
Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:
I. INSURANCE
A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
B. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile whileworking with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
C. This backstop will cost less than $50 billion—a small fraction of the current proposal.
II. MARK TO MARKET
A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.
This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, tostand up, speak out, and fix this mess.
Here is the text of a letter that is being circulated called "THE COMMON SENSE FIX" as relates to the proposed bailout, and some suggestions as to alternatives. Please note that I did not write this, but I agree with just about everything that is in it, and frankly, I consider it a far better proposition than the ones that have been discussed in the house to date. Regardless of your political position or affiliation, I urge everyone to look at this and give it serious consideration. If you agree with the suggestions, send this letter (or word it your own way) to your Representatives and Senators. If you do not agree with the suggestions below, please contact them anyway and tell them what you would like to see done. The key is to SPEAK UP!
Finally, pray for them to resist a spirit of FEAR and to embrace WISDOM. Even if you don't like them or agree with them, pray for them and tell them you are praying for them. There is a spirit over this problem that must be broken. Also, most of the media personalities are afraid as well and that is affecting their reporting. Pray for fear to be removed from them; they are making this worse. While I know it's cliche to say that time is of the essence, in this case, it really is.
THE COMMON SENSE FIX
Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:
I. INSURANCE
A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
B. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile whileworking with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
C. This backstop will cost less than $50 billion—a small fraction of the current proposal.
II. MARK TO MARKET
A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.
This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, tostand up, speak out, and fix this mess.
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