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August 2008 - Posts - The Dollar Stretcher
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The Dollar Stretcher

The Dollar Stretcher blog will explore people and money.

August 2008 - Posts

  • Product Review: Bleach Pens(r)

    From the very beginning of The Dollar Stretcher we've always felt that our readers were a major source of knowledge. Everyone is an expert at something. And, often that expertise can help us save some money! We've sought readers advice in "Can You Help This Reader?" weekly since 1996. You'll find articles under the "My Story" series. And, some "Insider Reports" not to mention all the readers' tips that we include between DS, DS for Parents and DS Tips newsletters each week. In short, our readers have been a major source of money-saving wisdom.

    We want to expand that knowledge to the area of product reviews. A few weeks ago I asked what you thought about the idea of doing product reviews. The response was generally good. We've done a few so far. You'll find them in the Community. We want to try to experiment a bit to find the right format. Part of it is giving readers a voice. The other part is distilling that information into something useable. So we invite you to join in the process. Not only in terms of telling us what you think of products and services, but letting us know which products and services we should consider for review. And, also if you have any suggestions on how we can make the process better for everyone.

    This week we begin with a question about "bleach pens(r)". You'll find the question here. Please send your answers  by email or rate them here.

    Keep on Stretching those Dollars!

    Gary

  • Where are you vulnerable?

     When you work with people and their finances you begin to see some common threads. Especially if you have the perspective of time on your side. One thing I've noticed is that very few people, even people who are pretty sharp, have taken the time to determine where they are most financially vulnerable. I don't know why that's true, but it is. 

    Seems funny to me. If you were the commander of a fort, you'd survey the situation and try to figure out where your defenses are the weakest. And, once you found that weakness you'd take steps to stregnthen it.

    Same thing if you were the coach of a football team.You'd spend hours studying film to see where opposing offenses might attack you. I suspect that's true of most team sports. You check to see where you're most vulnerable to attack and adjust your strategy.

    What's interesting about people is that we don't look at our finances the same way. Very few of us take the time to figure out where we're most vulnerable to a financial problem (crisis?). 

    There's much to be gained from asking the question. We'll learn where we should concentrate our efforts. That means that our time and money will be going to the place where they'll do the most good. I like that. It's also the place where we'll get the greatest "bang for our buck".  

    So how can you find our where you are most vulnerable? One way is to hire a financial planner to review your finances. They're trained to evaluate risk. 

    Another way is to do it yourself. By asking yourself three questions you can identify the major risks. Once you've discovered the risks you can begin to search out and evaluate potential solutions.

    The first risk: what happens if I lose my income? Many of us think about what would happen if we lost our job. And, it's a good question. No matter how safe your job appears, it's always wise to have some idea of what would happen if you were suddenly unemployed.

    Depending on your situation you might also want to ask what would happen if your pension quit sending the monthly check. Or maybe the investment checks suddenly stopped coming. Or your rental house is empty. Or you don't get your usual Christmas bonus. Or...(fill in your own lost income here)

    The idea is to take a few moments and decide what you would do if the income stopped and how likely that is to happen. Those two questions will give you a pretty good idea as to how vulnerable you are to lost income.

    The second risk: what happens if you lose your assets (stuff!). Could you handle your home burning? Or your IRA being wiped out? Any other large asset suddenly losing it's value? It does happen. Some assets are safer and more predicatable than others. But, you're wise to evaluate and know how much trouble you'd face if something that you depended on suddenly disappeared.

    The final risk: are there surprise events that could cause you problems? Suppose you had a car accident and were laid up for months or years. What would happen to your finances if that suddenly were you in the hospital bed? The most common suprises are medical. But, that's not the only cause. It could be a sudden change in the economy, a particular industry or even events in a foreign country.

    Admittedly it's hard to predict the unexpected. But the mere exercise is helpful. You'll be looking beyond the normal boundaries. And that's always good.

    Some situations combine all three risks. I know of people who lost their job when the company went under. They also lost their pension. And, to cap it all off, most of their 401k was invested in (now worthless) stock of their former employer.  

    You may find that you have a number of vulnerabilities. If so, you'll need to prioritize them. On the other hand, you might be the person who can honestly say that you've covered all the risks. And that's great! But, it doesn't mean that you shouldn't repeat the exercise every so often.

    The saddest stories I've heard are typically from people who thought that they had their finances in order but found out that there was a vulnerability somewhere that they weren't aware of. So you might want to take a page out of the coach's playbook and take a look at your defense to see where you're most susceptible to an attack. The grief you save could be your own!

    Keep on Stretching those Dollars!

    Gary 

     

  • Auto AC vs Open Windows

    Dear Dollar Stretcher,
    In "Recession Proof Your Family Finances" by Diane Schmidt,she mentions never using the a/c in the car because it uses so much gas; there's a lot of confusion around this and I swear that I've read Click and Clack say that this isn't true; it's the wind drag caused by rolling down the windows that uses more gas; the a/c runs off the battery.  could you please clarify?   Thanks.

    Debra 

    Debra,
    I'm a car nut, but not an engineer so this won't be too techinical, but I'm confident of it since I've read the same answer over and over. Here's what I've read over the years.

    There's no one set answer for all situations. You're balancing two different effects.

    First, the ac does NOT run off the battery. It runs off of the engine. And it does take some extra gasoline to use it. How much depends on the particular car.

    Second, opening your car windows does create some extra drag. More drag requires more gas to overcome that extra resistance to pushing the car through the air. How much drag depends on the shape of the car and how fast you're going. NO drag when you're at a stop light. Lots of drag on the interstate.

    So you're dealing with trying to compare two very hard to quantify numbers. What most experts say is that there's not a big savings to turning off the ac. So if it's hot enough that you need it, don't feel bad about using it. If you're super conscious about saving gas you might want to turn it off and open the windows if you're driving in town. You probably won't increase your gas mileage by much, but for some folks every drop counts.

    Keep on Stretching those Dollars!

    Gary

  • Count Your Pennies

    We've been busy beefing up our blog offerings here at The Dollar Stretcher.com. Along the way we're also learning about some other interesting money-saving blogs. One of them is called Count Your Pennies <www.countyourpennies.blogspot.com> by JG. It's a relatively new blog, but I admit that I enjoyed my brief visit. I suspect that you will, too.

    Keep on Stretching those Dollars!

    Gary 

  • The Best Time

    Saw an interesting phrase last week. It was supposedly ancient Chinese wisdom. Went something like this. "The best time to plant a tree is ten years ago. The next best time to plant a tree is today."

    The more you think about it, the truer it is. If you wanted shade or an apple today it would have been good to have planted a tree ten years ago.

    What does eating an apple in the shade have to do with personal finance? Good question! Let's ponder some of the answers.

    Retirement is a great example. The best time to start saving for your retirement was years ago. Maybe many more than ten years ago depending on how old you are. And maybe you didn't start putting money away in a pension plan, IRA or 401k way back when. So you can whine about not having any savings now or you can plant your tree today.

    Paying off debts is another one. I should have started paying down those credit card balances back when I got that raise. Or when I had that stretch of overtime. But I didn't. So now I owe just as much as I did back then. Probably too late to do anything about it. Guess I could give up and just plan on being in debt the rest of my life. Then again, maybe if I start today it won't be too long before I've made a dent in those balances. Might even get them paid off in the next few years.

    What about taking that course to improve your job skills? Or cleaning out that closet or garage? Or taking that cooking course so you don't visit restraurants so often?

    Wouldn't be surprised if you come up with a whole list of similar ideas that apply specifically to you and your family.

    So don't moan that you didn't start when you should have. So you didn't plant the tree ten years ago. That can't be changed. But you can plant the tree today. And have the joy of watching it grow over the next ten years!

    Keep on Stretching those Dollars!

    Gary

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Gary is a former financial planner and purchasing manager who edits The Dollar Stretcher website <www.stretcher.com> and newsletters. You can follow Gary on Twitter.com/gary_foreman
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