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December 2008 - Posts - The Dollar Stretcher
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The Dollar Stretcher blog will explore people and money.

December 2008 - Posts

  • Voluntary Simplicity

     Received this in my in-box the other day. 

     Hi Gary,
    I am a student at Bournemouth University (UK) who has recently come
    across the Voluntary Simplicity movement. It has really interested
    me and subsequently, I have decided to write a dissertation piece on
    the subject. I am looking for some volunteers to take part in the
    interviews, which should last between 30 minutes and one hour. If
    you would be willing to participate, I can send you the discussion
    guide in advance, and any information you provide will only be seen
    between the examiners and myself.

    Many Thanks, I look forward to hearing from you.
    Hannah

     So if you've been involved with voluntary simplicity and are willing to share your experiences please contact Hannah. You can reach her by email here

    Keep on Stretching those Dollars!

    Gary 


  • Crisis or Opportunity?

    I heard an interesting thought the other day. It was that crisis reminds of us of what's important. For instance, when we're young and healthy we don't give much thought to tomorrow. But, when you're stuck in a hospital bed contemplating life and death, it's only natural that you try to focus your thoughts on what's really important. That's not the time to be thinking of trival stuff. 

    The same is true of our finances. When times are good we add all kinds of discretionary expenses. After all, we have the money. No reason that we shouldn't enjoy a little luxury. And is cableTV really a luxury?

    But, when times are tough it's only natural to separate the things that you really need (i.e. shelter, food, immediate medical care, maybe transportation) from the things that simply aren't that important (i.e. entertainment, a fancier car, stylish clothing, etc).

    And, that's a good thing. It's important for us to know which things have a high value to us. Otherwise we'll forget their value and just treat them as being unimportant. I

    I need to be reminded that my family is more important than my stuff. That time with them is more important than television. That having a home is more important than what toys are in the garage or driveway.

    So in a way I could say that hard times can be a blessing. If I let myself, I won't be distracted by the things that I dont' have. But, rather I'll place renewed importance on the things that I do have.

    Keep on Stretching those Dollars!

    Gary 

     

  • Deck the Malls

    Left work a little early and made my annual visit to the mall yesterday. Our local mall is about average sized. Three main anchor stores (Sears, Penney's and Macy's). Not one of these huge megamalls, but still not small.

    As you'd expect there were Christmas carols playing in the background and the mall was decorated in winter finery (even in Florida we appreciate fake snow!). But there was one thing missing...shoppers. Granted it was 5 pm on a Wednesday, but you'd expect there to be some shoppers bagging holiday bargains a mere two weeks before Christmas.

    I admit I don't know what to make of this. According to CNN "black Friday" sales were up 2.2% from last year. At the same time the International Council of Shopping Centers reported that November 2008 sales figures were the weakest in 35 years.

    It could just be that our local mall has become obsolete. There are much larger malls half an hour's drive north and south. Like many shoppers, I buy most of my Christmas gifts online. And, when I don't buy online, often I'm looking for personalized help, so I shop at the much smaller mom and pop shops that tend to be in smaller shopping centers.

    I'd love to hear what you see happening this holiday shopping season. Please drop me an email.

  • Why Bailouts Are Dangerous


    Let's start with a disclaimer. I don't like to see any company fail. And I don't like to see anyone lose their job or their home. But, just because I don't like it, that doesn't mean that it won't happen. Let's face it. There are some things (like death and taxes) that I don't like, but are very much a part of reality.

    That's my concern with government bailouts. Often they don't seem to have much to do with reality. And rarely do they do anything about the root causes of the problem. The end result is that they make a bad situation even worse.

    Take the banking/housing bailout. Just this week a new government study reported that 53% of homeowners who received restructured home loans were in default again. They weren't helped. People who were already hurting were just put through additional hassle. And when they  attempt to restore their credit scores it will now be harder and take longer. For these people the bailout was not helpful.

    There comes a time when it is most merciful to recognize a situation for what it is. Some people are in homes that they simply cannot keep. To lead them on is cruel. To do so while you claim to be helping them is unusually cruel.

    If you want to help these people, find them housing that they can afford. It won't be as fancy. But they'll have the comfort of knowing that no one is going to take it away from them.

    Take the money that's going to bailouts and give them job training so that they can earn a better income. Show them how to build credit by paying off credit card balances every month and staying current with their auto loans. Explain how borrowing money that they can't repay will make their lives harder. If you really want to help them, those are the steps to take.

    The bailout has hurt the banks, too. Bankers know that these bad (so called 'toxic') mortgages are owned by many banks. Those banks are at risk of going under. So bankers are reluctant to lend money to other banks for fear that they won't be repaid. The longer that these bad mortgages exist, the longer we'll have banks that are afraid to lend money. So the credit crisis will continue.

    And, that's showing up even among good credit risks. You may have received a notice saying that the credit card company is reducing your credit limit. Or, if you haven't used your card in awhile, they have chosen to close your account.

    That's not the only way that those who had nothing to do with the banking/mortgage crisis are paying. Ultimately someone has to pay for the bailout. Now we all know that Washington isn't going to reduce other spending or raise taxes to pay for the bailout. They're going to borrow the money. So not only will we be paying for the bailout, but we'll also be paying interest on the money that was borrowed for the bailout!

    That deficit spending will also likely cause additional inflationary pressures. So if you have money tucked away in savings, you'll need to take precautions against inflation eating them away.

    Plus it looks like we'll be going through this again and again. The line up for bailouts is beginning to resemble the ticket window for a hit Broadway show.

    Each time the failed company/industry/state will show how much human suffering will happen if they are allowed to go under. The stories will be compelling. And, the media will play them over and over again.

    But, remember this - if the bailout does not address the root causes of the problem, it will not solve it. It will only delay the inevitable and make a bad situation worse. And, the suffering will spread from a few people to a lot of people.

    Choices have consequences. We can choose to bailout those who made poor choices and attempt to reduce their consequences. Bailouts will not make the consequences go away. They can't. They can only spread the suffering around.

    And worst of all, bailouts leave the people who made the bad choices no wiser for their next decision. They will have been denied the opportunity to learn from their mistakes. That makes us all poorer in the end.

    Or we can require that any bailouts address the root causes of the problem. That will mean that those who made poor choices will learn from their experiences. It will also mean that we'll keep the consequences to a minimum and have a healthier financial system which means a better life for all of us.

    Keep on Stretching those Dollars!

    Gary

  • Making Memories

    For many of us, the holidays are a time of memories and family traditions. And many of those memories go back to our
    childhood. I remember buying the family Christmas tree with Dad. Mom wrapping presents while watching Christmas specials
    on the living room TV. Many good memories float to my consciousness.

    I understand that not all holiday memories are good ones. We don't get a pass on bad things happening just because we're in
    the "holiday season." Wish that it was true, but it's not.

    So my hope for you is that you and your family get to make some very happy memories this year. Memories that your
    children will remember fondly when they're decorating their home in anticipation of their grandchildren coming to visit.
    In fact, you might want to put that near the top of your "to do" list this year. Make a happy memory that your children
    will carry with them.

    Keep on Stretching those Dollars!

    Gary 

     

  • Use Those Veggies

    I received an interesting email the other day. As you know, we've encouraged people to check out local agriculture resources. Often you'll find healthier foods at lower prices. Many of you have gotten involved with community supported agriculture. That's where the email comes in.

    So, I have a meal planning "tip", for people who get produce boxes from local farms (community supported agriculture). I have a free meal planning tool that I have built for this purpose, and intend on always keeping it free. It features healthy recipes, and the search function is designed to efficiently utilize all the veggies from the CSA box.

    I would love it if you could tip off your readers to this planner - I want to support buying local and small farmers. Thanks so much!

    http://mealplanner.eatrealgood.com

    -Alana Johnson

    Alana is right. There's no sense buying inexpensive veggies if you don't use them. And one of the best ways to use them is to search for creative recipes that include those veggies you wish to consume! So check out Alana's tool and let me know what you think.

    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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