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January 2011 - Posts - The Dollar Stretcher
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The Dollar Stretcher

The Dollar Stretcher blog will explore people and money.

January 2011 - Posts

  • TDS Quoted in WND article

    Recently I had the pleasure of speaking with Patrice Lewis for an article she was writing. She was nice enough to include me in the finished article. You might want to check it out. I think you'll find it interesting.
    Keep on Stretching those Dollars!
    Gary
  • National Thrift Week

    Just received this notice: This year, after a 44 year national hiatus, Mayor Michael Nutter is proclaiming Jan. 17-23 to be Thrift Week in Philadelphia. Thrift Week events will bring together a broad coalition of citizen leaders who share an appreciation of thrift as the wise use of resources and a conviction that thrift is the friend of sustainable prosperity, broad economic opportunity, beautiful neighborhoods, and a healthy planet. Anything that starts with Ben Franklin, ends with John Templeton and includes Thrift has my support! For more info check out their site.
  • Why Can't I Stop Charging

    This may sound simplistic but my goal is to stop charging, to stop using credit. The simple answer - cut them up, freeze them don't use them etc. Been there, done that a thousand times! So there has to be something in between that I am not getting. - FW

    Gary's response:
    FW is not alone. Many people are unable to control their spending. Try as they might, sooner or later they spend money on purchases that they had not planned on making. So, to paraphrase FW, what is it that we're not getting about the purchases? Why do we find it so difficult to control our spending?

    I'm not a psychologist, but I honestly believe that all of us spend money thinking that we have gotten value in return. We don't spend money just to spend money. At some level, the purchase feels like a reasonable decision.

    So the question shifts to what are we receiving in return for our money? In many cases where we can't seem to control our spending, we're really trying to get something different than the item we bought.

    Sounds strange doesn't it? If I'm buying a new shirt isn't that what I'm trying to get? Maybe and maybe not. I could be trying to impress a co-worker or someone else I'd like to attract. Or maybe I'm buying clothing I don't need to make up for a lack of suitable clothing as a child. Could be that I want people to see my new clothes and not the 15 pounds I gained in the last 6 months.

    One way for FW to understand their spending is to ask what emotion they feel when they're about to make the purchase. In some cases that emotion can lead them to understand the previously unexplainable purchases.

    In other cases, it can be used as a warning signal. Presence of the emotion means that you should make sure you're not in a position to spend money. Flee the mall! Turn off the computer shopping site! Take immediate action to remove the ability to charge a purchase.

    For some people these strategies will work just fine. But, for others, they will still struggle to control their spending. For them the only answer may be to not have any credit card accounts. If you don't have a card you cannot use it. Just like an alcoholic can't be a social drinker, the out-of-control spender has no choice but to avoid credit.

    Only FW knows for sure whether spending can be controlled. And, ultimately the bills belong to FW whether the purchases were planned or not. Hopefully FW will find a way to control their use of credit.

    Keep on Stretching those Dollars!
    Gary

  • The Future of Your Job

    Recently USA Today had an interesting article. It discusses how unemployment may be changing in the U.S. 

    In the past we looked at unemployment as being temporary. A time where someone was between jobs. And, generally that was true. Not only was our unemployment rate low (3 to 5% for most of the time), but people tended to find new jobs fairly quickly. 

    The article points to some economists who say that is changing. Our economy, by it's very nature, has always included some upheaval. Some industries were declining (typewriter repairmen for instance) as others were growing (personal computer repair technicians). So the typewriter repairman was likely to lose his job. And finding another job could require him to learn new skills. Like how to repair pc's. That's been true for generations. There was a time when buggy whip makers needed to learn how to install auto interiors if they wanted to continue working. The same is true today.

    But, something else is also going on today. Machines and technology are replacing many jobs. Years ago a stock clerk needed to put a price tag on every item in the grocery store. And, another clerk needed to enter that price into the cash register at checkout. Not to mention the clerk who checked the shelves to see if more product needed to be put on the shelf. Today bar coded products have eliminated much of that work. What used to take 4 people to do can now be done with 1.

    So what does that mean to you? It's probably a good idea to take a look at your profession with an eye towards the future. Ask some questions. Is your industry in a permanent slide? Could technology make your job unnecessary? What will it take for you to continue to be a valuable asset as an employee.

    If you think that you might be a candidate for a layoff or have already lost your job, you might want to visit our layoff resource page.You'll find a step-by-step process to help you get back onto the employment rolls.

    The experts may be right. Maybe the average unemployed person will stay jobless for a longer time in the future. But, none of us live out the average. What matters to us is how long it takes me to find another job. And, we do have some control over that. We can take steps to reduce the time to find a new job/career. 

    So if you're concerned about your job, read the USA Today article and The Dollar Stretcher layoff page. Who knows? You might be someone who helps to make the experts look foolish by quickly finding a new career!

    Keep on Stretching those Dollars!

    Gary

     

  • TDS in Survivalist Top 40!

    Just found out that our forum is included in Top 40 Blogs for Survivalists. The site focuses on issues of homeland security. You might want to check it out!

     

  • Frugal Price Alerts

     Hello to all my Frugal Friends!

    Wanted to take a moment to focus on something that's new for us. Something that I think will benefit everyone if we can convince enough people to use it.

    Fairly frequently we get emails or posts in our forum telling us about a specific sale or promotion that could benefit our readers. In the past we really didn't have a good place to put that info so everyone would have access to it. Well, now we do.

    We're asking you to share any really great prices, promotions or deals that others can use to save some money. Kinda like a price alert. Between us we have tens of thousands of frugal shoppers. That's a lot of eyeballs looking for good deals. Let's share them with each other.

    Help us get started. Post your find here  or just check in to see what others have posted.

    Keep on Stretching those Dollars!

    Gary

  • Rational Financial Decisions

    We all like to think that we're rational human beings. That our decisions are based on facts and logic. After all, that's what intelligent people do. At least that's what we think they do.

    It turns out that there's a pretty healthy controversy about that. For years, economists at the Univ. of Chicago have promoted the view that people consider all the relevant facts and then make decisions based on what serves them best. They've even reduced many decisions to mathematical formulas.

    Other economists say that humans can't possibly include all the relevant information in their decisions. There's just too much data for any person to rationally evaluate.

    I think that both schools may be partially right. Let me relate a recent personal shopping experience to illustrate. I was in the market for a TV. Spent part of an afternoon researching the different models and pricing available. Used both newspaper ads and online tools. Then I headed out to two local retailers to see what I could find. With a little negotiation I got what I felt was a pretty good deal with the second local store.

    Was it the absolute best (i.e. most rational) choice for me? Hard to say. It is possible that there was a cheaper price or more full featured model available somewhere. But spending more time and energy searching for it didn't seem worth the effort.

    Rational? I had a pretty good idea of what I wanted and what I would have to pay to get it. I shopped and negotiated to get the best price possible. Seems rational.

    Yet, there was an emotional element involved. I was anxious to replace the TV that had failed. It was one that I watched almost daily. Really didn't want to be without it for very long.

    Again, was it a rational buying decision? Probably so. Emotion was part of the choice, but didn't dominate the decision. I might not have gotten the absolute best TV or lowest price, but was probably pretty close.

    Let's ask a different question. Will everyone arrive at the same rational conclusion? Is it possible for something to seem rational to you while seeming irrational to me?

    For instance, if you're struggling to pay the rent, does it make sense to have cable TV? Or why are most lottery tickets sold in low income neighborhoods? Cable TV might seem like a luxury (and compared to food it is), but if you're unemployed TV might be your only escape from troubling thoughts. Or that lottery ticket might be a way to keep hope alive for a family that's never had much money or hope.

    Don't get me wrong. I'm not advocating cable TV or lottery tickets. Nor am I condemning them. Just trying to make the point that we won't all define rationality the same way.

    OK, so what does this mean to me? How does this affect my daily finances?

    It's an opportunity to evaluate how you make purchases and other financial decisions. A chance to consciously choose what things to include in your decision making.

    By doing so you might find that some of your choices have been overly emotional. You might identify some patterns or emotions that lead you to poor choices. It's even possible that you'll take a second look at what should go into a 'rational' financial decision.

    You'll also want to consider the assumptions that you used to make a decision. For instance, as gas prices rise you might think that getting a newer, more fuel efficient car would make financial sense. But, a little math could show that it will take many years and thousands of gallons of saved gas to pay for the new ride. It might seem like a rational decision, but if you look at the underlying assumptions you find it's not rational at all.

    We all like to think that we're making sound, rational decisions. But the truly rational thing to do is to periodically take a close look at how you make decisions. And, in so doing, make sure that your decisions truly do take your best interests into account.

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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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