February 2011 - Posts - The Dollar Stretcher
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The Dollar Stretcher

The Dollar Stretcher blog will explore people and money.

February 2011 - Posts

  • Selective Shut Down

    Recently I was exposed to some info on how our bodies handle extreme stress. Situations where our life is on the line. What I didn't know (although it really didn't surprise me) was that our bodies adapt to the situation. Automatically. Without us thinking about it. For instance, if we're being pursued by a predator or in hand-to-hand combat, our body uses all available resources to help us run or fight. Resources that are normally available for digestion or reproduction are shut down. Everything is focused on survival. Then after the threat has passed non-essential activities are restarted and we resume digesting lunch. Seems like that would be a good strategy for us to follow with our finances. When we're struggling (being pursued by creditors) we should shut down anything that's not necessary for survival (think restraurants and other non-essential expenses). Put all of our available money towards surviving the immediate danger. Then after the threat is over we can add back the items we put on hold. If you'd like to do an interesting exercise, take a look at your monthly expenses and decide which ones could have been avoided in an emergency. Even if you aren't facing a budget crisis today, it's good to know that you have a plan if one occurs. And, a side (snide?) comment. Wouldn't it be nice if those in government could grasp this concept and apply it?
  • Rinse, Repeat

    Just a couple of words on the back of your shampoo bottle - "Rinse, Repeat". Some brilliant marketer added them to the directions for use. And, many users followed the directions. Doubling the amount of shampoo they used in the process. No fancy ad campaigns were needed. No changes to the product. Just a very minor change to the packing. And, habits were changed in many, many homes. Along with costs. Would it be different if people thought about it? Probably. You don't wash your dishes or clothes twice. Nor do you wash the rest of you twice in the bath or shower. Why just your hair? A little thought would lead you to the conclusion that "rinse, repeat" simply isn't necessary. How many of your financial decisions are made without serious thought? And, what does it cost you?
  • High Speed Rail

     VP Joe Biden just proposed a multi-billion dollar high speed rail initiative. The Los Angeles Times described it this way:

    Vice President Joe Biden usedPhiladelphia's 30th Street Station, where the nation's only rail line approaching high speed passes through, as the backdrop to announce that the White House will be asking Congress to invest $53 billion over six years in faster passenger rail.

    The funding, like the $8 billion set aside in the 2008 economic stimulus for the same purpose, would support building new high-speed rail corridors and upping speeds on existing lines. Biden said it's about "seizing the future."

    I have a question. If your family was broke, and our government certainly is, would you be buying a train set? When we're forced to reduce expenses in ways that will be painful for many families, is this really the best use of our money? 

    Just asking...

  • Faith vs. Facts

    Recently I heard a phrase that stuck with me. "Don't confuse faith with facts." Often I get emails from people who have gotten themselves in trouble because they were sure that things would work out ok. They committed to a too large car payment because they really liked the car and were sure that they payments could be worked out. But now the facts show that they can't keep up with the payments. So they search for a way out of the bind. Please don't get me wrong. I'm the type of person who likes to look at the bright side. People say that I can find a silver lining in any cloud. I'd like to think that they're right. So I look for ways that things can be made positive. But, looking for the good does not mean that I ignore the bad. In fact, understanding the bad seems to be essential in finding the good. So just having faith that something will work out is no substitute for knowing and applying the facts. Financial decisions should be grounded in facts. Know what your budget can support. Don't assume that everything will go your way. Plan for some bumps in the road. In short, add some facts to your faith. You'll find that things seem to work out better that way. 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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