The Dollar Stretcher

Pinterest Wow!

Gary — Wed, 20 Mar 2013 15:36:00 GMT

Awhile back I mentioned that The Dollar Stretcher could be found on Pinterest. Evidently there must be a lot of TDS readers on Pinterest because the response has been awesome! We're seeing a lot of interest in our boards. And the repin rate has been amazing!

We wanted to say 'thanks' to everyone who has helped make us welcome on Pinterest. I can't share details yet, but I can tell you that we'll be having a Pinterest contest beginning on April 1st. We'll be giving away a number of Amazon gift cards with one grand prize winner getting a $100 card! We'll share info here and all around TDS when the contest is started. Don't miss it! Hope that you're one of our winners!

Keeping on Stretching those Dollars!

Gary

Where there are no bars

Gary — Thu, 07 Mar 2013 14:12:00 GMT

Had an interesting conversation the other day. I was speaking with K. during a brief break from her work. She's been working some brutal hours and is on call pretty much 24/7. It looked like she might get a break this weekend and try to get away for a day or two.

We talked about finding a quiet relaxing place. But, she said that what she really needed was a place that did NOT have a cell phone signal. We joked that we'd have to see if anyone has created an app for that: places where there are no bars!

While it's funny, it does make you wonder if too many of us are trying to live too fast. Personally I'm goal driven. I want to get to my destination as quickly as possible on the shortest route possible. But, I'm beginning to recognize that might not always be the best solution. I suspect that I've deprived myself by not going a little slower and doing some sightseeing along the way.

Don't know if there's a moral to this story. Guess maybe it's that we should all vary our speeds a bit. Not always fast or always slow. Giving ourselves a chance to get somewhere, but also experience something along the way. But, as they say: your mileage will vary!

Keep on Stretching those Dollars!

Gary

The Spending Choices and Happiness Quiz

Gary — Thu, 21 Feb 2013 15:41:00 GMT

Hello to all my Frugal Friends!

Wanted to alert you to a couple of things of interest.

Awhile back I was fortunate to meet Ryan Howell. Ryan is an assistant professor of psychology at San Francisco State University. He's created a "Personality & Well-being Lab" that works understand the role of finances and consumption in people's happiness.

One way he does that is by asking people to take online quizes. Right now he has one on Spending Choices and Happiness. If you have a minute or two (it doesn't take long) please take the quiz. You'll find it here . It does require you to register, but it's easy, free and informative!

Also wanted to mention that on the site we have a special section on crafting. How to craft without spending money, how to make money on your crafts and more. It's in the right hand column near the top.

Keep on Stretching those Dollars!
Gary

The Movement to Reduce Debt

Gary — Thu, 14 Feb 2013 14:14:00 GMT

At the beginning of the year I mentioned something called the Debt Movement. It's organizers hope to pay down a total of $10 million of debt by getting individuals to join in a report how much they've repaid.

According to Jeff Rose, who started the movement, there are current about 1,900 people signed up with $175,000 of debt paid off. One reader already paid off the $3,000 of debt she had so she's completely debt free.

I like the idea. Most of us are more likely to accomplish any goal if we have encouragement, companionship and accountability. That's one of the reasons that we encourage TDS Forums. It's encouraging to see that we have over 300,000 posts from readers like you. I don't know how many people were helped by those posts, but I'm sure that it's more than a handful.

So why not take a few moments to check out TDS forums and The Debt Movement site?

Keep on Stretching those Dollars!

Gary

Being Frugal vs. Valentine's Day

Gary — Thu, 07 Feb 2013 16:08:00 GMT

Hello to all my Frugal Friends!

Is it possible to be frugal and be a good Valentine at the same time? You have to wonder.

According to the National Retail Federation we'll spend $18.6 billion(!) on Valentine's Day. The average American will spend $131 on their significant other. Seems like the consensus is that you have to spend big to show how much you care for that special someone in your life.

Well, I beg to differ! I don't think that you demonstrate love by spending more. In fact, unless your very wealthy it's probably very unromantic to spend a bunch of money trying to show your love.

Suppose you spend $100 on a really nice, romantic dinner. You'll both enjoy a nice evening and hopefully build some memories. But, if you put it on your credit card you'll be paying for it for 2 years. Does your mate really want you to be in credit card debt? Wouldn't your life be less stressful and more loving if you didn't have the debt?

So if you still haven't spent the average $131 you might want to check out the Valentine's Day section of our library. You'll find literally dozens of ways to show your love in a frugal, but still romantic, way!

All the Best!

Gary

My Debt to Society

Gary — Wed, 30 Jan 2013 19:27:00 GMT

I heard a phrase that you don't hear too often anymore. It was on an old TV show. One character said that another had 'paid his debt to society.' He meant that the person had been in jail and the time spent there was considered sufficient to pay for his mistake. In effect the prisoner had given up his freedom for a period of time to repay society for the wrong he had committed.

As regular readers know, I've been on a crusade against debt for over 20 years. I don't like debt whether it's individual, corporate or government. I look at debt as being somewhat like a prison. While in debt I'm not free to do whatever I want with my money and a portion of my life is committed to earning enough to repay the debt.

With the TV show as a springboard I couldn't help but think of the debt that all U.S. citizens owe. According to the U.S. Debt Clock site the debt per citizen is over $52,300. Which means if I were to earn $20 per hour I'd need to work 2615 hours or 65 full-time workweeks to pay it off. Or, since it appears that we don't plan on paying it back anytime soon, I'll be working 524 hours to pay the $10,484 each of us owes in interest each year.

I understand that some economists think that public debt doesn't matter. As you might guess, I disagree with them. But that's another topic for another time. Suffice it to say that we're all wise to do whatever we can to control and eliminate our personal debts. We hope that this week's issue can help you do just that.

Keep on Stretching those Dollars!
Gary

Are Your Savings Really Safe?

Gary — Thu, 31 May 2012 21:01:00 GMT

Boy, this one is a shocker. CNBC is reporting that banks are being pressured into buying government debt (story here). They say that US banks have bought $700 billion worth of Treasuries since 2008. So what's wrong with this picture?

Let's drop down to the real world and take a look. You managed to save $1,000 and put it in a bank. You feel safe because of the FDIC or FSLIC insurance. After all, if the bank goes under, Uncle Sam will make sure you don't lose any money.

But, let's for a moment suppose that a few years from now the bank does fall on hard times. The people who they loaned money to can't pay it back. So they're closing the doors. You're ok, though, because the insurance has your back.

But, wait...there's more. You find out that part of the reason that the bank is having trouble is because the US Treasury can't repay the money they borrowed when they issued the $700 billion in bonds. Humm...could that be a problem for you?

You betcha! The same government that promised to guarantee your savings can't pay their own bills.

In reality it probably won't happen that way. If the government couldn't raise enough taxes to pay their bills they'll just run the printing presses. They'd issue enough dollars to cover their debts. So your savings would be secure. You'd still have $1,000 in the bank. The only problem is that you'll need that much to do your weekly grocery shopping.

So the next time you hear about government borrowing remember that it's your savings they're playing with.

Can Boomers Depend on Social Security?

Gary — Fri, 13 Apr 2012 14:18:00 GMT

As a baby boomer who has been involved in personal finance for 30 years I try to follow what's going on with Social Security. And I have to say that I'm not that happy with what I'm seeing. Just finished reading a report from Reuters that set off the butterflies in my stomach. Here's the first few paragraphs:

CHICAGO (Reuters) - The trustees of Social Security will release their annual report on the program's health sometime in the next few weeks, and the news will not be good.

The 2012 briefing is expected to show further deterioration in Social Security's financial outlook, due to the higher-than-expected 2.9 percent cost-of-living adjustment awarded this year and a decline in the taxable wage base available to the program. The report is the official gauge of the program's health - signed by three Cabinet members, the Social Security commissioner and two independent Congressional appointees.

Social Security is not in imminent danger of running out of money, but it faces a financial crunch a bit further out - around 2035. That is when Social Security's Trust Fund is projected to be exhausted due to the drawdown of benefits by the baby boom generation. At that point, the program would have sufficient tax revenue to pay only about 76 percent of promised benefits.

The article does a brief Q&A with Steve Goss, the chief actuary of the Social Security Admin. In it Mr. Goss tries to encourage people to wait until age 70 to begin taking benefits because they'll get more each month. And, his analysis is correct as far as it goes. But there are two things that weren't mentioned in the Q&A.

First, you really should take a look at how long you're likely to collect those benefits. Most of us boomers have already buried one or two friends. We hope to be among those who live into our 90's. But, based on our family history and our own current health that might not be too likely. If none of your parents or grandparents lived past 65, you might want to start taking Social Security as soon as you're eligible. At least have a financial planner (or a financial website) put together a projection of how long you'd need to live to make up for the years that you delayed getting Social Security.

Secondly, what happens around 2035 (just 23 years from now)?? Yes, we have a promise of what benefits will be paid. And, yes, there are cost of living adjustments. But what happens if the money simply isn't there? In a few short years (hopefully prior to 2035) we're going to be facing a decision. Will we ask seniors to take less in Social Security or will we take more from younger workers (and taxpayers)?

It's not a stretch to think that one of the first suggestions will be that people who have accumulated some savings will be asked to take reduced SS benefits. That's particularly relevant for people who have lived frugally so they could save for retirement.

And, I'm old enough to recognize that sometimes people make promises that they're unable to keep. Being frugal I'm naturally cautious. In effect Social Security has promised to raise taxes on our children and grandchildren. I question whether our kids can meet those promises and still support their own families. So I can't help but wonder how SS will keep the promises that have been made.

Bottom line? I'm not suggesting that everyone take their Social Security benefits as soon as possible. Just saying that you should look at some numbers before you make a decision. Consider your life expectancy and the ability of Social Security to keep it's promises in the future. Hopefully the money will be there and you'll collect benefits for 30 or more years. But, you'd be less than prudent if you don't consider other alternatives

Keep on Stretching those Retirement Dollars!

Gary

MIT Researchers Predice Economic Collapse by 2030 - Really??

Gary — Thu, 05 Apr 2012 11:53:00 GMT

Interesting piece in Yahoo this morning. It says that researches from MIT project that the world will run out of resources by 2030. You can read the article here.

A new study from researchers at Jay W. Forrester's institute at MIT says that the world could suffer from "global economic collapse" and "precipitous population decline" if people continue to consume the world's resources at the current pace.

I'm not an MIT graduate and I don't play one on TV. So I probably can't match credentials with the MIT folks. But, I do think I have something that they've neglected to factor into their research: common sense.

To make their prediction they need to forecast both the growth of population and the growth of available resources. And, I believe that's where their analysis breaks down. Here's why. There's no way to forecast what new technologies will do to the amount of resources available in the future.

Consider these examples from the past. 150 years ago people thought that population would outpace the ability of farmers to produce food. Ofcourse that was before the combine, tractors, modern ag schools, hydroponics and a whole host of other tools that have multiplied the food supply many times over.

Or what's happening to the energy market today. Just in the last few years we've discovered that we have much, much more recoverable natural gas than we thought we had. And, if some researchers are correct, the same may be true for crude oil. We've only begun to explore solar and other renewables. Not to mention nuclear power which didn't exist 50 years ago.

If that's not enough to convince you that we can't predict what man's ingenuity will make available for us, consider the computer/tablet/cell phone that you're using to read this on. 20 years ago none of that was possible. But it was and it has made many human endeavors much more productive. And, we've only scratched the surface. The personal computer is only 20 years old. Think of where the automobile was in 1920 compared to today. What might we be doing with computers (and their offspring) 80 years from now?

So while I'm sure the researchers at MIT meant well and used all the right math and algorithms, I think that they forgot a very important element. Man's ability to put his mind to solving problems. So to that extent, we should thank them for helping to spotlight the problem and then root for those who will discover ways to solve them.

Keep on Stretching those Dollars!

Gary

Homes Available for the Price of a Car?

Gary — Wed, 04 Apr 2012 11:58:00 GMT

Just read an article from Yahoo on how there are some homes available for the price of a new car. And we're not talking about some uber-luxury model like the Maybach or a Ferrari sports car. We're talking about cars like the Honda CRV or the Ford Fiesta!

I even know the area where one of the homes is (Two Rivers, WI). Not far from the old family homestead and in the heart of Packer country.

Now I don't know what's available in your hometown. Or whether now is a good time to buy real estate. My inner expert tells me that there's still a lot of homes that will be foreclosed on or sold short in the next few years. So there's probably no reason to hurry. But at these prices and with mortgage rates being so low, it might be a good way to lock in a low rate. Especially if inflation kicks in and rents begin to rise.

So take a look and let me know what you think.

Keep on Stretching those housing Dollars!

Gary

revision: Weds 4/4 9:45 am

New data on housing prices from Calculated Risk Blog. Seems as if housing prices continued to drop in February, but that the rate of descent is slowing down. Who knows, maybe we're getting near the bottom.