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September 2008 - Posts - Yankee 2.0
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Yankee 2.0

September 2008 - Posts

  • "thrifty" commercials

    There I was, watching the Antiques Roadshow on my 10+ year old televsion (tuned in through rabbit ears, as I cancelled cable this summer), and when some boring sports item came on, I flipped to one of the other three channels I get. And thre I saw two ads in a row for food items that were being marketed as budget-friendly.  Very savvy, Madison Ave -- and quick, too! Same day as the failed bail-out package.

    The first ad was for Kentucky Fried Chicken and was called "The $10 Challenge." It featured a mother and two kids going to the grocery store to see if they could find the fixin's for a KFC meal for four for under $10.00 (presumably, that's what the bucket of dead chickens dusted in chemicals costs -- did I mention I'm a vegetarian?). Of course, they can't meet the challenge, so they gleefully go off to KFC to "save money." You, the viewer, are thus able not to have to do that hard math, and can just trust that the KFC meal is less expensive than buying real ingredients. I seriously doubt that this is true, but it's a marvelously clever (and deceptive) commercial and really gets the spirit of the times.

    The second was for some frozen version of breaded dead chicken that you can cook at home. I think it might have been Banquet brand, but regardless, their tag line was something like "easy on the budget." (I was starting to fall asleep at this point, but was intrigued by the two "thrifty" commercials in a row).

    So, the advertisers now want us to buy "thrifty" food that we don't need (and that isn't thrifty) rather than "luxury" goods (that aren't really that luxurious) that we also don't need. It's interesting the different bill of goods we're being offered -- garbage to put in our bodies, rather than garbage to put on our bodies (coach bags and the like) -- as the economy downshifts. Still, that home-made fried chicken (or tofu, as the case may be) will always be a better value.

  • Another debt down

    Well, I've gotten paid from a new client and used part of the money to pay off a store credit card (at 0% interest) that I had opened to pay for a new mattress and box spring 18 months ago. I love my bed -- it's a tempurpedic and it really is restorative to sleep on (my dog and cat think so, too!).

    I now have four debts, but they're all doozies. A big fat credit card (just under $9,000), a home equity loan, a mortgage and monster student loans (which I'm ignoring as long as possible -- I can keep it in deferment for a few more years). 

    So now that my "small" debts are gone, it will be a while before I can say that I have paid something off. This is slightly discouraging, because I really enjoy the payoff feeling. I have to learn how to be joyful at seeing my other balances get slowly chipped down.

    So using a slightly modified Dave Ramsey targeted debt payoff plan, I'm rolling some of my bed payment into the remaining credit card (5.9%) and some of it into an online savings account (3.5% interest). Because my pay is sporadic (self-employed), I really don't want to put all my disposable income into debt payoff, because then I might wind up using my credit card if I'm in a tight spot. 

    Hearing all the scary economic news, I feel a little bit better knowing that I am sleeping on a bed that is mine, free and clear. 

  • (750) Billion dollar bailout vs. living within our means

    Like everyone, I've been following this whole financial meltdown in the news. A lot of us regular people have been saying "what does all this mean to me?" Well, I was listening to a call-in show on my commute yesterday and an economist was answering questions really clearly. He said, "What this means to the average person is they won't be able to purchase things that they don't have the cash for. So if you want to buy a house, send your kids to college, buy a better car, or go shopping at the mall, you might not be able to get credit for those things." 

    What?!?! A home purchase or college education is a major life milestone. And they require loans and financing (for most of us), and it would be terribly unfair if only people who were wealthy enough to pay cash for those things could access them. (As much as a financial burden as my student loans are, I very much appreciate my education and wouldn't go back to my pre-college mindset). But going to the mall???  Is our government going to print up $750 billion to prop up failed private businesses so that people can charge up junk they don't need at the mall or get a fancier car? 

    I guess those of us who are working to get totally out of debt and live on a cash-only basis won't be affected by this whole thing at all. We already have our debts, and we're not planning to incur any more. And maybe people who are thinking about living beyond their means will re-consider it and choose thrift instead. Maybe this whole "thing" will start a savings revolution. 

    It sure does seem like rich people are trying to help rich people who made foolish decisions and the average person is going to have to pay. I don't really understand the whole thing (who does?), but I do feel a very generalized sense of anxiety about the economy and our society. I am going to try to double up my savings and bill-paying so I can feel a bit more secure in this crazy environment. 

  • Dangerously cheap?

    I'm always on the lookout for quick cash schemes. Craigslist is a main source of ideas, and as I've been looking at the postings on CL over the past few months, I keep seeing posts for different "sleep studies" at a nearby University hospital. They usually require that participants live in the hospital/research center for 21 days, which isn't feasible for me right now (I do actually have real jobs that require my physical presence). They're also usually for people who are older or younger than I am. However, they promise to pay participants around $5,000 for the 21 day study.

    So I decided to write to the researchers to see if there were any shorter-term studies that I might be able to do in January (in between the semesters). I got an email back that there is an 8-day study for people in my age group that pays $1400 on completion. Great! So I asked for more details...

    Well, the first step is that you have to log your sleep at home for three weeks and wear some sort of wrist monitor (I'm sure my smart-alecky college students would think I was on some prison monitoring system) during that time. Okay. There are regular blood samples taken, and you have a pre-lab screening with a psycologist. Alright... Then you go into the lab for 8 days and are kept immobile and sleep deprived. What???? Yep, you agree to be put into a windowless room and kept awake for 20 - 36 hours while lying in bed. You are allowed minimal stretching, but nothing that gets your heart rate up, and you are given "the equivalent of the nutrition needed for three meals a day" (what does that mean?). You have no access to anything that gives "an indication of the passage of time" -- Apparently it's to study sleep deprivation on astronauts, but who knows, it might be for torture purposes. Anyway, it seems like torture -- how do they make sure you don't fall asleep? Poke you with a stick? Electrodes?

    Possibly the worst part is that you agree not to have any caffeine during the entire period (not just the 8 days, but also the 3 weeks leading up to it). Ugh. You can't drink alchol either, but I don't anyway, so that's no problem for me. The coffee is my beverage of choice.

    Yet, despite the fact that it's clearly torture (and also unpleasant due to no coffee), and despite the fact that the pay is so not worth it -- I mean, torture me and deprive me of coffee for only $1400? I'm still sort of thinking about doing it. Because $1400 is $1400, and really, it would only be 8 days of actual torture (assuming I even pass the psychological screening, who knows?), and I wouldn't be working anyway during those 8 days.

    I was discussing this with some friends last night and arrived at the idea that I would definitely do it for $3000. I wonder if we all have "a price", or at least a price point where we're willing to take on some risk (even physical risk) and how that changes over time. How much would you, readers, accept to participate in this sort of study?

  • Weekly Allowance

    As part of debt-reduction/fiscal awareness, everyone tells you to write down everything that you spend for a month or so. I've done that a few times in the past, and used it to arrive at a system that works really well for me. After analyzing my spending patterns, I decided that I can live very comfortably on a budget of $200 per week.

    That money is enough to cover groceries, pet food, gas for my car, clothes, coffee, lunches out, movies, books, haircuts, etc. Everything that is not a scheduled monthly or annual expense comes from this fund. I also put whatever is left over when the next Friday arrives into a savings account. When the money is gone, it's gone. I take it out on Friday, and sometimes I've spent it all by Sunday, so then I have a lean week, but I don't take out any more from the bank. Sometimes, I only spend $20 in a week, and I put the remaining $180 in the bank. 

    This system works for me for several reasons. First off, I'm mostly self-employed (and the college where I teach only pays us three times per semester, so that's just like being on a self-employed schedule), which means I get huge piles of money at times, and then nothing at all at times. Since money burns a hole in my pocket, having this agreement with myself is like getting a regular paycheck, and it's easier to manage.  It used to be that if I saw something pretty that I wanted and I had the money in the bank, I would just get it and deal with being broke later. Now, if I see something I want, I think "well, I've got $200 to live on this week, is it in my budget?"

    Secondly, I really don't like the whole writing things down process of spending -- I did it, and I arrived at this figure through that, but this way, I know what I have to spend, and I don't feel guilty if I want a $70 deep tissue massage or if I want to pop down to NYC for the day -- I make those choices knowing it might mean I'll eat beans all week. It gives me a parameter to work with. 

    Next, all the experts say that we're tighter with cash than with debit. Knowing I have $200 in my wallet makes me feel secure and independent, and I am often quite happy not to spend it. I also like not leaving a transaction trail behind me with debit purchases. 

    Lastly, it has gotten me to save. $200 per week seems (to me, anyway) like a pretty generous amount of money. Even with the cost of gas so high, I can meet my basic needs on less than $200, so I almost always tuck away at least $20 to put into savings.

    Over the summer, I had no income and wasn't able to live on this budget -- I only had $10 to live on some weeks. But I'm solvent again, and am back on my plan. It's nice to be in control of my finances again! I'm amazed at how much free-er I feel now. 

  • Craigslist, how do I love thee? Let me count the ways...

    As I was writing my last blog post, I received an email from someone responding to one of my many Craigslist postings offering stuff for sale that I don't use and have hanging around the house. This particular item was a Regina Carpet Steamer (that I had bought used at a tag sale several years ago and gave up on using). Sold it for $22.00

    So I thought I would write an ode to Craigslist and list all the recent reasons why I love Craigslist.

    1) Got a tutoring job ($640 per month of income during the school  year).

    2) Sold that big carpet steemer ($22.00) that had been taking up space.

    3) I actually found two different households that came to my basement and hauled enormous piles of dirt out of my basement for use in their own projects. I was quoted $750 from a contractor to do this work.

    4) Sold a bicycle and accoutrements (helmet, basket, etc.) that I wasn't using for $125.00 

    5) Gave away a big bag of old clothes

    6) Advertised a neighborhood tag sale, at which I made $200

    7) Traded two arbor vitaes for two hydrangeas

    And that's just this summer! Oh Craigslist, you are so beloved to me!!!  

  • Spending as a reward and changing my thinking

    I started a new part-time gig today. I'll be tutoring a college student for four hours a week in 101 humanities courses. His mother is more interested in his success than he is, but I  think it will be an interesting challenge to try to get him more involved in his schooling.

    Anyway, I'll be making $40.00 per hour (not too shabby! Thank you Craigslist!), and my goal is to have that pay for my home heating oil (or at least go towards it). But as I was making my way to our meeting, I thought, "I wonder if there's a coffee shop nearby, and I can treat myself with a nice coffee when we meet." But then I started tallying up all those $1.50 coffees (or whatever it would cost), and said "no way!" I like my own homemade coffee, but I was being tempted by the idea of treating myself to a little shopping.

    I wonder why I equate shopping (even if it's as little as just a cup of coffee) with treats and reward? I'm trying so hard to re-frame my thinking to believe that paying off a bill or putting money in savings is the real treat/reward, but it's not an automatic thought yet. I guess it all stems from my childhood (doesn't everything?) where shopping always was fun and always was a treat. Sigh... well, at least I'm able to recognize the thought and know I want to change it. I wonder if the reward of savings will ever become an automatic thought?

  • Scarcity and temptation...

    Well, I just got paid from a corporate client for my training business. Phew. I have had no income for about a month, and have been really stretching my pennies and living off savings (but NOT living off credit, for the first time in the past 20 years or so when in this situation -- why do I always get in this situation? Perhaps a topic for another blog post). So now that I have a bit of a cushion, I am faced with temptation. When I was little (and a little entrepreneur, always doing chores around the house, starting lemonade stands, selling junk at tag sales), my mother always said "whenever you get a dollar, it burns a hole in your pocket!" She was right.

    My temptation now is two-fold -- one is to rush to pay off debts and the other is to buy myself a little "treat" like a massage for the pulled shoulder I have, or take a trip to my favorite used book store, or buy some fabric for some curtains I want to make. I get a very similar psychological reward from both of these thoughts, but I'm going to resist the pull to spend the burning dollars and treat myself to early debt payoff or buying a little something.

    I'm going to leave the money in the bank, because I have *just* enough to live on through the end of the year (barring any unforeseen disasters), so instead of splurging now (so tempting after having been totally broke all summer), I am going to pay off my smallest credit card (the Care Credit veterniary account: $277.27), and go back to my system -- I give myself an allowance of $200.00 per week (for groceries, pet food, shopping, house things and gas for the car) and do my best to sock some of that away into savings. I'm saying no to the desire to pay off extra debts, knowing I might need that extra money to pay for essentials later.

    So now with Care Credit paid off, I'm down to one 0% interest card with about $800 on it (this was for a new mattress and box spring), one 5.9% credit card that is my rollover/snowball target account ($9200), a home equity loan ($14,000), my student loans (7$0,000 -- an almost unfathomable sum of money), and my mortgage ($139,000). 

    I gained a new client last week (hooray), so when I get paid from them, I will pay off the mattress loan and put about $1000 into savings. Then I'll be able to really get to work on my rollover/snowball plan of chipping those big balances down. One down -- it feels good to pay that baby off!

  • Should I stop accepting credit cards?

    I currently accept credit cards for payment of my training services. Most of my clients are corporations, though, and they pay me by check. I occasionally have individual clients who pay for themselves, but most of these people pay by check. Once in a while, someone pays by credit card.

    I am personally opposed to the use of credit, and am doing my utmost to pay off those rotten credit card bills that I have amassed in my past.

    But I'm also a small-business person and broke, and I don't want to turn away a potential source of income if they can only pay me by credit.

    At the same time, as an empathetic being, I don't want someone to pay for something they can't really afford by using credit, even if that something is my business.

    I pay about $25.00 per month ($300 per year) just to be able to accept credit cards. Then they take 3-4% of each transaction (that's $70.00). My contract is up at the end of this year.  Should I renew?

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