Advanced Personal Finance

Liz Pulliam Weston has an article on MSN Money entitled “10 ways to pay cash for Christmas.”  In it, she lists ten ways to free up money in your budget or otherwise buy presents for Christmas on the cheap.  I think she missed one, though.

How about not spending so much this Christmas season?

There are two sides to the equation - spending and saving/earning.  Why is it so hard to accept the idea of diminishing the ’spending’ side?

This year, my wife and I have decided to give each other just one present (plus small stocking stuffers).  By one present, I’m talking about a nice sweater or necklace, not a trip to Tahiti.  We’re concentrating less on us and a bit more on the kids.

We’d long ago established what we’d save throughout the year to spend around Christmas.   We have a separate savings account for this purpose that gets a monthly automatic deposit.

Not quid pro quo

Gift giving shouldn’t be a quid pro quo.  Do you judge how much someone appreciates you by the amount they’ve spent on a gift for you?  No you don’t.  Don’t you think your friends and family feel the same?  Of course they do.

Bottom line, you don’t have to spend so much money at Christmas.  It isn’t a contest.  You’re not impressing anyone by spending more than you can afford to give them a gift.  What do you think would garner a better reaction, giving a friend another personalized paperweight from Things Remembered or giving a card and explaining you’re trying like crazy to retire your student loans once and for all?

I’m not anti-gift.  I’m anti-debt.  And putting gifts on a credit card is just nuts.

Share This

I heard on NPR and later read that according to a study released Tuesday, the income divide between black and white households has widened over the past 30 years.  But that wasn’t what was most interesting in the report to me.

What was most telling about the report was exactly how families, black and white, managed to grow their income at all.  It was the women in the family that made the difference.  Almost all of the gain in household income over the last thirty years is because more women are working outside the home.

That is a depressing statement if I’ve ever heard one.  And it masks what I think is a serious problem in the U.S. - income polarity.  The gap between the wealthy and everybody else has widened and it seems no one minds.

It’s kind of like the fact that a majority of Americans favor repealing the estate tax (or, ‘death tax’ for some).  This makes no sense.  The vast majority of Americans will never come anywhere close to amassing the wealth necessary to be affected by this tax.  Why in the world would Joe sixpack want to get rid of a tax that would leave a multi-billion dollar hole in the federal budget?  Makes no sense.

So here we are in 2007 with many families only able to maintain their real buying power by sending more people (read women) into the workforce.  A quick calculation tells me that this model is unsustainable.  Last time I checked, at most a family had one mom and one dad.  Maybe we restart child labor?

Share This

Yesterday, I heard a commentary on American Public Media’s great program, Marketplace.  The piece, by Moira Manion, was about how Ms. Manion is looking forward to a recession.  It seems Manion is debt-free and she feels fully confident she can always bring in enough for monthly expenses (she proudly proclaims she nets $1,200 per month working a retail job at an airport).

Not only was the piece distasteful, it reflected a stunning hubris.  Manion seems to believe that anyone with debt (any debt) is an irresponsible consumerist, buying big screen TVs and expensive shoes.

“No, the people who need to worry are the people I see every day: Customers with 10 credit cards that are all maxed out. People with two cars, two kids, a mortgage and no savings. The fresh-out-of-college guy who bought a $190,000 condo, while owing $40,000 in student loans, and who still hasn’t found his ‘dream job.’”

Better than you

One of the complaints I read about personal finance writers (including bloggers) is that they exude a holier-than-thou attitude.  I truly hope I don’t ever sound like Ms. Manion on this blog.  If I do, please feel free to cyber-slap me.  I’m not writing to proclaim how awesome I am.  The fact is, my family often busts our budget, we owe money on a mortgage, and I don’t have all the answers.

On the contrary, I feel an almost constant underlying dis-ease.  I suffer from the feeling that financial disaster is only one step away.  And I feel this way regardless of our current financial situation.

I’m sure it’s a combination of biology and experience causing this.  Economic behavior is funny that way, I guess.  I read that the same percentage of people polled agree with the statement “I always/often worry about my finances” regardless of whether they were middle class or extremely wealthy.

So as for me, I hope there isn’t a recession.  Because I know people with debt aren’t bad people, and they certainly don’t deserve the pain a recession would bring.  Regardless of how many credit cards they’ve maxed out.

I understand the phrase, “There but for the grace of God go I.”

Share This

The Wall Street Journal had an article about how some very wealthy people are paying a premium to have new houses built in record time. Many of the people profiled say similar things - “I have more money than time.”

From the article:

“There was not a detail that was missed, everything from the dishes to the clothes hanging in the closet.”

Whew. Here’s a lady who doesn’t even hang up her own clothes.

“But such quick work can result in lapses. One person familiar with the Greenwich property says it has been plagued by annoyances such as sticky drawers and missing shelves. Lighting installed in the roof of the wine cellar has no vapor barrier, which upsets the delicate temperature-control system. And the wine cellar’s oak paneling was stained with polyurethane, which some wine enthusiasts say may create fumes that can seep into corks.”

No vapor barrier on their wine cellar lights?!? Outrageous.

The rich have more money than time.

And apparently much different problems than I do.

Share This

As surprising as it may seem, apparently Britney Spears doesn’t save or invest any of her income.

This from CNN:

Court papers released Thursday in Britney Spears’ custody dispute with Kevin Federline show she spends lavishly on clothes and entertainment, and doesn’t save or invest any of her roughly $737,000 monthly income.

The worst part is according to the complete article, neither of them save anything for their kids.

Ah, well, they’ll probably just spend like this until right before they’re not popular anymore and them save a whole bunch.

Right?

Right?

Share This