Tuesday, March 31

Cheap movies and expensive psychiatrists

Well, we can officially relax on the shrink front for a bit. Tim was due to see a woman on Friday for the "big appointment." But that's now canceled.

It seems that this lady would have wanted her money upfront, so that we would have had to bill insurance later. At $225 for the first session, that's an awful lot of money to be waiting around to get back.

Once I found that out, I asked Tim to call her and clear things up. While we waited for a callback, I asked if he had ever even checked if she was in-network. He thought he had, but checked just to be sure.

Yeah. So not only would we have had to pay $225 out of pocket, we'd only get 60% back. That's a $90 co-pay! Ouch. (And you hear horror stories about how long some insurance companies take for reimbursement.)

So, Tim called his insurance company and asked for female psychiatrists in the area, who would actually bill insurance themselves. We've had one or two calls, so that's promising. But it was pretty disheartening to find out we'd just waited over 3 weeks for absolutely nothing.

I lost it a bit yesterday and just started sobbing. We've both been tired and run-down. Oh and thanks to the depression and the nasty winter here, we've both packed on some extra pounds. That's not really helping our energy levels or our self-esteem.

Tim soothed me a bit. Mainly I think I was just overwrought and exhausted. The worry about unemployment benefits -- while now solved -- was eroding all of our energies. Meanwhile, Tim's in limbo about his diagnosis and the stress is exacerbating his skin. We're both just sort of stumbling through, it seems.

Again, we're focusing on being good to each other (and ourselves) and just trying to get the basics done. I think we're doing pretty well. After all, we've been married for almost 11 months now, and that entire time has been spent with both of us at home pretty much full time. And not once -- NOT ONCE -- have we even attempted to kill each other.

Not too shabby, eh?

I'm not completely sure how we'll celebrate our first anniversary. While I don't want to go completely overboard, it is an occasion I'm willing to spend something on. Probably a nice dinner or some such.

Speaking of festivities/getting out in the real world: I've been hermit-ing far too much lately. Essentially, home= warm, safe, easy and outside= scary, unknown (and rather windy!) So I need to start getting out in the sun and generally out of the house more. I'm unclear yet what route I'll take. Just pledging to go for a walk every day has not panned out... at all.

Tonight, however, we're winging our way down to UW campus to see a free preview of "Observe and Report." Seth Rogen is a guilty pleasure of mine. Yes, the movies he's in are filled with sophomoric, often-gross-out humor. But they're also friggin' hilarious. I guess I'm just not as much of a movie snob as I used to be. Also, I think, I'm just getting better at grabbing a laugh wherever possible. (Sorry, Mom, all those years of stuffing me full of alternative, artsy and/or foreign movies just didn't quite pay off.)

Plus, it has Anna Faris, who I have glommed onto for some reason I can't quite explain. I'm kind of rooting for her to rise as an actress. There's just something about her (and I don't generally root for blondes, horrible I know but there it is) and so her role in this movie makes it intriguing, as well.

So. We're going to go to the dermatologist where he will assure us that the esoteric skin disease that Tim's mom saw on Mystery Diagnosis is not applicable. (Since Tim, as a kid, would apparently swell up and turn bluish-purple on his arms/legs to the point he wasn't much allowed outside. But since then, he's lived in Arizona -- rollerblading everywhere.) Then come back here where I get to wash my hair (unless we want the movie theater all to ourselves, hmmmmm) and then to his therapy and on to the University District. I think we'll even treat ourselves to some cheap-o food on the main drag. It's one of the few areas left in town where you can get large portions of food for under $6 a plate.

Then on to a free, probably I-can't-believe-I'm-laughing-at-this movie -- having smuggled in some snacks, of course -- and generally having some fun.

On that happy note, it's time to get ready for said dermatologist appointment.

Monday, March 30

Carnivals, now and later

I'm excited to announce that I am officially joining the carnival circuit! (Don't worry, this isn't the same as running off to join the circus.)

Next Monday, April 6th, be sure to stop by and check out the Carnival of Everything Money. One week later, on April 13th, I will be hosting the Carnival of Debt Reduction.

So everyone be sure to send in some posts. I want plenty of content!


In the meantime, a big thank you to Clever Dude, who graciously allowed me to do a guest post for him while he was on the mend. Go over and check it out.

This week's Carnival of Debt Reduction is up over at Pecuniarities. Penelope chose the theme of "Debtor's Prison" and filled up the carnival with some great Dickensian quotes. She was also kind enough to feature my "Are we too optimistic" piece as an editor's pick. (Thanks Penelope!)

Over at Anything Goes & General News, the 52nd carnival is up -- also with my optimism piece. There are a wide range of topics covered, as the name implies, so be sure to take a look at your leisure.

The first-ever edition of Recession Fighters Carnival is up at RecessionsBlow.com. This will be a weekly carnival for anyone interested in future editions.


Sunday, March 29

Brother, can you spare a prayer?


I know that I'm cynical. And jaded. And sarcastic. But I am humbled before the most audacious of websites: The Information Age Prayer.

Information Age Prayer is a subscription service utilizing a computer with text-to-speech capability to incant your prayers each day. It gives you the satisfaction of knowing that your prayers will always be said even if you wake up late, or forget.

Yes, for mere pennies a day, you can "subscribe" to have a computer pray for you. Not surprisingly, I have a few issues with this.

First, I have yet to meet anyone so busy as to not have time for a prayer. Ever. Perhaps not in church. But who, exactly, thinks a computer is a good substitution for that?

Second, what person religious enough to worry about forgetting to pray would be comfortable bringing in a computer to pinch-hit? Who exactly subcontracts their religion to a machine?!

Third, and perhaps most disturbing of all, he has some subscribers. Not a lot. "A lot less" than 50, according to the Atlanta Journal Constitution. But he's only been up for a week! And if Americans have proven anything in the last decade, it's that we can be talked into buying almost anything sold as convenience.

Will the new mark of frugality be saying your own prayers, rather than paying a computer to do it?

Now that I'm done ranting (for now), I simply must get you to review some of the highlights of this site. I think my favorite part was the glib advertising of the packages. You can choose from popular options such as:

  • Protestant Daily Prayer Package "Get 8 prayers in one bundle": The Lord's Prayer, The Morning Prayer, 5 Get Well Prayers and Peace Prayer for the low monthly price of $19.95.
  • The Complete Jewish Package: Morning and Evening Shema, 5 Get Well Prayers and a Prayer for Peace for $25.95 a month.
  • The Hail Mary Prayer: "Subscribe for 10 a day, or purchase as many as you need. Conveniently sold in multiples of 10. Less than 7 cents each." (Though if you're really serious, you'll get the computer to say a full rosary for $49.95 a month.)
  • Prayer for Financial Help: Pray for Economic Stability (a discount rate, natch) for $3.95

I couldn't make this stuff up if I tried. Am I the only one who finds the sentence, "These prayers now on sale" to be utterly and completely beyond horrific?! And I'm agnostic!

For even more macabre humor (of the "It's so awful that I simply can't look away" variety) check out the FAQs, where the founder has clearly anticipated all of our pertinent questions.

Are the prayers meaningless? Will subscribing make a difference?

As with all prayer, the final results are up to God as everything follows His will. We make no claims regarding the efficacy of the service, however it is our opinion that the omniscient God hears the prayers when they are voiced, as He hears everything on this Earth. The omniscient God knows exactly who has subscribed and who each prayer is from when their name is displayed on screen and their prayer voiced. He is also aware of all donations to charity from each subscriber and we can surely make a difference in these charities supported.

Are prayers blasphemous if voiced by a computer?

We recommend you contact your local clergy for a personal answer, however we think that Information Age Prayer is a new and exciting way to connect with God.

Is it wrong to charge for prayers?

The fees assure our customers that we are the most reliable service provider for Information Age Prayer. While most companies only donate a small portion of profits to charity, Information Age Prayer donates a full 10% of revenue to charity before subtracting our operating costs.

I'm not sure whether this guy believes what he's saying, or if he is, in fact, the one true Cynic, come to show the rest of us the way. Perhaps, while he's at it, he can lead the capitalists back to the righteous path of making money of people's ignorance and laziness.

Whatever the reason, you have to admire this founder's twisted brilliance. He's tied religion in with bulk consumerism in a way that puts televangelists (past and present) to utter shame. He's giving us the ultimate convenience product: An affordable relationship with God without lifting a finger -- or a rosary or prayer mat. How can the average American resist that kind of sales pitch?

I truly hope I'm wrong, but I do think this guy will make some money. Some people will do it ironically. Some people might consider it for their less-than-religious children, which is an actual reason given on the site. Some people may just be self-important enough to value their time over prayer. Who knows?

But I think his best profits lie in pandering to bailout recipients. You know, AIG and the lot. Heck, right about now, I bet that GM and Chrysler executives are willing to try anything to save their collective hides.

Okay, sarcasm aside, I have to say that this site disturbs me in a profound way. It is sort of a shell-shocked fascination. I keep switching over to read it. Perhaps if I read it enough times, someone will finally admit it's a joke.

But it's not. And there is something luridly American about digitizing prayer for profit. So perhaps I can still make the big league cynics yet. (Does that position come with health care?)


Saturday, March 28

Perhaps you heard...

... a huge sigh of relief sometime around Thursday 1 p.m. Pacific time?

That would have been Tim and I. He contacted the unemployment office. It turns out that, not only will he probably be eligible for that extension of benefits, he has two more extensions on his current benefits left (one of which is 7 weeks' worth) before he even needs to worry about it. And we still have four weeks left on his current benefits.

This means that, as hoped, Tim will get some time to try out the medications he'll be prescribed. They can fiddle with doses and brands and find a good baseline before things get any tighter. Phew!


Friday, March 27

This is what is wrong with PF articles

Prime Time Money ran a guest post today. Let me break down this groundbreaking work:

The five habits that will help you find financial stability:

  • Control your impulse spending
  • Pay yourself first
  • Eliminate and avoid debt
  • Learn about personal finance
  • Evaluate your expenses

Okay, before I appear overly bitchy: I like PT Money. I subscribe. I read. He's good. Also, the guest writer does go (slightly) in depth on each subject. And I know that there are a limited number of actual subjects to discuss regarding frugality and debt reduction. There are few new ideas under the sun, as they say.



This is like those "signs of suicidality" commercials that list "suicidal thoughts or attempts" as a symptom.

I'm sure there are a few folks out there who this would be news too. (Please, God, may I never meet them!) But overall, if you're reading PF blogs, isn't it plausible to assume they know these basic basics.

I feel like a lot of these sorts of articles condescend to anyone with half a PF brain. Does anyone else feel like this?

Obviously, a lot of bloggers are trying to reach a wide audience, from newbies to folks who are done with debt reduction and living frugally as a lifestyle. That creates some basic problems when it comes to material. I've been reading a lot of bloggers to see how they balance these issues.

I try not to go too basic in my advice, though it's always hard to tell what things people have come up with on their own and what will be something unprecedented in their minds. Still, I try to assume that the people on this blog have at least a firm grasp of the basics.

I was raised by a frugal person, so most of these ideas are just a way of life to me. Others are discoveries (that probably tons of other people have already discovered) that I make as I read other blogs or examine my own navel.

But does that mean I'm leaving out too many people? Or being snobby? Or just being lil ole me?


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Wednesday, March 25

Who will the recession favor?

Living Almost Large was discussing a rather controversial article "Under 35? Hurray for the meltdown!" I don't think it was actually meant to be controversial, but it really rubbed a lot of people the wrong way. I think perhaps a different title would have set the tone differently. (Full disclosure: The author is an ex-coworker of my mother's and they are still in touch. But even beyond that, I think she is a pretty fabulous PF writer.)

Anyway, in her musings about this piece, LAL mentioned that she thought times would be rough for the less experienced, younger generation. "We have the least seniority," she said.

I think that could actually work in most young people's favor. On the one hand, if you have the least seniority, you may be more likely to be fired. But also consider it this way: You are some of the cheapest labor the company has.

Even if you are fired, I wonder if your lack of seniority will make it slightly easier to get a job -- assuming you have some level of work experience in your field. Employers can pay you less because you're less experienced. At the same time, you are more likely to be okay with living on less -- you're less likely to have a mortgage, kids or other major life expenses. In addition, you will have more years left working because of your age. And your overall need to build a career means you're more likely to work harder to prove yourself.

In journalism, it's been the trend for years that newspapers bring in bright-eyed and bushy-tailed reporters straight out of college. They pay them very little and get the journalists to do several people's jobs. This allows them to cut some of the higher-paid people with more experience.

On the other hand, some companies might prefer to keep the people who know what they're doing, rather than pay to train new people. And there's the popular last-in-first-out policy at some companies.

So what do you think? How is your company handling it? Or how would it? What would you do if you were the boss?

Monday, March 23

Are we too optimistic?

It may sound like a strange question in these grim times. But it turns out the answer is a resounding yes.

The April edition of Kiplinger’s Personal Finance mentions an eye-opening study about people’s sense of their own savings ability. When a group of people were asked to estimate how much they could save in a far-off future month, they wildly overestimated. Their response was $946. Yet in the month following the study, they saved only $248. And when that future month did roll around, they had saved $123. Ouch.

So what’s going on here?

It seems that human beings are naturally inclined to assume that things will get better. We assume that our lives will improve, whether it’s in love, money or some other area. Because of this inherent optimism, the people in the study were counting on improvements to better their savings ability.

This sense of certainty contributed to the current debt that most Americans face. People buying rampantly knew that they didn’t technically have the money now. But surely they would in the future. They’d get that raise/promotion. Then they could pay it all off.

In essence, Americans hope so fervently for good things to happen, we form our lives around the assumption that they will. It may just be one of our most dangerous traits.

I’m not trying to say that it’s bad to have hope. Hope keeps us going. In personal finance, we have to have hope that we will pay off our debts and/or reach our savings goals. Of course, hope is a good thing.

But that hope is directed at a specific goal. This study seemed to capture the sort of vague optimism, without any real plans on how to achieve one’s ambitions, that many Americans live with.

This blasé certainty is directly linked to many of our current problems. People were sure that the stock market would continue to go up in a never-ending spire. People were sure that any debt they accrued now could be paid down later -- you know, when they had more money. And, perhaps worst of all, people got so used to expecting improvement that, now, just maintaining their standard of living isn't longer enough.

Rather than hoping for good things to come our way, we tend to expect that they will. The difference? Hope implies that the goal is not within reach, that it will take work to achieve. Expectation breeds a sense of entitlement.

Even if things simply stay the same, that is no longer good enough. We’ve promised ourselves an ever-improving life for so long that we’ve come to believe the assurance came from higher up than us. And if our lives don’t get better? We feel angry, cheated.

When that promotion doesn’t come our way, we feel that something has been stolen from us. We feel, really, that we were owed that raise. We tell ourselves that the company owes us for our loyalty and hard work.

But isn’t that what our paychecks are for? When did it become common practice for us to expect rewards for doing our jobs?

That sense of entitlement has become so firmly entrenched that we are now outraged if we cannot perceive a steady growth in standard of living.

When we’re not in the situation, of course, it’s easy to see this sense of smug expectation. But the truth is that we’re all guilty of it. Whether you rationalize a calorie-laden dessert – you’ve been exercising devotedly, you deserve it – or some expensive gadget – you’ve been working so hard, you’ve earned it – pretty much any justification (short of “I can pay for it without credit and I’ve met my self-imposed savings goals”) is tied in to our collective sense of entitlement.

That expectation also contributed to the subprime crisis. So many Americans began to believe that they deserved a house, they forgot to consider whether they could (sustainably) afford one. Or perhaps they feel entitled to the largest one they can afford. Afford, of course, is a short-term definition, not taking into account any future interest rate increases.

Then they needed to furnish the place, what with all that extra space. Kids, being kids, are always begging for the newest toys. And let’s not forget all the cool adult toys (we call them gadgets and electronics to make ourselves feel better) that we have to have, merely because they’re the latest and greatest. (I read recently that, on average, Americans get a new cell phone every 18 months. Horrifying!)

The house, the décor, the toys, the gadgets – all of these things plunked down on credit or with a loan. All without a thought about interest rates that start to adjust after 3 or 5 years. It was simply assumed that the market would continue to allow for easy refinances, that interest rates would stay in the historically low range. Why did we all assume these things would follow this path? Because we needed them to, and so we simply assured ourselves that the future would bend to our convenience.

In this way, our sense of financial optimism is a fatal flaw for our economy. It ends up that we are not just poisoning our own well, but other people’s too. Plenty of people were frugal before frugal was cool. Yet they are stuck in the same awful job market, have the same low-interest CD choices. And, just for a little salt in the wound, their taxes go to programs to bail out people who made irresponsible choices. In essence, they suffer the lows without any of the highs.

Yet, they’re not really sure they could have it any other way. Would they let their fellow Americans go homeless? Jobless? Penniless? Would they let children suffer, quite literally, for the sins of the parents?

A few jaded responses aside, the answer is generally no. Those who were responsible to themselves tend to ultimately feel responsible for others’ suffering, if there is some way to prevent it. (Though they may disagree somewhat on what, exactly, that way is.)

No matter how unfair the situation may seem, most of us wouldn’t begrudge our fellow Americans the help they need. Because, despite the fact that there was plenty of poverty even in the high times of the housing bubble, most of us like to believe that America is a land of opportunity and a land of plenty. We need to believe that our citizens can and should have a good, fair standard of living.

So I guess, in that way, we’re all guilty of a little too much optimism there, too.

Sunday, March 22

Upgrade Update: What's in your bills?

Well, several of you have written in with your feelings about the satellite package upgrade.

I found them very informative. There seems to be an even divide among people who couldn't do without TV and those who have taken the (arguably healthier) route of going out and becoming more active in the outside world.

Wait... there's an outside world? That must be what the Travel Channel's always talking about!

Kidding aside, I'm inclined to agree with Shtinkykat that two people who are less able to leave the house -- and home all day -- are more likely to consider entertainment a necessity. Of course, that could be pure rationalization on my part.

That said, I still don't feel comfortable adding to the budget, even at "just" $12 a month. So I've decided to find the $12 in our budget.

I spent 4 minutes on the phone with a very helpful lady from Qwest. She put a block on outgoing, long-distance calls. (I would have settled for a no-charge plan with higher per-minute rates, but with the block there's no charge for adding/removing a service.)

I feel stupid for not checking the bills sooner. At $20 a month -- $25 on a particularly chatty month -- I just assumed I was getting a "good enough" deal. Then, I noticed we had paid a whopping $9 for 11 minutes of calling. It went something like this: $3.99 for the low-usage long distance plan, $1.99 interstate fee, $1.99 intrastate fee, $0.55 for calls, and then taxes. That rate was a little too close to a dollar a minute for my comfort zone!

And now that we have cell phones that work inside the house -- cheap ones, at that, since they're part of a family line -- there's really no point in the long-distance plan.

So in under 5 minutes, I was able to trim $8 from our monthly budget. That's almost $100 a year.

I think this is an excellent reminder to scrutinize bills more carefully. You can save a surprising amount with some indignation and a phone call. I may just spend the last part of this month poring over our bills and see where else we can cut. It might be an interesting game! (Plus I still have to find $4 more for the upgrade.)

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Thursday, March 19

When is an upgrade worth it?

Temptation comes in many forms. For Tim and I, it takes the guise of the TV channel G4.

This channel, which used to be known as Tech TV, is offering a free preview during March. Whenever there's a preview, we eat it up. Initially, Tim was the enthusiastic one. But he quickly turned me on to some of G4's offerings, and I was hooked too.

I took an immediate liking to "Attack of the Show" which makes me laugh. It also nicely sums up all of the hot YouTube clips so I don't feel quite so left out.

Tim loves X-Play which gives him even more information/reviews on games. (He has a subscription to a gaming magazine, but the show gives real time clips from the game and also often features cheat codes etc.)

Then there are shows like "Ninja Warrior" which I am now completely addicted to, and I couldn't tell you why. It's a ridiculous show, essentially showing various Japanese people attempting insanely difficult obstacle courses.

How difficult? Each competition starts with 100 people. The most I've ever seen advance is 11. Usually it's 2-4. Some people fall off on the first part of the course. Others almost make it to the end. But pretty much everyone who fails ends up falling about 4 feet into the muddy water below.

That's pretty much the entire show. The announcers (it's subtitled) are quite funny with their color commentary. Otherwise, it's just people trying (and mainly failing) to make it through the course. So why does it suck me in? I suppose the real allure is that, like many popular reality-based shows, it shows people failing -- and failing spectacularly. I mean, if it's just a little slip it's barely worth watching. But if you get to see someone tumbling end over end into the water, well that's entertainment!

I really never thought this kind of thing would get to me. But it's a morbid fascination. And I'm not the only one who's so enthralled. My mom, who doesn't even own a TV, watched a bit of it at my insistence. (Mainly because of the weird look she gave me when I was trying explain the show's appeal.) I thought she'd call time after a couple of people tried their best. She sat through the whole show, and even made the sympathetic noises -- "Aaaah, no!" as someone splashes down, "Oooo, almost!" as someone is 2 seconds shy of finishing the course.

So clearly, this show is a powerful substance.

So why do I rave about G4? Well because it's one package up from our current one on Dish. That's a $12 difference.

Logically, $12 a month doesn't sound like that much more. But it's $144 a year for the extra entertainment. I'm sorely tempted. But I'm just not sure.

Tim, of course, would be all for it. He doesn't just love G4. The package would also include his other-favorite channel: Animal Planet. In addition, some of the other channels in this preview are giving him access to some animated, comic-book-based shows that he loves: The Incredible Hulk, X-Men, etc.

And so my debate begins:

Pro: The extra $12 a month, would bring us hours upon hours of extra entertainment.

Con: We already watch a ton of TV. I'm not sure more is a good thing.

Pro: Tim gets antsy/bored easily, and more shows would mean less desire to go out.

Con: His Magic game on the computer provides many hours of entertainment and we already paid for that. (One-time $20 fee, paid 2.5 years ago.)

Pro: With Animal Planet on, I'd at least be watching vaguely edifying TV.

Con: I'd also be watching a lot of G4 silliness, and a whole lot more animated shows with Tim.

Pro: It's $12. You spend that when you and Tim each get a value meal!

Con: At least then we get out of the house.

Pro: You can't beat the cost per hour for entertainment. Even if we only watched the G4 shows we like, every day, the cost would be 30 cents an hour. More likely, we'd be looking at 10 cents or less an hour.

Con: However you break the cost down, it's still an extra $12 a month. And you're in debt. And may be losing half your income soon, unless Tim's unemployment benefits get extended.

It's that last one that I can't get around. I think, at least until we find out more about Tim's benefits, we probably shouldn't go adding to the budget. Even just $12 a month.

So we can't add to the budget. At least, that's what I'm guessing most people's answer will be. That it would be irresponsible, short-sighted, etc. (In other words, I'd be American consumer 1999-2007.)

As a result, I'll try to find it in the budget. I have to call the phone company and get some information on specific fees -- what they are and why I'm being charged them. And whether I can just NOT have a long distance plan. Last month, we used 6 long distance minutes for 55 cents. With fees, it was $9. So in other words, we paid $1.50 a minute.

If this were you, and you found out the benefits did get extended, would you upgrade?

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Wednesday, March 18


Some carnivals are showing me some love:

Carnival of Financial Independence

169th Festival of Frugality

Money Hacks #55

Tuesday, March 17

Should our economy fail?

During the good times, Americans spent, spent and then spent some more. They failed to realize that booms travel alongside busts. And I’m beginning to wonder if we created, with that financial myopia/arrogance, a situation that could only have ended with this ongoing economic failure.

I should preface this with what is probably an obvious statement: I am not an economist. So I can’t get into useful market theory. Then again, I don’t really want to. Theory is all fine and dandy in academia. I’m talking about reality – historical and present-day.

In my admittedly oversimplified view of historical economic trends, I’ve noticed that the economy tends to obey one of the most basic laws of all. I’m referring, of course, to Newton’s third law. For every action, there is an equal but opposite reaction. Put more simply: What goes up, must come down.

What’s ironic, or at least funny in a painful sort of way, is that this law is true mainly because investors refuse to believe it is. If they were more rational, they would realize that a boom is generally followed by a bust. They would take the appropriate measures, and so the “bust” cycle wouldn’t be quite so devastating. Instead, they seem to think they (or perhaps the stock market) are immune to such trends. This means they don’t prepare for bad times. And we all suffer because of it.

And so I’m wondering, if we have all but forced this current situation upon ourselves? Americans rode out the good times, thinking they would never end – and charging as if they never would. So when the inevitable yang to this yin occurred, the results were devastating.

This subject came up in Funny About Money’s post, “Frugality, savings, and the causes of doom.” In it, FAM retorts that frugality is not to blame for the current crisis. I couldn’t agree more. But I’d like to go a step further.

I think we need to turn this accusation around on the accusers. Frugality isn’t creating or worsening the crisis. But the lack of frugality and sensibility are probably what caused it.

The simple fact is that Americans staunchly refused to live within their means. They took advantage of easy, cheap credit. They bought their children (and themselves) lots of toys. When more money came in, such as a salary raise, the spending always managed to rise to claim it (plus a little extra).

If more Americans had focused on the future – not just the boom/bust duality, but also that you cannot live outside your means forever – they might have cut back. They might have sat down sooner and discovered their outlays were more than their income. This might have prompted them to take care of some of the outrageous debt so many had charged up. And so, when the subprime debacle began, they might have had, if not a financial cushion, then at least less debt.

With less debt, they might have been able to better afford the fluctuating interest rates. IF this happened, they might have weathered the rate hikes long enough to finance for a fixed rate. This would have slowed the foreclosure rate, which would have lessened the impact of the subprime mortgages.

Taken a step further, the subprime mortgage debacle might not have occurred. If more people had thought frugally, they would have seen that agreeing to a low rate now for an increasing rate later was a bad idea. They might not have taken their brokers’ assurances that they could “just refinance” down the road. They might have decided to buy less house – or not to buy at all.

And if fewer people had taken out subprime loans, banks would have had lower ratios of these high-risk debts. This might have allowed them to stay in business (without government assistance), as they wouldn’t have had to trade off so many derivatives just to keep their balance sheets clean.

If fewer people took out subprime loans, the craze might not have fed on itself to such a degree. As it was, the pure popularity drove banks to overextend themselves and to be reckless. So if we had been a tad more down-to-earth in our approach to mortgages, there’s every chance that the inevitable “bust” cycle would have been a lot easier to deal with.

Instead, in times of amazing prosperity, America had a negative savings rate. Does anyone else see something horribly wrong about that?

At any rate, we can’t change the past. (At least, not until I finish tinkering with this time machine!) And so we have to accept our present fate as a consequence of our actions – and our inaction.

I guess the problem is simply that economists and financial pundits refuse to do that. They refuse to accept that this is America’s medicine for being so reckless. Instead, they seek a scapegoat. And so they point the finger at frugality.

This is really enraging for those of us who were frugal before, as they say, frugal was cool. We didn’t much participate in the heyday. We have tried to live within our means for ages now. Yet we’re paying the price right along with the people who whooped it up.

But, of course, frugality is becoming a more nationwide trend, so really the finger-pointing isn’t just at the frugal old-timers. Fine. But I still fail to see how it’s a bad thing that Americans are finally living within their means. Really, does that say more about our more rational spending choices, or about the economy as a whole?

We’re told that it’s the lack of spending that’s killing the economy. Perhaps this is mathematically true. But it’s also a chicken-and-egg situation. If we hadn’t spent so recklessly before, the economy wouldn’t be predicated on our continued abandon now.

Essentially, we’re being told to keep up the insanity, so that the asylum doesn’t go under. I’m afraid I just can’t agree with this.

Even if I had money to spend, I wouldn’t want to spend it unnecessarily just to prop up the economy. I’m simply unwilling to help recover an economy that is so dependent on poor choices. I think we can do better. And I think the current pain is part of that process.

Don’t get me wrong: I don’t like to see my fellow humans suffer. Even if their choices led to their problem, which isn’t always the case, I’m troubled by rampant unemployment and foreclosures.

But while we’re all so focused on the human element, we fail to see the bigger picture. Unemployment is high because of the simple business principle: In good times, expand; in bad times, contract.

Companies that increased their reach during the boom can no longer afford to run all the locations. So they close some, which leads to unemployment. Small businesses, which are a gamble in the best economies, suffered financial setbacks, leading to some going out of business.

Seen from one level, it’s random pain created by a faltering economy. But from another, it’s simply the equal but opposite reaction to the boom.

That doesn’t mean I want our economy to fail. But I do want it changed.

We are arguing over how to help the economy, how to keep it from failing. And obviously politicians can’t just stand by while the nation’s finances go into the toilet. But perhaps we’re all focused on the wrong thing.

Instead of saving the economy, why not focus on changing it? Right now it relies on our financial myopia. We need something that’s sustainable, even when consumers are more logical about finance.

But in order to create this kind of change, we may have to wait longer, until the economy is truly at its most vulnerable. More to the point, we have to wait until people are most vulnerable.

Willpower is not exactly in Americans’ lexicon. We’re terrible at it. And so it takes these sorts of epic economic turnarounds to make people understand the value of a life without debt, one of living within their means.

So we may have to wait while Americans slowly learn to make these concepts part of their lives, rather than a temporary fix. If/when that happens, we can begin to rebuild the economy. But, bear in mind, with more rational spending comes fewer booms. If we want a less volatile economy, we may have to accept a more somber economy as a consequence.

In an economy where people spend more rationally, huge surges will be far rarer – and probably a lot less huge than in the past. So while we won’t experience the lows as acutely, neither will we experience the highs as often.

It may mean that a more rational economy looks somewhat similar to what we have today. Unemployment would probably be higher than we’re comfortable with. After all, economic booms are what create large-scale job opportunities. Americans’ net worth would probably be lower than in the last decade. Conversely, it would be a net worth that was more reliable and steady.

Are these trade-offs worth it? Would you rather live in an economically calmer country, or one with a better chance of rapid wealth gain?

We have to ask ourselves whether we prefer to continue with the dubious economy already in place – and just hope people keep their wits about them during the highs – or trade it in for an economy that has citizens with more financial sense, but potentially fewer jobs and raises.

What’s your answer?

Monday, March 16

Preparing for the (possibly) inevitable

I've already mentioned a couple times that Tim and I are facing a rather uncertain future. It's unclear whether his unemployment benefits will be extended. (It's unclear, in fact, because the agency says that it won't know until it sees his application; but it won't send us an application until his benefits are nearly gone.)

So in six weeks' time, it's entirely possible that our income will fall from just over $3100 a month to $1781 a month. With $700 rent and Tim's $502 insurance premium, we're not looking at a lot of wiggle room. Especially when my energy medication costs $337 every three months.

Certainly, we'll have enough for food and even some cheap entertainment, like our Blockbuster Online account. But we won't have a heck of a lot more beyond that. We will probably just be able to cover our minimum payments on the credit card. (I'm very thankful that we loaded up all the debt onto one card with a low-rate balance transfer.)

While I'm hopeful that Tim will get the benefits extension -- which would allow him some breathing room to get his medication situation figured out -- I am trying to maintain the assumption that this won't happen. It helps me plan for contingencies.

At the same time, I'm aware that dropping down to a much leaner budget is going to be hard on us. So Tim and I have been consciously trying to slowly pare down ahead of time. For example, Tim has been diligent about not asking for pricey groceries, like nice cheeses. (Those are his particular weakness.) I have been trying to buy myself less junk food, which is my particular weakness.

We've been slowly pulling on the reins, to give ourselves time to ease into this potential new lifestyle. My hope is that this will make any transition a lot easier. Tim and I both get tired easily these days, and that leads to being short-tempered. So limitations can really make us bristle. By starting the cuts ahead of time, I'm hoping we won't chafe against the new, lower budget restrictions.

I want the next few months to be as stress-free for Tim as humanly possible. He's already pretty stressed out about potentially losing his benefits -- in addition to the general stress of not being able to work. This is exacerbating his eczema to a pretty worrisome point. So you can see why I want to be able to ease us into any future changes.

The other major change I'm making is to try and find the simplest answer to everything. The reason for this is pretty simple: Tim and I are fried. We're exhausted, vaguely punch drunk and just generally ready for things to change.

Unfortunately, the change will probably be slow. Medication is rarely something that helps overnight. And once a good level is found, we'll still need to see how it affects his overall health. So, for now, I'm focused on ensuring that we're as nice to ourselves (and each other) as possible.

With the level of exhaustion around here, tempers run high. (We have, after all, been living most of the last 10 months day in, day out in a one-bedroom apartment.) So I'm focusing on calming down. And, perhaps more importantly, I'm focused on trying to find the least-demanding route to everything.

When Tim says, "Aw, man! I still have to get the groceries out of the car!" I simply reply, "Yes, but not right this second."

When Tim is stressed out about dishes piling up, I try to devise the minimal amount of work possible. If we're running low on only bowls, I suggest just doing a load of bowls. (Yes, it wastes some water, but right now our sanity is a little more important.) If the sink is full, but we still have all the basic necessities, I tell him to worry about it tomorrow.

Mostly, I'm focused on breaking everything down into bite-sized pieces. It seems our best hope for staying sane. And married.

Is anyone out there taking steps to plan for unemployment? Or a loss of unemployment benefits? Anyone else trying to find a balance between life's little tasks and your sanity? In other words: How are you coping with these stressful, uncertain times?

I feel like a million bucks -- or at least $28!

Just a quick "happy dance" moment...

First of all, as some of you may have noticed, I recently passed the 200 readers mark on subscribers. So thank you to everyone who has visited, contributed a comment, referred me to a friend, or otherwise just helped me get to this point. I'm really excited to see this progress! Combined with the followers, I have about 215 total "regular" readers, I suppose. The goal of 300 readers by the end of July is looking relatively attainable.

Secondly, I got a second advertiser today through LinkWorth, a program that links up bloggers and advertisers. (For more information on them, go to the "Make Money Online" tab or click on the ad on the lefthand sidebar.)

Frankly, I'm impressed with this progress, since the blog is relatively new. (My numbers, while thrilling to me, have me down in the bottom rung re: visitors/page views.) Considering my relatively newcomer status, it's pretty exciting to get two advertisers in under two months!

I have one other advertiser, who contacted me through the blog itself. The combination of the three means my monthly ad revenue is up to $28!

Okay, it's not exactly time to quit my day job. But it's still a really wonderful validation of my efforts on here. Which, of course, I should say, simply wouldn't be anything without all the help you readers have given me. By subscribing, reading, commenting, referring, and generally being my audience, you've helped me more than I can say. This blog gives me a place to vent, to pontificate and generally is a real ego boost. (I mean, c'mon, how could it not be when people besides your immediate family seem to actually care what you have to say? Even when it's to disagree!)

So thank you all for all the support and encouragement you have all given to me. I do appreciate it.

And, really, my not-so-secret goal would be to one day make something approaching a salary on this blog. Which makes both the readership and advertising milestones that much more special. I don't know if my goal is achievable, but it's certainly one I hope to keep aiming for.

I really do appreciate everything you have all done. Sometimes readers don't realize how much it means to bloggers that you click through to our posts. Or open up the email. Every time you do this, you validate all the effort I've put into this blog and into the community that encompasses so many PF blogs. I think I've come to rely on both more than I ever realized.

So thank you again, and here's to many more milestones!

Sunday, March 15

Sponsored Post: ExtraCreditCards.com

I was asked to look over a site called Extra Credit Cards – specifically the Prepaid Debit Card section of the site. While I don’t accept every request for a review, I made an exception for this site, which I’ll discuss further on.

As most of you may know, the idea behind prepaid debit cards is pretty simple: It offers you everything a normal debit card has… except that you aren’t allowed to overdraft. This may be appealing to those of you who have particular problems with overdraft fees. (Or if you want to teach a teen or pre-teen how to stay within spending limits, this may be a product you’ve considered.)

Most of us – even the big-time PF bloggers – have wrestled with overdraft fees in the past. At $28-32 each, they can have quite a devastating effect on your account balance. In fact, I have known a few people to completely eschew bank accounts because of the money they lost to overdraft fees.

The problem with that method, however, is that you then end up paying check-cashing fees. These vary with the amount of the check, so the bigger the check, the more you are penalized.

Eventually, someone perceived this dilemma and created the prepaid debit card to fill the need.

While these cards can be useful for the aforementioned reasons, I don’t want to gloss over what they are. In fact, to be brutally honest, these are not prime options. At least, they shouldn’t be. Prepaid cards are a business proposition, and so have a lot of fees attached to them. That’s not to say that they are always a bad idea; for some people, they are a saving grace. But if you can get a copy of Quicken, write yourself notes, or otherwise find a way to better track your spending – thereby avoiding overdraft fees and/or ending up in ChexSystems’ database – I suggest you try that before a prepaid card.

Still, if the alternatives fail to keep overdrafts away, or if you’re already flagged in ChexSystems, prepaid debit cards may just be the answer you need. Even after you have paid off whatever debt put you on ChexSystems’ radar, there will be a year before most banks will consider you. In that time, you could pay an awful lot of check-cashing fees. So if you choose carefully, a prepaid debit card may be well worth the money. Even with its set of fees, a prepaid debit card will generally be a far better investment than a never-ending set of overdraft or check-cashing charges.

So, enough with the generalizations. Let’s look at the particulars. ExtraCreditCards.com offers three different prepaid debit cards: Vantage Debit Mastercard, Ready Prepaid (Visa), and Greendot Prepaid Mastercard. I created a chart to help you more easily compare them against one another:







$9.95*/ $29.90*

Activation waived?

Yes w/ DD



Cash back?

$3 w/ $300+ load



Monthly charge



$4.95/ $9.95**

PIN purchase




Signature purchase




Online access




ATM balance check


$0.5/ free w/ DD


ATM withdrawal fee




Paper statement



Info not available

Phone balance check




Talk to a rep

1 free, $2

1 free/month, $2


Online bill pay



Info not available

Cash w/ purchase




Cash advance



Info not available

Credit builder?

Info not available

W/ online bill pay


*Current $5 off offer

**Extra $5 waived w/ $750 load

A couple things to note:

  • DD stands for direct deposit
  • Vantage offers $3 cash back on many in-store transactions. But most retailers will charge $3.50-$4.95 to load the money. The exception (for Vantage, at least) is Western Union, which is free if you load at least $300.
  • You’re going to want to be comfortable checking your account online, or the fees will add up quickly.

It should be clear from the chart above that each of these cards works best for different categories of people. If you don’t have direct deposit, but you are close to a Western Union, you’ll probably want to go for the Vantage Card. This is the best way to avoid the loading fees. If, however, you have direct deposit, you have the option of building up your credit history with ReadyDebit. Finally, if you know that you’re simply more comfortable talking to a live person, you should probably choose the GreenDot card, since you can avoid fees that way.

I know that many of us with bank accounts and credit cards may not understand people who choose to get prepaid debit cards. But most of us probably know someone who is a habitual overdrafter. If you assume even one overdraft a month (on average), that friend of your could be overpaying. After all, one overdraft fee pays for at least three months’ of monthly fees on a prepaid card.

Even if people aren’t overdraft-prone, they could be in ChexSystems’ database. If this happens, most people turn to check-cashing franchises. But with fees at 3% or more, someone making $8 an hour would be paying at least $30 a month just to access their earnings! Comparatively, a $9.95 monthly fee seems like a pretty decent deal.

This may also be a good way to teach your child or teen about responsible debit use – without the fear of overdraft fees piling up.

But I actually didn’t agree to this review because I’m big on prepaid cards. As I said, I do hope people will use them only when they’ve exhausted the other, better alternatives. In fact, I have turned down other requests to review products, because I don’t want to be seen as a shill for random companies.

This particular site intrigued me, though, because it’s unlike many of the other card-hawking sites I’ve seen. Most card sites you see are pretty blatant. They have categories of cards that you can use: bad credit, low APR, cheap balance transfers, etc. That’s the sum-total of the content. And that’s perfectly valid.

What intrigued me about ExtraCreditCards.com, however, is that it went further in its efforts. Of course, you should always remember that businesses are there to make money, not to be your friend. Still, this site had a relatively surprising amount of information about cards.

  • It has a glossary of terms, which can be helpful. (I’m embarrassed to say, I was misinformed about what a secured card was. So I did learn something.)
  • It has an index of various industry news articles, tracking overall trends in credit cards.
  • It has some informative articles about various credit card issues – trading penalties for fees (prepaid cards), how two Capital One cardholders dealt with recent credit hikes, etc.
  • It explains “trailing interest,” which was a term I hadn’t heard before.
  • It also informs about issues such as whether or not to sign your card or to write “Ask for ID.” I thought this was a particularly useful issue that most card sites don’t deal with.
  • It even has a short history about credit cards. It was a little briefer than I expected, but nonetheless interesting.
  • It even has a “Common Myths” section. I very much hope you already know the correct answer to these. If not, be glad I sent you there!

At any rate, I thought ExtraCreditCards.com was worth noting, for the simple fact that it did take some time to be informative. That’s becoming far too rare, in my opinion.

That said, let’s not pretend the site is there out of pure desire to inform the masses. The site owners will make money if you find a card you like and apply. Neither should we pretend that I wrote this piece purely out of amazement. I was offered compensation for this review.

Still, with the ulterior motives out in the open, I do believe that I made the right choice in accepting this review opportunity. It is a useful site, which may just educate you – or, at the least, help you find a credit card that fits your needs.

Saturday, March 14

Emergency fund vs debt -- the eternal debate

Free From Broke recently wrote a piece about extending one’s emergency fund. Instead of the normal 3-6 months’ worth of expenses, FFB suggested it might be reasonable – given the current uncertain economy – to pad the account up to 8-12 months’ living costs.

I understand the fear of uncertainty. We read, day in and day out, about mass layoffs, imperiled companies, and other, generally foreboding news. With that as a backdrop, it’s no wonder that people would look for extra reassurance. After all, there’s no guarantee that a laid-off worker would be able to find a job in 6 months’ time.

But I wonder: At what point do our current problems outweigh future uncertainty?

For me and Tim, it doesn’t make financial sense to have an emergency fund. We don’t have a car, so no unexpected repairs. Our rent is covered by my disability check. And in the unlikely, simultaneous event that my contract work was canceled and Tim’s unemployment benefits ran out, we would cut back to the bare essentials and apply for food stamps. So it makes more sense to us to throw everything we have at debt.

For others, though, the answer is not so clear. For example, you can’t predict with certainty whether you will qualify for unemployment. Even if you do, that may not cover your mortgage. So having some funds in abeyance would be a good idea.

That said, we come back to the age-old (for me anyway) argument: How much should you save for potential future needs if you have definite current ones?

Your debts are probably accruing at least 7 percent interest. Your emergency fund, by contrast, will be earning 2 percent or less. At what point does that “lost money” begin to matter? Because that’s exactly what it is: It’s money you’re losing out on to secure a perceived future need.

I’m not saying it’s wrong. Certainly, if your unemployment isn’t enough to cover your expenses – especially something like a mortgage – then you need to have a safety net. But each money choice we make carries an opportunity cost.

If you keep money in checking rather than savings, your opportunity cost is the interest you’re losing out on. If you put your money in a CD, your opportunity cost is anything you could have done with the money, if it weren’t locked away. Likewise, if you build up your emergency fund, your opportunity cost is all the extra interest you pay over the course of your debt reduction.

So how many months’ worth of expenses are you willing to save up at the cost of a longer debt-repayment plan?

Of course, the old pro-EF argument goes: The money doesn’t have to come out in big chunks. You can pay up your EF slowly, while still paying down your debt.

Still, the numbers have to be considered: Paying down less debt – even if it’s to build up an EF – means more interest. Eventually, that has to be a factor in your decision.

And that decision will vary, depending on the people making it. For some, peace of mind outweighs the math. They would rather pay a little bit extra in interest and get a nice large cushion “just in case.” And they’d want to build up that cushion quickly. Depending on interest rates, this could hamper their ability to pay down debt quickly. But for them, a good night’s sleep (aka no more 3 a.m. “what if” panic attacks) is going to be worth more than anything. For others, debt that exists now is worth a whole lot more than any problems that might be in the future. They may choose to put off saving an emergency fund at all – at least until their debt is gone.

Most people, I think, will fall somewhere in between these two extremes. They’ll divert some money away from debt payments. But not enough to be remarkable. It will mean that they may or may not reach their 8-12 month goal before a layoff happens. But they’ll know they’re working toward securing themselves for the future, which is enough for them.

I think there’s one more factor to take into account: What kind of debt is it?

I’ve tried to be pretty open about my absolute, knee-jerk reaction to debt. Debt=bad. End of discussion. I’m working on it. So imagine my surprise when I read an argument for paying down less debt and it made sense to me!

This was from one of my favorite PF writer’s Liz Pulliam Weston. She suggests that the kind of debt should have a lot to do with your priorities – at least in times of uncertainty. If you make extra payments on student loans, then are unexpectedly fired, that money is a distant memory. You can’t get it back, short of going back to school and getting more loans. If, on the other hand, you funnel extra money toward credit card debt and get fired, you at least have your credit line as your absolute last, use-only-in-desperation safety net.

So, what does all this mean?

I have no idea. Seriously. Like I said, Tim and I are weirdly fortunate to be close to the bottom rung. We don’t have far to fall. And we are incredibly lucky to have very supportive parents who will always help out however they can.

But all that means – for the purposes of this post, anyway – is that I really have no clue what a realistic emergency fund would look like. Sure, I know about how much our expenses are, but we don’t own a home or a car. We don’t have kids. And we have, relative to our area, a pretty low income. So I don’t know how much most people spend on funding their EFs.

So I guess I’ll put it to you: How much of an emergency fund do you need to feel safe? Has that number increased in recent months? How much do/did you put toward your EF each month? How much would have to be in the bank for 8-12 months’ expenses? For you, is that a better investment than paying down debt? Do you have a point where one supersedes the other?

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