Mystery shopping as a route to saving

These days, a lot of the mystery shops I choose involve some form of spending. First of all, these shops tend to have better pay. Often, the most fun shops involve spending. Last week, Tim and I got to see a movie. We'll be reimbursed for one ticket (we used a pass for the other) plus the popcorn.


But there is a third benefit that I am only now realizing: savings.


When you get paid for a mystery shop, you're generally looking at a month to a month and a half lag. So, by the time you get it, it can easily feel like found money -- even when the payment includes a reimbursement for shop expenses.


So if the spending on a shop is relatively low -- that is, you feel comfortable taking it out of the bank account, rather than putting it on a card -- mystery shops can provide an excellent route to savings.


Let's face it, except in the most extreme cases, most of us will pick up a few unnecessary purchases. If you have plenty of money still in the account, it's easier to rationalize that bag of candy, a latte or some other small treat. The point is, you're likely to spend money on something that you barely remember a few days later.


But if that $10-20 is spent in the course of a mystery shop, you will probably forgo the indulgence. Then, when the payment comes to you, it's a heftier amount -- one that you're more likely to put against debt or into savings.


In this way, then, I'm starting to see mystery shopping as a route to bigger debt repayment.


Of course, this doesn't work when you have to put the expenses on a card. So restaurant shops, which can often run $30-50, may not be expenses you can take out of your account without feeling a pinch. Or perhaps you would take it as a challenge to be particularly careful for that period.


I suppose this method of savings could be applied even without the mystery shopping angle. For example, when I feel the urge to get a DQ Blizzard, I could exercise some willpower and just put the money aside. (And that would be good for both my wallet and my waistline.) Then, when Tim's unemployment check comes, I could redeposit the cash and put it toward the credit card payment.


Arguably, if I can exercise willpower more, I could simply stick to a stricter budget and skip these little psychological fake-outs. But when I know the money is sitting in the account, I find it too easy to indulge in small ways. Often the expense is small. I'll okay a bag of candy for Tim or myself (or both) at the grocery store, when I'd otherwise stick to the list. Still, those $2-3 can add up pretty quickly, as most of us know all too well.


So, at least for now, I need to use these little tricks. They help keep me aware of our spending, and they help me recreate the sense of urgency that sometimes gets lost when I'm burned out or have a craving. Whatever it takes to keep those extra funds going toward credit card debt, rather than to some sugary treat or some fast food.

Cracking $3,000

Once the payment goes through on Sunday, Tim and I will officially have gotten our United card under $3,000. ($2,903.28, if you want to be exact.)


For whatever reason, this feels like a big thing. A debt under $3,000 seems, to me at least, to being more manageable. It sounds like an amount that you're almost done with. So I feel victorious for the moment.


Of course, we still have a ways to go. The Citi card is still hovering at just over $6,000. It's on the back burner because we've locked in a 4.99 percent rate until that balance is gone. And there are a couple of things that may push our balance back up. The car's check engine light came back on -- about a week after we got it taken care of. (We are going to need to return to NAPA and request that they check it again for free, since clearly the computer diagnosis missed something.)


Still, for now I'm going to enjoy the victory of getting the debt more under control.


And if we can avoid too many unexpected expenses in the near future, we can have this particular card paid off in February. That's the image I'm holding onto, right now: a nice, fat zero in the "United" column of my spreadsheet.


Isn't it amazing how sexy "nothing" can be?

Stupid things you don't need

No wonder Americans are in so much debt...


So there I was, waiting for my prescriptions to be ready at Walgreen's. I checked out sunscreen prices (remember when they weren't $10 each because people were actually into tanning? I suppose it's wrong to wish skin cancer on people just so I can get cheaper sunblock...) and looked around at clearance areas. Hoo boy, was there a treasure trove of useless crap in there!


But before we move to the clearance bin, let's start with the best (by which I mean the worst) product, displayed front and center in the store: the Egg Genie. This lil sucker promises you perfectly cooked eggs, up to 7 at a time! Also great for steaming vegetables! Light and sound indicators let you know when your eggs are done!


All for the low, low price of $19.95 plus $6.95 shipping and handling. (Assuming you're buying it online and not in the store.) And for an additional $6.95 s/h, you can get the Baconwave and Chop Genie. (Is it just me does this list start to sound like the products committed some unholy act of incest and gave birth to one another?!)


In case you care, the Chop Genie appears to be a really cruddy imitation of already specious products like the Slap Chop. (Which I can't ever even consider buying thanks to Attack of the Show's product evaluation. Those of you who get G4 know what I'm talking about. Let's just say they weren't content to leave the test to normal things that people eat. And that parts of a pig were involved.)


In a far more disappointing turn of events, the Baconwave is not some awesome microwave made of bacon. I got really excited for a minute... And that makes no sense because I don't even particularly like bacon. In fact, it's a tray that holds the bacon while you microwave it. Talk about a letdown!


So, for a mere $33.85, you can get an unnecessary gadget to cook eggs (for those of you too cool to fill a pot with water and boil eggs), plus a cheap-looking, Slap-Chop-wannabe AND a plastic tray to hold your bacon, which will somehow cook it to perfection in your microwave.


Of course, maybe the Egg Genie truly does work. But I really don't get it. I grew up with a mom who just boiled the eggs. Then again, she brewed her own iced tea too. She took out a small pan, filled it with some water, heated it and then steeped several bags of tea, which she later poured into a pitcher that went in the fridge. Whew, what a workout!


Then again, I'm still of the firm belief that 99% of people don't need rice cookers. I've always made my rice on the stove. Yeah, you have to check it a whopping three or four times after turning down the heat, but does that really necessitate a labor-saving appliance?!


Let's see, what wonders did I find in the clearance section?

• There was the overly large ruler that had a calculator on it, with plenty of small buttons that looked hard to operate.
  

• The pen that had a 2" by 1" square stuck on it that was, apparently, some Atari game I'd never heard of. On the back, it had a diagram that showed where the directionals were plus a few other key items. Good thing, too, because in front it looked like a chunk of plastic with just a screen and no buttons.
  

• Two hideously colored onesies. As in bright, garish colors. One was striped with them. I think it was orange, lime green and red. Or something really unpleasant. (Does anyone actually buy infant clothing at pharmacies? I suppose it can't be much worse than the rest of the mass-produced stuff out there.)

• A few, cheap-looking Jonas Brothers items. Or maybe they were High School Musical. The painful, teeny-bop trends all meld together into one unpleasant blur for me.

• Plenty more items that I've probably blocked out to save my sanity.

And so I repeat: No wonder Americans are so deeply in debt. We buy all this ridiculous crap that we think will be cool or fun. But usually it turns out to be stupid, unnecessary and cluttering. At least, until we throw it out or donate it. At that point, we look it over and wonder what we were thinking when we bought it.


I personally have this theory that capitalism (especially the advertising industry) rests so much on stupid, unnecessary purchases that they put special devices in random products. So we go into an induced stupor, from which we emerge only after leaving the store.


By then, though, it's too late. There's a bag in our hand and a receipt in our wallet. By the time we've gotten home, we realize the purchase was dumb and superfluous, but we'd have to go aaaall the way back to the store to return it. (Plus the receipts for this stuff are always the ones you can't find later. But I suppose that my conspiracy theory about engineered disintegration in receipts will have to wait for another day...)


The point is, clearance bins are both amusing and terrifying. Hilarious because it exists; terrifying because somewhere someone has bought it. After all, there was only that one Atari-game pen. I really doubt the store just bought the one. So where did the others go? They were probably purchased.


Okay, okay, I should point out that there are good things to be had in clearance sections. After-holiday candy comes to mind. Cheap water bottles and summer toys. (Tim gets compliments all the time on the $1 water bottle I got at Walgreen's last year. It's shaped like a D, so that there's a handle to grab onto when you're toting it around.) And in this set of clearance bins, there was a set of three Phillips razor replacement blades for $9.99, which seems pretty reasonable.


So I guess it's a mixed bag. But mostly? It's a testament to just how many stupid items Americans will buy. And why so many Americans end up in debt with few real, valuable things to show for it.

Is getting deeper into debt ever justifiable?

Photo by Gloria Payne

I think there are some arguments to be made that it is. But it's rare.


There are some obvious cases, such as medical costs, where money is not the most important item on the agenda. And certainly, you can make a case for student loans, although these are increasingly coming under fire. (To be fair, the criticism is generally aimed at students who emerge from graduate school so deeply in debt that their loan payments suck up most of their pay.)


Still, are there other cases?


This is the thought that bounced around my cranium this past weekend. Because we're moving to Arizona.


Not immediately, so don't get up on those soapboxes just yet. But the idea of just saying, "What the hell!" and taking off... It was alluring. Well, for everything except the actual, horrible process of packing up whatever you don't sell and lugging it across the country.


The reason we're considering Arizona is that Tim's skin was nearly flare-up free during the two times he lived there. Rash free, even.


Let me put this in perspective. Whenever we'd meet a new doctor, Tim would mention his eczema. The doctor would glance over and say, "Yeah, I see it's flared up pretty badly right now." Tim would give a small smirk and break the news that this was a good day for his skin. Put another way, every single doctor and pharmacist has told us that Tim's case is the worst (or, very occasionally, one of the worst) they had ever seen.


Meanwhile, as summer creeps on and the humidity rises, Tim's skin is getting worse. And I watch my husband be nearly constantly uncomfortable.


So, as much as I love the Seattle area, I realized we have to get the heck out of Washington. The sooner the better.


Unfortunately, there are a few very compelling reasons why we can't move just yet:

1. We owe $6707 on our Citi card (yes, I know I need to update my ticker) and $385 on another that was 0 percent.
2. Tim's rediscovered student loan (link) is still at $4100 -- about $600 of which will fall off once the loan is rehabbed.
3. We owe parents a total of $5,000.
4. We'd need a reasonable down payment for a car. Bus is not an option down there.
   
5. We'd need first/last/deposit for a new place
6. We'd need money to cover the move.
   

Certainly, it's not the best list in the whole wide world. Especially considering that we can only throw about $300-400 a month against it.


But it wasn't this that set my mind on overdrive. It was this fun, circle of facts:

• Tim's skin is so much better in AZ, he can work with almost no trouble
• With a full-time paycheck (and the cheaper rent), we could get out of debt quickly
• But we can't afford to move down there until we're further out of debt
• And we won't be out of debt for awhile, because his skin acts up so much
• And that won't change until we move down to AZ.
  

Talk about maddening!


Don't worry, I'm not going to rationalize a move at this point in time. Even if we could borrow/save up the money for a new place, we'd never be able to get financing for a reliable car. (Since we wouldn't know any mechanics, I'd probably just want to get a brand new one and keep it until it's absolutely dead.)


So we'd need around $1500-2000 for the apartment -- first & last month's rent, deposit and pet deposit -- plus a few thousand for a car downpayment, plus however much it would cost to move. Even being (extremely) conservative, that would be $5,000 we'd need just to get down there. And the cheaper rent would be negated by the car payment.


Still, there's part of me that keeps roving around the apartment, trying to figure out what we could get sell. Wondering if there's a point at which we could rationalize it, so that my husband can be comfortable in his own skin.


Not very smart from a personal finance perspective. It scares me a little, frankly, the idea of going further into debt. But there are times when money is a secondary concern.

Skip payments: Stupid move... or is it?

Me vs. Debt recently related a little trick Chase played on her recently: eliminating her monthly payment. Apparently, she can skip a payment -- so long as she pays past due and over-limit balances immediately. Oh, and finance charges will continue to accrue. But other than that, she's home free!


Riiight.


So, in other words, rather than pay your minimum balance, you can pay the $30-40 late fee, plus keep accruing interest, plus pay if you go over the limit.


Checking over some of our worst (read: biggest) statements, it's easy to see that the late fee plus finance charge isn't much less than the minimum payment due.


You have to admit: A pretty savvy marketing campaign on the card companies' part. It makes it sound like they're taking a load off our shoulders. In fact, they're letting us sink deeper into debt while still getting about the same amount of money.


First, Americans were convinced that they didn't have to put any money down for a house. Now, they're being told the same thing about card balances. And that house thing turned out so well, I can't see why people wouldn't follow suit!


Anyway, this post reminded me that I had saved an email from the oh-so-friendly folks at Citi. Why did it catch my eye? The title was just too hilarious to delete: "Find Out How to Take a Break from Your Monthly Payment."


See, the people over at Citi understand that things happen. Ya know: marriage, job loss, disability, "and more!" They're there for you. And they have some sage advice to impart: Cancel your Citi card payment when you need the money most.d (This is quite literally what I first read upon opening the email.)


Thanks to Citi Protection, you can take time off from those pesky bills that come around:

• Suspend your payments for up to 3 months for family leave (birth or adoption) or a chronic illness of a family member. (Because chronic illnesses are always handled in a quick, up-to-three-month fashion.)
• Or suspend your payments for up to 24 months for job-loss or short-term disability.

All you have to do is pay $0.85 per $100 on the card's balance, each month you're enrolled but not actually eligible to suspend payments. That works out to $42.50 per month for an account with a $5,000 balance. That's $510 a year.


Of course, if you pay your bill in full each month, you might be tempted into the program. Citi can't charge you if you don't keep a balance on the card, right? Wrong.


Turns out that the $0.85 is charged to the "New Balance" of each statement. That includes any purchases you make during the month., regardless if you pay the full amount off. So, if you had a really busy month and charged $1,000 -- even if you paid the whole thing -- your protection program fee would be $8.50. Pretty sneaky, eh?


Okay, this sounds just as awful of a deal as Chase, right? I mean, you're not really saving any money. Or are you?


Here's the thing, you can enroll in this program the same day that you are injured or lose your job. Just so long as you don't enroll after the event, you would be eligible. This means no payments at all, no interest accruing and no finance charges of any sort.


I think there are an awful lot of folks out there who are involuntarily unemployed who could use a program like this. And if you enroll the same day you're fired, you never actually pay for the protection. (Yes, even the protection fee is waived during this period.)


The only thing that I can think is that Citi hopes to prey on people's fear and get them to enroll as a preventative measure. If we are worried about impending unemployment, we might consider the program a good safety net -- especially with a free one-month trial. And if your company is about to announce another round of layoffs soon, I could kind of understand the appeal.


Essentially, I suppose, the company is betting that people will be too rattled by being fired; they won't think to call and enroll in card protection. Otherwise, Citi would lose millions, if not more!


But given this loophole, is a "protection program" ever really worthwhile? Or is it the newest form of "extended warranty" or "undercoating" on that new car you're buying? Could you ever trust yourself to enroll in a timely manner? Do you know someone who has actually successfully used this kind of program?

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?

Fun with balance transfers?

Tim and I just performed some mathematical circus acts. We made the numbers sit, stay, roll over and even jump through a (flaming) hoop. Maybe we'll take it on the road.


And as all the most financially savvy folks do, we started this conversation late at night.


Okay, so this is generally a big no-no, but we were both feeling alert. And there's been a looming threat for the last couple of months.


Prologue


Like most Americans, we got a nice little letter in the mail about our credit cards. They weren't cutting our limit. (In fact, our MyPoints card keeps upping the ceiling.) The company was, however, informing us of potential rate hikes. The cap was 31%.


Now, so far, nothing has happened. But given that both the cards we're carrying balances on have APRs of 15%, we decided to go ahead and play the balance transfer game. Here's where things get fun.



The players


We have three credit cards right now:

• Citi, which I've been paying off monthly, so our new charges don't earn any interest.

• MyPoints, which has a current balance of just about $5300. (Slightly rounded)

• Chase, with a current balance of $3300 (slightly rounded). We've been concentrating on it, since the rate could go up at any moment.

The offers


Ideally, MyPoints would offer us a balance transfer, so we could clear out Chase's balance and close the damn thing. (Mom and I each opened one to earn free airline tickets for my and Tim's honeymoon.)


Alas, no such luck. But the other two cards have some good offers:

• Citi -- 0% until August 2009 or 6.99% until May 2010.
  

• Chase -- 0% until September 2009, or 4.99% until January 2011.

Both have a 3% balance transfer fee.



Mapping it out


So I picked up the white board and some handy-dandy markers my mom got me for Christmas ("Same debt -- but now in color!" she wrote). I wrote all three names down. Underneath I wrote balances. Under that balance transfer offers. Under that, end dates for the promotional

Citi	MyPoints	Chase
$0	$5,300	$3,300
N/A	15.00%	15% (31%?)
6.99%		4.99%
5/1/2010		1/1/2011

Then I started drawing arrows from one card to another, to represent our options for balance transfers. (It quickly started looking like a football coach's playbook.) Then, we just had to go through the steps to evaluate our choices.




1. Short-term vs. long-term


Most balance transfer offers will give you two choices: 0% for a short time (usually 6 months or less) and a low-interest rate for a longer period. Your choice will depend on what your overall goals are, your salary/job, and how you are faring in the world of personal finance.


If you are on track to be out of debt in a short time, 0% may work for you. If you are secure in your job, which I suppose is rare these days, you may feel okay going for a short-term 0%, which allows you to throw everything you have at the principal.


If, however, you're not sure about your job, you may want to choose long-term stability. If you're still in the early to middle stages of debt reduction -- in for the long haul -- you may want to choose the low interest rate.


The main deciding factor, in other words, is just how certain you are that you'll be able to pay it all off before the APR goes back to normal. If you choose 0% and then have a ton of unexpected expenses, you will have to deal with the rate jumping back to a normal level. It can be jarring, not to mention disheartening, to have your rate jump 10-15% and still have a balance.


This may lead to yet another balance transfer offer. Besides the fee, you should also know that your credit score can take a hit from habitual balance transfers.


As for us, we're well aware that our future is uncertain. Tim will get unemployment through April or May. And he is working with the Dept of Vocational Rehabilitation, but they're still in the assessment phase. So he doesn't know what sort of career he wants to have. That means we have no idea if he'll need schooling or whether his potential job market is saturated.


Given how much of our future is a toss-up, we decided a longer-term, low rate was better than a shorter-term 0% rate.



2. What's the effect of a lower rate?


So, the obvious choice would be to take the $5300 from MyPoints and shoot it over to Chase at 4.99%, right?


Wrong.


As I explained to Tim, credit cards like to use little tricks. One of the best ones, of course, is double-cycle billing. But another dastardly one involves balance transfers.


Since our Chase card already has a balance ($3300 at 15%), the new balance transfer offer ($5300 at 4.99%) would actually make it harder for us to pay down debt.


When there is more than one APR on a card, the company applies payments to the balance with the lowest APR. So if, right after the balance transfer completed, we got a windfall and threw $5,000 at the card, our new total would be $300 at 4.99% and $3300 at 15%


Why do they do this? Well, it's simple: They make more money this way. By applying the payments to the lowest-APR balance first, they get to keep more of your balance at the higher interest rate. That means more finance charges for them, which means more debt for you.


So, if we simply transfer the $5300 over to Chase, our current balance will be untouched and grow larger each month. After 9 months, the $3300 will be over $3700. At 12 months, it will be nearly $3900.


Not a good option. Instead, we agreed to send Chase's balance over to Citi at 6.99%.



3. Make sure the math works out in your favor

One of the most important things about a balance transfer, of course, is about saving money. By cutting your interest rate down (or eliminating it) you can put all your funds against the principal. That can mean big savings.


But balance transfers always come with fees. In the best scenarios, there is a cap on the fee. In the past, I have had ones that topped out at $75. Unfortunately, those seem to be increasingly rare. Nowadays most are just a straight 3% of the transferred amount.


So it's important that you do the math. You want the balance transfer to be negated by the interest you save. Personally, I prefer for the equilibrium (fee paid vs interest saved) to come by the third month. But it can be difficult to calculate interest, since your payments may vary paycheck to paycheck, and double-billing cycles can make it hard to accurately predict interest accrual. In the end, you have to find your own comfort zone, and remember that many of these numbers won't be exact.


For us, the Chase-to-Citi transfer would cost just under $100. But on the Chase card, there'd be over $100 in interest by the third month. It made mathematical sense to shift Chase's balance over to Citi.


Frankly, I was all for transferring the MyPoints balance to Citi, as well. That would allow us to close the Chase card once and for all. Tim frowned and studied the white board for a moment. (He's a visual fellow.) He then very gently explained that my idea didn't make good financial sense. After all, 4.99% until 2011 is pretty obviously better than 6.99% until May 2010.


Talk about feeling dumb. Here I was, the financial head of the household, and my knee-jerk reactions were about to cost us money. It was fear pure and simple.


I hate uncertainty, and that's the threat that Chase presented. We don't know if/when the APR will go up. That makes me nervous, which makes me want to just jettison whatever is causing the stress and uncertainty.


Logically, though, my reaction didn't make any sense. Even if the APR did change, we wouldn't be affected, since we would have balances with promotional rates.


In fact, the only way we'd be affected is if the APR changed and if we were late with a payment. I make payments every time Tim or I get paid, so the latter is unlikely -- and it would still depend on the APR having skyrocketed, which still isn't certain.


Once I thought about it more rationally, it seemed like a pretty silly fear. But it was an excellent reminder at how easily our feelings can get in the way of financial decision-making.


With that in mind, we devised a new plan: Transfer the MyPoints balance ($5300) to Chase, where it will be at 4.99%, and then send Chase's balance ($3300) over to Citi, where it will be at 6.99%.


I once again checked the balance-transfer math: It would be around $150 to transfer MyPoints' balance to Chase. But the 10.01% difference in interest rates will make that up in under 6 months. The first month alone we'll save over $40.


We also discussed doing one more transfer, from Citi to Chase, so that everything was at 4.99%. That would save us 2%. But it would also incur another $100 balance transfer fee. And since there will only be $3300 on the Citi card, the 2% is negligible. It would save perhaps $5 a months, if that, and so it would take nearly two years to just make up for the balance transfer fee.


That's a good reminder to always do the math. Sometimes it's more than worth it. Other times, you're just costing yourself money -- money that could be going to debt.



4. Balance transfer timing

Whenever you do a balance transfer, you have to watch the account very closely. If it's close to a statement due date, you'll want to make at least the minimum payment. Otherwise, if the transfer doesn't complete in time, you'll owe a late fee.


As I already mentioned, we currently make payments just about every week. So there's no worries about missing a due date. However, there was another concern about timing.


I was paranoid about doing the transfers simultaneously. Different companies complete them at different speeds. I was worried that the MyPoints-to-Chase transfer would complete first. Then, when Citi completed its transfer, it would ask Chase for $3332. But would Chase give it $3332 from the original balance -- which was my goal -- or would it give up some of the money at the lower, promotional rate?


I decided not to take the chance.


Instead, we're going to simply complete the Chase-to-Citi transfer first. Then we will initiate the MyPoints-to-Chase balance transfer.


Then I can wipe our white board clean and get some pretty colors to represent our new lower-interest balances. After these mental and mathematical gymnastics, it should be a welcome exercise.


What experiences have you had with balance transfers? Did you pay off the balance before the APR reverted? Did your credit score suffer? Would you do another one?

Starting the new year off right...

Happy New Year, all!


I'm happy to say that we are officially starting off 2009 with under $10,000 in debt!


That means that, since mid-June, we've paid down approximately $4,000 between student loans and credit cards. It's a pretty awesome feeling! I'm not quite sure yet what 2009 has in store for us -- Tim's unemployment only lasts through May for now -- but at least for the next five months we are planning on staying the course.


Also, I managed to parlay a local mess into a nice little discount: Fisher is a local parent company for the ABC affiliate and the contract is up. It is now asking Dish Network for a fee that is about 80% higher than its current one. So Dish is nixing ABC until things can be resolved. Just ABC, from what I can tell.


We pay $5.99 for our local channels, but the only show Tim and I like on ABC is Eli Stone. (And that's available as streaming video on ABC's website.) I used to watch Lost, but it's been ages since last season's finale. Frankly, I may just wait for the whole thing to be on DVD. It seems easier, somehow.


Anyway, thanks to a tip from Tim's mom, I called up and asked for information. The operator explained everything and then offered me a $5 discount on our next bill. I politely informed him that my mother-in-law had received that same discount for 10 months. The operator agreed to honor it, and so we're essentially getting our local channels for $1 for most of 2009.


I also dropped the insurance on our equipment. This may sound like a bad idea, but I've been assured by two operators and a couple of Dish subscribers that you can restart it at any time. Which means that you can call up, start the protection again, then call back and tell them you need something fixed.


That brings our Dish bill down to around $40 after taxes!

Do I need an attitude adjustment?

I was perusing The Wisdom Journal, via Twitter (yes, I have finally taken a sip of the Kool-Aid) and something he wrote was both thought-provoking and immensely irritating.


Under the subheading "Choices," the author wrote:

Where you are today is the result of the choices you’ve made, the experiences you’ve felt, the associations you’ve cultivated, the words you’ve spoken, the ideas you’ve had, the beliefs you’ve clung to, and the habits you’ve created. You are more in control than you give yourself credit because 99 percent of the time, your attitude determines the choices you make, and your attitude is the only thing you really control.

Okay, most of this stuff is deep and basically true. Except for that whole big part about choices.


Here are the choices I have made:

1. I chose to go to University of WA rather than graduate $100,000+ in debt from Cornell. So you can either argue I might not have been exposed to Guillain-Barre out in Ithaca, or that I'd have died when my respiratory systems failed, because it's in the middle of nowhere.
2. I chose to keep working. Kind of a misnomer, actually, since it was pure denial and stubbornness more than active choice. But it meant I didn't get disability early on which may have caused some extra debt.
3. I chose to marry Tim. I knew that, between the two of us, we needed our own little bubble, we're so sickly. So I knew paychecks would never be for sure. And, a month before the wedding, he was fired. So I definitely had a clear view of the uncertainty in our future when I said, 'I do.'

So that it's, really. Those are my choices. Sure, there are lots of smaller ones in the day-to-day stuff: whether to have a drink with friends, whether to fling myself off the couch and cook or admit defeat and order pizza, etc.


But by and large, choice hasn't had a whole lot to do with the last decade or so of my life. I chose to seek therapy, which was certainly better than suicidality. I chose to get medicated (see the last remark). But I doubt my attitude determined my being in a hospital for 4 months. Or any of the fallout from that.


Does my attitude shape my decisions now? Yes -- for better and for worse. Some days, you just can't be chipper. I don't care how many optimists you throw together, when you have a long-term, debilitating illness, you're going to have bad days. If not, you're still in denial.


There are days when you need wail and gnash your teeth. Cry that it's not fair. That you didn't ask for any of this. And then you can get up and get on with life. Except maybe watch some TV and eat a little junk food for comfort. Theoretically, mind you.


But I guess my point is that I've been stuck in a more or less reactive state since the age of 19. Most of my decisions have been made based on a narrower set of choices than healthy people.


And I don't say all this to make a big pity party in my honor. I'm working on making peace with my limitations. Slowly. But I'm working on it.


My point is that, reading personal finance blogs, you'd think Tim and I were out on European vacations and driving two SUVs. We've certainly discussed the fact that most PF blogs are targeted at a very specific audience. But it still gets pretty exhausting when you are looking for support and still leave wanting.


It's not that the tips and ideas are bad. Just that most are completely non-applicable to our life. I've gotten some good ideas off PF blogs, certainly. If I'm lucky, 10% are applicable and perhaps 2% are things I haven't already thought of/tried.


In a way -- actually, scratch that, in every way -- it would be so much easier if Tim and I were the target audience for these debt-reduction blogs. I don't love admitting when I'm wrong (luckily, I never am, right?) but if it were simply a matter of our flagrant over-spending, how much simpler would it be?


How much better would it be to simply bite the bullet and cut back? Not that changing a lifestyle is easy, of course. But it's a hell of a lot easier than already living bare-bones and still being in debt.


If Tim and I could just work more, hell we'd both be thrilled to. (Okay, the joy wouldn't last long. But if it were a short-term solution to getting out of debt, and we could actually effect change? Hoo-boy, you better bet we'd be covered in papercuts from all the job applications we were handling!)


But not everyone gets the same choices in this life. And while, as The Wisdom Journal notes, attitude is very important, it's not determinative. In fact, where you are in life isn't always the result of your choices. Sometimes, your choices are the result of where you are in life.


I'll leave this chicken-and-egg question for the philosophers. No PF blog can be relative to everyone all the time. And I hope I don't appear to be suggesting they should.


Still, it would be nice if generalized statements could take into account more lifestyles than the writer's when they are made. Whether that's a fair expectation, I couldn't tell you.


It's just my attitude on the subject, I guess.

Don't ask, don't tell

So I was cruising through my Google reader this morning and happened on a reader's conundrum over at Make Love, Not Debt.


Seems this guy got married after getting a "vague" estimate from his wife of her debt: besides student and car loans, about $15,000.


The first thing that strikes me as odd is that he wouldn't push further. Isn't student debt an awfully nebulous amount?


At any rate, after they were married, she had trouble getting a job and had to make do with a lower-paying occupation. She did eventually get back into her chosen field and back to making the $50,000 a year the man says they each make.


Unfortunately, he recently discovered they owe nearly $100,000 because of her spending. The minimums are about $1000 a month and she's still spending. Did I mention her five cards are maxed out?


As you might expect, she's refusing to change, and he's trying to take away the cards. They're at an impasse.


So... Lots of people chimed in with advice about marital counseling. One called him an enabler. One bitter fellow suggested immediate divorce as she clearly has no interest in changing.


Here's what I don't understand: How could you marry someone without a full accounting (if you'll pardon the pun) of her finances and debt?


I really and truly can't imagine saying "I do" without knowing exactly what kind of debt I was accepting in the process.


Would you marry someone without first meeting her kids? Of course not! But, after children, money is the most-argued-about topic in marriage. So what gives?!


I keep hearing stories about this sort of thing. And I have to wonder why these people never get around to talking about finances, goals for the future, and plans about how to get there.


Before you start in: Yes, I know some people are excellent at secret spending. It's a practice that truly bothers me.


I was on a forum once where many of the women would openly talk about hiding their purchases from their husbands. They would schedule deliveries for when their husbands weren't home. When new things arrived, they would be hidden in plain sight -- among the older things. If the husbands noticed, the women just insisted they'd "had it forever."


Creepy.


While I may not understand it, I do see how one partner can hide purchases pretty easily. Although it seems obvious that if both partners go through the financials together, the behavior is a lot harder to keep hidden.


That said, this woman didn't seem to be hiding anything from her husband. He just didn't want to make enough trouble to get the whole set of facts. (He explained that it took a lot of "pushing and pulling" to get the vague answer about debt.)


Obviously, most people suggested marital counseling. That's very important, of course. But I wonder why only one other person thought to ask him why he ignored some pretty big signs.


Most importantly, why didn't they have conversations about spending and saving and debt before they got married?


I also found it interesting that no one much cared why she is spending this way.


Like eating disorders, drugs and other self-harming habits, overspending is a way for people to avoid dealing with their problems. If you feel bad, you can overeat, or refuse to eat, or take some drugs, or go shopping.


The point is, any regularly occurring excessive behavior is usually a sign of a problem.


Both of these people clearly have a lot of work to do -- on themselves and their marriages.


But enough about my opinions. What would you tell this guy?

May you live in interesting times

Things certainly have been difficult around here.


The Lexapro is kicking in to a certain extent. I am feeling less overwhelmed and more inclined to leave the house. But I am still kind of emotionally fragile.


Meanwhile, we're still sorting through Magic cards. We finally sorted the cards so that each set is in only one spot in the three boxes. But we have to check the boxes at some point to make sure everything was accounted for.


Also, if you'll recall our 0% offer ran out. So I went ahead and applied for a card offer in the mail that would give us 0% for 1 year. The good news: We got approved. The bad news: For $500.


Finally, we had some unexpected expenses -- doctors visits, a few of Tim's shoes wore out, and a few other odds and ends -- which means we actually went up a bit on the credit cards. Part of the problem is that I only just got around to invoicing for my contract work with MSN. Once that money comes in, we can pay down a big chunk on one of the cards.


But seeing the credit card go up was a good wake up call. I had a minor panic attack and then sat down and consulted with Tim about what we could do. Here's what we came up with:


The biggest thing is that we're going to slowly start paying for more things in cash. This will help in two ways. The first, most obvious way, is that we won't be charging up the balance while simultaneously trying to pay it down.


The second way has to do with double-cycle billing. Double-cycle billing is another sneaky credit card company trick. When you can't pay your balance in total, your finance charge is based on the daily average for two billing cycles -- aka months.


If that's a little abstract, think of this way: My card has an average balance of $10,000 for two straight months. On the 61st day, I make a payment of $5,000, bringing my card balance down by half. But my finance charge? It would be figured as follows: $10,000*59 days + $5,000 for one day, then divide all that by 60 days for an average daily balance of $9916.66. In fact, after a month of having a $5,000 daily balance, the card company would still be charging for an average balance of $7,500.


You can see the problem.


I know that, to some of you, it may seem ludicrous that we were charging everything -- and shocking that we haven't made this step sooner. But between my depression and Tim's ADD, we have a long history of getting overwhelmed by finances and overdrafting. So we talked about it and made the choice to take the less-than-ideal route of credit cards.


That worked for a bit, but this recent credit card statement confirmed my fear: We're not able to keep as close of track of spending. We have to switch to cash. Still, both of dispositions mean that we could do great at finances for a couple weeks, then crash and burn. So we are still determined to make the transition to cash gradually. The first step is paying only debit or cash for groceries.


The second major move is that we are going to a nearby food bank. There are three days we can go (written on the white board, since neither of us currently have a short-term memory) and it will help supplement our food budget.


While food rates are slowly lowering, just getting a few fruits, veggies and bread products will really take the pressure off our budget. I'm hoping we can save $50-100 a month this way.


This week, we got some taco shells (last Saturday we had some very tasty ground-turky tacos), some potatoes (eggs are on sale this week, so Tim will make his very tasty "hobo hash"), an onion, some rolls and a couple cans of beans. Next week, we'll have a better idea of what's there and what kind of meals we can make around the ingredients.


We will also be making Grocery Outlet our default store. We were able to get Tim's cereal-of-the-month (he is a cyclical eater), Fruit Loops, for $2 a box. So we got 6 boxes, because I've been snacking on the stuff myself lately. We also got some red and orange peppers for 60 cents each -- whereas in normal stores I've seen them for $1.50 to $2. Things of that nature.


And once again, I'm cutting back on my snacking. It'll be good for my health -- and for our budget. This should save us $6-10 a week. I, like Tim, am a cyclical eater and the depression has added to my snacking urges. This has hurt the grocery bill, significantly. Even on sale, a bag of candy is $2 and I often split it with Tim so it lasts no more than two days.


Finally, we're debating giving up our weekly training session. It's certainly a luxury in some regards, seeing a personal trainer. But our friend Elston is not your average personal trainer. He got a four-year degree in sports medicine and (I think) kinesiology. He then got a secondary degree at Ashmead, studying nutrition, physiology, etc. And he's about the only person I trust to not overwork me, because he specializes in people with chronic conditions.


With him, Tim and I do weight-bearing exercises once a week, and Tim has been reaping the benefits as well, since he has big joint problems with his knees. He has excess fluid on the knees, plus both have been broken two times. One of those was being run over by a car. His knees and back have definitely been better since we have been seeing Elston. And Elston gives us a special friends rate. Still, it would be $180 more each month toward debt. It's something I'm going to ponder over the next few days.


As for the small credit card limit, our options are limited. Just getting the new card probably hurt my credit score a few points. So it would look really bad if I opened yet another account.


I think the best bet is to call the card company and explain our position. The company pointed to our extensive use of credit. Understandable. But I will call and ask to speak with a manager. I will explain that we would be closing out the current United card, which we opened to get miles for our honeymoon trip. Perhaps this will help convince the manager to extend more credit. Unlikely, but then I can ask how long it might be before our account could be reviewed and extended.


If that doesn't yield great results, I will call up Citi and pull the "loyal customer" card. I've had the card for over 12 years. I will explain the situation and see if they can offer any kind of balance transfer offer of a lower-interest rate. Failing that, I'll ask for a lower interest rate in general, since I've been a good customer (and it would guarantee them that I'd carry a balance on my card, equalling interest income for Citi).


If that doesn't work, I'll have to evaluate whether it's worth investigating yet another 0% offer, which would further hurt our credit, or simply suck it up and pay the interest.


A lot will depend on the next few weeks, since Tim was officially accepted for services at the Department of Vocational Rehabilitation. (Yay!) There, they'll help him figure out career possibilities. Depending on whether he'll need schooling, we can make some choices.


And, on another positive note, I officially invoiced today for the first time for my contract work with MSN. That will give us the ability to make a big payment on the cards.


So things continue to be bumpy but overall we are moving forward. I am hoping to start testing out some new, cleaner-looking templates as soon as this weekend. Thanks to everyone who has filled out the poll at the bottom of the page. The feedback is really useful.


Currently, I am compiling an Amazon store based on my own readings and recommendations of people I trust. Once I get it up and running, I'll let everyone know which books I actually read and which were recommendations.

Is impulse spending okay?

I think the answer to that question is pretty obvious, but I stumbled upon an interesting little piece on Yahoo! Finance called "Buy Now, Don't Regret Later."


The author talks about times when we become too frugal. When we deny ourselves and end up regretting it later.


He is obviously quite fond of being budget-conscious, but I think he wants to point out that sometimes we go a little too far.


As I was reading, I couldn't help but agree: Any system, however smart, can box you in. It can lead to decisions based on knee-jerk reactions rather than logical decisions. And, as my fourth-grade teacher was so fond of telling us, often your first answer is the right one.


This really resonated with me, but not because I have some would-have-bought item I pine for. I have moved a lot in the last 12 years -- between college dorms and various housing scenarios, it's in the double digits. So I'm usually too busy wrangling the things I already have to yearn for something I didn't get.


But the same frugal impulse -- to quash "unnecessary" spending -- has led to my own dilemma. It's a tad ridiculous, actually, because the answer is obvious; but I can't quite bring myself to act.


Tim and I have a promotional 0% on the biggest card. That amount runs out after October, at which point we will have to either pay the interest (15% on just under $9500) or transfer the balance.


I sat down with various credit card offers recently and read them through. (Our other cards don't have any particularly good offers, at present.)

1. There's one that's a 7.99 percent, not an introductory rate. But, of course, you never know if that's what you'll really get until you apply.
2. There's a 12-month 0% offer. This would give us a lot more breathing room while Tim figures out what he'll train for, how long schooling will take, etc. But the 3% balance transfer fee has no cap. In the past, the cap was $75, making it a no-brainer. This time, it'd be closer to $285.
3. There's a 0% 6-month offer with a balance cap, but the limit would be too low to transfer the whole thing over. And chances are, Tim will still be in school when the offer ends.

I looked through all this and did the math. Even with the 7.99%, we'd be paying more in interest. In fact, by the six-month mark, we would have paid the same amount as if we transferred over to the 0% card. The clear answer is option #2.


So why am I reluctant to do it? Well, a few reasons, actually.

1. I'll have to open a new card. In this economy, that can be dangerous. Some articles warn that this may cause current card companies to downsize your limit or up your rate. I doubt this would happen, but it's a concern.
   
2. It will have an effect on my credit score. Not huge, but not great, either.
3. Most importantly, it's the psychological impact of putting more debt on the card. I know, logically, that the funds will end up there, whether by balance transfer or by interest. But it's still a hard thing to do.
   

And it's the impulse in this last one that is so frustrating. I know that it's the right thing to do. But I can't do it. I don't want to put more money on the card, even though I know it will eventually end up there anyway. These are the situations that make staunch, unquestioning frugality a dangerous thing.



But there are necessary transactions that are harder because it's easy to slip into the fast mindset of not spending anything. Ever.


In fact, this mindset is problematic in more ways than one. Tim's natural impulse is to spend without worry. Mine is to quash spending automatically. Neither is a very fun or happy way to live. (Though, admittedly, Tim's is probably more fun in the short term.)


As my mom likes to say, "Moderation in all things -- including moderation." Any mindset that asks for 100% unwavering commitment is pretty unrealistic.


And so Tim and I both make adjustments and try to move toward a healthier center.

The obligatory "stock market" post

Unless you're living in a soundproofed house without connection to any media, you should have heard about the stock market panic.


Long story short, inasfar as I understand it:

1. Lehman Bros called Chapter 11. The Fed wouldn’t bail them out, so they filed for bankruptcy.
2. Merrill Lynch opted for euthanasia. Lehman left a lot of uncertainty. Merrill Lynch wasn’t ready to gamble. Bank of America bought it up.
3. AIG is saved. Despite putting its foot down with Lehman, the Fed announced it will guarantee up to $85 billion for AIG.
4. WaMu sinking? There are rumors that the government is going to help out this bank, which has been foundering for some time.

According to experts, this is only the beginning. Or the middle, if you see this as an extension of the subprime crisis.


Point is, there's much wailing and gnashing of teeth. People are panicked, anxious, angry, pessimistic -- all sorts of unpleasant adjectives. An MSN Top Stock's blogger even went so far as to refer to the "stock market collapse" which I think is still a tad premature.


That said, this isn’t my area. I didn’t want to do a post about it. But as crisis piled on crisis, I started seeing an underlying theme near and dear to my heart:


We've stopped seeing money as real.

Of course, there are plenty of other factors: too much risk, too many rewards for those risks, greed, myopia, arrogance, etc. But, really, at the base of a lot of these problems lies a common thread: People deal with money as an abstraction.

The art of the abstract

We're all guilty of this, to some degree. More technology meant more convenience – but it also meant that money stopped automatically being equated with cash. Instead, it's theoretical money, bits of information, numbers on a page.

The main thing is money isn’t really money anymore.

Most Americans get a slip of paper each payday. It tells them how much they made, how much they kept and whether it's already in their bank account.


We might withdraw some cash for day-to-day needs, but most of the money remains in our accounts.

And what about those accounts? How real are they?

• Can you point to your account?
• Is it in a physical location?
• Is there a cash-filled cubbyhole with your name on it ?
• When you pay bills, do the bankers bundle up some $20s and run to the post office?

Of course not. The idea is laughable. But if it’s not really anywhere, how do we know that it’s really there?

You could argue that those numbers in your bank buy goods and services. But with checks, debit, credit and EFTs, we still aren’t dealing with actual money. It’s still a game, shifting numbers from one spot to another.

Don’t fence it in

The fact is, this society really can’t handle the limitations of physical money. As it stands now, our money exists everywhere.

• It could be at any one of several bank branches.
• It could be in an ATM (and not even, necessarily, your bank’s ATM).
• It’s always in your debit card, just a PIN number away.
• It could even be online, so that we can pay bills without stamps.

Cash, on the other hand, is only ever in one place. And if that place isn’t in your pocket or wallet, you’re pretty much out of luck.

So, you can know that your money is real – and risk limitations. Or you can take the bank’s word that it’s available. And, of course, the government’s word that you’re safe in the hands of the FIDC.

Out of sight, out of mind

I really think this is a big source of our growing carelessness with money.

How are you supposed to treat money as real when it’s nowhere and everywhere? How do you take money seriously when it’s all just a bunch of numbers?

We know that this is an attitude that lets people get into debt. They think of credit card purchases as something other than real money. They lose track of their spending. It’s just so easy to spend when it’s numbers, not bills.

And when the debt gets bad, those numbers become pesky or depressing or maybe even scary. So they ignore the numbers. Because how much can figures on a piece of paper really hurt you?

Eventually, this cavalier attitude was bound to spread to mortgages – especially in high-priced areas.

Housing in most metropolitan areas is beyond expensive. This means that mortgages are bound to be sky-high. Since those numbers were so ludicrously large, people were able to dismiss them as abstract. (I’ve noticed a strange trend: The bigger the number, the less real it is.)

The numbers were too big to comprehend, and so people didn’t try. They relied on banks to tell them what they qualified for. And that’s what they spent.

I think we all know how most of those stories ended.

So what now?

I’m not sure there is much of an answer. We’re not going to undo decades’ worth of technology so that money can be a more solid concept in people’s minds. But as long as we’re able to transfer huge sums with the click of a mouse or a swirl of a pen, money isn’t going to seem real.

A small start is what many of you are already doing: using cash whenever possible. But this system only makes a small dent. Even people who only use cash throw around an awful lot of big numbers.

Net worth. What does that mean? It certainly doesn’t mean they could cash out tomorrow. Often it includes a house (minus any remaining mortgage) and retirement accounts they aren’t supposed to access for at least another decade or two. But a net worth of $200,000+ sure sounds nice, doesn’t it?

Salary. It sounds impressive to make say, $60,000 a year. But is that really what you get paid? Yes, in a sense. But a more concrete answer is the amount you actually take home in pay. Planning out finances using pre-tax amounts is just budget suicide.

Debt. Some bloggers are tens of thousands of dollars in debt. Tim and I owe $12,000. I can’t even begin to picture what that looks like. To me, $12,000 is pretty abstract. It’s not real money. It’s money we owe. Money that's already spent, which means not actual cash.

Expenses. Can you picture what it would look like – your entire debt as a stack of bills? How about shelter costs? Can you picture paying your rent or mortgage in cash each month?

Fuel. What about gas? If you had to pay cash at the pump, would you be carpooling more? Would you have traded in for a smaller, more gas-efficient model?

In all, it just makes me wonder: If we didn’t have credit to fall back on? Would people be better or worse? (Tim would be worse off: We financed his expensive oral surgery and dentures on a card.)

Would no credit help inflation? Hurt it?

Most importantly, would people have a better sense of fiscal responsibility? Would they be less prone to thoughtless consumerism? Or would innate greed simply find another way to come out?

These are questions I do not know the answers to. But I feel like I should. What about you?

Forget respect, I'd take a little responsibility!

I decided to try out this BlogHer that everyone's so keen on. So here's a lil post I did especially for those folks. (But I would never deprive you all of my rants. That would be cruel.)

I feel as though I am beating a dead horse -- apologies to PETA -- but I just can't over how many people in this country act like truculent teens.

When you confront a teen about a mistake, chances are that they'll apologize in a half-hearted way (if they bother at all). Then they want you to clean it up for them. Because, after all, they're still just kids, right? If you try to make them understand the gravity of the mistake, they roll their eyes. Exasperation.

Maybe we didn’t push enough, and so they assumed someone would always clean up after them. Or maybe it’s just from living in a society that dips youth in gold and places it on an altar. Maybe it’s that adults now act more like children than ever: Always buying new, flashy toys; playing video games; eating unhealthily.

Whatever the reason, this society is disinterested in owning up to mistakes – particularly if it means making things right. It's so much easier to blame others. Obese? Fast food chains are at fault. Upside down on your mortgage? The lenders gave you too much mortgage.

This sort of thinking is awfully convenient. It allows you to walk away with no guilt. Because it wasn’t your fault to begin with. Unfortunately, it also means you don’t learn from your mistakes.

I know that some folks were duped into adjustable-rate mortgages but, by and large, people just wanted things that were previously out of their grasp. And once it was within reach, they didn’t ask questions, didn’t look critically. They just bought into the advertisers’ hype that they “deserved” these things.

Here’s my final bit of exasperation: “Upside-down on your mortgage.” What does that mean exactly? Well, I know what it means. But why does that situation somehow absolve you of any wrongdoing?

Even with the housing price inflation of the past few years, how “upside-down” can you really be? I would be shocked to find anyone who can answer more than $50,000. My guess is, most people are maybe $10,000-$20,000 short.

So why do they get to walk away from that responsibility? Why do they get to think that if they don’t break even, they have no options other than giving up?

They decided to get a house. There’s always risk with that: disability, prolonged illness, unemployment. With most kinds of investment there is risk. And they accepted that when they signed the papers.

Yes, $10,000 is a lot of money. So is $50,000. But you can pay it back. It will take time. And they will be forced to cut back and do without.

But it’s money they owe. Why do they think they're allowed to opt out because things didn't go according to plan?

If you lose money in the stock market, you can’t walk away. When you lose at a casino, you can’t go ask for a do-over. You accepted the chance of losing at the same moment you accepted the chance of winning.

But in this country people think that they are owed a happy outcome. When the unhappy news comes calling, they have plenty of excuses why they can't be bothered.

• 
  
  They point to children and say, “We have to live somewhere.” Fine, rent. Go for a small apartment.

• 
  
  They say they have too much “stuff” to fit into an apartment. Uh, isn’t that part of what got us into this problem? Sell whatever you can and put the money toward the debt.

• 
  
  They say their kids need to go to college. The kids will have to save on their own: holiday money, babysitting and a part-time job during the school year (full-time in the summers). They may still need to take out loans. It happens.

We need to start convincing people to take responsibility. We owe it to ourselves and to our children to stop this cycle. Teach your kids that debts should be honored and that mistakes do have consequences.

Otherwise our future is not only full of annoying whining, but also pretty bleak.