Search Results for “three-alternatives-to-a-budget/budget-lesson-part-5/debt-burnout/budget-lesson-part-3/budget-lesson-part-1/travel-expenses-why-i-splurge/slow-carb-diet-how-to-avoid-going-bat-crazy/budget-lesson-part-2/brown-bagging-your-way-to-savings/subscribe-by-email/INGDirect” — Page 100

Making Up Stories

Saturday night, as I was walking out of the pizza place, I saw a beautiful young brunette standing on the sidewalk talking on her cell phone.

As I walked past, I heard, “I could pay my rent if they’d just give me my last paycheck! They owe me like $200.”

That’s it.

Have you ever heard a tiny piece of a conversation and used that to build a back story in your own mind?

I do that all of the time.

In fact, I’m going to do that now.

First, what can I know from those two sentences?

She was unemployed. She was more worried about her last paycheck than her next one.
She had worked for a scummy, fly-by-night, something-or-other. Good companies don’t withhold paychecks.
She had no emergency fund. If she had one, $200 would be an inconvenience, not a disaster.
She rented, and had roommates. This conversation occurred in the parking lot of a pizza place in a reasonably affluent suburb. For $200, she wasn’t living alone. Whether she rented a room or shared an apartment would be a mere guess.

Those items can–I believe–be taken as fact, given the evidence at hand.

Now for the conjecture:

She was a waitress. A $200 final paycheck probably means her hourly wage was low. Besides, pretty, young, unskilled girls often become waitresses. It’s one of the few ways to make good money without a degree of any kind.
The restaurant wasn’t a chain. Chain stores have lawyers and procedures. They don’t withhold final paychecks.
She invites drama into her life. When you work for a company that makes a habit of shady practices, like withholding final paychecks out of spite, you know it happens. It’s not a surprise. If you continue working there, you are just waiting in line for your turn to have problems.
She wasn’t close to her family. In an emergency, $200 from Mom & Dad is nothing. In my mind, she only has one parent and isn’t close to that parent, but that’s purely invention.
Her friends are in the same boat. Short-term planning, no reserve cash, no room to let a friend couch-surf for a couple of weeks.
Next month, she’ll be having the same problems, but she’ll find someone else to blame. Her ex owes her money, or her roommate stole the last of her cash.

That’s my entirely unsupported guess of a young stranger’s life story. My opinion isn’t flattering, but how could it be, when $200 is enough to make the young woman panic?

Have you ever played this game?

Life may be like a box of chocolates, but it is certainly not a game of Sorry, where one person wins at the expense of all others. It is entirely possible for everyone to win in most voluntary interactions.

For example, if my company gives me a $10,000 raise, it would seem like I win and they lose. I’m getting more money, at the expense of their bottom line, right? Maybe. But what if that raise spurs me on to make an extra $100,000 for the company? That makes it a good investment and a Win/Win scenario.

When I’m dealing with one of my side-business customers or an advertiser, I’m definitely pushing for the Win/Win. Of course I want them to pay me as much as possible, but I also want their repeat business, which won’t happen unless they walk away happy. If I insisted that each of my customers pay the absolute top dollar, I may come out ahead in the short-term, but what about next month or next year? It’s much better for both of us if we can find a happy middle ground.

The four basic forms of interaction are:

1. Win/Lose. This is where I win and you lose. Haha! The problem with a Win/Lose is that the loser isn’t going to come back to play next year. He’s not happy and he’ll probably tell his friends how unhappy he is. This is also the interaction that people are mistakenly assuming when they complain about excessive executive interaction. The CEO is making a million dollars while the folks on the assembly line are stuck with $15 per hour? It’s entirely possible that, if the CEO weren’t doing his job, nobody else would have one. That is, like it or not, Win/Win.

2. Lose/Win. This is where I give up everything, hoping you’ll eventually throw me a bone. It’s a cowardly interaction that won’t work well when dealing with someone playing #1. I’ll keep giving, you’ll keep taking. You go home happy, I go home sore. When it’s done, I won’t do business with you ever again.

3. Lose/Lose. Nobody wins. We fight so hard to get what we want, forcing the other side to give up as much as possible, while they are doing the same. At the end of the day, the hatred is flowing so strong, there’s no possibility of a relationship.

4. Win/Win. Yay! Everybody wins! Everybody’s happy! This will involve some compromise, but hopefully we can reach the happy middle ground where we are both smiling. If I’m looking for a deal that involves you paying me $1000 per month, is it better for me to push to get exactly that, or let myself get talked down to $750? If the $1000 is more than you can afford, so you quit with hard feelings after one month, the ongoing $750 is much, much better for both of us. It is actually in my greedy self-interest to give up that 25% to build our relationship.

Winning doesn’t have to be done at the expense of others. If you do it right, we all win.

Charity

Finance, Life

Charitable giving is down. Predictions have been that donations would be up this year, but the reality appears to be otherwise.

I have an admittedly low sample size; I don’t talk to many charities and the 2012 donation amounts aren’t out, yet. The one I do have access to says that donations this year are among the lowest in memory.

As I’ve mentioned before, I’ve been a bit busy cleaning out a hoader’s house. Last weekend, we tackled one of the stashes of toiletries. We came out with several cases of soap, shampoo, blankets, towels, and sleeping pads.

For the right charity, an unopened case of bar soap is better than gold.

When our new-found treasures were delivered to Mary’s Place, I’m told the nuns wept. Mary’s Place is a transitional housing complex attached to a homeless shelter. They were totally and completely out of hygiene products for the residents.

Something that means nothing to me meant the world to someone else. I was just looking for a useful place to dump the stuff we can’t use or don’t want to store, and I made a nun cry.*

People need so much, and so much of what they need is trivial to my family. A blanket? A bar of soap? That’s nothing…to me.

As we go through the rest of the stuff, our focus will be different. Instead of, “Can we sell this at a garage sale, or should we donate it?”, it’s going to be “Can someone get more value out of this than we’ll get by selling it?” We can sell a comforter for $5, or give it to someone who needs to stay warm in the winter.

I’ll forgo $5 for that warm fuzzy feeling.

*Check one off the bucket list.

The Story of Sammy

Business

As I’ve mentioned, we’re cleaning out my mother-in-law’s house. She was a hoarder who passed away a couple of months ago. As of yesterday, we’ve filled two 30-yard dumpsters. For perspective, that’s big enough to park our F150.

I’m not here to talk about that, or the 20 year old can of green beans that burst and ran down my leg on Saturday.

Last month, we put a recliner out on the curb with a free sign. A few minutes later, a couple of guys stopped by and grabbed it.

Last week, one of the guys–I’ll call him Sammy–stopped by and left a note on the windshield of one of our inherited cars, asking about buying it.

Long story short, we sold him two cars. One hadn’t been run in a year or two, and one had been parked for almost 20 years. We signed this titles and let him take the cars while he was still $50 short of the purchase price. This isn’t a story about the cars.

It’s a story about Sammy.

Sammy doesn’t have a lot of money. He’s living off of a monthly check from an old injury, and his fiancee works part-time. They’re living in Section 8 housing, and consistently have more month than money. When he was younger, he made some decisions that make some forms of employment difficult now.

On Friday, Sammy stopped by. He was supposed to give us $50, but said that getting one of the cars running had cost more than expected, and it still had a problem that was keeping it from being safe on the road. He asked about an extension.

No problem.

Then, he looked around my mother-in-law’s overgrown yard and asked if he could help. After we negotiated the price, he asked if he could a) borrow our tools for the work, and b) get a ride Saturday morning.

I am a nice guy.

Saturday, I was planning to pick him up, then drive downtown to pick up a friend who has been living at the Salvation Army since moving to the area. His friend was so excited about the work, he hopped on a bus at 6am and got to Sammy’s house.

When I got there, Sammy also had a teenager he was mentoring. He told me that his dream was to start a lawn-care business with his friend, so they can put kids to work and help them turn into productive citizens. Idle, broke, and bored teenagers are a recipe for disaster. Teenagers who grow into men not believing they have a chance to change their future are worse.

I dropped them off and went to have a chat with my wife.

We’re far from rich but, at the moment, we are fairly flush. We’ve found some cash, and a there is a bit of life insurance money. Most of that will be going into remodeling the house, but we have a bit extra. If we can take a few hundred dollars, and help launch Sammy into a business that will help him, his family, and a circle of kids with few prospects, I think it’s the right thing to do.

When I told Sammy what we were considering, he started to break down. It was a truly emotional experience for him to know that somebody was willing to take a chance on him.

I told him to put together plan. I want to know what it would take for him to get started. Hopefully, he’s serious enough to do that. I’d like to help.

Mortgage Race

Finance

I spent last week at the Financial Blogger Conference. Saturday night was the big debauch, a 90s themed hip-hop dance party.

Yeah.

Instead, Crystal, Suba, and I hosted a super-secret pizza party to let some of the less “dance party” inclined attendees discuss things like the sanitary concerns of group body shots, sex toys, and horror movies.

During the course of the party, Crystal and I decided to race to pay off our mortgages.

Her balance is just under $25,000.

My balance is $26,266.40.

We both technically have the cash to pay off the balances right now, but we are both dealing with secondary housing issues. She’s building a new one, and I’m updating an inherited house. Neither of us is willing to use our cash reserves to pay off the balance right this moment.

Now that my credit card is paid off, I’ve moved that money to an extra interest-only payment on my mortgage, effectively doubling my mortgage payment, which puts my projected payoff date as about the end of next year. Crystal’s aiming for June, so I’ll have to hurry.

We do have tenants lined up for February, and all of the non-expense related rent will go to the mortgage.

I think I can win.

Update:

I forgot to mention the terms of the bet. The loser has to go visit the winner. When I win, Crystal’s going to fly to Minnesota to experience snow.

Car Dilemma

Finance

I’ve got most of my bills set up on auto-pilot, so I don’t have to worry about getting the payments in on time. It’s a huge time saver, but it occasionally comes with a downside.

A couple of weeks ago, I was reviewing our bills and saw this on our insurance statement:

2002 FORD	$51.07
2005 CHRYSLER	$47.40
1994 MERCURY	$1.64
2008 DODGE	$39.96
1986 HONDA — ANNUAL	$17.76

There are two problems with this.

1. We sold the 1994 Mercury a few months ago. Then, we forgot to tell the auto insurance company. We probably only wasted $6 on storage insurance, but it could have been worse.

2. We have 2 drivers in the house and 3 vehicles to drive, and the highest premium is on the vehicle getting driven the least.

We haven’t decided what we are going to do, yet.

Here are our needs:

We have 5 people in our family. My 13-year-old son is bordering on 6 feet tall and shows no sign of not growing.
Every weekend, we have at least 1 extra kid, sometimes 2.
We still have a giant(24 foot) boat that we won’t be selling until spring.
My wife wants to lease a couple of ponies next summer, which will mean a horse trailer to haul them in.

The Dodge is a Caliber, which is small. I don’t fit comfortably in the front seat for a long period of time, and I’ve got no idea how my son manages to fit in the backseat behind me, next to two car seats without complaining. It gets great gas mileage.

The Chrysler is a Pacifica, which fits out family perfectly, as long as there are no extras. It gets crowded with a dog and luggage for a trip, but it’s doable. We get gas mileage higher than the car is rated, but it doesn’t have a towing package. Even if it did, the car can’t handle a trailer full of horse.

The Ford is an F150 we bought new. It’s less roomy in the backseat than the Caliber, but better in the front seat and it can tow anything we need. Also the worst gas mileage of the lot.

The Honda is a motorcycle. I could haul both of the girls if I bungie-strap them to the backrest. Sucks in the winter.

Our choices seem to be:

A. Sell the Caliber. Drive the truck. Not perfect for hauling lots of kids, but it can work.

B. Sell the truck. Drive the Caliber. Screw the horses. (Not literally. Jeez, you have a dirty mind!) This still isn’t great for family outings, but works for a commuter.

C. Sell the truck. Sell the Caliber. Buy a mini-van. We’re looking at the GMC Acadia or the Chevy Traverse. Both are built on the same body, have third row seating that can fit an adult comfortably, and are rated high enough to tow a trailer full of horse. If we sold the car and the truck, and cash out an inherited IRA that has to be cashed out over the next few years anyway, we can come up with $22,000. That will buy a 1-year-old Traverse outright or get us within a few thousand of a similar Acadia.

I think C is the best long-term solution for our family. What do you think?

Search Results for: three-alternatives-to-a-budget/budget-lesson-part-5/debt-burnout/budget-lesson-part-3/budget-lesson-part-1/travel-expenses-why-i-splurge/slow-carb-diet-how-to-avoid-going-bat-crazy/budget-lesson-part-2/brown-bagging-your-way-to-savings/subscribe-by-email/INGDirect