- Up at 5 two days in a row. Sleepy. #
- May your…year be filled w/ magic and dreams and good madness. I hope you…kiss someone who thinks you’re wonderful. @neilhimself #
- Woo! First all-cash grocery trip ever. Felt neat. #
- I accidentally took a 3 hour nap yesterday, so I had a hard time sleeping. 5am is difficult. #
- Wee! Got included in the Carnival of Personal Finance, again. http://su.pr/2AKnDB #
- Son’s wrestling season starts in two days. My next 3 months just got hectic. #
- RT @Moneymonk: A real emergency is something that threatens your survival, not just your desire to be comfortable -David Bach # [Read more…] about Twitter Weekly Updates for 2010-01-09
Inadvertent BOGO
I refuse to buy my kid more expensive video game systems. He’s got a friend who’s got one of each, going back 15 years.
We don’t do that, so he’s spent the last 6 months saving to buy his own XBox 360. After his birthday this month, he finally had enough, so we ordered it a few days ago.
Wednesday was the Great Unboxing.
I was making dinner in the kitchen while the punk and his friend unpacked the box from Amazon.
The squeals were normal. The shouts of “Dad, why did you buy two XBoxes?” were a surprise.
Two?
No.
Actually, yes. There were two of the things in the box. Did I order two? Did I accidentally pay for two?
Nope. The packing slip only listed one, my order history only showed one, and my credit card was only charged for one.
Yet, there were two in the box. Free XBox! Woot!
That means an XBox in the bedroom for Grand Theft Auto and Red Dead Redemption, and an XBox in the basement for Madden and Star Wars. No fighting. No turns to take. And it didn’t cost us an extra $200.
That’s all win.
If there’s nothing on the packing slip, then Amazon didn’t know I had it. Even if they did, I didn’t do anything to make them send it. There was no fraud. Legally, I had no obligation of any kind to do anything other than enjoy my new prize.
Lots of win.
The kids were excited. Everyone gets a turn. Multiplayer games.
The parents were excited. We get a turn. M-rated games.
So much freaking win in that box.
But….
There’s always a but.
We didn’t order it. We didn’t pay for it. It wasn’t ours.
A friend told me to sell it. She knows how hard we’re working to pay off debt.
A coworker said, “Screw them. They’re just a big corporation who’d be happy to screw you first.”
But it wasn’t ours.
I spent 12 hours trying to rationalize a way to keep it that wouldn’t be unethical, make me feel guilty, or–most important–send a horrible message to my kids.
I couldn’t do it.
It wasn’t ours.
I had a talk with my son. It was his money that got this little prize into our house, after all. He wanted to keep it, naturally. He’s got a lot to learn about persuasion. He acknowledged that sending it back was the right thing to do. He agreed that it would suck if the roles were reversed. His only argument in favor of keeping it was “I want it.”
Even he admitted that was completely lame.
It’s going back. I let him think that was his decision.
I talked to Amazon. They apologized for the inconvenience and gave me a UPS label to send it back at no cost. It didn’t cover pickup, but I’ve got a drop box in my office building, so I can deal with that.
My wife was pissed. The customer service rep never bothered to say thank you. She called Amazon to complain to a manager. After reminding him that we had no duty to return the free XBox, he gave us a $25 gift card to say thank you.
I love my wife.
My son, for deciding to to the right thing, gets to spend the gift card. My wife, for being awesome, gets to be with me. I miss my free XBox.
What would you do? Would you keep the free XBox, sell it, or send it back?
Sunday Roundup – Life’s Been Busy
I’ve been skipping the Sunday roundups for the last month. Over the last 4 weekends, I have put 2000 miles on my car, taking 4 trips–only one of which I consider optional and that was the only fun trip. With the extra gas, and having to pay for my son’s vision therapy, we went over budget by more than $4,000.
Ouch.
It’s the first debt I’ve picked up in more than 2 years. It’s leaving me twitchy and crabby. I don’t like it much at all.
And, with all of the traveling, I have let the Sunday posts slip.
Weight Loss Update
I am on the Slow Carb Diet. At the end of the month, I’ll see what the results were and decide if it’s worth continuing. For those who don’t know, the Slow Carb Diet involves cutting out potatoes, rice, flour, sugar, and dairy in all their forms. My meals consist of 40% proteins, 30% vegetables, and 30% legumes(beans or lentils). There is no calorie counting, just some specific rules, accompanied by a timed supplement regimen and some timed exercises to manipulate my metabolism. The supplements are NOT effedrin-based diet pills, or, in fact, uppers of any kind. There is also a weekly cheat day, to cut the impulse to cheat and to avoid letting my body go into famine mode.
I’m measuring two metrics, my weight and the total inches of my waist , hips, biceps, and thighs. Between the two, I should have an accurate assessment of my progress.
Weight: I have lost 45 pounds since January 2nd. I haven’t weighed in since my last Sunday update. For the last week, I haven’t been terribly strict about being on the diet and I haven’t stressed about staying on it while traveling.
Total Inches: I have lost 27 inches in the same time frame.
Best Posts
Every home needs a secret tunnel. Every time a house in my neighborhood goes up for sale, I try to convince my wife we should buy it and connect it to ours with tunnels.
Some day, when I’m a brazillionaire, if I hate my descendants, I’m going to set up my will to frustrate them all.
Haggling is a skill I need to work on.
The Monster Hunter Alpha early advanced reader copy is available. The Monster Hunter books are fun, fast reads.
Bacon art makes me cultured and hungry.
Making strangers smile is a way to make your day memorable.
I always get a warm fuzzy feeling when I hear about people successfully chasing their dreams.
I need to find a use for some of the unique materials here.
Carnivals I’ve Rocked and Guest Posts I’ve Rolled
Karate Guess So was the winner of last week’s Best of Money Carnival! Woo!
Debt Options was included in the Festival of Frugality.
Budgeting Sucks was included in the Carnival of Personal Finance.
The Benefits of Ignorance was included in the Totally Money Blog Carnival.
New Debt was included in the Yakezie Carnival.
Thank you! If I missed anyone, please let me know.
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Answer: How Much Term Life Insurance Do I Need to Buy?
From a question posted here:
Thank you for all your help in my previous question. After meeting with the agent, I’ve decided on term life insurance over whole life. But I am still not sure how much term life I should buy. Should I buy as much as I could afford or some specific amount?
My answer(edited a bit):
That question is far too open-ended.
Are you married? If yes, are you the primary breadwinner? Do you have children? Investments? Savings?
Here’s my situation:
I am married, with three children. I have the primary income.
We have a mortgage, a car payment, and some consumer debt.
I added up all of the debt as my base level of term life insurance. My family will not be burdened with debt if anything happens to me.
To the base level, I added 5 years of my net income. Without changing a thing, my family will be supported exactly as is for 5 years if I die. They won’t, however, have the same level of expenses, due to the base level of insurance paying off all debt. All of my living expenses also evaporate. For example, there will be one car sold, one less mouth to feed and body to dress, etc.
I figure with the lower expenses and no debt, my insurance will support my family for 10 to 15 years if my wife manages the money right. If she continues to work, it should last almost forever.
How do you figure the “right” amount of life insurance?[ad name=”inlineright”]
Budgeting Bulimia
As the President is so quick to point out, ten years ago, there was a large budget surplus. Naturally, the government went into a massive cycle of lifestyle expansion. That expansion, combined with lower tax revenue and a recession has brought us from a $230 billion surplus to a $1.4 trillion deficit. That’s a bit above the trivial level. A definite binge.
In Minnesota, there was a $2 billion surplus just a few years ago, which was obliterated by, once again, government expansion and a recession. During the boom years, government programs were enacted with no thought to sustainability. Nobody thought about the fact that a surplus isn’t a balanced budget, either. We just kept adding to the budget, thinking the good times would last forever. Another binge.
Last year, the governor of Minnesota had to “unallot” money from the budget. He went through the budget with a red pen and struck line items until the budget was balanced, a requirement in this state. This infuriated his political opposition. They were not prepared for the purge.
Federally, the purge hasn’t happened, yet. Give it time. Excessive spending using imaginary money can only last so long. It will stop. The longer the binge, the harder the purge.
Families are doing the same thing. Four years ago, I got a raise and immediately bought a new car. Binge. Two months later, I was laid off and had to cut everything possible to make ends meet. Purge. Tax refunds, inheritances, drawings. So many of these things give us an excuse to commit to long-term expenses without planning for long term sustainability. If I inherit $5000, is that a good time to add $500 to my monthly bills? No! That’s an unhealthy binge. In ten months, if the money lasts even that long, I will be forced to purge something to keep afloat.
The responsible, healthy way is the same as healthy, responsible eating. Diet and exercise. Spend less, save and earn more. That’s the strategy that will let you level out life’s valleys, instead of puking all over the floor. Don’t spend every cent you see, just because it is there. Set some aside for a rainy day.
Leave the binge-and-purge financing to the politicians.
Update: This post has been included in the Festival of Frugality.
Money Problems: Day 10 – Debt Insurance
Today, I am continuing the series, Money Problems: 30 Days to Perfect Finances. The series will consist of 30 things you can do in one setting to perfect your finances. It’s not a system to magically make your debt disappear. Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.
I’m not running the series in 30 consecutive days. That’s not my schedule. Also, I think that talking about the same thing for 30 days straight will bore both of us. Instead, it will run roughly once a week. To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.
On this, Day 10, we’re going to talk about debt insurance.
Debt insurance is insurance you pay for that will pay your lender in the event of your death, dismemberment, disfigurement, disembowelment, or unemployment. Exactly what is covered varies by insurer, type of debt, and what you are willing to pay for.
Private Mortgage Insurance(PMI) is a common form of debt insurance. Generally, if you take out a mortgage with a down payment under 20%, you’ll be expected to pay for PMI. According to the Homeowners Protection Act of 1998, you have the right to request your PMI be cancelled after reducing your loan amount to 78% of the appraised value of the property. That ensures that the lender will be able to recoup their money by seizing the mortgaged property if you should happen to fall under a bus or get hit by a meteorite.
Another common form of debt insurance is for your credit cards. Card companies love it when you buy their insurance. If you buy their life insurance, your card is paid off when you die. Disability insurance pays it if your get hurt. Unemployment insurance…you get the idea.
Here’s the deal: Get life insurance and disability insurance separately. It’s cheaper than getting it through your credit card company and let’s you get enough to actually live on if something tragic happens. Unless, of course, you die. Then it will leave enough for your heirs to live on.
As far as unemployment insurance, build up your emergency fund instead. That’s money that gives you options. Credit card insurance is money flushed down the toilet. Many of these policies cost 1% of your balance. If you’ve got a $5,000 balance, that will mean you are paying $50 per month. By comparison, if you’ve got a 9.9% interest rate, you’ll be paying about $40 per month in interest.
Debt insurance is a bad idea, if you can possibly avoid it. A combination of life insurance, disability insurance, and an emergency fund provide better protection with more flexibility.
Your task for today is to review your credit card statements and mortgage agreement and see if you are paying debt insurance on any of it. If you are, cancel and set up the proper insurance policies to protect yourself and your family.
