- RT @ramseyshow: RT @E_C_S_T_E_R_I_: "Stupid has a gravitational pull." -D Ramsey as heard n NPR. I know many who have not escaped its orbit. #
- @BudgetsAreSexy KISS is playing the MINUTE state fair in August. in reply to BudgetsAreSexy #
- 3 year old is "reading" to her sister: Goldilocks, complete with the voices I use. #
- RT @marcandangel: 40 Useful Sites To Learn New Skills http://bit.ly/b1tseW #
- Babies bounce! https://liverealnow.net/hKmc #
- While trying to pay for dinner recently, I was asked if other businesses accepted my $2 bills. #
- Lol RT @zappos: Art. on front page of USA Today is titled "Twitter Power". I diligently read the first 140 characters. http://bit.ly/9csCIG #
- Sweet! I am the number 1 hit on Ask.com for "I hate birthday parties" #
- RT @FinEngr: Money Hackers Carnival #117 Wedding & Marriage Edition http://bit.ly/cTO4FU #
- Nobody, but nobody walks sexy wearing flipflops. #
- @MonroeOnABudget Sandals are ok. Flipflops ruin a good sway. 🙂 in reply to MonroeOnABudget #
- RT @untemplater: RT @zappos: "Do one thing every day that scares you." -Eleanor Roosevelt #
How to Prioritize Your Spending
Don’t buy that.
At least take a few moments to decide if it’s really worth buying.
Too often, people go on auto-pilot and buy whatever catches their attention for a few moments. The end-caps at the store? Oh, boy, that’s impossible to resist. Everybody needs a 1000 pack of ShamWow’s, right? Who could live without a extra pair of kevlar boxer shorts?
Before you put the new tchotke in your cart, ask yourself some questions to see if it’s worth getting.
1. Is it a need or a want? Is this something you could live without? Some things are necessary. Soap, shampoo, and food are essentials. You have to buy those. Other things, like movies, most of the clothes people buy, or electronic gadgets are almost always optional. If you don’t need it, it may be a good idea to leave it in the store.
2. Does it serve a purpose? I bought a vase once that I thought was pretty and could hold candy or something, but it’s done nothing but collect dust in the meantime. It’s purpose is nothing more than hiding part of a flat surface. Useless.
3. Will you actually use it? A few years ago, my wife an cleaned out her mother’s house. She’s a hoarder. We found at least 50 shopping bags full of clothes with the tags still attached. I know, you’re thinking that you’d never do that, because you’re not a hoarder, but people do it all the time. Have you ever bought a book that you haven’t gotten around to reading, or a movie that went on the shelf, still wrapped in plastic? Do you own a treadmill that’s only being used to hang clothes, or a home liposuction machine that is not being used to make soap?
3. Is it a fad? Beanie babies, iPads, BetaMax, and bike helmets. All garbage that takes the world by storm for a few years then fades, leaving the distributors rich and the customers embarrassed.
4. Is it something you’re considering just to keep up with the Joneses? If you’re only buying it to compete with your neighbors, don’t buy it. You don’t need a Lexus, a Rolex, or that replacement kidney. Just put it back on the shelf and go home with your money. Chances are, your neighbors are only buying stuff so they can compete with you. It’s a vicious cycle. Break it.
5. Do you really, really want it? Sometimes, no matter how worthless something might be, whether it’s a fad, or a dust-collecting knick-knack, or an outfit you’ll never wear, you just want it more than you want your next breath of air. That’s ok. A bit disturbing, but ok. If you are meeting all of your other needs, it’s fine to indulge yourself on occasion.
How do you prioritize spending if you’re thinking about buying something questionable?
The Obligatory Thanksgiving Post
Tomorrow is Thanksgiving. Tomorrow is also Thursday, and I don’t post on Thursdays, so I’ll be posting about Thanksgiving today.
Thanksgiving is a day to be thankful for–first and foremost–capitalism.
When the Pilgrims first landed, they set up a communal farming arrangement, figuring that a good Christian community could take care of its own. From each according to his ability, to each according to his need, and all that. Everyone worked for the good of everyone else, so everyone benefited, right?
The Pilgrims, like every other group that has ever advocated communism, neglected to consider human nature. If you have no incentive to work, you don’t. If sleeping in and making babies still gets you fed and clothed, why work?
On the other side, if you work hard, only to see your hard work go to benefit your lazy neighbor, sleeping in and rattling the headboard, but never doing anything productive, why bother?
It didn’t take long for the Pilgrims to notice this tragedy of government wasn’t working.
The strong, or man of parts, had no more in devission of victails and cloaths, then he that was weake and not able to doe a quarter the other could; this was thought injuestice. The aged and graver men to be ranked and equalised in labours, and victails, cloaths, etc., with the meaner and yonger sorte, thought it some indignite and disrespect unto them. And for mens wives to be commanded to doe servise for other men, as dresing their meate, washing their cloaths, etc., they deemd it a kind of slaverie, neither could many husbands well brooke it. Upon the poynte all being to have alike, and all to doe alike, they thought them selves in the like condition, and ove as good as another; and so, if it did not cut of those relations that God hath set amongest men, yet it did at least much diminish and take of the mutuall respects that should be preserved amongst them.
It didn’t take long before nobody was working. Neighbors resented each other, because everyone had a right to the work of the other, with no need to compensate each other. That’s a case of “I’m starving because you aren’t working hard enough, but it’s not my fault you’re starving.”
At one point, the production of the colony was down so much that the colonists’ ration of corn was just 4 kernels per day. That’s how you kill a colony.
But they learned from their mistakes before they all died.
Yet notwithstanding all those reasons, which were not mine, but other mens wiser then my selfe, without answer to any one of them, here cometh over many quirimonies, and complaints against me, of lording it over my brethern, and making conditions fitter for theeves and bondslaves then honest men, and that of my owne head I did what I list. And at last a paper of reasons, framed against that clause in the conditions, which as they were delivered me open, so my answer is open to you all. And first, as they are no other but inconvenientes, such as a man might frame 20. as great on the other side, and yet prove nor disprove nothing by them, so they misse and mistake both the very ground of the article and nature of the project. For, first, it is said, that if ther had been no divission of houses and Lands, it had been better for the poore. True, and that showeth the inequalitie of the condition; we should more respecte him that ventureth both his money and his person, then him that ventureth but his person only.
The slavery of working for the benefit of others didn’t work, unless you were “theeves and bondslaves”. Then, it was great, living off of the sweat of others.
To make a long story short, the starvation ended when the Pilgrims were given parcels of land and told they could keep what they built from it. They went from the edge of extinction to being prosperous in a short time. The old and weak were cared for, not by the governor’s decree, but by the generosity of their neighbors.
Everybody in the colony won.
Delayed Gratification, Take II
How much would you pay for a kiss from the world’s sexiest celebrity?
That was the focus of a recent study that I can’t find today. There is no celebrity waiting in the wings to deliver the drool, and the study doesn’t name which celebrity it is. That’s an exercise for the reader.
This was a study into how we value nice things.
The fascinating part of the study is that people would be willing to pay more to get the kiss in 3 days than they would to get the tongue slipped immediately.
Anticipation adds value.
Instant gratification actually causes us to devalue the object of our desire.
This goes well beyond “Will you respect me in the morning?”
The last time I talked about delayed gratification, it was in the context of my kids. That still holds true. Kids don’t value the things that are handed to them.
The surprising–and disturbing–bit is that adults don’t, either. If I run out to the store to buy an iPad the first day I see one, I won’t care about it nearly as much as if I spend a week or two agonizing over the decision.
The delay alone adds to the perceived value. The agony turns the perceived value into gold.
If I spend a month searching for the perfect car, the thrill of the successful hunt adds less value than the time it took to do the hunting.
Here’s my frugal tip for today: Delay your purchases. While it may not actually save you any money, you will feel like you got a much better deal if you wait a few days for something you really want.
Optimized to Go, Part 1
Last weekend, we held a garage sale at my mother-in-law’s house. It was technically an estate sale, but we treated it exactly as a garage sale.
A week before we started, a friend’s mother came to buy all of the blankets and most of the dishes, pots, and non-sharp utensils so she could donate them all to a shelter she works with. She took at least 3 dozen comforters and blankets away.
Even after that truckload, we started with two double rows of tables through the living room and dining room. The tops of the tables were as absolutely full as we could get them, and the floor under the tables was also used for displaying merchandise.
Have you ever had to display 75 brand-new pairs of shoes in a minimal about of space? They claimed about 16 feet of under-table space all by themselves. Thankfully, the blankets weren’t there anymore.
We also had half of the driveway full of furniture, toys, and tools.
We had a lot of stuff.
Now, most people hold a sale to make some money. Not us. We held a sale to let other people pay us for the privilege of hauling away our crap. As such, it was all priced to move. The most expensive thing we sold was about $20, but I can’t remember what that was. Most things went for somewhere between 25 cents and $1.
At those prices, we sold at least 2000 items. That isn’t a typo. We ended the day with $1325. After taking out the initial seed cash, lunches we bought for the people helping us, and dinner we bought one night, we had a profit of $975.
At 25 cents per item.
We optimized to sell instead of optimizing for profit. At the end of a long summer of cleaning out a hoarding house, it all needed to go.
In the next part, I’ll explain exactly how we made it work.
Net Worth Update
Welcome to the New Year. 2013 is the year we all get flying cars, right?
Here is my net worth update, along with the progress we made over the course of 2012.
As you can see, our net worth contracted by about $11,000. Part of that difference is due to selling our spare cars and–against my better judgement–taking payments with a lien on one of them. That is supposed to be paid off within a couple of months. If not, I’ll play repo man again.
The other part of the difference is in the final preparations for our rental property. The only things left to do are sanding and polishing the hardwood floors and cleaning the living room carpet. The final push to get to this point cost some money. All told, we’re nearly $30,000 into getting the house ready to rent. For the naysayers who think we should have sold it, we would have spent more getting it ready to sell.
Other than that, we’re not doing poorly. Our credit card is still being paid off every month and our mortgage is shrinking. If things continue to go well, we’ll have our truck paid off in a couple of months and the mortgage by mid summer.
