Monthly Archives: July 2008

Totally Skewed Economics: Test your financial performance

Evaluate your financial performance

 

Many are asked to complete job performance reviews, but it’s beneficial to extend the idea of personal evaluation to home life.  For instance, you might want to ask yourself (but doubtfully your spouse) how well you’ve been managing your family’s financial goals. 

In compliance with The Paperwork Reduction Act, I’ve taken the liberty to provide you with a copy of my own short-form test to assess year-end financial and budgetary progress. Two people have taken this test, and it took them approximately three minutes to complete (but they’re still arguing over the results).

With luck, you’ll find this questionnaire ever bit as helpful as your job performance review.

 

Place a check mark next to each statement that is true:

 

Investment Goals

 

A.___         You summon the courage to read your IRA or 401(k) statements without crying.

B.___          Your investment advisor has stopped calling to ask about trading inactivity.

C.___          Your home has retained at least 80% of its original value.

D.___          You’ve held a garage sale this year.

E.___          You’ve sold at least one item on eBay.     

 

Personal Savings

 

A.___         You haven’t yet spent your government economic stimulus check.

B.___          You have on hand at least two week’s living expenses.

C.___          The coins in your change jar include more than pennies.

D.___          You haven’t had to borrow money from your children this year.

E.___           You’ve no more than twice searched underneath the sofa cushions or car seats to collect emergency funds.

 

Food Budget

 

A.___         You buy generic canned goods when you don’t have a coupon for name-brand

varieties.

B.___          You limit gourmet coffee purchases to no more than three Grande cups per week.

C.___          You only eat out in restaurants that provide unlimited servings of chips, bread,

crackers or take-home Splenda packets.

D.___         You take advantage of fast-food value meal pricing.

E.___          You skip breakfast most days in favor of scrounging coworkers’ cubicles for

leftover donuts.

 

Utility Budget

 

A.___         Your home includes two or more ceiling fans—and you use them.

B.___          You’ve managed to keep your water bill in the double digits.

C.___          You’ve limited your cable service to no more than two premium channels.

D.___         You call your neighbor and ask them to look up phone numbers before dialing

directory assistance.

E.___          You almost never double-flush.

 

Gasoline Budget

 

A.___         You run regular gas in your high-performance car engine.

B.___          You’ll drive more than six blocks to find the cheapest gasoline price.

C.___          You consolidate trips to the salon with those to the mall. 

D.___          You drive your riding lawnmower when traveling short distances.

E.___           You’ve considered walking to neighborhood activities and events.

 

Scoring:     Give yourself 5 points for each A, 4 points for each B, 3 points for

each C, 2 points for each D, and one point for each E answer.

 

How well did you do?

 

51-75 points     You’re on track.  There’s a place for you in Congress!

26-50 points –      With a little more effort you’ll soon be less dependent on credit

card advances and “convenience checks.”

1-25 points –        Consult with a bankruptcy attorney. 

 

 

http://www.TotallySkewed.com

 

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Totally Skewed Economics: Buying from wholesale clubs

Wholesale buyers’ clubs

 

 

Does it make sense to buy in bulk when you have a small family? I’m often forced to debate this question, especially when my Sam’s Club or Costco membership needs to be renewed. And the answer is this; it depends. 

 

 

On a recent trip to one of these stores I found myself staring at a 2-lb. tub of hummus and debating the pros and cons of its purchase. The expiration date was only two weeks away. (Yes, I’m one who actually pays attention to such obscurely marked information.) So I had to question whether I would consume that much hummus within such a short timeframe, and, perhaps more importantly, if I should. Additionally, I wondered if chickpeas, like other legumes, cause intestinal gas.

 

Wholesale buyers’ clubs often have good deals on more than foods. They also offer clothing. Call me cheap and tasteless, but I acquire some of my casual wear from them. I’d probably be cheap and tasteless, even if I didn’t. So why not?

 

Earlier this week, I bought a sweater. Yep, I know. It’s July, and it’s 103 degrees outdoors. But, hey, the knit top was embellished. It was pretty. And it was there. It won’t be available in November, when I’m ready to wear such a garment. That means that, next fall, when friends ask where I found this gorgeous green pullover, I can smugly reply, “Don’t even bother to look for one, now. They’re all gone.”

 

But, like I said, there can be drawbacks to visiting big discount stores. When I buy foods in mass quantities, I’m forced to confront the “law of abundance.” The more I have, the more I’ll eat.

 

If I have a package of a dozen Rice Krispies Treats then I will parcel them out, one here and there, prolonging my sugar bliss. But give me a briefcase-size box of 90 of those suckers and I’ll have one for breakfast, another at midday, and yet another before bedtime. For me, buying in bulk leads to bulk.

 

At my house, warehouse shopping causes bacon binges, too. What are they thinking, packaging breakfast meats in convenient 72-slice containers? I’m having bacon sandwiches, bacon garnished burgers, bacon crumbles on my salads, and bacon-wrapped chicken breasts. I’m even feeding bacon to my cat, it’s so cheap! (The strips, not the cat. Ms. Kittty is REALLY expensive.)

 

So now, after all that pork, I’m forced to buy hubby’s cholesterol-lowering drugs in larger containers. Fortunately, the pills are sold in Sam’s.

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Totally Skewed Economics: How to invest during a recession

 

Let’s talk about savings and investments. No, I’m not referring to vintage doll and baseball card collections. Yes, I know theses are currently worth more than your retirement account. But that’s not my point. Besides, you can always delay retirement until your children are sufficiently well off to take care of you.

The first thing you should do is cancel any and all subscriptions to investment newsletters. Why? Well, did any of these geniuses tell you to sell your stocks before the bear market set in? I didn’t think so. There’s no reason to continue paying for bad investment advice. You can do just as well, if not better, by following your intuition.

The next action you’ll want to take deals with your employer (assuming you still have one). Do you receive earnings alerts and corporate updates about company stock? I bet so did Enron employees. And we know how well that worked out for them. Any time your employer conducts an emotionally-charged, upbeat earnings conference call you should short the stock.

While I’m on the subject of stocks, my best suggestion would be to avoid these securities in favor of buying garden seed.

Diversify your investments. This, naturally, means you’ll need to establish an eBay account.

When it comes to real estate, buy apartment futures.

I’ve no idea what to advise you about oil and gas. That ship has already left the Middle East, if you catch my wave. Otherwise, I’d recommend you purchase a refinery.

My thoughts about bonds are simple; you should refrain, if at all possible, from ever having to post one.

What about gold? All I can say is this; now who’s stupid for installing those over-the-top bathroom fixtures? Remember the gals you called idiots for wearing jewelry fashioned from Krugerrands? Yeah. Some fads turn out to be prophetic.

Finally, I have to admit I don’t understand the appeal of insurance and annuities. Why would you want to wager a bet in which the other party wins if you die? That’s seems self-explanatory, so I won’t elaborate any further. Besides, Guido The Actuary and I have an agreement.

 

 

http://www.totallyskewed.com

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Manage financial stress: to meditate or medicate?

 

 

Trying economic times can raise anxiety levels. I’ve been told that the practice of meditation is particularly helpful during times like these. Meditation has been known to reduce the effects of all types of stress. That’s why, this morning, I thought I’d sit down in the comfort of my reading room, surrounded by magazine litter, disorganized books and other clutter, and become One with The Universe.

 

Who ever knew birds could be so loud? They wouldn’t stop chirping so I could hear that Still Small Voice within. So I started chanting, silently, to distract myself from the shrill singing and the percussion of pounding hammers. (Someone is building a home two blocks away from my house.)

 

I am grateful for this day. I give thanks for all that I’ve received.  I ask only that You guide me in the direction of my highest good.

 

Chee-ee-urp! Chee-ee-urp! Chee-ee-urp-urp-urp.

 

Whack, whack, whack!

 

Okay. This isn’t working.

 

Wait a minute. What did Eckhart Tolle say in his book, The Power of Now? Or was it A New Earth? You know, about the intervals between thoughts? Oh, yeah. I’m supposed to try and extend the time between my thoughts so that the intervals become longer and longer.

 

I will think no thoughts.

 

(A second passes.)

 

But isn’t “I will think no thoughts” a thought? Oh, great. I’ve already botched it.

 

Okay. Seriously. That’s it. No more thoughts. Not a single one.

 

(Moments pass.)

 

I did it! I didn’t think a single thing for, what? At least several seconds. Uh-huh, but now here I am THINKING about how long I’ve managed to not think! I’ve probably negated the benefits of whatever minor accomplishments I’ve made.

 

This is insane.

 

Try again.

 

I entertain nothing but the quietness within me.

 

You ninny! That was a thought!

 

Start over.

 

“Start over” was a thought!

 

Stop, already! Quit thinking! Let it go-o-o. Just be.

 

(Suddenly, all time and external stimuli ceased.)

 

And then I woke up.

 

Did that count?

 

 

 

 

http://www.TotallySkewed.com

 

 

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Totally Skewed Economics: Recession Survival Tips

Recession Survival Tip of the Day

Coupons –  Printing online grocery coupons only makes sense when it makes cents. If you have to drive to the nearest office supply store and buy a new color ink cartridge before you can print a coupon that will save you 35 cents on single-ply toilet paper, then you’re in for both an expensive and an unsanitary outcome.   

 

                   It’s better to waste a discount coupon than it is to waste real currency. If you have a coupon that is good for a $10 savings on purchases of $100 or more, then what you really have is a thoroughly stupid excuse to overspend.

 

Go ahead and buy what you need, but don’t buy more than you should just to keep from “wasting a coupon.”  (Example: If your coupon is good for $1 on the combined purchase of ketchup AND hot dog buns, and you are Southern, which likely means you don’t put ketchup on hot dogs, then just buy the darn buns.)

 

                   Stack all your unused $10-, $25-, and $50-off coupons together. At the end of the month, calculate the sum of the minimum purchase amounts stated on these discount tickets. Subtract the coupon face value amounts. THIS is the money you’ve saved with these coupons!

 

                   Buy one, get one free meal coupons – Unless your coupon specifies that the two meals must be served to separate individuals, single people would do well to order both meals for themselves, pay for one, and take the second serving home for later discard. You might have to eat these leftovers, one night, when you’re gas tank is empty and you’re too broke to fetch sushi.

 

                   For couples, “buy one, get one free” meal coupons can offer true savings—provided the participating restaurants have positive health inspection ratings. Otherwise, medical bills may offset any reductions in food expenses.

 

The skinny on coupons is simply this: These paper slips are neither financially risk free nor FDIC insured. So this makes them about as safe as your mutual funds.

 

 

 

 

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Totally Skewed Economics: Ways to fight back (cont.)

Rule #2: Eliminate debt

 

Tackling tough times is a lot like dieting. To lose weight you must increase activity and reduce calories. During economic downturns you have to similarly increase savings and reduce enjoyment, which is to say, expenses.  So here are some specific types of debt you might want to address:

 

Credit cards –       Understand the difference between 0% interest and a truly paid off balance. Zero interest is a sucker invitation to a game where the odds are slanted in someone else’s favor. Don’t think that just because you’ve moved a debt from one to another lender that you’ve paid off this debt. You have paid off a creditor who will now send you three, new, pre-approved credit cards, hoping you’ll become desperate enough to use them. And you probably will.

 

Mortgages –          If possible, don’t have a mortgage. Consider investing in a light-weight camping tent instead. But if this isn’t an acceptable option, are some alternatives:

                             Rent out your media room and apply the proceeds to your house payment to more rapidly pay down the home mortgage. Trust me. This will be one of the best returns you’ll ever get on that space.

 

                             Reverse your thinking. Sell or rent out your first home and live full-time in your second. Use the sales or rental proceeds to reduce any debt on the vacation quarters. If nothing else, this will prevent your relatives from borrowing your lake house.

 

                             If you don’t have a second home and you can’t afford your first, go live with your children or other kin. They’ll likely float you the funds for your next dwelling.

 

Automobiles –      Don’t trade in your gas hog for something more fuel-efficient. You will get more money by disassembling the older vehicle and selling it off in pieces as used auto parts.

 

 

                             Replace your second car with an electric golf cart. This mode of transportation is safer than a scooter and it uses even less gas—because it’s battery-powered. You might, however, have to allow extra travel time to reach your desired destinations.

 

                             Don’t, under any circumstance, buy a pickup truck. Friends will only expect you to loan them your vehicle or to help them move. In either case, they will be using your precious $4+ per gallon gasoline.

 

College loans –      Tell your kids to make good grades because they’re going to need them. Explain clearly to your offspring what their choices are: They can finance their own education or provide your retirement home. If they seem “on the fence” about this, mention that you’ve recently had some trouble with incontinence.

 

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Totally Skewed Economics: Ways to fight back during a recession

Ways to fight back during a recession

 

Rule #1: Reduce your cooling costs  

So you think the price of a movie ticket is too high? How much does it comparatively cost to heat or cool your house for three hours during peak electricity demand periods? Uh-huh. That’s what I thought. Movie tickets remain a bargain—especially in the South. During August. Save some bucks, adjust your home thermostat, and go to the theater.

You might also consider enrolling in a night class at your local junior college. You can more than cover the tuition with what you’ll save on your utility bills. And you just might learn something—such as how to accurately define a recession, though probably not how to weather one—in the process. If nothing else, you’ll feel wiser simply from being around so many students who are text messaging in class.

Looking for no-cost alternatives? Spend an afternoon or evening at your local library, read all the periodicals for free (while these publishers can afford to remain in business), and use the computers to surf those sites you wouldn’t dare attempt at home. (I’m talking about the ones that scream “VIRUS ATTACK,” not the ones your spouse would object to.)

No library in your community? How about your local bookstore? The store clerks don’t know if you read your last novel in high school. They’ll think you’re there to actually purchase something—like maybe a latte.

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