What’s with kids and credit cards?
Who are these parents that are giving their kids Visa cards? I was at Dairy Queen yesterday picking up a Blizzard for my girlfriend (who wasn’t feeling well and wanted something cold/sweet) and the kids in front of me were paying with plastic. I thought, okay, maybe these kids are teens with jobs and checking accounts – but then I got a look at the card and it was issued by a major credit card provider, not a bank.
I can only come to the conclusion that these kids parents signed them up as authorized users on their credit accounts. The question is – why? Does your kid really need the convenience of plastic to buy a soda or maybe a Barbie doll? Seriously? I don’t even want to think about the finance charges a kid could rack up if they realized that your card was basically a license to spend.
Don’t get me wrong – I think it’s great for a working-age teen to have a debit card so they can learn how to handle their finances like an adult. But I have a big problem with that same kid having access to a line of credit, particularly one they are not on the hook to pay for. Now, that being said, and with the caveat that I don’t have kids, I want to open up the question to everyone else – do you think it’s okay for a kid to have a credit card?
Regularly Scheduled Posting
I should be back on my regular posting schedule starting tomorrow, now that the month without a day-off is over! Yay!
Are you lying like the governor?
The governor of South Carolina came out yesterday with the news that he has been having an affair, and decided to travel to Argentina with his mistress. And he mislead his staff about where he was going. Not to mention that he didn’t follow proper protocol, so the state was practically without a leader for about five days. He was lying, and it all started by him lying to himself, telling himself he’d never get caught. Isn’t that what everyone thinks when they are trying to get away with something?
Guess what, you’re probably lying to yourself about your finances right now – and trust me, you’ll get caught. Are you carrying too much debt? Are you living off your credit cards? Heck, are you just trying to keep up with the couple down the street that happen to have a ton more ’stuff’ than you do? All of these are common things that we do, and we convince ourselves that we’ll figure out how to pay for all of it later. We’re lying to ourselves, day in and day out, trying to make ourselves feel better about all this debt we’re carrying around.
The first step we have to take is very similar to what the governor did today – we have to admit we’ve screwed up. Maybe we don’t have to do it in such a public way, but at the very least we need to be truthful with ourselves, and realize we’ve dug ourselves in a hole that won’t fill itself in. As I understand they say in all of those twelve step programs, we first have to admit that we have a problem. Maybe that problem is carrying debt, or trying to keep up with our friends new cars, or maybe our problem is that we just buy too much crap that we don’t need. Whatever it is, fessing up to it is the first step to fixing whatever financial mess we’ve gotten ourselves into.
Can you do that? Can you come to terms with our failings, and then take whatever steps we can to rectify them? I was reading somewhere this week that people who are too far in the hole tend to wait too long before declaring bankruptcy. Why? Because it takes a lot of guts to basically announce to the world “Hey, I screwed up and I need help.” I’m not saying you need to go so far as that to fix your problems – hopefully you don’t. But it’s time to be brave – putting it off just makes it harder.
Opportunity Costs
Cost is a funny thing – we can talk about it in terms of dollars and cents, but really, what something costs is what you are willing to forgo for whatever it is that you are gaining. In theory, that means everything has a cost – and a truly cold person would calculate what will bring them the greatest return and go after those things. Other than the basics, which is time spent in exchange for more time on earth (you won’t last long without food, water, and shelter), everything else you spend your money on is at your discretion.
So, what is the return you’re getting? When you’re spending your money on someone else, it is the joy of knowing that they appreciated the gesture and enjoyed the fruits of your labor. It’s funny, but giving a bit of yourself away like that is very fulfilling, even though there is little if any material gain from it. If you’re spending money on a new toy, hopefully you’re getting some enjoyment out of it. And then, there’s spending money on an investment, with the idea that you’ll get more money back in the future – that way, you fight against money degrading value over time.
What should you do with your money? Honestly, I have no clue. I would say “do what you think is best, as long as it won’t put you into debt.” But even that piece of advice has to be taken with a grain of salt – some people think that there is such a thing as ‘good debt,’ I just don’t happen to be one of them. But remember that when you spend on one thing, you can’t spend on another – so weight those benefits before making whatever purchase you are thinking about.
Finding Time
I’ve had several people ask me where I find the time to write this blog 4-5 times a week. Not to mention a couple of slightly incredulous people asking me why I would even bother. The latter can await my answer with baited breath for all I care, but the former probably deserve an answer.
How do I make the time, you ask? First thing is that I check out Lifehacker.com daily for efficiency tips. Basically, any tip worth considering eventually finds its way onto Lifehacker, so rather than search around for a faster way to do something, I devote 5 minutes a day to reading that one website. It has definitely paid dividends – they talk about all kinds of stuff like time management, speeding up your routine, and they even cover some techie stuff like speeding up your computer.
The second, and probably most important thing I do to keep up with the blog is I schedule an hour a day to work on it. Yep, just an hour. A 500 word post (which is about my average) takes me about 30 minutes to compose, so that gives me a bit of time to mess around and suffer from my semi-regular writers block before getting to work. Since the idea of writing this blog is really a marathon, and not a sprint, I don’t worry that I’m not putting enough time in – I figure that if I keep it up long enough, people will notice and keep coming back.
Now, you’re going to think this sounds silly, but there is also a commitment piece of this little puzzle - I’ve decided that I will post several times a week, and that I will be successful at this. That decision is almost always the most important part of execution – I’ve never met anyone that was successful at anything that didn’t decide that they were going to be before they were.
Oh, and did I mention that I like to write? I started getting into this whole personal finance thing a few years ago after I bought my new house but refused to be house poor. I didn’t want to stop going out with my friends and otherwise doing the things that I enjoy. That wasn’t the point of buying my condo. But, buying a house is a commitment, and something somewhere had to give – in this case it was my frivolous spending. I decided to spend consciously. But what I found I was lacking was any sort of accountability and support – it’s like trying to lose weight when your spouse keeps bringing home pints full of ice cream. Since writing is something I enjoy, and gives some visibility without having to organize some sort of personal support, I thought blogging would be a good tool for me.
The last piece is that I make time to do this because I really appreciate the kind words and comments I get from everyone about it. Since a lot of my readers (at least at this point) still know me personally, I get a ton of great verbal feedback about my blog, as well as the comments people leave. Seriously, I even like it when people disagree with my thoughts on something – at least that means someones reading my stuff and thinking critically about it. You can’t imagine how much of a motivator that is for me.
So, do you have something that you want to do, but you’re afraid it’s too much work? Find the smallest chunk you can do and get a return on it (like my 500 word posts), and then do it. After you’ve done the first one, keeping it up gets a lot easier. Just make sure you have someone to give you crap if you start slacking off. For me, I hope you all will give me that crap if I ever need it.
Don’t Throw That Out!
This week my personal file server kicked the bucket – I’d only had it for about 8 months. This is where I store a copy of all my music (it’s not the only place, luckily) and some movies I’ve bought using my XBox. I didn’t lose anything of value, but it’s still fairly annoying that I no longer have access to it. And I’m pissed because I’m out $250, because it didn’t last nearly as long as I’d planned.
Then, I remembered that I bought it using my American Express, and that Amex doubles the warranty on everything I buy. YES! But still, I have to find my proof of purchase, and call the manufacturer to find out if they will exchange it first. It turns out I was still under the manufacturers warranty, and I put in an RMA request to get it replaced.
Funny thing though, I almost always consider electronics, like this little file server, as disposable pieces of equipment. If I hadn’t been so pissed that it wasn’t working when I needed it, I probably would have just chucked it, or maybe scrapped it for parts if the hard drive was still good. Because of that, I’ve decided to come up with a little list of things I should do before I throw anything of potential value (broken or not) out.
- Would someone else buy it?
- Is it under warranty?
- If it isn’t, did I buy it with a credit card? Will the credit card company warranty it for me?
- Can I re-purpose it and get more use out of it?
- Can I scrap it for parts and use them elsewhere?
In this case, I could have said yes to #2 and #3, and maybe #5 if it wasn’t completely dead. Good stuff – and since I would have otherwise replaced it, I saved myself $250 just by realizing I shouldn’t have to spend that money. Have you ever bought something, and then chucked it when it broke, without thinking about these things?
We Interrupt This Regularly Scheduled Programming…
Last week they turned off analog television broadcasts across the nation – that means, if you don’t have a digital tuner (either a set top box, or integrated into your TV) you won’t be able to get over the air television anymore. In general, this is a good thing – but I don’t care to write about the merits of it. Rather, I want to talk about how much it cost.
It cost a huge amount of money to turn something off. I’m not talking about the money that TV stations had to pay to get upgraded to digital, I’m talking about the money that we had to invest so that grandma could still get TV over her rabbit ears on the TV she bought in 1983. Isn’t it kind of crazy that we had to spend millions upon millions of dollars to do this? Talk about a hidden cost… who would have thought it cost that kind of money just to pull the plug on something?
If you think about it though, there are a lot of smaller examples of this in our own micro-economies. For example, the cost of moving to a less expensive apartment might include what you have to pay someone to haul away your stuff, the cost of moving the stuff you’re keeping to the new place, the cost of the 15 phone calls you have to make to the cable company to actually get them to discontinue your service, dammit.
Yes, as a matter of fact, I hate the cable company. I get crappy service and I pay a lot for it. Maybe I should start using rabbit ears like your grandparents.
Anyway, these hidden ‘end’ costs are all over the place, and I know that I personally do a lousy job of keeping track of them. Do you recognize them in your life? I’m wondering how much of those are sunk costs, and how much of them could actually be avoided with a bit of due-diligence. Honestly, I’m not sure. I do know that moving to a slightly less expensive apartment is rarely a good deal, because of the cost of moving (unless you have some VERY good friends, and even then it’s close). Even just getting rid of old appliances (not the buying new ones part) can be very costly, with disposal procedures and having to pay people to come in with special equipment to remove whatever it happens to be.
Oh, and don’t even get me started about cell phone termination fees and the like – totally nuts. But there are a few things that we can do about these things:
- Know about them ahead of time
- Plan for them
- Budget for them
- Include them in the total cost of the item or service before you make your purchase
At least that way, there aren’t any surprises like there were with turning off analog TV.
Doing it like strippers do
If you’re coming into this piece from Moolanomy, please check out some of my other pieces while you are here. Some of my most popular ones are Never Move For Money!, Fixing your W2 Withholding for Fun and Profit, and Sales, lies, and videotape.
I was talking with one of my readers today and he made a great point about yesterday’s post – I could have gone much further with it than I did. Rather than leave so much unsaid, I decided to do a follow up piece for today. Particularly since I have yet another bachelors party to go to this weekend.
Stripper Lesson #1 – Be Shameless
Strippers, like most other entertainers, have to have little or no shame, otherwise they wouldn’t be able to do what they do. While I’m not suggesting everyone run around naked, there is a lot to be said about being shameless, particularly when you’re talking about personal finance and entrepreneurship. Not only do you have to go out and ask for what you want, but you have to believe that you deserve it. There is no question that strippers believe they are worth whatever money you pay them to do their thing – follow their lead on this, they are on to something.
Stripper Lesson #2 – Be Aggressive
Strippers are nothing if not aggressive – they come right up to you and expect that you will hand over your hard-earned money to them, just because they are naked and in front of you. When was the last time you were that aggressive about getting exactly what you wanted? I’m willing to bet that whatever it was, you found a way to get it, didn’t you? It’s amazing was a bit of assertiveness can add to a situation, particularly if you are self-employed, or are trying to be.
Stripper Lesson #3 – Don’t Sell Yourself Short
Strippers will do different ‘things’ for differing amounts of money. A great example of this is that for a $1 (or a $5 if you’re in Vegas), the dancer will do something a bit special for you. However, if you wanted a lap dance for the same amount, they’d laugh in your face. They have a number in their head about what they think their ‘value’ is, and would rather walk away than accept less than that. This is a concept that freelancers and your regular old workers could both learn from – if you are willing to walk away from a job unless you got a raise, you’re a lot more likely to get that raise. Why? Because no one is going to value you more than you do, so if you don’t think you’re worth it, they won’t either.
Stripper Lesson #4 – Keep ‘em Coming Back
Once you’ve got someones attention, you have to hold on to it. If you start out strong, but end weak, your customer is going to remember the ending a lot more than the beginning. Strippers (well, the good ones at least) know this, so they save their best ‘tricks’ for near the end of their dances. Then you go back to your friends telling them how “it just kept getting better and better!” Can your employer (or customers) say the same thing about you?
Stripper Lesson #5 – Get Good Help
This is more of a strip club lesson, but it still applies. What is more important to a strip club than the strippers? The bouncers and bartenders. The bartenders lubricate your wallet, so you end up spending more, while the bouncers make sure nothing gets out of hand. Sometimes, the bouncers and the bartenders are the same people – I find that is particularly true in my professional life. The people I rely on most both break down barriers for me, and make sure that things don’t go too far down the wrong path.
Stripper Lesson #6 – Do It Low and Good
Okay, so this has a bit of a double meaning when you’re talking about a stripper, but the idea here is that you want to find something that you do well that is sale-able and has a low cost of entry. Writing, programming, photography, graphic editing, housekeeping, landscaping, and yes, stripping, all qualify here. I touched on this a bit yesterday, but anyone who wants to be wealthy needs to have something that one thing that pushes them over the edge. Either you have to spend less, or earn more. I’m firmly in the earn more camp – so figure out a way to do it!
Stripper Lesson #7 – Do It Like You Love It
I don’t know many strippers, but have you ever met (or heard of) a stripper who wasn’t at least a bit proud of their work? They certainly seem to be when they’re at the club – most of them walk around flaunting their stuff, daring you to look at them so they can pry a few more dollar bills out of your wallet. If you enjoy what you do, you’re going to do it better, and your customer or employer is going to be happier with what you’ve done. This is key, particularly if the work you are doing is something after your “real job,” because if you don’t love it, you won’t keep it up.
So, I guess the question is – are there any more lessons we could learn from strippers?
Strippernomics
The economics of stripping amaze me sometimes. There you are, participating in a friend’s bachelor (or bachelorette, I suppose) party, and you’re being harassed by naked people who want your money because they took their clothes off. But they won’t actually do anything for it that they won’t already do for free (well, maybe with the exception of a lap dance). Why would anyone throw money at these people? How is that fun?
You’re right – I just don’t see the appeal. I get the whole ‘right of passing’ thing that goes along with it being a bachelor party, but couldn’t we find a better way to be debaucherous, other than paying some naked girl to pretend like she is the guy’s girlfriend and not have sex with him?
Now that I’ve ranted a bit, the reason I wanted to talk about this here is that I think this is a brilliant business model, since it literally has people throwing money at you and there is almost no investment on your part, other than a bit of shame and some of your time. I’m not suggesting that people go out and do this for a living, but if you’re looking to make some extra money, it behooves you to consider businesses that require very little or no capital investment.
If you already have a sale-able skill, such as writing or programming, those are perfect because they don’t require you to spend any money to make money in return. I’m sure other skills fit this bill just as well. Maybe the answer to your financial issues isn’t to spend a bunch less money (although that can be good), and rather focus on ways to bring more in every month. Even if that means working at the strip club outside of town…
You cost me an opportunity, man…
Okay, so maybe you personally didn’t cost me an opportunity, but at some point, someone has. And it sucked.
Did you know that when you spend money that you don’t otherwise need to, you are costing yourself an opportunity? You aren’t just costing yourself the opportunity to spend it on something else, but you are actually costing yourself the opportunity to invest that money elsewhere and make it grow. And since money is just an exchange rate for time, you are costing yourself time (that’s the reason why efficiency experts tend to be interested in finance as well).
I hate it when that happens. There have been a few times in the past several years when I’ve said to myself, “Self, if I had enough money, I could buy that and make a ton of money.” Now, I’ll give you that I am no investment expert and have lost my fair share of money learning how to invest in securities, bonds, you name it. But it’s inexcusable that I didn’t even have the option, because the money I had was tied up elsewhere.
You shouldn’t use that as an excuse not to invest, but it’s important to be conscious of how your spending affects these things. If you aren’t, you could find yourself in the same boat I’ve been in several times in the past few years, saying “If I only…” And being able to take advantage of those opportunities makes all our efforts to get our spending under control well worth it.
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So, you want to know what's up with the brackets in the name? "Curly brackets (also called braces, or "squiggly brackets") are sometimes used in prose to indicate a series of equal choices" and "Square brackets are mainly used to enclose explanatory or missing material usually added by someone other than the original author, especially in quoted text." So basically, if you really want to be wealthy in life, you have to figure out how to get happy. Since that whole spiel would make a crappy name for a blog, I decided to do something a bit creative with some brackets.
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