Friday, August 21, 2009

Changes in Credit Card Law

Here's a law that will help a lot of consumers get out from under their credit card debt. Sometimes people have found that their credit card interest rates were suddenly raised to a level where paying off the debt was all but impossible.

The new Credit Card Accountability and Disclosure Act of 2009 becomes effective in several stages, and some new rules became effective yesterday (Thursday the 20th).

Now, credit card companies have to warn consumers 45 days before an increase rate increase. In case of a rate increase, customers may choose to close the account and pay off the balance at the old (lower) interest rate. In the past, credit card companies only had to give 15 days notice that the interest rate was being raised.

In addition, the credit card companies have to mail statements at least 21 days before the payment is due. That time period used to be 14 days.There will be additional provisions of the act that become effective in the future, including restrictions on marketing credit cards to young people and regulations over fees and rate increases.

The most important part of a plan to reduce credit card debt is including strategies (like cutting them up, or maintaining an emergency fund) so you don't grow a balance again. A quote from Orison Swett Marden: "Unfortunately, Congress can pass no law that will remedy the vice of living beyond one's means."

Monday, August 17, 2009

Cheap Luxuries

Do you ever discover something that you greatly enjoy, and yet it’s cheap, or free?


One of my great luxuries is to listen to audiobooks – a great many of them – as I drive to and from work, or as I do chores or exercise.  I download the files as .mp3 files from  Of course, I could join Audible and purchase audiobooks inexpensively, if I wanted the newest releases.  I have also checked them out from the library.


It wasn’t entirely free, because I did have to have an MP3 player, but most people have those now.  I purchased mine, an off brand, on sale for $15 and it holds a long book.  The one necessity, other than enough space, was the ability to begin a chapter where I left off.


Another great luxury, for me, is to read lots of books.  Unfortunately, I need to improve my focus, because I am reading quite a few at once right now, instead of my usual one book at a time routine.  Not counting audiobooks (which, at least, I only do one at a time), I am reading one about a healthy lifestyle, one about human relations, a book of short stories, an autobiography, and a mystery.  I read some of them on a Kindle, for which there are a great many free books available if you do a little research.  I get most of my free Kindle books from Amazon.  I also have a library card and friends who trade paperbacks with me.


Here’s one you won’t expect:  I consider my packed lunch a luxury!  When people are trying to save money, packing lunches always seems to get discussed.  I used to eat out five lunches a week with friends, which was very nice, but expensive, and I hated to eat packed lunches, which reminded me of grade school.  I’ve somehow transitioned into the habit of only eating lunch out about once a week (and that’s to maintain professional relationships and contacts).   When I eat my own packed lunch in my office, I have all the following luxuries:

·         A chance to be alone (my job is often quite hectic)

·         Food that fits my diet, or perhaps my whim

·         Extra minutes that would have been spent driving to a restaurant and waiting for a table – and that’s the real luxury.  I can read, or work a little if I’m behind, or listen to music, or phone a friend. 

·         I eat whenever I please, and often bring something for an afternoon snack.  It’s not the best driving strategy, but sometimes I’m crunching an apple as I sit in slow traffic on the way home.

Packing the lunch is really no trouble – I buy fruit, organic carrots, yogurt and the like, and put it all in an insulated bag.   We have a fridge in the office.


Efforts to cook more and eat out less have gone from being a chore for me to being quite enjoyable.  First of all, there’s the coffee-and-muffin thing so many people do on the way to work.  We don’t go to Starbucks.  When my husband gets up, he starts coffee and then walks the dog, and when I finish getting showered and dressed, I go downstairs and cook breakfast.  Then we relax together and eat breakfast for maybe 20-30 minutes.  We read the paper.  Nobody else is up yet, except the dog, who’s hoping we’ll scramble an egg for him – that hasn’t happened yet!  It’s actually a very nice time together. 


Somewhere along the way I started being more diligent about cooking a meal after work.  Yes, I’ve worked all day, but John appreciates my fixing dinner, he’ll wash dishes more often than not, and I like to eat homemade things instead of fast food or heavy restaurant food.  I have gradually developed a stable of 30-minute-or-less meals that we enjoy.  30 minutes is not much more time than it takes to go buy something and bring it home.  It’s cheap, good, and again, we don’t have to go anywhere or wonder what the ingredients are in our food (okay, John has to wonder, but I know what’s in it).


You know how it’s cheaper to only shop for groceries once a week?  My husband has organized us in that area.  He keeps a list and we all add things to it as we run out, and he likes to stock more than one of the things we use habitually, especially if they’re on sale.  I enjoy not having to stop and deal with the grocery store several evenings on my way home, hungry and wanting to be home but not having the items we need for a meal. 


Another thing we’re experimenting with is making our own convenience foods.  For instance, the grocery where I shop has frozen, already-browned ground beef crumbles.  I buy a giant package of ground beef occasionally and make my own, drain it very thoroughly, bag it and freeze it.  One day recently, a bunch of Steve’s friends were over, and I made tacos – thaw out enough little bags of ground beef, add seasoning to it, put a bunch of other ingredients in bowls, and they were quite happy.  A five minute meal.


My greatest, most unbelievable luxury (that costs nothing) is having a happy spouse.  My husband is a genuinely nice guy, and always doing something for someone.  For some time, I’ve been trying to be a much better wife, and instead of it working out that I’m resenting doing “more than my share” or being oppressed or something, he’s returning every small act of kindness and then some!  I don’t understand it – I got nicer and somehow, he got nicer.  Was he this good a guy and I didn’t notice?  Or did he simply not appreciate being ignored by the tired spouse?  Food for thought.  As it got to be habitual, I did a little more for him, and now, we’re ridiculously sweet to each other, and I’m too happy to be embarrassed about it.  Of course there are terrible jerks who will take advantage of you, but most married people have a perfectly normal spouse who wants a little appreciation and mostly reflects what they’re receiving.  


There are so many easy things that couples can do to build each other up, simple things.  I can’t “get him to change,” but I can change me.  My sister used to tell me that the wife/mom sets the mood for the whole family, which goes right along with something I finally realized late in life:  we all have great power and influence in life, we’re all leaders, influencing people around us, and the challenge is to be a positive influence.








The Family Who Quit Shopping

I was at the eye doctor’s office this morning, and read an article in Good Housekeeping about a family that stopped making purchases unless the item was edible or depletable.  She contrasted their previous, very consuming lifestyle, with their new, simplified one, and they felt, as a family, that they came out ahead with this remarkable experience.


I was trying to discern what she mean by depletable.  I think she means items you use up; for instance, I think a roll of toilet paper is, but a disposable plastic cup isn’t.  That fired my imagination, too – isn’t it amazing when you read about the things that American throw away and have to go into landfills?  Just imagine, the disposable razors, disposable diapers, paper plates, fast food drink cups…  What’s more, I believe this lady said they eliminated restaurants, too.


They did this for a whole year, saved some serious money, and it sounds like they enjoyed the new lifestyle a great deal, enough to keep most aspects of it after the year was over. 


It’s so easy to buy things – things we don’t need, that get in the way, that are around long after their emotional expiration date has come and gone.  My husband and I have worked hard to get where we are, out of debt and with one boy through college and a solid financial plan to get the other one through, that it’s easy to rationalize purchases. 


One of my favorite financial tricks is to merely stay out of the stores.  This is reasonably easy since I don’t really like to shop anymore.  When I was a young, single girl, shopping was a form of entertainment, but now, after years of shopping for a family who need things, I’m tired of it.  I buy groceries – once a week, period.  I buy gasoline.  I buy supplies for work (network stuff).  Otherwise, I haven’t got much interest in shopping and tend to stay out of the stores.  Since I’m such a brown-bag-luncher, and since Steven went to college and isn’t around and asking for money, I might have the same $40 in my purse for a couple weeks.  Not hitting the mall means I have more time to do other things.





Monday, August 10, 2009


If you did some thinking about the “money misery” quiz, did you make a list of the things that were bothering you the most?  You need some plan of attack, some idea what to fix first.  If you still feel rather vague about it, I’d recommend you follow somebody else’s marching orders.  Again, I particularly recommend Dave Ramsey’s materials (for instance, his book The Total Money Makeover).

If you’re in great shape financially, it’s probably because you take an active interest in it, and you probably still have areas where you’d very much like to improve.

Since the biggest priorities for most people are to get out of debt and get some savings together, your next action item is going to be figuring out where you are today. 

Simply list your cash and your debts!  Write down how much money you hand on hand, and which accounts it’s in, and then write down each debt balance, how much the payment is, note of the interest rate and when the debt is scheduled to be paid off if you make the regular payments as billed.

For some people, that’s a pretty big assignment – they’ve got find all the papers, bring down or balance the checkbook all that.  

If you can handle something more, calculate your net worth:  List your assets – real estate, cash, stocks, retirement accounts, vehicles, and so forth.  On the consumer items like cars and furniture, list them for what you could sell them for, that is, at market value.  Then list your debt balances.  Subtract the total debts from the total assets, and you have found your net worth.  Show it to your spouse (who might help you with a few corrections).  Keep it.  Then, as you make financial progress, you can watch your net worth go up!

Saturday, August 8, 2009

Situation: Desperate

If you did the Mental Money Misery exercise and you feel that your situation is actually desperate, please get some help!  There are resources out there, and there is emotional power in taking action.

·         Sit down with your own loved ones and discuss the situation honestly.  Make a commitment to have a loving discussion even in an emotionally painful situation.  Brainstorm ways to make improvements, showing some confidence in your family’s ability to pitch in.  Write down, as a family, what ideas you might have to make extra money.  This could range from a little business like a babysitting service to renting out a room to a college student.

·         Are you a stress monster?  Does the money mess make you so crazy that you’re making your loved ones suffer?  Calm down; you are looking for action items, not drama!

·         Can you lower your monthly “overhead?”  I’m referring to those items you have to pay every single month – the cable bill, the car payment.  If you can lower your overhead, you are giving yourself a raise.  Brainstorm radical ways to cut costs, like moving into the parents’ basement (and paying them rent).  Mooching is not a solution.

·         Most churches have a benevolence fund.  Call and see if a local church can help you with bills, financial mentoring, financial classes, counseling or family counseling, low-cost child care or other practical assistance.  They probably have phone numbers and ideas for you.

·         Get on the phone to local government agencies and information hotlines.  Find out what assistance is available.

·         Make a list of people you know who are clever with money, and call somebody to help you think through your situation.  For instance, I knew a single mom who told me, “I am good at money.  There is always money in my purse, I never worry about money, and I don’t make much.”  I wouldn’t mind following her around and seeing how she does it!  Wouldn’t she be an ideal financial mentor?  Maybe your financial mentor is an older person who used to own a business and brought it through both bust and boom.

·         Find a class.  If you join a Financial Peace or Crown Ministries class, or a night class on personal finance, suddenly, you’ve got a peer group with whom you can share and learn. 

·         Hit the library and internet, looking for ideas.

·         Explore the bad spots in your personal financial situation.   If it’s ugly, face it.  Don’t let it deteriorate.  Can you work out a payment plan for the mechanic?  Do you have a creditor you’re not paying but you haven’t written or phoned?   Have you seen a professional about those back taxes?

Friday, August 7, 2009

Your Mental Money Misery Index

Does anyone remember the "misery index?" Economists simply added the inflation rate and the unemployment rate to get a number to measure how tough things really were. This began in the late 70s.
Not that I'm trying to write a miserable article - I'm thinking that maybe you figure you have so many financial things to do that you aren't quite sure what to work on first. So, pull out a blank sheet of paper and make a list of the things in your current financial situation that bother you the most.
You can change your situation, far more than you realize. You just need to boil it down to individual actions and then do the actions.
To jog your thinking, run through these questions. Pick out the areas among the questions where you feel uneasy, and then jot down an action item or two related to that item. Now, I'm calling it an action item loosely - you might not know what the action is, so maybe write down "learn about..." or "do something about..." and then the item.
  • Do you have some cash in hand in case the auto mechanic, doctor, or air conditioner repairman gives you a bit of expensive bad news? Or, would you be stuck putting the expense on a credit card?
  • Do you have a will? Do you know how your family would manage finally if you were gone?
  • How's your insurance situation? If you're a renter, do you have renter's insurance? Do you have life insurance, and are you happy about what it's costing you? Do you have health insurance?
  • Are you actively working on an effective retirement plan?
  • Do you argue with family members about how to manage your money?
  • Do you have people (including relatives, especially adult children) you feel are mooching from you instead of taking care of their own responsbilities?
  • Are you and your spouse in agreement about money?
  • Are your children learning how to manage money?
  • How's your career? Are you good at your work, and do you enjoy it? How's your paycheck?
  • Do you save a little each month, or do you spend a little more than you make?
  • Are you spending too much? Earning too little?
  • Do you wish you could support charities?
  • Do you know how much you spend?
  • Does your checkbook balance?
  • Would I benefit from outside help and support as I change my financial outlook?
  • Do you feel pretty good about your money situation, or do you feel worried and stressed about it?

Leave the action items list out for a while. Mull it over a few days, and then decide which things are the most important to you.


Americans are among the richest people in the world.  Even during a tough economy, poverty in America is a joke compared to poverty in some other countries.  Plus, consider what have today compared to what our parents and grandparents had.  Then think about the  pioneers who began our society, with their drafty, dirt-floored shacks and one mule.

Certainly we have poor, desperate people in our country, and we have a moral duty to help them.  But as for most of us, well:  we’re fat.  We’re spoiled.  We’re trying to be entertained every minute.  We’ve got all kinds of resources, but we live among financial predators.  And, we’re so worried about money, we’re not sleeping, our families are neglected as we fight the financial fight, and we’re going through life distracted.

I’m a lady CPA.   I didn’t choose this career because I was fascinated with money or particularly motivated by money, but because it was something I discovered I could do fairly well.  However, once you do this kind of work, you find out how much people are suffering over their financial situations, and you become very interested in financial consciousness-raising. 

Money is not the most important thing.  When you live to serve it, it enslaves you.  On the other hand, if you don’t supervise your financial situation, it gets out of control and enslaves you. 

For this blog, I’ll offer a buffet of ideas.  Pick and choose, using only the ones that work for you. 

I want you to declare financial independence, and get your thinking off the beaten path.  All day long, we’re exposed to advertising, individual ad messages passing before our eyes at break-neck speed.  We are also exposed to the spending habits of our friends and neighbors, and the desires and needs of our families.  Maybe, with everyone feeling so much pressure to own stuff and spend at a breakneck speed, that beaten path is leading off a cliff.

I might not be cool; I might be off that beaten path where all the cool people are walking lock-step, but I love it over here in the bushes.  I am listening closely, trying to hear the beat of a different drummer, dancing to a different money melody.