Archive for May, 2009

Credit Card Companies Threaten To Be Mean

Saturday, May 23rd, 2009

In recent news, our federal legislature has passed bills restricting the bad behavior of a certain class of financial institution: The Credit Card Company. Under the new legislation (if signed into law), all credit card companies will have to follow certain rules and regulations. Not least of which:

* No More Universal Default. Previously, if you were late paying your water bill, the financial institutions could jack up all your credit card interest rates to 20%, 30%, or more.
* Interest rate increases are no longer retroactive. In other words, if they do increase your interest rate, they can do it only for new expenses, not back-date it to the amount that you’re paying down.
* Reasonable notification of increased interest rates for missing a payment – 45 days notice (depending on which story you listen to) – AND if you make a minimum payment in that time, the interest rate goes back down to normal.

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When To Call A Professional

Wednesday, May 20th, 2009

My human just dragged a first kill through the tall grass onto the sidwalk!! I’m watching from the window!

The pull cord on our Craftsman push-mower (with power assist) is jammed up inside. It no longer allows the operator to use the pull cord to start the engine.

YAY! Nasty LOUD growl-monster is dead! Pookah’s ears are saved! Human will no longer stink as much! This is a good, if graceless, kill!

I took the cover off. Then tried to disconnect the fuel line from the gas reservoir so that I could tilt the reservoir out of the way and get to the bolts holding the main, metal cover on. Once removed, I would have access to the mower’s guts, and be able to take a look at the jam-up.

My human disemboweled the growl-monster! Finally, all those lessons in hunting are taking root! See?!?! Humans CAN learn! Look at all the… blood? grass? brown-gunky-sticky-bits? Human is bent over it, feeding. Can’t see…

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How To Prevent Your Own Financial Meltdown

Tuesday, May 19th, 2009

You’ve heard it before. I’ve got some good news… and some bad news…

The bad news is that there are certain types of disasters that you will never be adequately prepared for. Astroid strikes and nuclear wars are at the top of the list. Fortunately, those are “Outlier Situations” with a low likelihood of happening.

The good news is that it is relatively easy to prevent your own financial meltdown – a lesson that many financial institutions could have easily remembered, yet failed to.

The basic principles are:

1. Prepare.
2. Reserve.
3. Insure.
4. Conserve.
5. Review.

It’s all about managing risks.

1. Prepare.
Prepare for life’s emergencies. At some point, you (or a family member) are going to get sick, lose a job, need car repairs/replacement, purchase a home, need significant home repairs/replacement, need emergency shelter, or need legal assistance.

By Pookah Finances 201, you can start really thinking ahead. Your mind, along with your ability to plan ahead, is your most powerful asset when dealing with finances. Plan Ahead. Work through a list of “What If’s”. Learn about your family’s medical history. Check with your neighbors or the local city council for what past disasters have struck your neighborhood. Write down what you learn… and what you plan.

2. Reserve.

Set aside enough of your earnings to cover one or two of these emergencies, preferrably the expensive ones. You do NOT have to start out with the most expensive one (probably serious illness). But car replacement/repair is highly likely, as is home repair. Ten thousand dollars is a lot of money – build it up over time. Your emergency fund can act as this sort of reserve.

When it comes to investing, it depends on your level of interest. Index funds are a good choice, in general (though there can be great variability even among index funds). But don’t put every single egg in one basket. An IRA (Roth or Standard), 401K plan, and Emergency Fund are a good start. With a little planning (see 1. Prepare above), you can also take great advantage of a Health Savings Account (HSA) or other vehicle that allows you to reserve some of your money, probably earn interest on it, and then pay for some of those incidents when they crop up. If your interest lie in the direction of direct stock purchases, you can increase your reserves (with attendant market risks) steadily over the long run.

This is akin to keeping enough money in the bank to cover your borrowing – a concept that has direct bearing on the crisis our economy is currently experiencing. You have a (hopefully) rare opportunity to learn several important lessons and take them to heart. This is one of them.

3. Insure.
Insurance, in the United States, is screwed up. It is one of those necessary evils.

Insurance is intended to spread the cost of expensive problems and disasters over a wider population, using the premiums paid by the insured as investments to generate additional money for the insurance company AND to pay for those who file a claim to be repaid.

I do not have the space to go into details about the many, many, many problems and pitfalls of insurance here. But I do offer this advice: Insurance is there as an emergency measure, for when one of the disasters strikes. If your cash flow can handle it, use a high deductable to lower your insurance costs – and keep that emergency fund at three- to five times the deductable. With the exception of medical insurance, insurance is for the “What If’s” – those emergencies that are unusual and tend to be devastating in their effects. What if your house burns down? What if you are in a car accident? What if you are diagnosed with cancer? What if you are killed and your family needs to pay off the house mortgage?

Just one of these events can destroy your finances. Insurance is there to prevent that destruction.

4. Conserve.
Conserve your resources. You can look for ways to cut drains on your resources from the preceding principles. For example, if your emergency fund is at a reasonable $10,000 adjusted for your lifestyle, you can look for ways to cut your expenses. One of the easiest is with a car. If replacing your car with a like make & model would only cost $5,000, talk with your insurance provider about dropping vehicle replacement coverage from your car insurance. How much would it save you per month? Then put that savings towards your emergency fund, until you get it to $15,000+ (three to five times the replacement cost). You can also look at raising your deductible, increasing your emergency fund accordingly, and using the savings for other projects.

Medical insurance is a touchy subject. But if you are regularly on medication to treat a condition, it may be worth your while to seek out either a cure or alternative treatments. To use diabetes as an example, mild cases *may* be controllable solely through dietary changes. Not having to buy medication (insulin, in this case) all the time means that you can improve your cash flow. However, it is up to you to determine if the cost of the cure (or the attempt to get around) the problem is worth it.

You must also ACT CONSERVATIVELY. Are you taking on too much risk by raising your deductibles? What if you have to pay three or four of those deductibles in the same six month period? If your household only generates one bag of trash (because of your extra efforts at frugal living, for example), would it be worthwhile for you to join up with your neighbor and have a “joint trash pickup” service? What are the costs of your employer-provided insurance versus getting your own? (It does happen occasionally that paying for your own insurance is cheaper than accepting your workplace plan.) Ask your doctor if there is a generic or older equivalent of your prescription medication that would cost less, yet still work for you.

Above all, when you are changing something about your finances, THINK: How will this impact me? Does this create too great a risk? What will it cost if the emergency DOES happen?

5. Review.
Review your plans every year, especially the insurance. If you have picked up a few fender-benders or tickets (it happens even to the best of us), check your insurance to see if the monthly cost should have gone done by now. You may very well have gone the required one or two years (or whatever requirements are there for your situation)without an incident to qualify you for the reduced cost. Definitely insist on being pro-rated for any time that has passed before you noticed this cost savings! Or for the cost of a simple blood test, you may be able to demonstrate that you no longer suffer from an expensive, high-premium medical condition (thanks to your efforts to control or cure it), and thereby cut your medical insurance costs down.

This review also introduces a sanity check. After all, if you are at Pookah Finances 201, there is no reason to pay for insurance covering stretch limousine trips to and from the car dealership if you get in a wreck. A phone in combination with bicycle, public transportation, friend, or cab will do just fine. As a counter-point, if you are finding yourself more accident-prone as you get older, maybe you need to lower that deductible to better match your changing life.

I will never forget the neighbor who discovered he’d been paying for his eldest son’s medical insurance into the son’s thirties, when the insurance could no longer cover him once he passed his 21st birthday. (Like most insurance companies, they didn’t want to reimburse him for the overpayment. The state’s Attorney General, and a judge, vehemently disagreed.)

Toxic People – Different Worlds

Saturday, May 16th, 2009

If you haven’t read my post on Toxic People, please take the opportunity to do so now.

Ok, ready?

Many years ago I had to work with John Doe. Within ten minutes of talking to him – after he’d been hired – I knew several things: John was a pretty darn smart guy. John had an easy-going personality. John had in-depth knowledge of the type of work we did, and knew the buzzwords to prove it. John was a little weak on the documentation side, but most techies are. John didn’t mind sharing information about his own life. John had some problems with letting other people participate in the conversation.

That last one is what I call, “A CLUE.” I really should have paid more attention to it at the time. The management that made the hire/no-hire decision REALLY should have paid attention to it.

See, if a smart person can’t shut up long enough to let someone else finish a statement, they are A) Rude, B) Egotistical, and C) Blind.

You can’t have an in-depth discussion or transfer of information with someone who is Rude. They will keep interrupting you whenever they feel like it. Their reason is simple: You’re just not good enough compared to them, you don’t know as much as they do, and, frankly, you’re not as smart as they are. They have stopped seeing you as a person. They have stopped listening to you. What you have to say isn’t important. They already know the answer. You’re not worthy of listening to.

You can see the Egotistical part already. They already know the answer because they already know what you’re going to say. Talk about a Geek Social Fallacy! Once a person becomes so impressed by their own knowledge, skill, and ability that they stop listening to people in general, they have become the problem. They are so certain of their own greatness that they can’t even conceive of the “help” they’re giving you is actually toxic.

Once they stop listening, they quickly become Blind. They can’t see that they’re actually damaging the person they’re talking to. Since they have stopped listening to you, and willfully blinded themselves, they will cheerfully lead you off a cliff – dragging you the entire way in spite of your yelling, screaming, and pleading to stop before you both die. In a business situation, if they are not the manager, they won’t be there for long… unless the management is also toxic.

Now, if you’ve read this far, and thought about what I’ve written, I’d like to point something out. Rudeness, especially the egotistical, casual kind, was actually the second Clue that John Doe was a Toxic Person. The first Clue was his buzzword proficiency. See, the hire/no-hire management didn’t actually give him even a simple test of basic competence (do you know where the on/off switch is on this model of equipment that you say you’re expert on?). They certainly didn’t invite any of the techie staff in to ask questions and make sure personalities wouldn’t clash, or, maybe, find out that John Doe was extremely good at talking the talk, but only mediocre at being a techie — in that environment. Talking is only so much hot air. Actions make the difference. However, being able to talk well, speak to the benefit of the listener, and use good people skills in the process will determine whether your John Doe is a Toxic Person, or not.

Don’t get me wrong – John Doe had techie smarts. But because he was in that particular kind of work environment, dealing with the personality types that already worked there, he became a Toxic Person. Three full-time staff lost six months of effort trying to contain the poison. That’s four (including John Doe) full-time employees dedicating 90% of their 50-hour work week to… poisoning. That’s some expensive damage control on so many levels.

When John Doe left that work environment, he was hired into a different one. There, from the little bit I heard, he wasn’t a Toxic Person. And I am very glad.

So watch out for people who might be Toxic to you: They talk a good game, use casual rudeness in conversation as a habit, and do not listen to you. The other lesson is this: Toxic People may be Toxic to you, but not to others. But you still need to get them out of your life.

Religion and Finances

Thursday, May 14th, 2009

Pookah now takes the opportunity to remind all humans of the divinity of cats. Offerings of small tasty birds and delicious fishes will be accepted between the hours of 12:00am and 11:59pm.

Many religious works contain advice about finances. Much of it, from what I have read, is quite sound and good advice that will serve anyone well. Religion, however, is one of “those” subjects that can raise quite violent feelings in faithful and non-faithful adherents alike.

I’m not going to advise you on what aspects of your religious obligations are good, bad, or other. It’s not my place. It’s between you and your religion.

What I will advise on is how to get out of debt (Pookah Finances 101) and how to pave the road to your own financial success (Pookah Finances 201). So please bear this in mind: You are free to use or ignore this advice as you see fit.

Tithing/Donations: Cut the cash outflow. If you’re in debt, you can’t afford it. Ending up needing financial support from your religious organization harms you, your religion, and the people relying on your religion’s collective efforts. If you really *must* give, donate your time. Help out some of your fellow faithful with home maintenance, car repairs, yard care, or babysitting. Donate some time to helping keep up your religious sites, temple, church, altar, other place of worship.

Religious Subscriptions: Many local (and national) religious organizations distribute publications – what’s happening in your faith. These are important so that you can stay connected with your fellow faithful both locally and abroad. They also tend to come with a subscription cost that you are expected to pay. However, if you are in debt (Pookah Finances 101), this is a drain on your resources. You can’t eat the subscription, use it to clothe your family, and it sucks as shelter. See if you can trade in your services – perhaps as an editor or proofreader – in exchange for a few months off the subscription fee. If you have children, see if they can help with packaging and distribution. It might even serve well as a family Saturday event. The goal is to reduce the monetary outflow so that you can get out of debt. When you reach Pookah Finances 201, you can *consider* going back to funding a monetary subscription.

Sunday Clothes: Okay, I’m showing what religions I’m familiar with. Many faiths expect you to wear certain types of clothes – usually of a nicer variety – during attendance of ceremonies. If you are handy with needle and thread, or a sewing machine, you have here an opportunity: Donate some of your sewing efforts to maintaining the ceremonial attire of your priests, singers, or other uniformed attendees. If you need appropriate attire, try shopping around thrift stores, or even ask your local religious authorities for advice on where to acquire appropriate attire.

Expense of Ceremony: Some faiths require purchase of incense, candles, or other items used in the practice of that faith. These can get expensive, and are difficult for someone like me to advise you on. Let your local religious authority know a bit more about your situation. See if they can advise you on a good course of action. Maybe you can trade your work for some of these items, or maybe you can get a price reduction until you get back in the clear. This is a case where you are going to have to swallow your pride, smile about the taste, and ask for another serving. It sucks. I know. I’ve done it.

Here is the basic idea: Replace your money costs with goods or services. Maybe you got a really killer deal at the grocery store, and have ended up with more canned food than you could possibly use in a year. See if that extra will make an acceptable donation. Maybe some of your fellow faithful participate in Habitat for Humanity – and so can you. Extra practice building someone else a home means you will be better trained to keep your own place in good shape – which will reduce your maintenance and repair expenses. Just about anyone with two legs and two arms can serve meals and bus tables. Serving at a soup kitchen was both an eye-opening experience for me and brought home, pointedly, just how important it is to help someone else make it through another day. (Later on, when I was financially stable, I bought a $20 cookie from that soup kitchen bake sale. I knew that $20 would feed roughly 50+ people who were trying to pull themselves up out of the gutter. Best. Tasting. Cookie. Ever.)

When you get out of Pookah Finances 101, and are into Pookah Finances 201, start adding back some expenses — IF YOU WANT TO. You may find that the greater personal involvement in your faith is more fulfilling, and more useful, than simple cash expenditures.

Greater personal investment in scritching Pookah’s chin is more fulfilling.

Falling Off The Financial Schedule

Saturday, May 9th, 2009

Well, it happened.

I fell off my financial schedule, and missed an opportunity that would have netted me about $250 in interest earnings over the course of the next 12 months.

How do you deal with this?

Some people look at it as losing $250, and castigate themselves appropriately.

Some people view it as a critical failure and beat themselves into the ground over it.

Some people swear a blue streak, gripe about it for a few weeks, and move on.

What did I do?

I said, “Aw, crud!”…

DID NOT!! You made Pookah hide under the coffee table!

Then I wrote in big red letters in my calendar the due date for the next opportunity… and set it about three days ahead of the actual drop-dead date. I am now highly motivated to not miss this one, even though it will net me only $70 over the next 12 months.

See, I didn’t “lose” the $250. I never had it to start with, so why beat myself up over it? Even if that $250 would mean the difference between eating and not eating, I’d be better off spending the time fixing the problem than crippling myself mentally over it. In fact, why waste time getting all upset, when that energy would be more productively spent taking a few steps to keep it from happening again or working towards the next opportunity?

Life of Pookah: A healthy attitude is very important.

Frugal Idea – Save That Toothbrush

Thursday, May 7th, 2009

Is your toothbrush all worn out? Ready for a replacement? Do you already have a replacement ready – in one of those econopacks that you bought at a discount? Good!

Do NOT throw that old toothbrush away.

You can:

  • Use it to clean the hard-to-reach places around the kitchen or bathroom faucet.
  • Use it to clean out the crud in the kitchen sink drain.
  • Use it to clean dust off the coils of your refrigerator.
  • Use it to get those hard-to-reach spots on the pile of rocks exterior.
  • Use the handle as a soft prybar.
  • Turn it upside down and use the corner of the head to smooth out wet caulk.
  • Use the handle as a disposable stirring rod.
  • Use it to clean all the dust and insulation wrapped around an improperly installed light switch or electrical outlet (after turning the power off and testing it for no nuclear go-juice, of course).
  • Use it as a launching lever to toss kitty treats past Pookah’s nose.

BANZAI!!!!!

I keep a couple of old toothbrushes in my toolbox, another couple with the pile of rocks cleaning kit, one under the sink in each bathroom, one under the sink in the kitchen, and a few in the wash room (they’re great for cleaning lint out of the lint trap screen).

Plus, those soft or hard plastic dental tools don’t decompose very quickly in a landfill.

Why The Tough Apology?

Tuesday, May 5th, 2009

Well, I’m back. Immediate family medical issues are being dealt with. And yours truly is working on a better process for this blog – so that there are fewer critical points of interruption.

So, to get back on track – especially now that my legs have healed up:

It happens every so often. Pookah climbs up into my lap, making sure she doesn’t impale me too much on her built-in scythes, and asks a question:

Why do you take such a hard line with apologies? Cats are MUCH more forgiving and reasonable.

I separate Apologies from Forgiveness for one very important reason: Trust.

We give a certain amount of Trust to everyone – friends, family, strangers on the street, companies that we do business with. We Trust that strangers on the street are not going to actively harm us – it is a foundation of civilization. We Trust that the companies we do business with are not going to actively cheat us – it is a foundation of economics. Similar foundations exist in our Trust of friends and family. I’ve posted about this before, regarding Trust, but Verify.

Trust, once broken, requires significant effort to earn back. And this is as it should be.

You are making it complicated again.

Really? Okay, let’s pull some examples from your life, Pookah.

Okay. Just keep rubbing that muscle… right… there…

Would you have come up to the food I set out to trap you if I’d kicked you?

… No.

Why?

Because if you kicked Pookah once you would do it again.

Even if I said I was really, really sorry?

How could I believe you if you kicked Pookah once already?

But I have kicked you, Pookah. Even stepped on you.

That was different.

How so?

It was an accident. You did not mean to hurt Pookah.

How do you know that?

Because you immediately stopped what you were doing, apologized, and then made sure that Pookah was not seriously hurt. You went to extra effort to reassure Pookah that it was alright, you didn’t mean to. If Pookah was hurt, you did your best to help Pookah feel better. Except for that time at the V.E.T. Pookah did NOT feel better until Pookah was home!

Is that all?

Afterwards, when a cat was in the human-walkway, you used your foot to gently nudge Pookah out of the way… until Pookah learned how to avoid clumsy humans.

So you trust me because…?

Your actions, even though they are clumsy, are the same as your words.

Now this, I am proud of! Well, I’ve got to get out in the primordial scrub to… Hey, careful with the sharp pointies!

Prrrrrrrrrrrrrrrrrrrr!

Dangit.