Archive for the ‘Life’ Category

2010

Monday, January 4th, 2010

So, Life of Pookah is over a year old now. It has been an interesting trip. So what’s in store for next year?
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Should and Shouldn’t

Monday, December 21st, 2009

Should and Shouldn’t are close relatives of Can’t.

Should and Shouldn’t are those little monsters inside us that whisper FAILURE at us, when we’re most vulnerable.

“I shouldn’t feel this way…”
“I should be up doing X…”
“I shouldn’t rest…”
“I should have done Y instead of…”
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Your First Number – You Have Pets

Thursday, December 17th, 2009

Your First Number, your Emergency Fund, is the most basic one for your financial success, for too many reasons to list here (though I will return to this subject several times in the future). Your First Number may be different from mine… just like mine is different from the baseline I described in the linked article.

So what if you have pets?
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Crockpottery

Wednesday, September 30th, 2009

As in “crockpots”, not “crackpots”.

I am once again reminded of the incredible ease, efficiency, frugality, and usefulness of a chest-type freezer + crockpot combination.

S.O. caught a nasty bug, and is down for the count. Leaving yours truly to act the part of Knuckledragger. (I.E. Take care of S.O.)

Leaving one person to take care of an entire pile of rocksĀ  + primordial scrub is a LOT of work.

Here’s how we make it easier:
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Keep Your Family Close

Wednesday, September 23rd, 2009

Your family is either your best financial ally or your worst financial enemy.

Your family can help you out when times are tough – and they are very tough right now.
Ten bucks from three different family members can feed you for a month.
A couple of hours of familial babysitting gives parents some much-needed time together, gives the relative a lot of fun with the next generation, and gives kidlet(s) a break with a loved one who can spoil them appropriately.
Your family can add stability to your life.
You can add stability to your family’s lives.
You and your family can trade advice, stories, ideas, cooking, tools, and so many other things.

Hand-me-downs work great!

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Multitasking for Dummies

Friday, August 28th, 2009

I have been conducting an on-again, off-again study of my own performance with multitasking.

Bottom line: It sucks.
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Can’t

Wednesday, August 12th, 2009

Many years ago, my father gave me some of the wisest words I’ve ever heard. One of the things he said was, “People who want to succeed are more often held back by what’s behind them than what’s ahead of them.”

My human’s father is very wise in spite of being male.

Ignoring the parenting gender differences between cats and humans for a bit, let me throw out some thing’s I’ve said:

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When the Hits Keep Coming

Tuesday, June 9th, 2009

It has been a rough few weeks out here in the primordial scrub.

Lawnmower broken – repaired.
Tiller broken – at shop.
Car AC/emissions system – at shop.
Death in the family.
Dying family member.
Sick Old Lady Cat.

old_lady_cat21

Old Lady Cat does not feel well

That deceptively short list is just the last four weeks. It is more accurate to list it as:

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Death in the Family

Tuesday, June 9th, 2009

Pookah is very worried about her human. Both humans have been upset and sad. But Pookah’s purring will fix it. Pookah is even willing to share human’s lap with Old Lady Cat… sometimes.

Pookah makes human feel better

Pookah makes human feel better

It happened to us recently: We lost a grandparent.
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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.)