Monday, August 25, 2008

I Was Completely Snowed

So, tonight on my way home, I needed to get some gas. I pulled in off the highway and stopped at a small gas station and figured I was in for a good 45 bucks to fill my tank. I squeezed the pump and let my mind wander and then the pump popped because the tank was full. I hung up the pump and looked at the price and was shocked. It was less than 40 bucks to fill my tank.

Normally, when you pay less for something, it is a thrill. And I was quite pleased as I pulled away. The annoyance only came once I realized that I was so happy. I was completely snowed. After months of paying higher gas prices -- prices that were around four dollars per gallon -- it felt great to pay 3.60.

This is not a blessing or a deal though. This is still painfully expensive. And I don't think that these temporary decreases in price are a very good indication that we'll have cheap fuel for long. I'm with other people that think that our heating bills this winter will be significantly more than we had paid last year.

Call my view cynical, but I think that this was just a breath of air before we plunge back into the long hard increase in gas prices. And I for one am not going to take this level of prices for granted long term.

Sunday, August 10, 2008

Net Worth Taking a Beating

In the latest net worth post I made, I found, unsurprisingly, that my household net worth continues to decline. This in the face of a painfully slow economy, a housing slump, and a languishing stock market.

Here's the link to the details:

In short, this month marks a nearly 3.5% decrease in overall net worth. However, all that being said, I feel richer and more secure than I have in a long time. So, what does that tell you?

I've made two interesting observations from this:

1. People are aware of the behavioral finance concepts now...especially those who are really 'in tune' with personal finance. That is, if me and my neighbor each has 100k, I feel worse than if I have 50k and he has 10k. The idea being that it is not simply enough to have lots of money, you need to have more than your neighbors to feel good. On some level, it feels a little sad to me, but alas, this is how most people feel/think...and I confess, I am not very I need to make a conscious effort to not feel that way.

The point is, in this case, that I feel better because although I am struggling, I know that it isn't as hard for me as it is for other people, so that makes me feel better.

2. For me personally, having a big net worth is nice, but more important to me is the feeling of security. That is what having "money in the bank" is really all about. And right now, I feel comfortable with my job. And more and more of my consumer debt is paid off. So, even despite the economic slump, as each month passes, it seems to become easier and easier to weather occasional emergencies that would have completely wiped me out a year or two ago. For example, a recent assessment came for our condo association. It was an extra 650 dollar bill. Yikes! But with having other debts paid, there was enough to pay it off out of miscellaneous money in the account...without even dipping into the freedom fund savings that is set aside for those emergencies.

Overall, despite all the reasons to be sad, I still find it hard to be unhappy right now :)