Easy Change

  The Economist , dated Dec 12-18, 2020, has a cover story, "Will Inflation Return ?". The question is not if, but when. According to the article, three arguments for increased inflation include the following: 1. Pent up demand 2. Aging societies which reduce the number of overall workers 3. Complacent politicians, who are happy to spent more, even if it goes over 2% inflation targets in order to satisfy liabilities, specifically mentioning those related to health care for an aging population, see point 2 above. I find the article a competent summary, to be sure. And the question to me is not whether there will be inflation. There will be. The question I am having for myself is twofold: 1. When will it show up? 2. How will it show up? I find that this, along with many other macro-level items are some of the most interesting aspects of finance for me. While they are tough to bet on individually, that is exactly what I am going to discuss here.  Regarding when it will show up, ...

I found this post recently and I thought it was quite interesting to look back and see how reasonable and accurate it was since about 2 years have passed since it was written. So, I leave the full post here for you to read and my ideas/comments are at the end. To say that this month has been difficult with the spending would be a huge understatement. Just this past weekend I went overboard on the spending with clothes and christmas shopping. What's more, the car needed new brakes this weekend--420 dollars! Yikes! Yes, Christmas shopping. I know that it is early, but I still intend to be prepared and get it out of the way. That said, there are huge cutbacks this year. I'm hoping this update with help me get some perspective. First off, in our own families, we are keeping the gifts much smaller. Even though I normally give bonds to my nephews and neices I have decided to not do that this year. The bonds are normally quite small and we need to make sure we're being mo...

In this, the great recession that we're slowly (arguably) coming out of, I have realized that there is quite a bit of opportunity for us to learn about ways to make better lives for ourselves by leveraging new movements and ideas (some of which are really just re-made ideas from the past). Two ideas that are really worth considering, in my opinion, is the idea of "timebanking" and "CSA". Both of these ideas were covered as part of a documentary that aired on "Now On PBS" titled "Fixing The Future". While these were only two of the ideas covered, I think it is a good short documentary that gives some hope to the somewhat difficult mess that we're in as a society. The first idea that might help us is the idea of "timebanking". Timebanking is a system whereby you donate your hours into a shared pool with lots of local members and then are able to get a comprable portion of time from someone else. This is sold as an item that builds...

So, this past weekend I was looking at funny pictures. I highly recommend the site PetsWhoWantToKillThemselves.Com . It had me giggling all day as I kept thinking about some of the photos on there. At any rate, over the course of the day, I determined that there was some sort of virus, malware, or rootkit installed and my AVG Anti-Virus started going haywire. Wanting to take no chances, I quickly backed up my files and decided it was time to wipe out my computer. Of course, it is always tempting to try to salvage it to avoid doing crazy reinstalls of everything, but I decided that in this case it would be better to just go for broke. Being an IT guy, I was able to do it myself, but it totally took the whole day, even though there was no real issue or crisis to it. It just takes a really long time. And one thing it made me realize is that I should get back into doing that more often because the money was decent compared to the amount of effort it took.

Recently a review of the bank account revealed that there were some fees charged on my bank account each month. I was completely annoyed by this because I was sure that this was not something that should have been happening and instead was something that was just going on due to my lack of paying attention. In reality, this was an account that I didn't check on very frequently. After spending some time in the local branch (and time is rather scarce), I was able to get a representative to resolve this. At nearly 20 dollars monthly, the fees were no small potatoes. But the story, unfortunately did not end there. After about 6 weeks, I noticed that the charges began again. This time, I went to the branch again but was shocked that there was only one representative working and it looked like it could easily be another hour in the lobby before I would get it resolved. I left and attempted some miracle working by talking to the customer service via the bank's internal email. It worke...

This past week was filled with excitement, albeit the uncomfortable variety when I had to pay my bills quickly via my bank's electronic payment system and made a mistake which will be annoying at least, and costly at worst. First, the week was a busy one in which I did not feel like I had the time I needed in order to do it properly. Lesson Learned: carve out time in your normal routine to pay bills and check on finances. Not doing so will cause mistakes. The mistake was a rather easy one to make: I paid one bill on my electronic banking instead of another bill. They were named something similar so the mistake was fairly easy to make. The result was a large credit on one account and an outstanding balance on another. Second, I discovered the mistake but was so blindsided by it that I didn't handle it properly, immediately and instead intended to simply run up this month's expenses against the card with the credit. And thereby paying everything off within the next 30 days or...

Just this past week I was on a visit to some family a few hours away and I was pleased at how efficient the trip was. The cost of the fuel to get there was not overly expensive and good planning kept the costs down to something reasonable. Due to space constraints, I opted to get a hotel room for the night but this was planned for in advance. I use the same chain each time to accumulate reward points. However, about half way through the weekend, I noticed that I was getting a cold and felt like I had a sore throat. Cut to a trip to the pharmacy to get a package of cold medicine. Even the store brand, which was on sale, still cost about nine dollars. The costs of these things really are increasing. That is the very reason why I find comments that there is no inflation to be dubious at best. Statistics from the Dept. of Labor when it comes to the Consumer Price Index (CPI) tell a more accurate story than just waving-of-hands types of comments. The CPI shows, in short that there are many...

To say that this month has been difficult with the spending would be a huge understatement. Just this past weekend I went overboard on the spending with clothes and christmas shopping. What's more, the car needed new brakes this weekend--420 dollars! Yikes! Yes, Christmas shopping. I know that it is early, but I still intend to be prepared and get it out of the way. That said, there are huge cutbacks this year. I'm hoping this update with help me get some perspective. First off, in our own families, we are keeping the gifts much smaller. Even though I normally give bonds to my nephews and neices I have decided to not do that this year. The bonds are normally quite small and we need to make sure we're being more careful with our money in this economy. No one knows what the future holds. While the stock market has bounced back, it certainly seems like we cannot feel certain about anything. Volitility seems to be quite high over the past few years, so who knows what will happe...

One of the largest US Lottery prizes in history was claimed recently by a man who works in a small convenience store according to MSNBC. I think that it is pretty amazing when you think about it. Chris Shaw is a guy who is working and can really really use the money. I hope he gets his health and kids taken care of and really is able to improve his long term quality of life for him and his family going forward. Even at a lump sum, the payment is over 120 Million dollars which is quite respectable. I think that many people would be able to make a serious lifestyle change with anything close to even just a million, so 120 million is impressive. Many people often feel like winning the lottery is like a curse. It is unfortunate but many people lose their lotto winnings . So the best thing to do in these situations is be slow, deliberate, and have a group of advisors who can really help you manage any kind of dramatic new wealth. With a good plan in place, it is far more likely that the m...

With the season of weddings behind us and having just finished working through my own big day, I thought it might make sense to share some of the key items that would make sense to consider if you're doing a cost-sensitive wedding. Of course, that first paragraph is a big disclaimer. But seriously, if you were not cost-sensitive, you probably wouldn't be reading this. Furthermore, anyone else reading this and thinking about a wedding should be cost sensitive in my opinion. Weddings are crazy expensive. Many vendors charge more for a service simply because they know it is in connection with a wedding and that people feel like they are going to spend through the nose on those events. Before reading this, understand that I am practical person before I am romantic. So, before the flames start coming about how I "don't understand," simply realize that these are my views. Take them or leave them. All that said, here are five ideas: 1. Keep the guest list small. Figure o...

One of the most basic things that I've realized this past month is related to health. For the past few weeks, I've been busy but have been unable to do something that has become so much a part of my life that I really miss it. And it has become second nature to me. The thing I'm missing is exercise. Since I usually arrive home late from work, I find that there can be some pent up stress associated with work and also with my commute. After starting an exercise regimen, I found that my stress was under control. I started slow, and I followed up with my doctor to make sure that I was really doing the right thing. After about two years of exercising, I've never had a bad experience in terms of a serious injury. Then, about two weeks ago, I was afraid that had changed. After what seemed like a normal exercise routine, I must have pushed too hard. The next day I was showing signs of pain. I can't say that it was not completely unexpected. I didn't spend enough time wa...

One of the things I remember when I was in the process of getting my first mortgage before any refinances etc, is that they said that you had to plan to have about 1% of the value of your home in addition to mortgage payments set aside. This money was to handle the upkeep of such a home. Fortuntately, I have been in the position that there hasn't really been a ton of upkeep. The roof was replaced which was a pretty big expense and there were a few other minor things. However, when all is said and done, it was pretty reasonable given the quality of the space that this money had purchased. Even now, in the midst of spending a tidy sum on redoing the two bedrooms, I can't help but feel like this is money that needs to be spent; it is not extravagant and it should help the value of the place as well as the quality of life overall. So far, these have been the expenses: 2300 dollars for new carpeting (original was over 15 years old). 120 dollars for paint 200 dollars for new curtains...

Everyone who has been paying attention is aware that the economy is in dire straits. From the serious tumble that the stock market took, to the completely tanking housing market, it is easy to see examples nearly everywhere that things are going badly. Fortunately though, the chances are, that if you're reading this, that you're in relatively good health. This is something that has the kind of value that doesn't have a price tag. There, I said it. Now think about it for a minute; you're good health is priceless. Recently I had someone close to me undergo a serious surgery. This has given me a new perspective on my health and also made me realize how important it is that everyone, no matter what their situation, do what they can to stay healthy. When you go to the doctor, you may be told to change your lifestyle, quit smoking, stop eating bad foods, etc. When you go to the dentist you may be told to brush better, or floss more. Regardless of what these professionals are ...

This week on Meet the Press, an contributor to Vanity Fair was one guest and she asked this very question. The concept is rather simple, it asks the question why America has become so content to spread the risk around? That is, if we fundamentally think that people who make bad decisions should bear the consequences of those decisions, then we must consider bailouts which significantly reduce and/or eliminate those risks to be a problem. Moral hazard is the term applied to such an event. Indeed, this is a fair question. Listening to broadcasts from the fall of 2008 would bring you to the same question when there was a workout for Bear Sterns. Some felt that any type of intervention, even in the form of a deal, was a bad idea. But others felt like this type of government assistance was a bad idea and was a moral hazard. This was a backlash which might have contributed to the U.S. government allowing Lehman to fail. Regardless of the whys and the hows, the question is now: why has the ...

A Freedom Fund is a great supplement to the Emergency Fund. It stands to reason that there are categories of upcoming expenses that are likely to come up within a year or two and you can easily save for these expenses, a little each month, above and beyond your normal savings. This past weekend, the cat got sick and required an ER visit which totalled over 300 dollars. This was an unexpected expense -- the reality is that most people can't easily absorb it. My budget is certainly tighter now this month, but it is not undoable in any way. Fortunately, the experience has showed me it is a good idea to review the expenses to see what, if any need to be revised. The first that you might be overlooking (if you're like me) is pet expenses. These can run into thousands of dollars, so it is important to budget for this so that a pet-emergency doesn't totally ruin your finances. The second is an inflation buffer. This seems a little strange, but the reality is that our normal adjust...

In the craziness that continues to happen in this economy, it is important to stay focused and remember to review your overall plan. Focusing on this plan is a big part of making sure that you are able to withstand all of the news and panic that is running amok lately. For me, personally, the plan is pretty straightforward and so I figured I'd share it with you. 1. Pay all bills. Not just on time. Early. Period. 2. Never commit to debt that I am not extremely comfortable with paying off in 3 years or less. The only possible exception to this is a mortgage in the event of a move. 3. Continue paying down outstanding debts, focusing mostly on the smallest debt until it is paid down. Personally, I do not focus every free penny on debt paydowns like some personal finance experts advocate doing. I think that the importance of a significant emergency fund is just ignored during these broad statements about debt reduction. 4. Continue building the emergency and freedom funds with approxima...

This week has been quite a ride already and we're not even half done. Lehman Brothers is bankrupt , B of A buying Merrill Lynch , and AIG not looking so hot, searching for some emergency money ..... One of the most important things you can have in this kind of uncertain time is an emergency fund. Not only should you have it, it should be big. The next best thing you can do is cut expenses and do all that you can to shore up your financial footing because who knows where the financial axe is coming from? I know that for many people out there, it is simply too late to do much in the short term about their emergency fund and way too difficult to figure out what to do to move their money around in any significant way. There are 3 things small things you should consider doing though, right now, before the summer ends in order to start picking up some stability in these uncertain times: 1. Make sure that your "safe" money is really safe. If its safe money, it is in an account t...

Lately, there has been a huge change in lifestyle for me. My side work has declined in volume (largely by choice). As a result, I have the tradeoff of less money and more free time. The realization of this new lifestyle came to a head this past week when I was on vacation at home. So, I thought that this would be a great time to find some things that needed to be done around the house that I had not gotten to lately. I fixed up the front garden and was able to also work on my back deck and get it stained. I am also looking at ways to improve and make even more out of what I have. Lately I've become seriously addicted to rolling change. Saving change is a great way to save money without noticing it. In my house I have a 5 gallon water jug that gets all the extra change and occasionally a dollar bill. But, the problem for me now is that I know that this money is money that is not "earning" anything. If you find yourself having extra time on your hands, consider getting your...

I think that the goal of personal finance in my life is to help me live a better life. I am not talking about just having more money and being able to buy more stuff. Although there is an obvious component of being able to purchase more goods. But I think more important than the stuff is the ability for me to know that *I can* purchase these things without worrying. Removing my fear about spending money is one major goal of my personal finance journey. The second goal is to incrementally make my life better. Whether it is to have more choices for food, more places where I can travel, or even more people I can help with various issues in their lives, these things are all things that come from having more money. And the abundance in my life is due to better financial skills. Realizing weaknesses and improving myself is another goal of personal finance. I notice this trend more and more in the PF community at large. Even my mother is a good example. Once you tackle your finances, taking o...

Well, with a recent windfall, it was possible to retire a significant bill which was costing about 250 minimum in cash flow each month. However, this was a bill that was being paid extra on, so strictly speaking, this is more like a 500 dollar increase in monthly cash flow. Getting debts paid off is really great for three reasons. The first reason is the increase in cash flow. The second reason it is great to pay off debts is the emotional feeling. In reality, the debtor really is a slave to the lender. And I know that people will feel that this is a somewhat dramatic stance to take, but I feel like it is true. Each time I pay off a debt, I feel more and more free. Finally, the great thing about paying things off is knowing that it is over. In a strange way, finishing a debt is like crossing the finish line on a long race. And when extra income comes in, it is like a windfall, a burst of energy that cannot be missed.