Can We Afford Intelligentsia (Coffee)?

May 9, 2008 by

Sure it makes Starbucks taste like the swill that it is. The branding is terrific (but is not used to good effect on their website). The coffee is fantastic. But can we afford Persephone & Alchemy, Zirikana, Anjilanaka? Starting to think about cutting corners. Eating out, $3 coffee, these things are on their way out. But I don’t know if we can give up Intelligentsia.

Look, tea, made at home of course, is insanely cheap. Put it in a thermos. Tons of antioxidants (black or green) and research has proved (though I can’t cite it) that it gives a more sustained, gradual release of the caffeine, leading to a more relaxed, alert mind. No crash. The whole personal finance recovery thing is about smoothing out the roller coaster of consumerism, isn’t it? Drink tea.

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To Lunch or not to Lunch

May 9, 2008 by

I’ve been out to lunch for a long time. And now it’s time to get back to work.

By the end of this weekend I will update our debt watch stats. The good news is that we’re still down a lot from when we first started. The bad news is that we’re up a lot from where we last left off…the problem is good ole fashioned cash flow. We said goodbye to the single digit debt numbers quite some months ago.

I’m thinking about my day tomorrow and wondering if I should cancel my lunch with a colleague. It may cost me $15. Lunch out is lovely but is it necessary? I’m thinking that instead I’ll force myself to go to the gym (which I pay for and seldom use) and instead ask my colleague to have coffee with me. A healthier decision for my heart as well as my pocketbook.

Dormant Volcano

May 8, 2008 by

We’re in pretty bad shape financially. This blog is operating on geological time. Perhaps it will erupt soon. 

Noma

Help!

January 11, 2008 by

I’m so glad we didn’t delete this blog. We are in a mess again financially and only the kindest gurus (ourselves, I guess) can get us out of it. I’m enlisting Lady Dough Girl (my wife) and we are going to lick this thing into shape.

Probably the best way to look at it, from a psychological point of view, is from an addiction perspective. Not in the shaming AA way where you lose all your status and have to start from the bottom (which, admittedly is rather appropriate), but from the perspective that there will be screw ups and they are part of recovery.

‘Knee deep’ wouldn’t really capture where we are with this. We are up to our necks in it, credit card debt. I hope we can enlist the support of that dear personal finance community again, as it was so helpful before.

Where Do They Go?

October 31, 2007 by

Old blogs that is. I considered calling this “coda”, but I’m not sure it’s time just yet to cash in the chips, call it a day, and so on. In glancing over the more recent posts I note that there’s nothing about my passing the licensing exam. And that’s ancient history.

We are back in debt, to the tune of a few thousand at least. That I only have a ballpark idea indicates where we’re at. Still, it’s confined to one card now. We just hit that wall of “I want that.” That wall is tough. Plus, what do you do when your bank balance is $0.00. That was a new one, courtesy of overdraft protection. But it didn’t last for long and soon we were at -$207.

Managing Internet Identity: Addendum

September 29, 2007 by

The previous post courtesy of pasadena conversations, an excellent blog the keeps an eye on media and community in Pasadena. A related website offers “open hours” with instructions on how to develop websites.

If you happen to be in the Pasadena area, these are well worth checking out.

On taking control of one’s internet identity

September 28, 2007 by

Privacy? What’s that?
Somehow I came upon this fascinating take on managing one’s internet persona. It’s here. Since clicking on links seems to be not a very engaged in practice (how’s that for passive voice?) I’ll quote at length. As someone that writes an “anonymous” blog I found this fascinating:

controlling your public appearance

In the last month, I’ve received almost a dozen panicked emails from people who had commented on my blog at one point or another and were horrified to find that their comment was at the top of Google’s search for their name. In each case, I have respectfully altered the comment to an anonymous name. I prefer not to remove these comments because this leaves holes in my blog, especially when others’ comments are based on those earlier comments. Unfortunately, most of these people do not understand how Google’s cache works and write back in rage that it’s not fixed. I politely try to inform them that Google’s cache can take months to update and I cannot do anything to speed this up.

When people bitch about MySpace and Facebook being walled gardens, one of the positive things that I offer in return is, “at least those teens’ profiles aren’t in Google’s cache.” With Facebook’s opt-out decision, this is no longer the case. As I mentioned yesterday, I’m a bit terrified of what this might mean long-term. Read the rest of this entry »

Hitting the Financial Reset Button

September 27, 2007 by

I’ve been Missing in Action. It’s been a busy summer. First we had to deal with fumigating our house. Then I was away for a few weeks on a vacation and then work-related trip. Upon our return we were scrambling to unpack and get ready for the beginning of a new school year. During all of this our blogging feel by the wayside. This doesn’t mean we haven’t been thinking about our finances and ways to run a tighter ship. Still, I must say that it was really therapeutic to get away from the day-to-day grind.

When we got back from vacation I found a big check waiting for me. This check was the result of our decision to sell a mutual fund. We decided to sell this asset so that we could pay off our credit card debt. We were sure to put a good chunk of the money aside in a high-yield CD so that we have the money available to us when it comes time to pay taxes. We used the rest to help wipe out most of our debt. I have no doubt that we did the right thing as the level of stress we were living with trying to pay down our debts was really not healthy.

Our challenge now will be to keep on top of our bills and really build our emergency fund so that when big expenses arise (and they always do!) that we don’t have to use a credit card to pay for it.

Tonight when I was updating our debt/assets and paying bills online I noticed that the one credit card I had paid off in August was showing a $242 finance charge. I was enraged and called the cc company to ask them to get rid of it. Amazingly enough they did! So, I am now back to a $0 balance with that.

I’m still hoping the Bizarros will rise from the dead.

Vacation from Blogging

September 14, 2007 by

Unilateral.
I’m making a unilateral call. I should find out about the results of my licensing exam soon, on Monday. I think, though, that we’ll probably not be back scrutinizing the finance stuff for a few weeks. October 5th. Of course, Ladydough is free to violate this at any time. So check back once in a while, for kicks.

Lady Dough said to me the other day, “I can’t believe Bizarro are done with their blog. I feel like we were blogging for them.” RIP.

Blog Action Day.
Of course you all know about the blog action day coming up, right? Check it out. Google ‘blog action day’.

Vacations and the value of perspective

September 6, 2007 by

Our posts have been erratic and our stats have been plummetting. And I haven’t even cared. Frankly I haven’t been in a blogging state of mind. And that’s OK.

I’ve been on the beach, literally and figuratively.

We went on vacation back at the beginning of August and then I was on a business trip. Going away has so many amazing benefits. It’s wonderful to get out of the grind of daily life and all the work and worry. I also find that leaving the daily grind allows me to relax and really reconnect with family and what it is I enjoy (going for walks, reading books, cooking good meals, time to daydream, etc…)

I got back from my voyages a couple of weeks ago. Another benefit of travelling is that I always feel so happy to come home. I notice things I really like about my life while I’m away and it feels good to get back.

That said, I’ve found that for every week away it takes 2-3 weeks to get back into a routine.

As Noma mentioned we need to updated our debts and net worth information. The good news is that we decided to sell some stock to get rid of most of our credit card debt. I feel so happy about that decision. Now we need to get aggressive about managing our money so that we don’t rack up the debt again.

Pissing On American Express, or, Hot Air into Action

August 31, 2007 by

The hair that broke.
Oh, I meant pissing off. So sorry. Do I sound angry, bitter, resentful? I am and have been all those things, but the overriding mood is one of sweet, unalloyed triumph. As I mentioned early in August, American Express really pissed us off. I don’t know why. We should really not be so naive. They simply pulled the old bait and switch tactic, 0% followed by two late payments and then whack! 30%. Will we ever learn?! So I wrote of drastic measures. I even mentioned Thunderbirds.

Napalm for debt. Napalm for Chase. Napalm for Amex.
In any case, we converted some of this hot air into some active warfare. We liquidated an asset. We are sad about this. This was not part of the dream. But, as John Lennon sang, the dream is over, time to move on.

Recent payments, made August 3o:

United Mileage: $3207.32

Chase/ Amazon: $5999.24

American Express: $15,770.15

I am ecstatic that we have the resources to do this. Amazingly, we still have a couple grand of debt. But the bulk is paid off. I’m delighted that we didn’t take out a home loan thereby prolonging, and multiplying our debt for 30 years.

Not doing it again!
Now the trick is not getting back into a debt that even remotely resembles this morass. Since canceling credit cards hurts your credit rating we are pondering what do with the couple we won’t ever use again. I said never. Shame on me. Freezing them is not enough. How about preserving them in plexiglass? Or amber, maybe. Another idea is cutting them up and burying them in the back yard. Admittedly, these solutions are more based in poetic justice than any real contingency.

The morass.
This last bit about not doing it again is very serious. We still want to maintain a credit card for airline fares, that sort of thing. But we really need to get into a mindset where that card is literally frozen, is treated like a hand grenade, is kept under lock-and-key, sort of like a firearm that you wouldn’t want your kids to get their hands on. This will be the challenge. I’m hoping we’ll be more than up to it.

The addiction model — a little psychology.
I think debt is a little like addiction. It is, after all, largely a result of compulsive behavior. It creeps up on you. Little mindless impulse purchases, CDs, video rentals, trips to Vegas and then — kablooey — $20,000 in the hole. (I realize this scenario is not as common as some people would like us to believe, thus normalizing large debts. But it is fairly common, nevertheless.) So back to the addiction model. In Alcoholics Anonymous addiction is viewed as a disease. On a charitable day I view this as wrong-headed, perhaps even dangerous.

Biological determinism.
I am familiar with the brain science. Much of it is compelling. But I’m still not convinced that it fits the disease model. And as with much biological deterministic thinking there is the chicken-egg problem. What causes these mechanisms in the brain to activate? Another side to the disease model is that there is a high genetic component to alcoholism. This is undeniably true. But why is it that some become alcoholics and others don’t? What is the mechanism that activates the gene? My point is: We are not doomed to fulfill all the scenarios scripted in our genes. This makes for hopelessness and a willingness to shirk off responsibility.

Behavior.
In Marlatt’s relapse model relapse (in our case, think Doctor Debt shows up at the doorstep, “Damn, you again?”), relapse is viewed as inevitable. This is not fatalistic. It is just viewed as part of a process. Relapse is part of the process. It is not looked upon as being shameful. When it is viewed in this way, it is easier to pick oneself up and get back on track (hey, two cliches in a row!). You are not a failure! Your life is not over. You can be debt-free again. One does not have to return as a newbie and start all over again. Time and again I’ve heard from relapsed AA members that this can be a very shameful, even shaming experience. When relapse is a process it is treated matter-of-factly. And it is dealt with accordingly.

Making it official.
Once the transactions clear I’ll update our debt meter. But I want it to be all, like, official.

Macroeconomics or bust

August 29, 2007 by

My sense is that macroeconomics is not a topic that causes spine-tingling curiosity out there. Consider these facts:

  1. What if you were even more squeezed out of the housing market than is likely to currently be the case?
  2. What if a political crisis turned into an economic crisis, China rapidly divested itself of U.S. dollars and the country suddenly found itself in deep guacamole? What if China forced a political crisis on very compelling economic premises?
  3. Did you realize that in terms of consumer debt Americans eat up the equivalent of the GDP or Mexico or Brazil? Brazil, just for point of reference, is the 10th largest economy on the planet.

Here’s a quote from a fascinating article called “Debtor Nation” appearing in Harvard Journal that addresses many of the above-mentioned facts:

The United States, for example, was “the world’s biggest debtor for a hundred years,” Frieden notes, “but the money was used to build the railroads and the canals and the factories and to improve the ports and to build our cities. It was used productively, and it worked. The question to ask now is not, ‘Is the country living beyond its means?’ The question is, ‘Is the money going to increase the productive capacity of the economy?’ Because if it just goes to getting everybody another iPod,” he warns, “then unless iPods make people more productive, there is going to be trouble down the road when the debt has to be serviced.”

Take a look at the article. It makes a very interesting and compelling case for what are the larger consequences of our consumer spending. You can click again, here.

Response Burst

August 25, 2007 by

Statisitics.
I was looking at our stats — there was a huge jump during the debt reduction carnival, then a precipitous drop and complete flattening out during our vacation and continuing into the present. This looks suspiciously like what is called an extinction (or response) burst. First, I must assert that that is not what it is! Say it isn’t so!
Extinction burst.
An extinction burst occurs after a reinforcement is discontinued. For instance, if you stop picking up the crying baby at night, initially, the baby will cry louder, perhaps even for a longer period of time. But eventually, lacking reinforcement, the baby will stop crying.

‘Correct’ parenting.
(I’m not advocating that you leave your baby crying in the crib. Nor am I saying it’s tantamount to a war crime. For the most part, I think that’s a very personal decision that has as much to do with who parents are and what they can tolerate, in conjunction with who their child is and what she can tolerate. It has more to do with these things than any particular prescribed way of ‘correct’ or ‘incorrect’ parenting. In other words, it depends. Whatever works for you!)

Back in the saddle.
What was the topic again? Oh, right. Well, there was a huge spike in the stats. And then there was the plateau of death. I’m cooking a Trader Joe’s pizza. There was a comment on the site that I can only ascribe to bad karma — was that a joke? — and any way, we’re trying to get back on the frugal horse. Lady Dough is still in New York. I take the licensing exam next Saturday. We’re a little scattered, but after I shred all these old documents things will be nifty.

Post Aversion

August 22, 2007 by

Not meaning that we are past the aversion, but we are still getting it in gear. Lady Dough mentioned something very post-worthy (I thought at the time, now it slips my mind) last night as we were conferring long distance.

She’s pounding the streets of Manhattan and marveling how few people are in the city this time of year.

I’m continuing to patronize the local deli near my work, which is nothing special, costing me about $7 a pop.

Back?

August 21, 2007 by

I am back, sort of. An east coast vacation leaves me somewhat discombobulated, not feeling the frugality. I bought a BLT. I crank the central air — not dealing with jet lag and super-hot house. Just ain’t happening.

Prepping for Vacation

August 8, 2007 by

As Noma mentioned we’re getting ready to board a plane tonight. I’ve learned my lesson and decided to take today as a vacation day to take care of all those miscellaneous things I need to do before a big trip.

In the past I would have worked at least a half day. Not anymore. There’s just too much to do to prepare for the trip. This includes taking the cat to the kennel, cleaning the house (who wants to come home to a dirty house?), finishing packing and reviewing of our finances. I’ll check Quicken, Wells Fargo, etc and make sure we have enough cash for our trip and make a trip to the ATM. Once we’re back East we won’t be near a Wells Fargo and if we withdraw cash we’ll get those pesky bank fees. 

In addition I’ve leveraged today’s vacation day to have some contractors out today.  The extermination company just left — they came to inspect post fumigation and clean up the frass (termite poop — great new scrabble word) and an electrician coming to replace our broken (for 6 months) porch light.

I’ve already stopped the mail, the papers and bought small gifts for my nieces who we will be staying with….Getting closer.

Our friend will be driving us to the airport which will save us money on parking. We’re also fortunate enough to have family who donated their miles to us…so our airfare was free!!! Yipee! So, financially speaking the biggest cost for us will be the cat kennel fees, entertainment and dining charges, the car rental and money we spent on small gifts.

I feel very saavy about the car rental. We’re flying into one airport and out of another. When I looked into one-way car rental costs for it was going to be like $500 for 5 days! I then played around and found that if we rented a car in the first city for the first 4 days and then returned that car and got another one from a second company just to drive down to the second city that I was able to get the car for about $250. Saving $250 is worth a extra trip to the airport.

Yes, indeed. I can almost taste the sweet New England air.

We’re excited!

Vacation, Blogroll, Aching Desire

August 8, 2007 by

We’re going on vacation today! Off to the East coast. We’ll be back, perhaps even posting, by Monday, August 20th. I noticed that we’re getting a lot of traffic from the frugal for life blog. Since I’ve always liked the site, I added it to our blogroll. I had an ache to reciprocate… If that’s a non-sequiter, see the last post.

The Crass Construction of Desire

August 8, 2007 by

Smooth Persuaders: Leveraging Human Nature.

…Would you mind? The pf community is a great place for otherwise scarce information about debt reduction. Pfbloggers are making a public commitment to debt reduction — a powerful motivator. Perhaps you will post something to the next carnival, respond in kind? Since you’re reading this, it only makes sense.

In a brazen and hamfisted way, the opening section of our debt reduction carnival attempted to incorporate many of the common techniques advertisers and politicos use to separate us from our money:

  • I appealed for a sense of commitment, “would you mind?” by making an innocuous request.
  • I mentioned that there were limited resources in terms of debt reduction advice (patently absurd). That’s an appeal to your fear of scarcity, and the tendency to value things that are scarce, or even might be scarce.
  • I stated that other people are doing it too. In other words, why don’t you? Particularly in ambiguous situations, we model our behavior on what other people are doing.
  • I appealed to your sense of wanting to return a favor. Reciprocity is simply one of the foundations of society, and as social creatures we feel a strong desire to reciprocate. A big part of this is that we generally hate to feel we owe others something! (Funny, given the personal finance context of trying to reduce or avoid debt…)
  • There’s a war going on out there — and if you don’t watch out, you and your pocketbook will be the casualties. That’s one of the central thrusts of Dr. Robert Cialdini. His book has sold over 1 million copies. If you think you are largely immune to the ploys of advertising, read on!

    Cialdini on unconscious modes of persuasion.
    I mentioned Cialdini, a social psychologist, in an earlier post. You can find his books in the business section. (A recent New York Times article “Who’s Minding the Mind?” covered the surprising range and variety of powerful ways we can be manipulated — without any conscious knowledge of what is going on. In the Yale study, people’s judgment was strongly affected simply by handing them a cup of coffee.) Cialdini writes about the ways in which human beings respond automatically, without thought. Here are the ways he outlines that we can be easily manipulated: Read the rest of this entry »

    A Debt Reduction Carnival

    August 6, 2007 by

    Our First Carnival.
    Warning: Many exclamatory statements ahead. I guess we’re just excited, excited, excited about hosting our first ever debt reduction carnival. It certainly has been inspirational to be a part of the debt reduction community, really.

    Would You Consider Helping Another PF Blogger?
    We’ve learned a lot. So, sit back and click. Would you mind? The pf community is a great place for otherwise scarce information about debt reduction. Pf bloggers are making a public commitment to debt reduction — a powerful motivator. Perhaps you will post something to the next carnival, respond in kind? Since you’re reading this, it only makes sense.

    [If the previous paragraph reads like utter dross — please pardon, there’s a reason, to be explained in a later post about marketing that exploits our deepest, largely unconscious needs. Look for it on Wednesday, most likely.]

    For the record, these are in absolutely no particular order! Enjoy.

    Two Investment Mistakes:
    I’m partial to this post, perhaps because it looks into two mindsets, cognitive rules of thumb, heuristics, that can get us into trouble when investing. That’s psychology folks. So read on… It’s hard not to want to spur someone on that has just started a pf blog, whatever the focus — debt reduction, money management, frugality, investment. Check it out!

    Building A Better Snowball:
    Is it possible to resist such a title. This is an awesome post. If you haven’t read it yet, get thee to consumerism commentary and check it out. It’s got Pink Floyd, it’s got a killer financial plan for getting out of debt, it’s got a credit reduction calculator, did I mention it’s got a plan. For my money, setting up the emergency fund is key, this message cannot be crowed off the rooftops enough. Check it out!

    When You Put Your Mind to It:
    Clever Dude is not kidding. He shares his method for destroying $58,000 in debt. There’s hints galore for even the most world-weary debt gladiator. One of my favorites is “We Fix Things Ourselves.” It doesn’t take much — not that I’ve done it — to change the oil in your car, does it? Check it out!

    Free Credit Reports, A Cornucopia:
    Hustlerama offers no less than 15 ways to get a free credit report. Not that I’ve actually ever done this, but this could be the inspiration that finally puts me over the edge. I’m actually kind of worried that some of our behavior has led to some nasty credit comments. Maybe not. An important step in reducing debt: Know where you are, financially. (And for the not-faint-of-heart, scroll down about halfway down his homepage and look in the left gutter — something to roil the emotions of any debt reductionist.) Check it out!

    Alternate Income Streams:
    I’ve ventured into this area, but think it is underutilized. An occasional CD sold on amazon has bought me the occasional lunch. At businesscreditcards, the focus is New Media Ways to Raise Capital. Some tips you’ve probably not considered. If you’ve got a little time, these could really pay off! Check it out.

    David On Finance:
    Has got some well considered thoughts on when to consolidate debt. He also uses the phrase “raw power”, which I think is highly under-used in the pf world. If it was good enough for Iggy… David makes some excellent points about credit unions (not always…) and extra payments (ah, the power!). Check it out!

    Grad Money Matters:
    He calls them myths. I call them heuristics, cognitive shortcuts, rules of thumb. Well, some of them, anyway. There’s a goldmine of good advices and links here. I particularly like what he’s done with the I’ll-never-get-out-of-debt-so-I’ll-give-up mindset. Check it out!

    Mighty Bargain Hunter, Putting Things in Perspective:
    This is a refreshing post that puts a little forest into the viewfinder (rather than trees). Your debt needs the context of your life. Not other people’s lives. An important thing to be reminded of, that. Check it out!

    Sex for $3:
    Can you beat that for a deal? Another whale of a post from one of the funniest bloggers around. If you’re not conversant with the ways of Bianca and Basil, you’re in for a treat. Check it out!

    OOPS: It appears that the Bizarros have “scrapped” their blog. I’m not sure what this means, but hope it’s temporary. The link may not work. Sorry.

    A Book Review. Now I Want to Read This Book.
    Books are invaluable motivators for re-focusing. Get it at the library or one of those great used books sites (I kick myself when I think of all the new books I’ve bought — used books are simply no longer the coffee-stained acid-ravaged items we encountered in less-than-savory warehouses.) And of course, Trish at blogging away debt is a certified maven of personal finance. Check it out!

    Another Lie About Debt:
    Here’s another perspective enhancing article. (Or a link to it.) In the circle of linking, I got this one from blogging away debt. I found it so interesting I broke my goal of having 10 links for this carnival. So now we have a nice prime number. Check it out!

    Am I Really Ready to Get Out of Debt?
    Okay. So Let’s Make It An Even Dozen. NCN submits some interesting points, ready starting points for self-inquiry. I particularly liked the one about being ready to withstand the opinions of others. Let’s face it, turning down lunch because you don’t want to spend money is awkward, in many circles. Check it out!

    Comments?
    We’ve enjoyed hosting this incarnation of the debt reduction carnival. If there was anything you particularly liked or disliked, we’d like to hear about it.

    Privacy? What’s That?

    August 5, 2007 by

    Reading Lady Dough’s mention of privacy reminded me of something I read recently. Privacy may well be a soon-to-be-antiquated concept, if you use a computer. The article, tellingly entitled Invading Our Own Privacy includes this stunner:

    And now, according to Science News (Jan. 13, 2007), because computer users have “characteristic patterns of how they time their keystrokes [and] browse websites,” researchers are learning how to use “typeprints, clickprints, and writeprints, respectively, as digital forms of fingerprints.”

    If you’d like to zoom in further, here’s the Science News article. It includes some curious facts about code-breakers during WWII.

    On the bright, non-Orwellian side, I’m feeling a little liberated. I took an important practice exam that is supposed to be “highly predictive of a passing score” on the national licensing exam, the EPPP. And I got the score I wanted. Since the woman that teaches the prep class is a statistics whiz, I feel fairly confident that the score is predictive. As long as I keep studying. Now I can do so with some breathing room. Ahhhhh.

    We’ll be going on vacation soon. We may vanish until late-August, but we’ll be back with a vengeance. Up soon: The Carnival of Debt Reduction. Hope you can join us, for the carnival, that is.