This week I have had little time for writing since I have been getting our yard in shape to host a graduation party for a good friend of mine. My friend is graduating from MIT on Friday — ten years after most of his classmates. I am thrilled to be hosting this party, and thrilled that my friend is graduating. I think it must have taken an enormous amount of courage, and clearly a great deal of effort, to go back to school after being away for 9 years, to finish an undergraduate degree. I think this is, in many ways, far more difficult than graduating on time.
This friend of mine has been very successful in a pretty decent job for the last 9 years, and that’s what makes this all the more courageous: he didn’t really need to do it. Clearly, having a degree from MIT will certainly help his chances for future employment, but nearly 10 years of experience as a circuit designer and programmer will also count for a lot all by itself.
So KUDOS to you, friend! (You know who you are) and best of luck to you and yours with whatever comes next!
Courage does not seem to be in short supply this week, and I would like to highlight a couple of other cases:
- Some friends of ours confessed this week that they are selling their house. Their house is for sale because they can no longer afford to make the payments. I do not know the details of their inability to make the payments, but I do know that they assessed their situation and made a hard decision — a VERY hard decision. Clearly this is the right choice for them, and I applaud it. I believe that this gives them a new lease on life. Starting over is hard, but without the baggage of a downward spiral of debt and possibly a bankruptcy looming, this family has a great chance of succeeding in the end.
Owning can be significantly more expensive than renting in our market, and if I had it to do over again, I might have looked a bit harder for places to rent rather than buying our current house. It is clear that in many cases, even with the decline in the housing market, that renting is still quite a bit cheaper than buying in our market. I hope that this family will be able to save quite a bit of money to use to buy their next home when the time is right.
Our friends have expressed embarrassment over their situation. I don’t think that they have any reason to be embarrassed. We, as a society, are constantly bombarded with advertising and mass media suggesting how we should live, what we should own, drive, etc. Yet most of us learn no more in public schools about money than perhaps how to write a check and balance a checkbook. Who still writes checks as the basis of their finances? This training certainly does not translate into our credit driven economy and as such, it’s no wonder that failures like this occur — in fact it’s surprising that it doesn’t happen more often. I hope our friends make the best of this experience to wipe the slate clean and use this as a great learning opportunity.
- Lastly, my dear wife showed a lot of courage this week in realizing that she was wrong to spend our money without consulting me. I actually did not even say much to her about how I felt about this, and the next thing I knew she had written a blog to expose her transgression to the world. The 10% that we may have to forfeit for backing out of the agreement she signed is still a lot of money, but I think that it was money well spent if it does nothing but serve as a reminder to both of us that we care for, respect, and love each other enough to consider our partner’s feelings. This is truly a case of “What doesn’t kill us makes us stronger.” (not that this was at all close to “killing” us…)
Have you witnessed any random acts of courage this week? Have done something courageous yourself?
Well this is basically going to be a confessional post….
I did a bad thing the other day…
I broke almost every financial rule we have….
I bought something over $200 without the other person’s consent…
I bought something without thinking about it for at least 24 hrs…
I applied for and used credit without my spouse’s knowledge….
In my defense we have talked about this purchase and had decided that it should be put on the radar as something to start thinking about. Of course in a perfect world I would be able to pay as I go and save along the way. Unfortunately at the company I went to the product is offered as a package deal with a deep discount for prepaying. That is why I should have done my due diligence and realized that this is a huge red flag and reputable companies don’t make you prepay for services.
I broke the unwritten contract we have concerning money and I feel awful about it. This is what I have done to remedy the situation.
After doing a little research (that I should have done prior to signing on the dotted line) I have realized that:
A) Although the woman I spoke with said they do not give refunds, the paper I signed clearly states they do.
B) I have written a letter to the company requesting a refund and have copied the credit card and the Company’s main customer service department.
C) I will wait to see if the company makes good on the refund. I will give them 30 days or until I get the credit card bill. If they do not, I will send the letter to the credit card company and dispute it with them.
I can’t believe I fell for such a scam. I just finished reading Predictably Irrational… I didn’t learn anything, clearly. I have learned my lesson now. This is why we have the 24 hr waiting period, this is why we talk to our spouses before making big purchases, this is why when it looks like it’s too good to be true, it usually is.
I’m not proud of myself but this is something that is very important to me. In the heat of the moment I got excited. I forgot everything I have learned about finances and purchases. I know now that I did not approach the purchase correctly or fiscally responsibly, and I may end up eating a 10% administrative fee because of it. After the matter is resolved I will make an appointment with a reputable, local, licensed practitioner and see if I can save up the money to start the process the proper way, the way we agreed to do so. I hope Mr. MITBeta can forgive my financial transgression. I will try to make it right.
Update: I have heard from the company and I believe they will be issuing a refund minus the 10%. Cross your fingers for me.
Editor’s note: MITBeta forgives ScrapperMom… but is still not happy about having to pay 10% for nothing…
It was an unexciting week in the personal finance blogosphere, but I did manage to find a few interesting articles:
- Lynnae at BeingFrugal.net posted the next installment of her (Not) Keeping Up with the Middle Class review. I still agree that personal responsibility is priority one, but many comments continue to argue that government and big corporations have little influence on the squeezing of the middle class. I disagree — I think these two elements play a large roll.
- The Freakonomics blog had a post on an opportunity for Obesity research using New York City’s new law requiring restaurants chains of 15 or greater to post calorie content in the food. Interesting stuff…
- PaidTwice had a post titled Don’t Wait Until Mortality Stares You Down to Write a Will. What struck me about this was the realization that PaidTwice had a greater chance of dying while riding to and from the hospital than he did while being tested. It is only the fact that the chance of death was outlined in black and white and he had to sign off on his acknowledgment of it. It’s amazing what a difference framing a statistic in one form or another has on perception. Incidentally, one of the last things on our path to financial wellbeing for ScrapperMom and I is to write a will…
ScrapperMom and I eat out together at “expensive” restaurants only a few times a year: once on our anniversary, and once on each of our birthdays. The last few times that we have been to expensive restaurants I have had the following experiences:
- I got into an argument with our waiter who refused to run my credit card to pay the balance of a ~$109 bill after I had already given him a $100 bill (a gift from my in-laws) to cover the better part of the bill.
- I got a dish at a very nice restaurant near our house that was way overcooked (seafood…). I am the suffer-in-silence type (ask me about not seeing a doctor for 3 days after I broke my thumb) and didn’t mention anything to the waitress until dinner was nearly over. She rightly pointed out that I should have said something earlier so that she could bring me something more to my liking.
- We were given the bum’s rush through a meal at a restaurant in Vegas at which the cost was over $100 per meal.
After these experiences, I am inclined to believe that I can have just as bad of a time for much less money somewhere else. And yet, I don’t have that many bad experiences at less expensive restaurants. Perhaps my expectations are simply that much lower when dining at a local brew pub than at Chez Moolah. Conversely, when dining at a nice place, my expectations are much higher and maybe I set myself up for failure.
And yet when good, expensive restaurants are good, they’re really good. These places treat you like king for a day, serve up a wonderfully presented and flavorful meal, and attend to your every culinary need.
As a result of these bad experiences, I have become a bit gun shy about returning to some of these expensive restaurants. Some will never see us again, but my experiences have also shown that we can have good and bad experiences at the same restaurant, which by extension means that any restaurant on any night is a roll of the dice. The only question is: What are the chances that tonight is going to be a bad night, and am I willing to take that chance with my hard earned and closely guarded money? Or should we just stick to lower expectations and lower risk, even when celebrating a birthday or anniversary?
Here are some interesting articles that I read this week:
- Lynnae at BeingFrugal.net started a multi-part book review on (Not) Keeping Up with Our Parents by Nan Mooney. Lynnae was upset at the assertion that people don’t have choices, and I agree with her. However, I argued that the middle class is being squeezed by both corporations and the government and that “middle class” members should be able to take their kids to Disney World now and again. Yes, people make bad choices, but all too often these days many people are taken advantage of by greedy companies under the full knowledge of our government. See my review on Maxed Out for more thoughts on this.
- The interview with the author’s of Nudge at the Freakonomics blog was very interesting. It’s amazing what a difference can be made simply but changing the framing of the question or the default choice for such things as organ donation and 401(k) contributions.
- At MyTwoDollars.com guest poster Tisha Kulak discusses the pros and cons of co-signing a credit application for your children (or anyone else for that matter). Most of the comments conclude that one should not co-sign for one’s children. I tend to be less black and white about just about any issue. I suggested that co-signing for a credit application is acceptable as long as it’s not the first lesson your child is getting in money management and responsible use of credit.
- Paidtwice at Paidtwice.com argues that All Funds are Emergency Funds until you have sufficient reserves. We have a fund into which we make monthly payments towards annual bills (insurance, taxes, etc.). This article reminds me that we don’t have to have a whole year worth of payments for each annual payment before paying out of the account. All we really need to have is enough money to cover the biggest bill.
- Madison at MyDollarPlan.com writes about the lessons learned while filing her taxes this year. Madison and I both had issues with Roth IRA conversions this year that required recharacterizing contributions due to ineligible conversions or contributions. The recharacterization was easy, but I’m still struggling with how to fill out the necessary tax forms. I have not yet filed our taxes this year (we’re getting a refund, so we’re not late…). I’d like to thank Madison for her help to me on this sticky issue.
Off topic:
- I enjoyed reading the article by Lenore Skenazy here and the follow-up here, as well as Ms. Skenazy’s NPR Talk of the Nation Interview which featured a great quote: “It’s not like we threw him into the East River…”. Her thoughts about Free Range Kids sure has generated a firestorm of comments. ScrapperMom and I find ourselves on opposite sides of the issue, though we are not radically left and right on it, but rather both closer to the center.
photo figure credit: Felipe Skronski
