Archive for the 'Social Psychology' Category
In the first week of June, we had the first of what could be many heat waves of the summer. A Saturday afternoon errand run resulted in a horrific discovery: the air conditioning in my 2001 Jetta was not working — at all. There had never been a problem with getting cool air out of the vents in the past. “Oh great!” I thought, “how much is this going to cost us?”
Since the Jetta for the most part is my daily driver (primarily because it gets better fuel economy and I drive further on any given day than ScrapperMom) I put the lack of A/C out of my mind and lived with it. Mornings are cool enough, and opening the sunroof was enough to keep things comfortable. In the afternoons on the way home, the hottest part of the day was behind us, and windows down, sunroof open, and 40-50 miles per hour is enough to keep me cool for all of my 20 minute commute. In fact, some days it was nice to “thaw out” after a whole day spent in the air conditioning of my office.
One day recently, however, ScrapperMom and I had to trade vehicles for the day. On that day in particular she had to drive with our two nieces and our daughter — and it was hot that day. When I got home I got the directive: “You’ve got one week to get that air conditioning fixed, or I’m not trading cars until it is.” Fair enough. It one thing to suffer through something of your own choosing, but it’s quite another to subject your daughter and nieces to the excessive heat.
As it happened, I had to get my yearly inspection sticker for the Jetta, so while I was getting that done, I asked the technician if the garage next door did air conditioning repairs. The tech said that it did, and so I went over and made an appointment for the next day. The next day I dropped the car off at 8am and 7 hours later got the call: it’s all set, come pick it up.
I didn’t dare ask on the phone how much the repair cost, but when I arrived to retrieve the car I got the bill for $117. I was expecting more, especially considering that labor rates alone today can be $50-$100 per hour. The bad news is that they didn’t actually fix anything: they pulled a vacuum on the system twice and it held steady for over an hour each time. The good news is that apparently nothing is broken or leaking. So they recharged the system and added some dye to it that will show up under a UV light should the system stop working again.
ScrapperMom and I are happy that the air conditioning is working again. However over the last week I’ve found that I got used to not having the air conditioning. On the way home from work I’ve been putting the windows down and opening the sunroof — even though it’s been 90 degrees for the last 3 days.
The whole point of this post is that the misfortune of being without A/C quickly taught me that I didn’t need A/C (most of the time). This should save me some small percentage in fuel costs this summer. But it also makes me wonder what other “recalibrations” that I or we could undergo to save money and energy, live more simply, or all three. For starters, we could probably set the A/C in our house a couple of degrees higher this summer — or forgo using it altogether whenever possible and use fans or natural cooling instead.
Have you “recalibrated” lately? Are you driving less or shopping differently? Let’s hear about it!
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The 4th of July in the United States marks our independence from British rule. It’s also an appropriate day to declare Financial Independence. What is financial independence? It’s probably something different to each and every person.
For me, financial independence would be the freedom from having to answer to someone else for my livelihood — in other words: I don’t want to have a boss anymore. It’s not that my boss is that bad — he’s pretty good actually (had to say that in case he’s reading… ;). But the simple fact is that on any given weekday I have to get up and go to work for him and not me.
A second level of financial independence would be the freedom from having to work at all — having all of my income come from passive sources. This is a typical definition of retirement where one’s income is derived from dividends and the sell off of substantial investments, social security, rent payments, etc. This would free me up to do what I want to do rather than what someone else wants me to do.
So how do I get from here to there? I’ve been thinking for many years about starting my own business, but that’s about as far as I get. I’ve had a million business ideas over the years, but never had any confidence that someone would actually buy my service(s). The major thing that I’m missing is capital to start the business and/or the funding to live on until the business is up and running and turning a profit.
Therefore, in the mean time, I am focusing on the accumulation of capital part of the problem. With just $100 more each for ScrapperMom and I, we will have fully funded our tax advantaged Roth IRA retirement accounts for the year. So today I will make a new first step on my road to financial independence: I will create savings accounts to use for funding a future business venture, a single family home, and a late model used car. We have no specific time horizon for these expenditures yet, but first things first. Once these accounts are created, I will set up an monthly automatic deposit into each of them following the “pay yourself first” principal.
To help accelerate these savings goals I will begin to divert some of the money that we have been using to pay down low interest debts. I have written previously here and here about the question of investing/saving or paying down low interest debt. So today on Independence Day, I will finally put my plan into action.
Regardless of one’s definition of Financial Independence, most of us are probably not yet financially independent. But as Lao-tzu, Chinese philosopher (604 BC - 531 BC) said:
“A journey of a thousand miles begins with a single step.”
So take a few minutes today to decide what being financially independent means to you, and then make a single step on your journey. It might be your first step, or your middle step. Maybe it’s even your last step. But take a step today, and then share your definition of Financial Independence and the step you took today in the comments section below.
Happy Independence Day to Everyone!
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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?
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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…
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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…
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