Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective

Archive for the 'Values' Category

Ecto-2

Creative Commons License photo figure credit: AdamL212

When I was a kid my family had a Commodore 128 computer.  The vast majority of the time spent on this computer was in playing video games.  We had a game called Ghostbusters which, of course, was modeled after the hit movie of the same name.

The object of the game was to respond to calls of high paranormal activity in buildings all around New York City.  At the start of the game you are given an allowance of funds with which you can buy gear for catching ghosts.  The amount of money that you start with is enough to buy the cheapest car and a minimum of ghost catching gear — just 1 Slimer trap, and not even enough money to buy an Ecto-1.  When the trap is full, you have to return to Headquarters to empty the trap.  You get paid for each ghost that you catch.

As the game progresses, the Keymaster and the Gatekeeper arrive on the scene.  These two wander rather aimlessly around the city until they finally arrive at Zuul.  When they arrive at Zuul, if you have caught enough ghosts (it was never clear to me what metric was used to determine whether you had caught enough), you are given the opportunity to sneak through the legs of a dancing Stay Puft Marshmallow Man, take a trip to the roof of Spook Central, cross the streams and win the game.  If you manage to do all this, you get a code that you can use the next time that you play so that you can enter the game with more money.

What does all this have to do with personal finance and avoiding lifestyle inflation?  Well, it was my experience that no matter how much money I earned in the game, it never did me any good to buy more and better equipment.  Some of the options available were 4 different cars, each faster than the next, as well as the ability to buy several traps.  Having more than one trap allowed you to catch more than one ghost before having to return to headquarters to empty it, and having a better car allowed you to get from ghost call to ghost call and back to headquarters much faster.  It seemed, however, that the more money that you spent up front, the harder and faster you had to work to catch enough ghosts before the Keymaster and the Gatekeeper got together at Zuul. In fact, it was so hard to catch enough ghosts, that I was never able to beat the game by using anything more than the most minimal gear available.

I’ve been thinking of the parallels between this game and personal finance for a long time, and more lately as I read the popular personal finance book Your Money or Your Life by Vicki Robin and Joe Dominguez (more on that later…).  I’m finding it less and less useful to want to make more and more money if one of the big problems that it’s going to create for me is to need to keep making more and more money to support our lifestyle.  I would much rather be happy with what we’ve got and use any money that we happen to make above and beyond what we need to boost our retirement savings and lower our retirement age.  Coming to realize that we don’t need more stuff or a bigger house to make us happy has been a very freeing realization, and one that will allow us to maintain our lifestyle more easily over time.

Nail Biting

Nail Biting: A Bad Habit Creative Commons License photo figure credit: coxy

We’ve had a busy few months:

During this time, we have not paid very much attention to our finances.  Most of our finances are automated, so our bills still got paid on time, and I know that we’re generally doing okay.  However, I really can’t say whether we’re still saving enough, or even whether we have anything to save.  

Our busyness is really no excuse for taking our proverbial eyes off the ball here.  The truth of the matter is that I’ve had my head in the sand since shortly after ScrapperMom lost her job.  I really did not want to have to acknowledge the drop in income and figure out how to live without it.  As a result, I haven’t looked out our Spending Plan in months, I have no idea whether we’re spending more than we earn.  I do know that we have not yet made any retirement contributions for 2009 even though we are already 13% of the way through the year, and that’s starting to bug me.

Good personal finance is a habit like any other.  Breaking bad personal finance habits takes time, dedication, and work.  We’re all susceptible to falling back into our old habits, especially during times of stress, inattention, etc.  I gained a few pounds over the holidays (no excuse again…), and I’ve been working to take the excess off again.  Similarly, it’s time to get serious with our finances again.

Tomorrow I will draw up a new Spending Plan.  I will find money to contribute to our Roth IRAs, even if I have to take it out of our savings.  I will forget about our spending over the last month or two and focus on the future.  I will get back into the habit of good personal finance.

Do you fall back into old habits?  How do you get yourself back on track when you do?  Share your story in the Comments section below.

10.03.2008
Tivo

Creative Commons License photo figure credit: billaday

While on vacation, ScrapperMom and I discovered a curious thing. We were watching a children’s TV show to keep daughter #1 busy and suddenly the show stopped and changed to voices and images that encouraged us to buy a bunch of stuff that we don’t need. Amazed by such a brazen attempt to sell me something, I asked our host about it who informed us that what we were watching were “commercials”.

Ah yes!  Commercials!  I had forgotten that such things still exist.  You see, ScrapperMom and I purchased a Tivo back in 2003, and for the last 5 and a half years have been commercial free.  And it has been wonderful.  After watching way too many of these while on vacation, I had forgotten how insidious and manipulative they could be, and am glad that our daughter is still too young to be enticed by a toy dog that can roll over by itself, or a princess on a horse that can walk by itself.

I am often asked by friends, coworkers, and family if I have seen a certain commercial that may be funny or entertaining in some way.  “No,” I usually say, “we don’t watch commercials.”  Originally our disdain for commercials was simply practical: commercials account for 27% of total network TV time.  We quickly found that with Tivo we could watch 30 minutes of TV in 22 minutes. We filled the saved 8 minutes with more interesting things, like reading, blogging, etc.

Having seen so many commercials during vacation, however, it has become abundantly clear to me that having Tivo saves us money.  Exposure to advertisement makes you aware of things that you didn’t know you needed.  It’s hard not to keep up with the Joneses when you are constantly bombarded with indications that you are too fat, too thin, too ugly, too short, too bald, don’t drive a good enough car, deserve a great vacation, etc.  But life is not that bad when you don’t have all these unreal standards against which to measure yourself.

Tivo is near the top of our top 10 list of must have gadgets, and it’s nice to see that after having it for so many years, we are still realizing new value in it.

Hotel Pool

photo figure credit: ScrapperMom

Michelle asks:

"How was the vacation?"

In a word: Fantastic!  We got to meet the newest member of our extended family (on that side, anyway…) who is already one and half!  We got to catch up with family that we haven’t seen in over 2 years.  We got to know new wives, girlfriends, and old friends a lot better.  Thanks to all of them for taking the time out of their busy schedules, providing places to stay, cooking dinner, etc.  This picture is the pool at the hotel in Orlando, which the kids loved.

As a follow up to my original post on this topic, I thought I would offer a post-trip analysis on how we did financially. It’s important to note that while we put nearly everything below on our rewards credit card, it will all be paid off by the end of the month because we had already set aside the funding for this trip.

I’ll start with the area in which I feel we did the worst from a frugal perspective: Dining out.  In total we purchased 9 meals out and they totaled $378.  This breaks down to $42 per family-meal, or $17 per person per meal if we count dear daughter #1 as a half person who shared what we ate most of the time.  Given that we ate a total of 22 meals, 9 represents only 40%.  We easily could have converted a couple of dinners out into dinners at home, but then again, we were on vacation…  We did manage to convert a couple of these meals into lunches the next day since the portions were often too big! I should also point out that this total included drinks with meals as well, which as you know can get pretty expensive.  During one meal we paid close to $9 for an 8 ounce rum and coke!

Relating to dining, our grocery bill came in at $141.  As described in the initial article, we had a lot of opportunity to prepare meals, especially breakfasts and lunches.  If you put all of our food spending together, the per person per meal average comes down to $9.50.  The grocery bill includes a 12 pack of beer that we brought to a party, as well as a lot of bottled water that we wouldn’t normally buy at home, but the local water was terrible!

In the category of transportation, we got a great deal on airline tickets: we purchased 3 seats for $597 on JetBlue.  The in-flight entertainment, especially Animal Planet and the XM station for Radio Disney went a long way to keeping our 21 month old busy on the flight each way.  In total, we spent $378 (Yes, exactly the same as on dining out!) on the rental of a mini-van and the fuel we needed for a week.  We drove the van over 500 miles since we went down to Disney, and much of the time the van was nearly at capacity with 4 adults and 2 toddlers in car seats.

Our short jaunt to Disney cost us both on the ticket side and on lodging.  We somehow thought that we still had tickets that we could use at Disney, which would have given us “free” entry to the park.  Unfortunately this was not the case, and we ended up having to buy 2 adult, single day passes for a total of $160.  Yes, that hurt.  The Magic Kingdom is a great place, but honestly I think it’s looking a bit dated, and I’ve been to a number of better parks in recent years that cost a lot less than this.  But it’s the American Way to take your kids to Disney, right?  The lodging for one night was not bad at $90.  This was our share of the split on the condo that we shared with my cousin and his family.

We spent a total of $23 on items that didn’t fit into any of these other categories.  This included a Christmas ornament from Disney, and a couple of magazines at the airport.  We successfully resisted the urge to spend $17 on a fan-assisted squirt bottle in Disney on a 93 degree, scorching hot day.  We also avoiding having to purchase every cute stuffed animal that DD#1 got her hands on.

Last, and far from least, we spent $720 at the Dog Kennel.  As outlined in this article, our dogs are expensive.  It definitely hurts to have to budget 30% of every trip we take to kenneling the dogs, and it’s the first thing that pops into my head whenever we consider a trip.  We spent a few years trying to find the right mix of costs for kenneling.  In this business, the saying is true: You get what you pay for.  We were horrified upon retrieving our dogs from a budget kennel on one trip, and they didn’t want to come home when we tried to get them from a super-expensive kennel.  Eventually we found a “just right” kennel that treats them well — but not too well.  This is certainly an area that will factor into any future pet decisions.  It’s a good argument against having two pets.

In total, we spent $2487.  This is a lot less than ScrapperMom and I spent on a lavish Quebec trip a number of years ago, but more than we have spent on a vacation in some time.  Was it worth it?  It’s hard to put a price-tag on the experiences that we had.  If pressed, however, I would have to say that the cost was worth it since it meshes with our values: notice that we have only a couple of magazines and a Christmas ornament to show for this expenditure.  We don’t place a high value on “stuff”, but rather experiences and time spent with family and friends.  You can’t put a price on that.  This trip would have been a lot less fun if we just went to Florida by ourselves…

We’re already looking forward to a mini-vacation in November as we travel to New Jersey to celebrate a wedding!

07.26.2008
Feeding the Firefoxes

Feeding the Firefoxes
Creative Commons License photo figure credit: Glutnix

It’s been another busy week in the MITBeta and ScrapperMom household. But I’m feeling like things are a little more under control since I started reading the now well known but still great book Getting Things Done by David Allen. I’ll have more on that in an upcoming post, but in the mean time I wanted to share some of the best articles that I read this week:

In National News:

With this week’s hike in the minimum wage, Nickel examines the historical minimum wage level relative to the value of a dollar and finds that those on minimum wage have been seeing the value of their salaries fall for the last 25 years.

The Freakonomics blog wonders are we a nation of financial illiterates?  I’ll reserve judgement for now, but what do you think?  Did you answer the quiz questions correctly?

Personal Finance

Shilpan at successsoul.com reposts Warren Buffett’s 7 Secrets for Living a Happy and Simple Life.  There’s some great advice here that really forms the basis for most personal finance: don’t try to keep up with the Joneses, be happy with who you are, not what you have, etc.

Mrs. Micah writes about an error in her paycheck and how thankful she is that she is not living paycheck to paycheck.  This reminded me of something similar that happened to ScrapperMom a couple of months ago.  Mrs. Micah also has some great tips for breaking the paycheck to paycheck cycle.

Home Economics:

EconomistMom writes about “a big family infrastructure day” that took a serious bite out of her bank account.  She makes a couple of great points in this article, especially in explaining why the health care problem is such a difficult nut to crack.

J.D. asks readers to help a fellow reader who asks “how can I get my wife to talk about money?“  Chronic disagreements about money are cited as a leading cause of divorce.  However many astute readers rightly point out that it’s never just about money.  As near as I can tell, open communication is the only way to truly make a marriage work.  In fact, that’s the best way to make nearly any interpersonal relationship work.

Social Psychology:

Steven Levitt at Freakonomics shares a great anecdote about performing a blind taste test to see if his colleagues could tell the difference between expensive and more frugal wines.  Can you guess what the results were?  Apparently there is now scientific evidence to support the idea that taste can be influence by pre-conceived notions about something.  I wonder if this means I can think my way into liking onions…

Giveaways:

Frugal Babe is giving away a $100 jewelry gift card to Diamond Nexus Labs in the spirit of switching away from mined diamond based bling.

Baby Cheapskate is giving away $200 worth of BumGenius cloth diapers.  As you may know, using cloth diapers is a great way to save money and save the environment.