Monthly Archives: August 2008

Making Financial Preparations Ahead of Surgery

Posted on by  at  6:00 am
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Photo courtesy of Frenkieb

Thanks to all of you who have taken the time to write me directly, or comment in various posts, with prayers and well-wishes for my mom.  Her surgery is scheduled for today, August 25th, and could last for several hours.  I may be away from the blog for extended periods this week, so if I seem slow to respond to comments or emails, it is not because I’m not appreciate of them.  I’ll post an update on her condition when I can.

The last couple weeks have been a scary time for all of us, as my mom was diagnosed with a life-threatening condition that will require surgical intervention.  In fact, by the time this post is published she will be undergoing surgery.  It has been more than a year now since my own shoulder surgery to repair a torn rotator cuff, and remove a large bone spur from my shoulder joint.  I thought it might be a good time to review the types of financial preparations we both have made in the unlikely event of a negative outcome.

Emergency Fund

In the weeks leading up to surgery I suspended all debt repayment above and beyond my minimum payments.  With the extra money I added to my emergency fund, as sort of a first line of defense in case of unexpected medical costs, or a lengthier hospital stay than planned.  I also wanted my wife to have a cash cushion in case something happened and it took time for insurance/health benefits to be processed.  By the way, it is a good idea to have your spouse, or someone else you trust, listed on your checking account for this very reason.  If you are currently the only one listed on your checking or savings account you may want to take a spouse or friend with you to the bank and have them added to the account.  This can usually be accomplished by you both signing a “signature card,” or in some cases a new, joint account must be opened.  Either way, it is a good idea for someone else to have access to your money in an emergency situation.  Be sure this is someone you trust will not clean you out without permission!

Living Will/Advanced Directive

When I went for my pre-op appointment I was given the option to file an advanced directive with the hospital. After reading over the informational sheet provided I thought this would be a good idea because I could list who I wanted to be involved in decisions regarding my care should I not be able to make them for myself.  I also wanted to make clear what steps I wanted taken on my behalf  (food, hydration, life-support, etc.).  By making these choices up front I was relieving loved ones the burden of having to make such tough decisions in the event something went dreadfully wrong during the surgery.

Update Your Will

I am by nature a procrastinator.  I joke that I work best when the pressure is really on at the last minute, and if it wasn’t for the last minute, I wouldn’t get anything done.  Unfortunately, the last minute is not the time to wait to get a proper will in place.  In fact, because any of us could go at any minute, it is a good idea for everyone to have a will in place–particularly those with large assets and/or children.  Take some time to make sure your last wishes are known and well-documented, and that someone knows where to find that document.

Updated List of Accounts

A couple weeks before surgery I listed all of my accounts in an Excel document (legal pad will do), including contact information, account numbers, current balances, payments due, etc.  I also included some general instructions on who to contact for insurance policies and indicated where the hard copy certificates of insurance were located.  My wife and I reviewed this list prior to my surgery and she kept a hard copy in a designated area at home.

Put Your Bills on Autopilot

If you feel like you are the last person on Earth not using Online Bill Pay, do not fear, you have company.  I don’t know if it because I am just the world’s slowest adopter, or because strangely enough, I actually like paying bills, balancing my accounts, etc.  Still, it is a good idea to put as many of your regular payments on “auto pilot” while you are recovering from surgery.  Most companies now allow you to schedule payments ahead of time, and most banks offer a free (or nearly free) bill-paying service where you can schedule payments well in advance of their due date.

I know it seems morbid to discuss planning for worst case scenarios, but it really will help loved ones handle your affairs if you are gone, or otherwise unable to handle them yourself.  Hopefully all will go smoothly with your procedure and you will be back home before any of these contingencies would have to be implemented.

Going On a Frugal Safari

Posted on by  at  6:00 am
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Sometimes you just need to get away.  A change of scenery, a different routine, and some quality, uninterrupted time with loved ones can work wonders when you are feeling stressed.  Unfortunately, the demands of work and school often interrupt the best laid plans for week-long vacations, so we decided this year to end summer with a short day trip.

The great thing about day trips is that a short ride can often reveal fun things to do in your own backyard (well, close enough).  No expensive overnight hotel charges are required, and to keep things frugal you can even take along food to save on expenses.

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This was the only time I actually feared for the condition of our car’s exterior.

Last weekend we ventured out a couple hours to a wild animal park that lets visitors drive thru and feed the animals from your car.  We planned a trip to the zoo this summer, but my wife’s ankle is still a little bothersome, so the idea of driving around to look at the animals seemed like the next best thing.  We surfed around online to find ticket prices, and unfortunately there were no discounts for online or advanced orders.  The morning of the trip my wife packed up a cooler with a few sandwiches, bottles of water and enough snacks to keep us far away from McDonalds drive-thru windows.  The park’s website indicated they had picnic tables and even a covered shelter so we opted for the picnic as opposed to the restaurant adjacent to their gift store (can you say $7 hamburgers?).

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Amazing creatures, and surprisingly gentle when fed by hand.

The ride over was easier than we imagined and the kids had a blast seeing the various animals in their natural habitat.  It’s not every day you can lower your window and feed a giraffe!  The cost of the tickets, the food (for the animals), and the gas there and back totaled less than $100.  Considering we would spend nearly as much on dinner and a movie for a family of four I thought this seemed like a reasonable expense.  We probably shaved $30 off that total by bringing our own lunch.  We also saved a bit of money by driving our own vehicle, rather than renting a zebra-painted rental for an extra $15.  Of course, this is one benefit of driving an older vehicle.  I didn’t see too many shiny BMWs weaving through the thousand-pound bulls smearing slobber and mud all over their windows.

We arrived home Saturday evening and gave our car a good washing!  Our dog didn’t seem to happy with the scents she was detecting and probably wondered where the heck we had been all afternoon.  A fun time was had by all, and it was definitely a “do-over.”  The short trip also gave us some ideas on how to save on future “frugal safaris.”  Here are a few of our ideas:

  • Pack a picnic lunch.  Call ahead and make sure it is acceptable to bring in your own food in a small cooler.  Some places frown on this, but many zoos and animal parks are open to picnics-even providing picnic tables or shelters.  If the place you are planning to visit does not allow outside food, try to grab a bite before entering, or pack a lunch and eat it in the car on the way (we call these “rolling picnics”).
  • Buy tickets in advance if possible.  Some places offer discounts for online purchases, or purchases in advance of the day you are visiting. Even if you don’t get a discount, it is usually worth ordering tickets ahead of time and saving yourselves some time by not having to wait in line to buy tickets.
  • Stock up on hand sanitizer!  I probably should have listed this one first, especially for zoo trips and safari rides.  Animals are cute and cuddly, but they are dirty creatures out in the wild (the white rhino we saw was actually brown from laying in the dirt all day).  Before unpacking the picnic be sure everyone lathers up with some hand sanitizer–the next best thing to soap and water.
  • Fill up in your home town.  Often times gas stations in tourist destinations (or near major attractions) charge a premium over other stations.  It’s a good idea to fill up the tank before starting out for your destination, and holding off until you are well away from any tourist areas before topping off for the ride home.
  • Don’t forget a camera, and extra film or batteries.  Seems funny to recommend bringing film–I doubt many people use film cameras anymore.  If you have a digital camera, be sure your memory card has plenty of room and you have a backup set of batteries.

Enjoy the safari!  And whatever you do, don’t watch Jurassic Park the night before your trip!

Weekly Roundup: Fay, Fay, Go Away Edition

Posted on by  at  6:00 am
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Photo courtesy of laffy4k

Things are getting soggy here in the south with Fay deciding to take up residency in the state of Florida.  We badly needed the rain, but this is a little excessive.  The worst thing about the rain is that I didn’t get our grass mowed in time, so our yard will be a soggy mess for days.  Hope everyone is safe and sound.

The Roundup

5 Things Scuba Diving Taught Me About Living Life to the Fullest.   Jeff says, “There are a lot of parallels between the principals of scuba diving and how to live a rich and fulfilling life.” His article defines these “parallels,” and makes a lot of great points along the way.

Save Money at Restaurants.   Money savings strategies for dining out are becoming more and more valuable as the costs of food rise.  These increases will be felt at restaurants much more than at grocery stores.

40 Positive Effects of a TV Free Week.  I’m convinced our lives would be a little better if we unplugged from the television more often.  We scaled back from the 100+ channel digital cable, to expanded cable, to a basic cable package with ten channels.  We couldn’t be happier!

Investment Management Tips for a Tough Stock Market Climate.   Number one tip, “Go against the crowd.”  I love this advice when it comes to investing.  When others are selling right and left it is a great time to look at bargains and dollar-cost your way into a great stock or fund.

Canning is Making a Comeback.   Canning could be making a comeback as people again start to appreciate the fine art of stockpiling your own preserves, vegetables, etc.

What?  Me Stressed?  A Stress Test and Tips to Reduce Stress.   This health scare involving my mom has been stressful.  Unfortunately, one of the first things I quit doing is eating right and working out.  I immediately start eating crap and skipping trips to the gym.  Hey, at least I can admit it!

Five Myths About Simplicity Busted.   Most people look down on simple living because they think it means a life of misery.  Quite the contrary–those truly living a simple life are some of the happiest, most content people you’ll ever meet.

38 Random Thoughts on Building Prosperity.   My personal favorite?  “Don’t let STUFF rule your life.”  Amen!  Once you get a handle on “stuff” it makes it much easier to live a prosperous life.

What To Do With My 401(k) After I Quit.   A thoughtful discussion on what to do with a 401(k) after leaving the company.  Hard to go wrong with the advice to roll it into an IRA to retain control and provide the best investment options possible.

This is the Right Personal Finance Book for You.   Sort of a personal finance book roundup of its own, this post provides a great list of finance reads.  Trent even went the extra step of suggesting a book for various stages in personal finance education.

Poll:  Do You Save in 401(k) Without Company Match?   I personally do not.  I invest through the match and then invest additional retirement funds in a Roth IRA. While I lose some pre-tax benefits now, I’ll enjoy tax-free withdrawals on earnings down the line.

Why You Need a Will and the Basics of Estate Planning.   Wills and sufficient life insurance and two things people can put in place right now to benefit loved ones after they are gone.  This is not a time to be cheap; pay what it takes to get a proper will drawn up and do not underinsure in an effort to save a few bucks on premiums.  Your family will appreciate it.

7 Sneaky Ways Your Health Insurance Can Save You Money.   A lot of people leave benefits on the table in the form of unused annual physicals, paid-for dental exams, etc.  But the savings don’t stop there.  Time to hunt down my own employer benefits and give them a thorough reading.

Generation X Feeling Sandwiched Between Boomers and Generation Y in the Workplace.  Generation X is right smack in the middle of Boomers setting up for retirement, and Generation Y entering the workforce.  With Boomers working longer it makes for a strange generational mix in the labor force.

Paying Off Debt.   Changing your money habits has to happen from the inside out, and this article details what’s required to do just that.

Best Credit Cards for College Students.  This one goes against the conventional grain and suggests that college is a good time to “charge wisely and build your credit history.”

11 Cheap (and Free!) Toys for Young Children.   Often times it is the simplest things that kids enjoy the most. This is a great list of cheap ways to make toys out of everyday items around the house.

I’ve got a fun post lined up for the weekend, and I’ll try to sneak in a Sunday Conversation to answer the questions you asked a couple weeks ago.  

How to Go Broke Being Frugal

Posted on by  at  6:00 am
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The following is a guest post from Sara of OnSimplicity.net, one of my personal favorites in the simple living genre.  Be sure to visit her site, and sign up for free updates via feed or email while you are there.

So you’ve been working incredibly hard at being frugal, but your bank account looks no better for the effort. In fact, your situation seems worse off than before. What went wrong?

You may have fallen into the trap of going broke by being frugal. If your extra efforts are leaving you with no extra cash, check for these culprits before throwing in the towel.

High Start-Up Costs

Some frugal habits have a break-even point that’s a few years in the future. If you’ve racked up expenses, try to determine whether these costs will be made up in the future. Club memberships (such as Costco) might be one start-up cost that will take a few months to work in your favor. Similarly, it can take years to break even after cutting out the lawn service and investing in a good mower, or purchasing a fuel-efficient vehicle.

The Solution? Estimate your break-even point (the time when the savings incurred will likely outweigh the expenses).  Use that number to decide if your new frugal habit is truly worthwhile. If it is, take comfort in the savings you’ll be banking in the future. If not, it may be time to rethink your strategy.

Not Shopping for a Bargain

Even if a frugal habit can save you money in theory, you may still need to make an effort to save. Take sewing as the perfect example.  With a sewing machine and some practice under your belt, you can sew fantastic items for a few bucks apiece. On the other hand, between expense fabrics and non-sale patterns, you can also wind up paying $50 to make a dress you could have purchased for $25.

The Solution? Make sure that you shop around for components and equipment, whether you’re gardening, cooking, sewing, or doing your own auto maintenance. Look for combinations of high quality and low to reasonable prices to boost your bottom line.

Rewarding Your Efforts Too Often

You’ve been really good this month, so you totally deserve to splurge a little, right? Perhaps. Splurges and indulgences are a key part of keeping yourself satisfied and on-track, but if you’re not watchful, they can quickly erode any savings you’ve accrued—and then some.

The Solution? Keep track of your splurges. Put a smiley face on the calendar each time you indulge, keep a monthly tally sheet, or write it in your journal. If your frugal habits aren’t helping you make any financial headway, check back and see if “deserved” treats are eating up the savings you would have built up. Then, continue as before or scale back as needed.

Never Pay Credit Cards Before Mortgage

Posted on by  at  6:00 am
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The last couple years have proven to be tough times to be a homeowner. Home values around the country have seen a decline, and many homeowners are now feeling the squeeze from signing up for adjustable rate mortgages.  Many homeowners are having a hard time coming up with mortgage payments, while meeting minimum payments for cars and credit cards (even low interest credit cards often have high minimum payment requirements of 2-3% of the outstanding balance).  Something has to give, and all-too-often it is the house that falls behind.

The Squeaky Wheel Gets the Oil

There are too many stories out there about homeowners who kept their credit cards current as they fell behind on their homes, ultimately leading to foreclosure.  Credit card collectors are notorious for their obnoxious, high-pressure techniques, and unfortunately they are also often the most successful.  I used to work in a call center, and I’ve seen these collection practices up close and personal.  Believe me, it wasn’t any more fun for me being on the other end of the line, but some people seem to enjoy abusing others over the telephone.  I was raised on the idea that you catch more flies with honey than with vinegar, but in the collections world this just isn’t true.  The best way to collect money on a credit card is to scare the cardholder into thinking they will be sued, or to pester them to the point that they finally pay just to get you out of their lives.

Shelter and Transportation Before Capital One or American Express

The problem with paying credit card companies when you are in a financial bind is that with only so much money to spread around, something else is going to suffer.  I’m not advocating you neglect to pay a just debt, however I am advocating that you sit down with the pile of money you have to work with and put life necessities at the top.

I’m a fan of the Dave Ramsey radio show. I don’t agree with 100% of what he advises, but he is right on when it comes to this subject.  When he fields calls from people who are being bullied by credit card collectors he advises them to list out their monthly expenses beginning with life-sustaining expenditures first:

  • Housing
  • Food
  • Lights
  • Transportation

Notice credit cards weren’t part of that lineup.  If you have money left over after paying those four basic categories, then by all means make your credit card minimum payments.  If you don’t have anything left over, do not stress out about what Bank of America might do to your FICO score, or worry that Discover Card is going to garnish your wages.

If you receive a call from a nasty credit card collector, explain in a calm manner that you have budgeted your bills for the month and unfortunately you are not able to make a payment this time.  When they start to scream and yell and call you names, simply put the phone down on the table and go about your business.  If you get emotional and yell back at them, they win.  Getting you upset is their objective, so don’t let them win!

When your financial situation improves make plans to catch up on outstanding bills, again putting credit cards last.  House and car payments come first, and with anything left over you can begin to catch up on outstanding credit card debt.  The bottom line is to play by your rules, not the credit card collector’s.  After all, you are the one that has to suffer the consequences of missing a house payment, or getting your car repossessed.