Monthly Archives: October 2008

Domestic Violence Statistics On the Rise As Economy Weakens

Posted on by  at  6:00 am
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Here in my home state a recent Commission on Family Violence study reflects the number of deaths related to domestic violence is up nearly 33% over last year’s totals, and those figures are only through September.  According to a number of counselors, and those running shelters for victims of domestic violence, it seems a weakening economy leads to more incidents of violence against domestic partners.  Just a couple weeks ago a neighboring community was rocked by a murder-suicide in a quiet, affluent neighborhood, and the authorities suspect financial troubles were a motivating factor.

Economic Stress Leads To Violence

The classic case of domestic violence typically involves violence against women committed by a male partner.  Of course, this is not always the case, and there are many different forms of domestic abuse.  In a struggling economy where it is getting tougher to make ends meet, and where many breadwinners are concerned over job stability, the pressure can lead to domestic violence in the home.  The recent report is a good reminder that in tough times we should be holding each other close, not pushing each other away.

It is normal for couples to have different opinions on how to manage their finances.  For instance, one partner is usually a “spender” while the other is a “saver.” However, in lean times you have to find some common ground with your spouse, whether it be for basic survival or figuring how to maximize your earnings and stretch your dollars further than you ever have before.  The bottom line is it takes teamwork, and both partners have to be on the same page.

As Budgets Grow Tighter, Victims Have Less Financial Means to Get Away

With savings dwindling and monthly expenses going up, victims of domestic violence often lack the financial resources to flee their abusers.  This is particularly true in cases of a single income households where only one partner controls the checkbook, and the other is unable to accumulate money to flee.  Fortunately, there are shelters in many areas that will take in victims of domestic violence, and their children, but even their resources are strained due to a drop in donations during economic downturns.

Seek Help, Before It Is Too Late

If you are struggling financially, and feeling the pressure build, find someone you trust to talk to–either a professional or just a good friend.  Sometimes it helps to have this “sounding board” to vent frustrations, without taking them all home to your spouse.  If you and your spouse are fighting over money, consider attending marriage and/or financial counseling so an objective third party can help you work through the various issues in your relationship.  If you are currently in an abusive relationship, please seek help immediately from a friend or family member, a shelter, or even law enforcement, if necessary.  Domestic violence is not something to be taken lightly, and as the statistics referenced above show, many times the violence escalates over time and ends in tragedy.

Ten-Week Sam’s Club Membership for $10

Posted on by  at  1:23 pm
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I heard an interesting radio advertisement today for Sam’s Club.  According to the ad beginning this Friday, October 17th, you can sign up for a 10-week membership to Sam’s Club for only $10, which should last through the end of the year.  It could be a good opportunity to save a little money on Christmas shopping, stockpile paper products, and even save a little on gasoline (Sam’s Clubs usually offer cheaper gas than other stations). 

As always, do your homework before signing up for a membership.  If you doubt you will ever shop at Sam’s Club, or won’t buy enough to realize $10 worth of savings, you would do better to pass on the offer.  And keep in mind that bulk packaging is not always cheaper.  Sometimes you do better to buy smaller packaging, but more of it–always compare unit prices.

One note:  I wasn’t able to confirm this deal at the Sam’s Club website, but I have heard some buzz about the deal from forum participants in other markets, so I’m hoping it is something that is available nationally.  Watch the comments for updates, and please share a comment if you hear about this deal in your area.

High School Students Getting Trapped in a Generation of Financial Mistakes

Posted on by  at  6:00 am
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 studentworrying101308.jpg
Photo courtesy of powerbooktrance

The following guest post is from Mike Young, Founder and CEO of The S.E.C.U.R.E. TM student program.  You can learn more about Mike, and the The S.E.C.U.R.E.TM student program at his website.

The media today is focused on the $700 Billion bailout on Wall Street and the credit crunch.  However, what has become very clear in the eyes of many is that the real problem is with the foundation of our educational system.

Remember all of the neat stuff you learned in high school about credit and money?  If you are like me, you don’t, because there was no education on how credit and money actually worked.  The average kid today will see over 360,000 advertisements before the age of 18 while receiving less than 10 hours of formal education on financial literacy.

CNBC reported that the real problem with the adult population today, is they were never taught this stuff in school.  This leads us to an entire generation of consumers with a -2% savings rate.  The average American has less than $3800 in savings and an average credit card balance of $9,200!

Marketing and advertising has been working full steam ahead since the 1950’s and it’s about time that our educational system begins to make sweeping changes to help high school kids develop positive habits with credit and money before they leave home.

It’s time for our society to begin making an impact on the next generation, teaching them lessons we’ve learned the hard way.  It’s time to make a difference and consume less while saving more.  We can turn this ship around, but it’s going to take a group effort at the community level and begin getting involved now.

Frugal Dad’s Thoughts:  I couldn’t agree more with Mike’s message, and his organization’s mission.  As a society, we do a poor job at preparing our youth to take the next step to become fiscally responsible citizens.  Think about it–we spend countless hours of instruction preparing students for fitness through health classes, gym and physical education.  We spend many more hours teaching students proper grammar, in both English and foreign languages.  Rather than teaching them how to take tests, or prepare for college, perhaps we should focus our efforts on preparing students for life.  Some basic courses in personal finance including lessons such as how to balance a checkbook, how to manage credit, how taxes work, etc. would go a long way towards creating a better prepared group of high school graduates.

Should I Pay Off Debt With Savings?

Posted on by  at  6:00 am
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I don’t have quite enough in savings to get out of credit card debt, completely, but as I continue to accumulate money in my emergency fund I’ve started wondering if it makes sense to use some of that cash to pay off debt. It’s a classic financial dilemma: continue to build emergency fund, or pay off debt?

If I used all of our available savings we would be almost back to zero, and would need to use a credit card if a large emergency came up before we could rebuild the emergency fund.  That scenario reminds me of the hamster wheel of debt that got us here in the first place!

Interest Rates Matter, Some

The argument for using savings to pay off debt is made easier in this environment of low interest rates.  Sure, interest rates on my credit card accounts have dropped, but are still significantly higher than any rates I’m able to lock in on savings.  Just last week ING Direct lowered the interest rate on our Orange Savings Account to 2.75 APY.  That is still much higher than the rate earned on my local emergency fund, but several percentage points lower than the interest I am paying on revolving debt.  However, since I am not overly concerned with the interest earned on emergency savings–it is just for emergencies, not investing–it is hard to justify cleaning out my emergency fund to pay off my debts.

The Psychological Benefits of Having Savings

Often times people do have significantly more in savings than they owe, but are still hesitant to pull the trigger and become debt free.  That’s where the psychology of money comes into play.  When you know several thousand dollars are sitting in an emergency fund ready and waiting to tackle your family’s next big emergency, it is a comforting feeling.   Draining that fund down to zero, or close to zero, immediately brings out pessimistic thinking.  What if the roof starts to leak?  What if the car dies?  What if I get horribly sick and miss several weeks of work?  These are legitimate concerns.  After all, those are the very events we hope to avoid, but are prepared for with a solid emergency fund.  Without that cushion it feels like we are living life too close to the edge.

Bottom Line, We’ll Probably Use Some Savings to Pay Down Debt

Even though we don’t have enough in savings to completely clear our debt, we have enough to make a significant dent.  However, with an ongoing medical emergency in the family, I am reluctant to use the majority of these savings for debt repayment.  What we will do is use about $1,000 to finish off an old consolidation loan that’s been hanging around since I finished school.  The loan has a large monthly payment, and by using that $1,000 to clear it I’ll be able to put a couple hundred dollars a month towards something else rather than continuing monthly payments for the next three or four months until the loan balance finally reaches zero.  Since we have beefed up our emergency fund a bit, we can do this without dropping the emergency fund down below our comfort level.  Admittedly, the thought of knocking out yet another debt is exciting!  One step closer to debt freedom!

Weekly Roundup: Medical Update Edition

Posted on by  at  7:26 am
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It’s been a few weeks since I updated everyone on my mom’s medical condition.  She remains in neurological intensive care, and is beginning to show some signs of improvement.  About two weeks ago she suffered a stroke following surgery for a related neurological condition.  She has been in ICU for four weeks now, and has been in the hospital for 40 days out of the past two months for various tests, surgeries, and recovery.  It appears her recovery could take months, but we remain hopeful she can still make a full recovery.  Thank you for continuing to keep her in your thoughts and prayers.

Now, for the Roundup:

  • Back to Basics:  Debt-Free Is the Path To Success.  I agree with all of Jeff’s ideas, but particularly like the point that being debt free lowers stress.  Sure, you could point to a hundred reasons why leveraging your house or your credit history to make investments makes sense, but none of those reasons outweigh the feeling of laying your head on the pillow at night and knowing you don’t owe anyone a dime.
  • A Do-It-Yourself Guide to a Romantic and Highly Frugal Date Night.  Some great ideas on how to put together a frugal date.  I particularly like the format of this post as it reminds me of a DIY meal-plan.  Only, instead of picking a protein, carb and vegetable you pick a meal, entertainment option and a follow-up item for your date.
  • How Ignorance Can Lead to Success.  This reminds me of the idea that some people succeed despite great risks of failure simply because they didn’t know about the risks.  Sometimes you just have to go with your gut without gathering all the facts first.
  • My 401(k) Is Losing Money and I Don’t Care.  My 401(k) has been obliterated, and I don’t care either.  The way I look at it, I just own more shares of a few great funds that will surely rebound (and then some) before I retire.  I do feel for those closer to retirement age, assuming they didn’t move to more conservative investments in time.
  • Keep Your Holiday Supplies Simple With An Inventory and a Plan.  The idea of keeping an inventory of holiday supplies is brilliant.  We spend a lot of time around the holidays trying to remember where we put that box of outdoor lights, and an even greater amount of time trying to decide if we even own a box of outdoor lights!
  • Barack Obama vs John McCain-Who Cares?  I share Ben’s apathy towards this year’s election.  I think both political parties have done a particularly bad job of nominating candidates, and I wish the ballot had a “Do-Over” option.  I hope four years from now a true fiscal conservative emerges with a campaign based on actually upholding our Constitution–something most politicians have largely ignored.
  • 17 Sneaky Savings Strategies.  I’ve never thought of several of these “sneaky” ideas, but I plan to implement them in the frugal household.  The “own your own laundry mat” is my personal favorite!
  • Divorce-A Wealth Killer.  Lots of reasons to avoid divorce if at all possible, and wealth-killing is near the top of the list.  Both sides of a divorce seem to be hit particularly hard, but it is often the children who are most affected.
  • Improving Middle Class Finances Through Education.  Financial literacy is a big deal to me because I believe many of our society’s money problems could have been avoided if young people were properly trained to take on the world of personal finance.  If schools won’t do it then us parents will have to take up the slack.
  • Fulfillment, Accomplishment, and  a Game of Risk.  This is a great reminder that sometimes there is nothing wrong with just “being.”  Put down your to-do list, your Blackberry, your laptop, your meal plan and your calendar and just “be.”  Enjoy the nature that surrounds us.   Enjoy some quality time with family.  I’m turning off this computer now and plan to spend the rest of my weekend taking this advice.  Hope you have a great weekend, too!