My Money Sucking House

I blogged a few weeks ago about new roofs.  Well we have one now.  It was an exciting and thrill chilling experience.  The chill came when I had to pay them.  Ouch!  The pain!

To add to the excitement the plumber came and fixed the water leak in the main line that same week.  You guessed it, another thrilling experience.  Then I ran into the kitchen counter and broke off the corner.  No really, you read that right.

So now my house needs the drywall repaired (water damage, thus new roof), new counters, a repaired irrigation system, new carpet, interior paint, new light fixtures and a detective to figure out why I have a sporadic beep coming from the kid's room.

We are hemorrhaging money.  It is falling out of our pockets and puddling on the floor.  It is making a mad dash out of our bank account and into the hands of every casual passerby.  It must stop.

So here is my plan.  I am going to saran wrap my house and keep it in a bubble until future notice.  We will not use any moving parts, such as doors, to keep them from wearing out.  I will not walk on the floors to save the carpet.  I will not allow any eating to preserve the remaining counter top. I will not turn on the lights so I don't notice the ugly brass fixtures on the walls.  I will let my plants die so I don't notice the leak in the irrigation.  (Who am I kidding, I will let the yard die so I can get polite letters from my association.) And lastly, I will turn on death metal so I don't hear the annoying beep coming from the kid's room.

That should fix the problems...don't you think?  Viola! Money is still in my pocket and I am left to enjoy my house, as long as I don't want to live in it.

The Art of Entitlement

One of my favorite pastimes is watching HGTV.  What is not to love about shows where I get to see the insides of homes across the world without ever having to get off the couch?  (Better yet, I don't have to pay a single mortgage.)

I have been watching these shows for quite a while now and I have to say I am a bit stunned at the number of entitled people showcased.  Words like "I deserve it" and "it's not big enough" are all over these shows.

The entitlement issues really became obvious when a young couple buying their first home with low/no paying jobs and low budget kept saying things like "I need a bigger walk in closet for all my shoes."  That was followed by, "I don't want a kitchen without granite counter tops" and "why isn't the yard bigger..."  Oh my.  They were looking in an older neighborhood, they were stretching as it was to get a house at all and they were upset it didn't look like their parent's home...you know that house they were living in rent free at the moment.

I would like to say this couple was an exception, but it wasn't.  Many of the people showcased whine about how small and plain the homes are they can afford. (This includes multimillion dollar homes.) They almost never have any money to buy the house and walk away with mortgages way above their ability to pay and eat.

Now I know I am not telling you anything you don't know.  The housing crisis was built on the backs of people who got loans too big from lenders who lent too much.  We are all reaping the "rewards" right now.

What intrigued me was the entitlement I saw in these couples.  They really felt they deserved now what their parents worked for over 20-30 years.  Most of them had not saved enough money to cover any purchase costs and they felt it was their right to own a home larger than they could afford.  It seemed so odd to me.

When I look around our culture right now I see a lot of that entitlement.  It appears everywhere and at every level.  I see people without jobs for long periods of time who won't take an offered job because it is less money.  I see people out of work buying expensive luxury items because they "deserve" something nice.  I see families taking trips they can't afford because they "deserve" time with their kids.  This doesn't even cover the teenagers who feel entitled to cars, clothes and entertainment.

You may have guessed I am on a little rant right now.  What I can't figure out is how we became so entitled.  Growing up I felt entitled to food and a place to sleep.  Even then I knew there were people who didn't have that.  How did we make the cultural leap from "earn it" to "deserve it?"

Dave Ramsey has a billboard in Phoenix that says "Act your Wage."  I love that sign.  It doesn't mean you can't dream, it just means you have to live with what you have right now.

I think many people confuse their self worth with a list of their possessions.  They feel that if they are "worthy" people they are worthy of possessions. At what point do we decide we are worthy of financial security?  When do we decide freedom isn't the ability to buy anything we want but the ability to decide how to spend our money.

People who "can't resist" spending money are slaves to it.  Those who look at a purchase and walk away have mastered it.  While I may want to buy many things I realize I would rather control my money than have it control me.

The sad truth is we are learning a lot about entitlement as a society right now.  We can either feel bad about it or we can take the lessons and come out better on the other side.  When it comes down to it, none of us is entitled to much.  The more money we have the more is available to spend.  There is no reflection of self worth in that statement.

So here is a little exercise.  Spend the next week looking at how you spend your money.  Take notice of what you are thinking when you whip out your wallet.  Note thoughts of "I deserve it" and other similar ideas.  Determine if the thing you are buying was in your budget or if it is an impulse purchase.  You can learn a lot from identifying how you spend money. 

Okay, I think the rant has subsided a bit.  I feel better.  I think I am going to go buy a designer cup of hot chocolate...I deserve it!

You Don't Know What You Don't Know

One of my favorite phrases is: "You don't know what you don't know."  It is amazing how many situations this phase can accommodate.  It can be a great excuse when you flub up, but it can also be the reason your best laid plans don't work.

As the year is new and we are attempting to better ourselves and our homes I would like to suggest we work on "what we don't know."  For me the arena of "don't know" is huge and I love it when I am able to shrink it ever so slightly.

One area of concern for many people is the world of finance.  With the economy doing what it has been doing for the last few years there are many people afraid and confused about the "right" way to handle their money.  With questions surrounding retirement accounts, college funds, interest rates, market fluctuations and a number of other unfamiliar topics, a person can be very timid when it comes to properly handling their finances.

Here is my suggestion, go find out what you don't know.  Use this time when you have a ton of unanswered questions to get educated.  Expand your understanding of what is going on around you.  Take a class at the local community college.  Watch a financial news program once a week.  Check out a book from the library now and again.

It doesn't take much to expand your knowledge, but lots of people are so afraid of asking questions they decide it is better to be ignorant.

Now I am going to suggest a really scary idea.  Go see a financial professional.  Ask questions, and get a plan from someone who understands the market and your goals.  Please note: I did not say invest all your money with a financial professional.  I did not tell you to buy into big portfolios or investments you don't understand.  I did tell you to find someone who knows what they are talking about and get a firm grasp of your goals.

It is my experience that many people are wary of financial planners.  In some cases you should be, but in most cases a reputable financial planner is a great idea.  Their job is to know about a confusing market and explain it to you in plain terms.  They are also there to help you define your goals and find ways to reach them.  They can be your partner, because they know what you don't know.

Now you really don't have to follow my advise.  You can be a financial whiz even if you never meet a financial planner.  You can have wonderful goals and well defined plans to accomplish everything, however most people need a place to start.

If you don't know where you are going it is doubtful you will get there.  I had the chance to take a financial planning class years ago and as part of the class I had the chance to sit down with a certified planner.  It was very nice to find out I was on the right track.  He gave me a few suggestions and I went on my way.  He would have liked it if I had invested money with him, but what he had to offer wasn't what I wanted to buy.  I gained knowledge and a direction, and he gained a reference.

I understand if I just scared you with this suggestion.  Taking the bull by the horns isn't the way many people do it.  So find what works for you.  Start with a book, take a class, watch a show.  However you do it, make it your goal to shrink what you don't know.  You will be glad you did.

P.S. I do not suggest ever investing money without first understanding the investment, researching the company and being in a position to tie up your funds for an extended period of time.  Make sure you are comfortable with whatever you do.  You earned the money with hard work, make sure you put the same hard work in when finding out how to make your money work for you.

Thinking Ahead

Tax Time.  (Did you just shudder?) I know tax time strikes fear into the hearts of the strongest and smartest.  While we all try to pay the correct amount throughout the year it doesn't always turn out the way we hoped.

As I get older I find tax season to be a little stressful.  It is not that I am a wasteful doofus who can't control my spending, I promise. The stress comes in the form of paperwork gathering.  Every year I have these amazing intentions to organize as I go.  If I receive a statement I put it into a "safe" place for tax season.  The problem is remembering where that "safe" place is come tax time.

This year I have decided to start early.  I will collect information as I see it and put it into a slightly less "safe" location so I can find it.  I will collect receipts and document expenses.  I will submit all reimbursement forms for my medical flex account on time.  I will rotate my files on December 31. I will have my information to the accountant on Feb 1.

Apparently I will also need to keep dreaming.  I think I will do all of this, but I won't.  I will struggle just like everyone else.  I will flip and flop, staying awake thinking of all the information I need to gather.  I will remember deductions after I have submitted to the IRS.  I will wait by the mailbox (or inbox) for proof of my return.  (Yes, I am optimistically thinking I will have a return...)  I will be relieved just like everyone else when it is over.

So why am I bringing this scary thought to the surface in November?  I have almost half a year before it is a true crisis.  Lest you forget, I am the "Prepared Binder" lady.  What kind of preparedness nut would I be if I wasn't prepared for tax season? hmmm?

I will raise my right hand, you can follow along if you wish, and I will swear to calm down, relax and not worry about it.  I will also promise to dutifully collect information as I find it.  I will start my return in a timely fashion.  I will enjoy my rebate or survive my payment.  I will NOT shy away from this task, but I will not obsess over it either. (You can put your hand down now.) 

Okay, now I am prepared.  That felt good...

Is This What a Recession Looks Like?

Are we or are we not in a recession?

It seems all the media can talk about is this recession, or lack of recession.  I was reading the news this morning and on the same news site they had two articles, one was about how the recession was over and the other was about how we had a long way to go before it was over.

Excuse me, but how can both be true?

After thinking about it I had a few thoughts.  The first is that this recent economic downturn has taught us a lot of really good lessons about financial stewardship.  I think we forget these lessons.  How many people remember the "Roaring 20's" were just before the "Great Depression?"

We need to remember to take ownership of how we spend money.  Just because we want it doesn't mean we need it or can afford it.  I grew up in a home where we waited and saved.  It was hard to see my friends get what they wanted when they wanted it, but I have to tell you I appreciated it a lot more when I got it.

It seems the recession is only as bad as your advance planning.  Those with money saved and realistic financial habits are feeling pressure but don't seem to be panicking.  Those who were in lots of debt are having a much harder time.  Before I get angry letters telling me about people you know who are in trouble by no fault of their own, I understand there are exceptions.

If you are used to spending all you make or more a recession can hurt.  Less income means cutting back.  Sometimes you can't cut back enough and that is hard.  The cruddy part about a recession is life goes on whether or not you have extra money.  People get sick, you need to move, the kids need shoes, you get the idea.  Life goes on.

So what to do?  Many people are without jobs or are making less at the jobs they have.  Morale may be down, there is less cash to spend and debts may be coming due.  This is a tough situation to be in.  I wish I had all the answers, but I don't.  I would suggest looking at what you do have.  People who have lost it all have told me they learned what was really important, and it wasn't the stuff.

If you need financial help, get it.  Find an adviser, a banker, a wise family member or a counselor.  Don't hide from the problem.  If you are stressed, get help for that too.  Spend your money wisely and don't panic.  If we want to get out of this recession (with all media outlets in agreement over the subject) then we need to make wise purchases and create new jobs.  We need to buy what we can afford and reduce our debt.  We need emergency funds and a "Plan B."  Most of all we need a firm grasp of what is important to us.

So are we in a recession?  Probably.  Do we need to stay there?  No.  Can we come out the other side as better, wiser people?  You bet.