Irony

It's really fun to read financial articles from the first few years of this decade:

2006: Investing: How to recognize a bubble

I like his comment on housing construction, where he figured the bubble was already finished:

"Barring a full-blown consumer recession, something we see as unlikely, we see respite fundamentally for this sector."

I guess we should never ignore the possibility of a recession...

Grocery Buying Thought #1: Staples

One way to reduce the amount you spend on groceries is to figure out which foods are staples in your family's diet and make adjustments. For example, convincing your family to drink water instead of soda will save a lot of money, and it will make everyone healthier.

For my family, throwing out the granola bars made a significant difference. At first it made sense to me to buy low-sugar granola bars in bulk. They were relatively healthy and we could eat them on the run. The problem was, I liked them so much, I ate them all the time. Eventually, I realized I ought to be eating whole grain bread or rice, nuts, and fruit instead.

The great thing is, any one of these things cost less per ounce than the bars. The grains--which made up the bulk of the bars anyway--cost much less. I stopped buying the bars and, when they were no longer an option, I started eating healthier replacements. I save money every month, just by cutting them out.

Here are a few other adjustments we are working on:

-more beans and lentils, less meat
-whole grain bread and rice as staples (good, cheap, solid, healthy calories)
-more seasonal fruits
-only very inexpensive, healthy cereals
-more whole vegetable, fewer prepared veggies
-no more frozen pizza (I have to admit, sometimes I get nostalgic about these)
-if I am desperate for cookies, then I have to make them myself

A Big Letdown

When I was a kid, I saw amazing commercials for a Star Trek Phaser, that could shoot out beams of light! It amazed me that this device could shoot out beams that looked just like the devices I'd seen in the television show.

I decided to convince my brother to go buy a couple with me. We gathered together what little cash we had, and went to the store with my father, picked up a couple of them, and went to the cashier to purchase them.

The cashier told us the amount they cost, and we were quite surprised - they'd apparently been mislabeled on the shelf, and really cost nearly twice as much as we'd expected (either that or my label-reading skills weren't very good). So we went home empty-handed.

Waiting only made us want them more, so a few weeks later, we decided to get them after all - the commercials had been very convincing. We brought home our new phasers, and excitedly put in the batteries.

(As an aside, this is why the story of Calvin and Hobbes and the propeller beanie that he waited for for months became one of my favorites: Calvin and Hobbes)

It quickly became clear that these toys we had bought were little more than glorified flashlights. We were quite disappointed that the beams of light depicted in the commercial were completely impossible to reproduce with the actual toy. This surprised me quite a bit. Up until this point, I'm not sure it had occurred to me that the basic features of an item could be so exaggerated in a commercial.

These toys remained at the bottom of the toy box, except when the power went out.

Escape

How does one waste the days of his or her probation? Turning to sin is surely part of it, but there is another, more subtle way, a way that may not seem evil at all [....] One of the ways Satan lessens your effectiveness and weakens your spiritual strength is by encouraging you to spend large blocks of your time doing things that matter very little.

M. Russel Ballard, Be Strong in the Lord

Escapism has been on my mind today for a couple or reasons. First, I read an article in the Ensign about the addictive nature of online role-playing games. It isn't available on the internet yet, but if you're interested, it is called "Just a Game? by Charles D. Knutson and Kyle K. Oswald, August 2009 Ensign. Second, I had the stomach flu yesterday, and since I could not stand up without feeling nauseous, I ended up watching a lot of T.V.

The truth is, I loved it... at least the T.V. part of it. Jeremy and I found a show we hadn't seen before that was both fun and clean, and watched a bunch of episodes in a row. I have found myself wanting to watch more today. But I know that wouldn't be wise.

While I am not tempted to take up online role-playing, television happens to be one of my weaknesses. In college I went through a stressful period when I watched way too much T.V. I would come home from class, grab some food, sit down, and watch a show. If it was good, I would watch another one because I wanted to hold on to that happy, relaxed feeling. If it wasn't that good, I would watch another one because I hoped the next one would be better. In either case, I would stand up from the television, hours later, feeling unfulfilled.

I regret now all the time I lost, when I could have been learning, serving, and solving some of the problems that made me so stressed.

This can happen with a lot of things. If we let them, even harmless activities can gobble up our time and take away our independence. Sometimes it is good to escape for a while into a good book, a shopping trip, a T.V. show, or a computer game. But, we will not be self-reliant if we do not have the time to take care of all the necessary and mundane details of life. We cannot serve others if we are too busy escaping to face our own problems. And, we cannot keep our finances in order if we spend recklessly on shopping and entertainment.

In the end, no escape can substitute for the peace that comes through turning to the Savior. We still have to work to solve the problems in our lives, and we will never find happiness without putting forth earnest effort, but the Savior promises:

Come unto me, all ye that labour and are heavy laden, and I will give you rest. Take my yoke upon you, and learn of me; for I am meek and lowly in heart: and ye shall find rest to your souls. For my yoke is easy, and my burden is light.

Matthew 11: 28-30

Through Him our efforts will have meaning, and our peace will be real and lasting.

How Often Should Computers be Upgraded?

When I was a kid, I figured that everyone ought to upgrade their computer at least every year or two. I continued to think that until recently, when I was shopping around for a new computer for our home. I realized that I wouldn't actually get that much of a noticeable increase in capability by buying a new machine. I'd get a number of "nice" things, but nothing that was really necessary. So, instead of buying a new computer, I decided to address the specific issues that I had:

1. I had difficulty running some heavy duty mathematical software, so I doubled the RAM in the computer from 1 GB to 2 GB. This cost $30. It works fine now.
2. Netflix streamed videos were a bit choppy (because of the new SilverLight player). I discovered that Boxee can play Netflix videos better than a web browser, and the choppiness problems went away.
3. We were a little bit low on hard drive space. I moved most of our media files to an external drive.

Now the three-year-old laptop does everything I need it to do, and it only cost me $30 plus a little bit of work. Now I can wait another year or so before buying a new computer!

If you're deciding whether to buy a new computer or upgrade your current one, here are my recommendations:

1. If you can upgrade your RAM to at least 1 GB, do that. If you've been running Windows XP or Mac OS X with only 512 MB, you'll be surprised at how much better it works (if you're running Linux, you don't need this very basic post about computers). Make sure to add the correct RAM for your computer (check out NewEgg).
2. If your hard drive is more than 70% full, buy a larger one (perhaps external).
3. If your computer can't be upgraded to 1 GB RAM, and you want to use it for modern software and web applications, you're probably best off replacing it soon.

As a last note, from a productivity standpoint, it can be beneficial to spend almost as much on the monitor as on the computer itself. Studies, such as this one from the University of Utah, seem to show that larger monitors result in better productivity. Currently, a 24-inch monitor seems to be the offer the best balance between affordability and size - or, you could always hook up multiple monitors...

You're worth is what you make?

As my father's worldly circumstances were very limited, we were under the necessity of laboring with our hands, hiring out by day's work and otherwise, as we could get opportunity. Sometimes we were at home, and sometimes abroad, and by continuous labor were enabled to get a comfortable maintenance.  LDS.org - Joseph Smith's Testimony

When I was a teenager, I had a terrible thing happen to me. I was offered a great job. Though I was a talented student, I had never had an easy time finding good jobs. So I was really pleased about this one. I would be making about 50% more than at my job at a fast food restaurant. I immediately quit the fast food job, and accepted the position. As it turned out, the position I'd accepted was as a temp. Though the pay was excellent for two days, they had no more work for me after that. They promised to call soon though. It took me about a month to realize that they weren't going to call.

The damage was done, however. I now considered myself to be worth $10 an hour, no less. Fast food was now beneath me. I began only applying to jobs where the pay was at least that much.

Needless to say, I had difficulty finding any job that paid that much. In fact, I remained mostly unemployed for the next six months. Finally, halfway through my freshman year of college, I figured things out. I applied at a fast food restaurant, and started working for $6.00 an hour - even less than at my previous fast food job. But, $6.00 an hour is a lot more than $0.00 an hour!

I decided never to make that mistake again. Since then, I've had a system:

1. If I don't have a job, take the first job I can get.
2. If I don't like my current job, look hard for a better job.
3. Don't ever quit a job until another, better long-term job is guaranteed.
4. Always be prepared in case I become unemployed tomorrow.

This is why during college I had the following series of jobs:

• Fast Food (at two different places)
• Assisting a disabled older fellow
• Elementary School Music Teacher
• Russian Tutor
• Research Assistant at an aerospace company

The last job was a very good job - but importantly, I didn't quit the two jobs I'd held at the time until I had the Research Assistant job.

It is foolish to define one's worth by an hourly wage - especially during a job search. And minimum wage definitely beats no wage.

Dry Pack Canning

Here's a great introduction to the Church canning centers:

The Mission: Put Up in Bulk

Much of our long-term food storage is from a dry-pack cannery, and we were surprised by how inexpensive it was. I definitely prefer doing dry-pack canning, rather than wet-pack (ie, canned goods such as jams, green beans etc.). Different canneries handle different items, but it is quite affordable, and comes very well-labeled to be part of food storage.

Of course, because of the size of our apartment, our food storage is mostly behind our couch...

Comparing a State's Finances to Personal Finances

Mint.com has a great article comparing the state budget crisis in California to our own personal finances:

Understanding the California Budget Crisis

It's often possible to learn valuable lessons about our personal lives from large events involving many people. The pride cycle of the Book of Mormon is certainly applicable in our own lives, and the scattering and gathering of Israel can be a powerful metaphor for repentance. Similarly, we can learn important lessons about our own finances from the financial failings of large institutions, states or countries...

And California has definitely failed.

Competitive Times

You are moving into the most competitive age the world has ever known. All around you is competition. You need all the education you can get. Sacrifice a car; sacrifice anything that is needed to be sacrificed to qualify yourselves to do the work of the world. That world will in large measure pay you what it thinks you are worth, and your worth will increase as you gain education and proficiency in your chosen field.

You belong to a church that teaches the importance of education. You have a mandate from the Lord to educate your minds and your hearts and your hands.
Gordon B. Hinckley, A Prophet's Counsel and Prayer for Youth.

Our state has hit 11.5% unemployment. The competition that President Hinckley spoke of is far more intense now than usual, making education even more important.

Besides, a college or vocational school is a good place to sit out a recession - once one's studies are done, the job market has usually recovered.

Confusing Expiration Dates

Lifehacker has posted a short note listing some resources for figuring out if your food is still good. Knowing when to throw food out is definitely important for food storage, and just for shopping in general, so I thought I'd post a link here:

Read and Understand Your Food Expiration Labels

I was glad to find out that that yogurt that we ate a little while after the date was probably OK.

Skip the 10-Year Plan

For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?
Luke 14:28

Now that you're convinced to go to college, it's not enough just to show up for a few years at the college campus.

I have a friend who, as is common among college students, is on the "Ten-Year Plan". This is the plan where a student changes their major (or gets D's) so many times, that it takes far more than four years to graduate. As he finally, hopefully, approaches graduation (it will only have actually been six or seven years), I asked him what he would do differently.

"I wouldn't change my major."

As it turned out, his final major is identical to his original major. A few times throughout his college work, he decided he didn't like his major, and changed to a different one - sometimes a very different major. As one major proved difficult, he moved to an easier one, but then realized he'd have no good career options, so he moved to a more lucrative easy one. He then discovered that he hated it - and moved back to an interesting difficult major.

This reminded me of a decision that I made when I first started college, that turned out very well. I had about six different majors that I was considering. After speaking to people from the different departments, I still couldn't decide which was best, so I picked a major based on a few criteria:

1. It required many classes that were also required by other majors I was interested in.
2. It could result in a good career, with which I could support a family, with just a Bachelor's degree.
3. It could lead to a variety of Master's Degrees.
4. It sounded like it would be interesting, and challenging.

I then decided to finish that degree no matter what (well, almost no matter what). Then, if I had decided by then that I hated the degree, I would go on to get a Master's Degree in something I actually liked. Then, I could take as long as I wanted on the Master's Degree - if it didn't work out, at least I'd have a Bachelor's degree and be able to find a good job if I needed it.

Things did not, as usual, turn out quite as expected. Once I finished the degree that I chose, I was offered a very good job, and am now just working on a Master's Degree part-time. Many of my friends, though, are still in school and having difficulty supporting their families, since they have taken so long to graduate. I have a lot of freedom, thanks to having finished what I started.

I certainly made (and will probably continue to make) various mistakes in my educational choices - but I'll write about those later.

Betting against the credit card company

The rich ruleth over the poor, and the borrower is servant to the lender.   Proverbs 22:7

We have some friends who had a goal - and it was a very good goal. It would cost a lot of money, but it was the type of expense that results in an equal size tax credit, meaning that they would get all of the money back during the next tax season.

They were able to find a credit card that offered 0% interest for one year, followed by terrible interest. They put most of the debt on the credit card, knowing that they would be able to pay it off before then, with their tax refund.

Let's pause for a moment here, and ask a simple question: Are credit card companies generous? Did they give my friends this card just to help them out? Certainly not. The company gave them this card because they knew that, statistically, a high enough percentage of people would fail to pay off the card after one year to make up the losses on all of the people who did pay it off after one year.

Basically, trying these sorts of tricks are like betting against the credit card companies.

Our friends ran into a problem with this expense - and because of the intricacies of tax law, they would not be able to put the tax credit on the current year's return. They would have to wait until the next year. They suddenly had a looming deadline to pay off the credit card, and no money with which to do it.

Credit card companies are devious. Hence, my rule:

• If you don't pay off your credit card in full every single month, just cut it up.
  

A minor variation on this rule was discussed in the Ensign:

In Charge of your Charge Card

Helping Job Seekers

New York Times: Helping the Job Seeker Without Hurting Yourself

I just wrote about how to better network if you're unemployed. You may have noticed that I emphasized to job seekers to network primarily through people who can vouch for them. It is important to network even further out than that, but if you're a person that people try to network through often, you know that you can't help everyone.

I was recently approached by a student from my former university who wanted a recommendation. I didn't know him, but he was apparently under the impression that I'd just recommend him based on our common university background. His resume looked pretty good, though a couple of parts were rather suspicious. I explained that I could only recommend him if one of a list of four professors that I trusted him could recommend him strongly.

As it turned out, he had been attempting to hide some important facts in his resume - and none of the professors were willing to recommend him. If I had recommended him, those facts would have inevitably come out during the interview process, and my recommendations would be less trusted, and I'd be less able to help other job-seekers in the future!

He ended up applying for the job without my recommendation, and was not invited to an interview. I gave him quite a bit of advice about how to improve his career options, and hopefully he'll fix up the things that are holding him back.

The New York Times article above has quite a few more good points about avoiding these types of problems when helping job-seekers.

How Many Cars do You Need?

OK, those of you who don't own a car, go pat yourselves on the back and read a different article.
For the rest of us, imagine with me. Now, imagine owning one less car than you currently do.

We own one car, and it was built in 1995. It's been running really well lately. Even though we only have one car, we don't need it most of the time. Here's what we do:

1. We walk everywhere that's within a couple of miles.
2. I bike or jog to work (2 miles the short way, 5 miles the scenic way).
3. I bike to school (5 miles).
4. Julianne walks when she can do her grocery shopping close (she has to drive when going to Costco).

We don't end up needing the car very often, and have been putting fewer and fewer miles on it. Really though, it would be really easy to find a way justify having two cars in our situation (it's really easy to justify about anything if you want it badly enough), but we have saved a lot of money by only having one car.

When we were in Seattle, this was a bit harder - since it rained often enough that I couldn't always bike. So I got a bus pass instead for the rainy days.

OK, I know what some of you are thinking: "Jeremy you're cheating - you're supposed to imagine yourself with one less car."

Here goes:

• We would still need a car to visit family a couple of times a year, as they live about 10 hours away. We could rent one for these occasions. This would actually be nice, since we could rent a small SUV to make it through the sometimes treacherous pass between here and there during the winter, instead of having to take a roundabout trip that adds 4 hours.
• For occasions when we would need a car, we could use ZipCar!
• Julianne can use the bike trailer when she needs to go shopping at Costco.
• We can just plan better - half of our car usage is when we didn't plan well enough in advance.
• Julianne would still need to find a bus or something - she often takes night courses at a college. Since they are night courses, it would be too late to bike back afterward.
• There are lots of good public transit options around, so we'd probably be able to get wherever we needed just fine.
• We'd save lots of money on repairs, car insurance etc.
  

We added everything up, looked at the probable costs for each option, and decided that not having a car probably wouldn't actually save us any cash - primarily just because of the high cost of renting a car to get back to see our families, which is where the car gets the majority of its miles anyway. In addition, ZipCar doesn't yet have any locations within four miles, which would make it difficult to use.

Add it up yourself - as we've decreased our own car usage, we've quickly discovered that we don't miss driving everywhere. And if you have two, three or four cars, the savings from getting rid of one or two of them can be substantial. There are many websites that can help to estimate the true cost of owning a vehicle.

Getting rid of an extra vehicle is one of the ideas suggested in this Ensign article for getting out of debt or avoiding bankruptcy: Before You Lose It All …

Paid Clergy

Is it OK for a Pastor to Earn 600k a Year?
Who Should Know How Much a Pastor Makes?

Interesting articles - it makes one glad to be LDS and not have to worry about that.

I know that their are many salaried pastors who preach for the right reasons, and have the difficult stress of needing to raise enough money to keep their churches healthy (or the blessing of having enough and being able to contribute the remainder to worthy causes). But for those preaching for "filthy lucre", I suppose they "have their reward."

It is very important in our own financial lives that we have the right motivations - supporting our family, preparing for the future, and contributing to those worthy causes. Otherwise, we will have no more real reward for our efforts than those who preach to get gain.

Networking

Receive him as myself - Paul in the Epistle to Philemon

When I first realized what an effect that networking could have on a job search, it seemed to me a bit like nepotism - the practice of doling out the best jobs and favors to relatives. As I've become more involved in the hiring process, I've realized how little can truly be discovered about a person from a resume and job interview. The place I work has a very thorough job interview process - involving a half dozen (or more) 45 minute interviews with different people. Even with this type of process, I often feel like we don't have nearly enough information.

When the candidate was referred by a current employee of the company, however, the situation is different. The interview can, to some extent, determine their skills in communication or technical work - and the referrer can vouch for the candidates work ethic and honesty. That vital combination gives far more information than either alone could.

Networking can thus be a very valuable way to find ways for the people who know you and your work ethic to express that confidence to potential employers.

It can be difficult to build up the connections necessary to find a job that will work out well - there are lots of resources about successful networking, including this on Provident Living:

Effective Networking

The Step-Down Method

The key to spending less than we earn is simple—it is called discipline. Whether early in life or late, we must all eventually learn to discipline ourselves, our appetites, and our economic desires. How blessed is he who learns to spend less than he earns and puts something away for a rainy day.

N. Eldon Tanner, Constancy Amid Change

When I was at Utah State, I took an excellent family finance class taught by Alena Johnson. In addition to teaching classes, she worked in a financial counseling center on campus helping people who had found themselves in difficult financial situations. One of the gems I picked up from that class was something Alena called the "step-down method." Simple and adaptable, it is the best method I have found for reducing our family's expenditures.

Here is how it works: In any given situation, you have a variety of options, and some cost more than others. The example used in class was waffles.

Restaurant waffles: a few dollars
Frozen waffles: about a dollar
Waffles from a mix: less
Waffles from scratch: pennies

Sometimes people think that in order to cut back, they have to drop from expensive end of the scale to the cheapest end. This can be kind of depressing. The point of the step-down method is that, wherever you are, you take a step down. If you are eating waffles at a restaurant every Saturday morning, you will save a lot of money by eating frozen waffles at home. If you make waffles from a mix and you still need to cut back, you can start making them from scratch.

You can apply this principle just about anywhere. How do you watch movies? Where and how often do you eat out? What makes for a good family vacation? Where do you buy your clothes? Take a step down in several areas and you will find more room in your budget. You may also find that there are some areas where you are willing to pay for the nicer option, and some areas where spending more hardly made a difference.