Economics

February 24, 2012  by

Sayonara, Credit Cad

Sayonara, credit cad. Yeah, you read that right: credit cad. I had no idea until today how much power you had over me. Because you were my first and only cad, I didn’t want to cut off contact with you, even after I’d cut up that momento you’d given me. (Pure plastic–I should’ve known how cheap you were, under all that swagger!)

You were gentle with me, most of the time. Just coos about “we can afford this; you deserve this.” And because I listened, you never needed to leave the charm phase. I was that much of a dope.

When you said, “I can cover this,” I felt like you really cared. Somehow, I didn’t mind getting the itemized bill at the end of the month; in that moment at the restaurant, you seemed like a gentleman.

I was the lucky one: somehow you never got me so fully under your sway that I couldn’t pay you off. You never got to turn your extortion goons on me.

But don’t think I don’t know about the others. I’ve seen their carefully treasured momentoes, tucked away in their pretty little purses.

And I’ve heard how it turns out for those who can’t pay you back.

And those “dividends”? Now that I think about where they came from, I can’t believe I ever got excited about them. Since I only had a few late payments, nearly all of those “incentives” was coming from other suckers strung out on your line. These are people: people panicked about their finances that you and your minions are milking for all they’re worth.

Of course, they–like I–gave you a hold on them. Which is why this is the last letter from me you’ll ever receive. No more monthly correspondence. No little notes with checks attached. No fevered checking on my status to make sure you’re still “cool” with me. And I’m blocking your personal ads–those pre-approved offers you keep sending me. I am not interested.

It only took me six years to catch on.

When I called just now your first hireling told me he didn’t have the authority to break everything off. I knew what that meant: he was sending for the Big Kahuna to sweet talk me into something I no longer want. Well, I’m sure you’ve heard about how that went. At some point, bringing up the years we’ve been together is the most abrasive strategy there is: it shows me how much of an idiot I’ve been for the last six years. So database that: you’ve lost your hold on me.

You’re no longer my security blanket, my soulmate, my pretend sugar daddy. ‘Cause I’ve learned that even when you go along, I’m the one who always pays.

You were all cunning: “Can’t we just work this out? Don’t you want to wait until you build up your next divided allotment?” Yeah, I know what that means: delay this indefinitely until we can get back ahold of you! Well, sir, I’m happy to give you my $43.99. Because, like I mentioned, it’s not my money anyway. Why don’t you give it back to that grandma on line 2 that you’re trying to guilt trip into payments she can’t afford?

You had all your pretty figures in a row: how long we’d been together, how much money we’d spent together, how many divided dollars you’d given me, how “savvy” I’d been to pay off my card each month. Yeah, well, if I’d been really “savvy” I never would have taken up with you in the first place!
Six years, and what did you just tell me? Forty thousand dollars; $350 dividend dollars.
Ha: shows just how “generous” you are, eh? I had to spend 40k in order to see a fraction (0.875%) of that back. And it didn’t cost you a dime!

So I stuck to my line: I was changing my spending strategy because I was taking a Dave Ramsey class, and Dave had put me to wise on how to make sense of my finances.

I can just imagine the shudder that name gives you, which is why I said it: Dave Ramsey.

I’m breaking this off… now.

You were all charm, cad. You–ever so gently–stirred a little threat in with your honey, even in your parting words. If your tone hadn’t been so sweet, your parting words about “try to get good rewards with your debit card” would have sounded oh-so bitter.

Well, I’ve got news for you, pal. I’m not switching to no debit cad. I’m done with cads. My new BFF is cash: cold, hard, and honest. You may regret me, but I certainly don’t regret you.
I just can’t believe how long I’ve let you string me along.

in Economics 0 comments
August 16, 2011  by

My Own Debt Ceiling

All this debate about the debt ceiling has brought the topic of money up close and personal. But that’s a good thing. This summer as I’ve struggled to get my own financial house in order, I’ve learned some things I’d like to pass on to my friends in Congress.

#1) Be honest with yourself about your spending problem.
As a kid, I was a saver. My mom and dad had given me a bank with different divisions for church, bank, store, and I dutifully split my life savings and bitsy income between them. Throughout college, the little bit of money I made went into textbooks and art supplies, and I was happy. The last thing I ever thought I’d struggle with was overspending. When grad school came, for the first time in my life I had a real paycheck. My first few years I lived frugally, shopping at ALDI, spending literally nothing on clothes or decorations, donating a bit, and chiefly eating Raman noodles and bean burritos. But then I realized I had money left over. Gradually, I became accustomed to buying pretty much whatever I wanted: first small things (a nice shower curtain), later large things (a nice camera with accessories). I never looked at how my rate of spending of was increasing and my appreciation of stuff was decreasing; I just did what I wanted. Gradually, I fell into a disturbing pattern of spending binges and purges. I’d declare a “need” that took precedent over everything else, and go on a book or poster-buying spree. Then I’d “purge” as penance for overspending by subsisting on canned food instead of buying fresh groceries. Then reality began to dawn. This spring I started listening to Dave Ramsey. Based on my spending habits, I started hearing myself in the callers to his program. I wasn’t the caller yelling “We’re debt free” with my husband, five kids, and family dog; I was the caller swamped with $300,000 in credit card debt and a foreclosed home. The day I woke up to this, I realized my spending pattern wasn’t just unhealthy, it was stupid! I was no longer the saver I used to be; it was time to rein in the spender I’d become.

#2) Say yes to a budget; say yes to sanity.
When it comes to shopping, I seem to be the world’s worst combination of extremes. After endlessly vacillating between two choices, I impulse buy… both. Yeah. Not proud of that. But y’know what I’ve learned? A budget does wonders at focusing the mind. Some things got cut completely. Other things remained, but were given an explicit allotment of funds. Everything was scrutinized, and for the first time I realized how much of my money was going to completely indefensible ends. Once I recognized that there would always be more opportunities than cash, and honestly distinguished between what I needed to live and what I thought I needed to live, life became much simpler. The word “no” reentered my vocabulary, and peace was restored to its throne. I set aside a fixed amount for each activity I deemed worthy of putting money toward, and the thrill of the chase began. Shopping was no longer a paralyzing matter of finding that perfect widget at any cost. It was an energizing matter of finding an OK widget within my budgeted cost. I regained sanity.

#3) Limit the time you spend offering yourself things.
The more offers you get to buy something you don’t need, the more times you’ll have to say no. While I was getting better at saying no, I wasn’t perfect yet. And I realized that an offer to buy something often set my mind down a spending track even if I said no to the offer at hand. When clearing out my email inbox, I realized for the first time how many marketing spamlists I was on. I started to see these emails for what they were: offers I not only needed to decline, but offers I needed to stop subjecting myself to. For years I’d been reading and deleting these things. I just plain needed to unsubscribe! So I did. I thought about other temptations to spend. Instead of looking forward to the next “Dividend Dollar” check from my bank, I decided to try to keep my dollars in the bank instead of trying to “win” them back by overspending. I decided to turn my radio down whenever commercials for things I didn’t need came on. I realized that my credit card inflated my sense of wealth, and cold turkey, switched to a debit card. I relearned the joy of paying for something once, and never needing to pay another bill.

#4) Surround yourself with lifesavers.
Do your friends ever pressure you to spend more than you think you should? Or do they impress you with their feats of coupon prowess? Subtly and overtly, we are influenced by the people and media around us. As a recovering shopaholic, I’m trying to learn from people who put money and possessions on the right priority plane. That is, they’re not skinflints making their own dental floss, but they’re also not trinketjocks flaunting the latest whizbang. They show me by example that living withing their means isn’t an exercise in futility, but a series of tradeoffs that ultimately leads to contentment.

You may wonder how my list could possibly help Congress. Here’s how. Washington has become too comfortable with overspending and debt. You don’t have to be Jabba the Hutt to be obese, and instead of comparing ourselves to Greece and Ireland, Congress needs to own up to its own burgeoning spending problem. Besides, debt makes us a slave to our debt-holders, and the sooner we recognize this, the sooner we can get on the path to fiscal sanity. We’ve got to distinguish between national expenditures that are actual needs (defense) and others that are not only wants, but unconstitutional wants (welfare). Instead of avoiding even the construction of a budget for years on end, Congress must consistently make–and follow–a realistically cost-cutting budget. Instead of maxing out its federal credit card, Congress must seek to decrease its debt and reclaim the financial security only solvency ensures. Everything must be weighed against the Constitution. Strict priorities must be established, and money must be allotted according to these priorities. If the money runs out before the wants get taken care of, the wants get eliminated. Instead of debating new ways to spend money, Congressmen must try to outdo one another by advancing new ideas of cutbacks. Finally, if Congress is going to beat its spending habit, Congressmen must seek out others who value thrift. This is no time to be buddying up with spendthrift Congressmen; we’ll vote out as many of them as we can, but in the meantime, shore up your newfound fiscal sanity by listening to Dave Ramsey.
This four-point plan took a lot of pain, mirth, embarrassment, and rejoicing, but it worked for me, and I know it can work for this great country.

in Economics / Politics 0 comments
March 1, 2010  by

You Have to Be Green

There was a time when being green either meant you were inexperienced, from a different planet, eaten up with envy, or about to puke.

Times have changed. Today these negative connotations have been swallowed up by the green overgrowth of environmentalism. News broadcasters and Quad-chalkers use the term and all of us are supposed to buy in, fall in line, and trill our allegiance – often without full disclosure.

But after all, it’s so fresh, so clean, so GREEN to join! The genius in using such an ambiguous term is that it makes it fairly impossible to debate whether something is green or not.

Take the current Sustainable Campus Environment Fee. We’re told that it’s green, that it’s for sustainability, but we’re not even told what “it” is! Evidently, once the $14/per student is raked in (yes, I am looking for those agricultural terms), the campus will decide what to do with it. We should rest assured that it will, in fact be green.

Somehow, I think that taking this at face value would, indeed, prove our greenness (i.e. Merriam-Webster “green” definition 9a: “inexperience”). As any experienced shopper knows, details first, greenbacks later. If the Student Sustainability Committee can’t manage to describe the specifics of what the funds will be used for now, we have nothing to hold the committee accountable to later. I would describe this as one giant slush fund, but that doesn’t seem green enough. Let’s call it a swamp fund.

Here at UIUC it’s standard for even an RSO to itemize its financial needs, justifying its claim that it needs the money and detailing its anticipated use. Is it asking too much for this green initiative to at least live up to this standard?

Yes, I’m seeing red instead of green, but let me tell you why. A blank check for $14 may not seem like much (two Subway footlongs and a Coke), but think of the total amount this initiative represents. Our university website reports that there’s currently 31,173 undergrads and 10,322 graduate and professional students traipsing about the greening Quad. If all 41,495 students paid the $14 fee, that would amount to a total of $580,930 – over half a million dollars. And this is going to what? TBD.

So far, the only proven greenness of the measure is that it requires a substantial transfer of green from the private to the public sector. I say, make it opt-in. Give us the opportunity to prove our greenness, voluntarily.

in Free Market / Politics 0 comments