I Don't Get It

Someone please help me understand the psychology of money. Please help me understand why some people (those who "know" better) use credit to purchase things they could have paid for with cash - when I say credit, I don't mean use credit and pay it in full when it's due, I mean use credit and make payments? Please help me understand how paying 18% or more a month in interest payments while earning less than 3% of interest in a savings account makes sense. And while you're enlightening me on that, please don't forget to share with me how purchasing nonessential depreciating items on credit makes sense when you have other outstanding debt - i.e, balances on credit cards that you cannot account for. Yes, I need a tutorial, I need some understanding.

Now before anyone thinks that I'm being snooty or "forgetting" where I came from, please understand that I have done almost every dumb thing you can do with money. I've gone into debt for some of the most ridiculous reasons ... BUT ... that was before I had any knowledge or understanding about money. Once I learned how to handle my finances, I didn't look back, not once. I continued to make mistakes until I learned - with each book I read, each CD I listed to, each website I perused, I made better decisions. So no, I'm not talking about those who honestly may not know better, I'm talking about those who can talk personal finance with the best of them. I'm talking about those who openly profess and proclaim their pursuit towards financial independence one minute but then justify their ridiculous spending with one made up excuse after another the next minute. News flash, you can always conjure up a reason to spend, that's not hard. Heck, 15 reasons just ran through my mind for spending some of my savings.

It seems as if frugality is the latest vogue; it's a movement, it's in, it's hot, it's even sexy. I guess everyone wants to be in but not everyone wants to pay the price. If you're not ready to pay the price, then don't pretend, just be honest, if not with others, then at least be honest with yourself - that's what matters most.

One day soon I'm going to write about the inspiration for this post, but before I do, I want to know if I'm missing something - so someone please help!

It's That Time Again

Spring weather is here, the days are longer, flowers are blooming and the winter blues are gone. Yes, this is my season! This is the time of year that I enjoy the most. But oh boy, I have to keep a watchful eye out for a financial nemesis that provokes me every year - with very little effort might I add. For some reason I love to eat out during this time of the year. Perhaps it's the gas stove in my ranch style home that gets ridiculously hot when I cook in the summer, or maybe there's some type of serotonin in the summer sun that makes me want to hang out more than usual. Another possibility could be the fact that the first 4 months of the year are extremely busy and I'm just catching up for seemingly "falling off the face of the earth" - according to some of my friends. Who knows? All I know is something happens when the season changes and that something usually results in a negative impact to my budget. You know what I'm going to do, I'm going to increase my "blow" budget. Yep, that's what I'm going to do. I just came to that decision.

When I started writing this post, I planned to confess my financial sins and promise not to do it again. I planned on detailing out my 12 step program on how I was going to mitigate the risk of me blowing my budget wide open but no, I'm changing courses. I'm giving myself permission to increase my frivolous spending, yep, that's what I'm doing - even in this recession.

Honestly, I do a pretty good job of managing my money and I have come a very long way from where I used to be. The only debt I have is my mortgage, my e-fund is fully funded and my necessary living expenses only account for about 50% of my income. Most of us know how challenging it can be to balance financial responsibility with enjoying some sort of quality of life. Don't get me wrong, I'm not one who feels like I "deserve" this or that, and I'm definitely not one who does not know the difference between a need and a want. However, I have paid the price to have a little flexibility in my budget so I am exercising that option. Where is this extra money coming from? Well, I never adjusted my gas budget from last year when we were paying upwards of $4 a gallon. I'll adjust the budget to what I'm really spending on gas and allocate the excess to my blow money - at least until Oct 1, 2009, when the summer season begins to hibernate again.

Aah, a balanced life ... that's the ultimate goal.

Financial Nugget 13

My west coast blogpal MoneyFunk wrote something in one of her posts that really resonated with me, "I realize that the true life I want to live is not about the items I can buy, but about the experiences I can create." Well said Christine, well said!

What Has Me Excited Today...CSA

Have you ever heard of a CSA, community supported agriculture? Perhaps I'm late on the information but I'm excited nonetheless. In my quest for a healthier lifestyle, I constantly look for opportunities to improve the quality of food I purchase. It concerns me that many of our foods have origins many miles away - the same foods that are available right in our backyards. Seriously, please explain to me how it is possible for grocery stores in the Southeastern United States to sell shrimp shipped from the far east of the world significantly cheaper than it is to sell shrimp straight out of the Gulf Coast or out of the waters of Savannah? How is it that foods harvested and grown thousands of miles away are cheaper than foods locally grown? My guess is there has to be some sort of compromise in the integrity of the product, but hey, I could be completely wrong. What are the checks and balances? How about the quality control? Oops, I digressed, back to the CSA ...

Per Local Harvest, community supported agriculture has become a popular way for consumers to buy local, seasonal food directly from a farmer. Here are the basics: a farmer offers a certain number of "shares" to the public. Typically the share consists of a box of vegetables, but other farm products may be included. Interested consumers purchase a share (aka a "membership" or a "subscription") and in return receive a box (bag, basket) of seasonal produce each week throughout the farming season. The rates vary among participating farms but I think the prices are reasonable. I plan on signing up and splitting a package with a friend.

For more information, check out Local Harvest's website here. You can type in your zip code to find CSAs in your area. Of course, if you have a really good farmer's market in your area, you have the best option since there is no minimum commitment.

Happy healthy eating,

Not So Good News

"Police are looking for a BMW that may have started a fatal chain reaction car crash that claimed the lives of 5 people, one an infant." Over and over again, that was this morning's headline news on every news channel in my city. At 7:46 am, I received a call and learned that one of the cars involved was carrying a dear friend and her family, a spouse and 2 children. Speechless, amazed, confused, perplexed ... the call put a knot in my chest that has yet to leave.

Death has an uncanny way of causing many (or maybe just me) to take an immediate inventory of life. Are we living life to the fullest? Are we enjoying the present because it really is a gift? Are we appreciative to our family and friends, and more importantly, do they know it? How many friends have we scheduled and rescheduled and rescheduled lunch with, never really having the time to do so because we're all so "busy"? At times I can be such a planner and goal seeker that as a result I get off balance.

My friend was truly a person who was bigger than life. She dedicated her life to motivating and inspiring others and I'm not joking, this is really what she did. She was "that" kind of woman - you know the kind - the one who makes lemonade out of lemons, the one who can see the diamonds in the dirt, the one who can work around the thorns to get to the roses, that woman. A woman's woman. From my vantage point, she definitely practiced what she preached. Her life was a celebration, she was an over comer, she pursued her dreams and helped others to pursue theirs as well. She will be deeply missed but this I know, because she impacted so many people's lives, her legacy will continue.

I've been struggling with making a few decisions primarily because of finances. Now yes, money is important but I get sick and tired of it being the driving force in many of my decisions. In an instant our entire world could change so now that I've been painfully reminded of that, I need to take inventory and make sure that I'm living in today and not just for tomorrow.

Guess Who's Eating Crow?

Several months ago the blogosphere was buzzing with anger and frustration from many of Chase's customers. One of my favorite PF bloggers wrote one of the best dear john letters ever written. If you've read Shtinky's letter, I bet you will agree with me that it was not AG Cuomo, it was Shtinky who single-handedly caused Chase to reverse their decision (Hi Shtinky, I told you it was an awesome letter;-).

Click here for the link to the story or read below:

JPMorgan Chase & Co. agreed under pressure from New York state to stop charging a new $10 monthly fee to credit cardholders and agreed to refund the proceeds collected since the fee was first levied in January, Attorney General Andrew Cuomo said Monday.

Over 184,000 JPMorgan Chase cardholders will receive $4.4 million in refunds as a result of the agreement, Cuomo said in a statement.

Chase Bank, one of the biggest U.S. credit card issuers, said in a separate statement it will reimburse $3.3 million. There was no immediate explanation for the difference in figures.

Cuomo said the bank had offered promotional rates for several years for balance transfers or other loans put onto their Chase credit card accounts. The offers made clear a one-time transaction fee would be charged for this promotional rate, Cuomo said in the statement. But last November, the bank sent letters to over 300,000 consumers, saying it would start charging a flat $10 fee per month.

Following consumer complaints, the attorney general demanded that Chase cancel the charges and refund the fees collected. Last Thursday, Chase agreed to comply with the demand, Cuomo said.

However, the bank said it decided to withdraw the fee based on cardholders' feedback.

With U.S. credit card defaults at their highest level in at least 20 years, credit card lenders are trying to protect themselves by tightening credit limits, raising standards and closing accounts. They have also been slashing rewards, raising interest rates and increasing fees to cushion losses.

I Want To Refinance, but Should I?

Mortgage rates have hit another low, 4.75% or there about. My current mortgage rate is 5.85% and my credit is very good (caveat...I have not checked it recently). Sounds like a no brainer right, well, not so much. Here's the problem, lenders are requiring 20% LTV (loan to value) ratios now and I'm not sure what the value of my home is today. During the mortgage heyday, I was able to get a conventional loan with no PMI and a much smaller down payment than 20%. I must also tell you that I purchased a home in a price range that was wayyyy lower than what the mortgage brokers were willing to give me, like $75K - $100K lower. Whew, glad I dodged that bullet!

Since my mortgage is pretty small, the savings on a 1% interest rate reduction will yield about $110 a month. On the one hand, if I can get a loan with no PMI and not subject myself to "creative financing," then maybe refinancing would be worth it. On the other hand, if I can get the rate reduction but am forced to plunk down a huge principal payment or obtain PMI, then the refinance will not be worth it for me.

This season of historic mortgage rate drops may be one where I have to be a spectator and not a participator. Or as it's said in the south, what's good for the goose may not be good for the gander (1. I'm certain it's said in other regions but I'm a southern girl born and bred and 2. I know it's also quoted as what's good for the goose is also good for the gander ... just thought I'd clear that up;-).

Have a great weekend everyone,

Have You Ever ...

Purchased an item that you forgot you purchased? Not just any ole' thing, something that you price stalked and thought you just couldn't do without? I'm talking something that you looked at every time you were in the store, something that you just had to have.

Apparently back in January I purchased a pair of shoes that I'd wanted for quite some time. I even price stalked and that is something I don't do (i.e. continuously checked the prices at the store and online). If I see something that I like and I have the money to buy it, I buy it. No price comparison, no price stalking, no waiting on a sale, no googling for coupons, none of that. I'm too impatient and while I like clothes and shoes, I am not a "shopper" per se.

So what happened? I was cleaning out my purse when I saw a folded receipt in the coin section of my wallet (interpretation ... I was looking for something specific that required me to empty the contents because I couldn't find it otherwise). When I looked at the receipt I saw that I apparently had purchased 2 pairs of shoes in January. Now I remember one pair because I wear them pretty frequently but I could not remember the second pair. This is when the scavenger hunt began. I began to search high and low looking for a new pair of shoes and guess where they were? They were still in the box, on the outside of my closet door! You mean I didn't even take the time to move them 2 feet into the closet?! LOL. Is this how I treat something that I had to have? Gee whiz. In all fairness, I claim amnesty on this one because it's been a very hectic 3 months. But what about you, have you ever ... ?