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Stagflation: A Rant

I am all for freedom of the press. I have a blog for God’s sake, so of course I believe in free speech. But I wonder if somehow all the reporting on economic woes actually feeds into the woes. Do you ever wonder this?

For the past twelve months during my morning commute, I would listen to NPR story after NPR story about the housing woes, which turned into the housing crunch, which led to the collapse of the housing market, which then led to the credit crunch and now we are in the midst of the credit crisis.

In between, there was talk of a recession and then talk of us not being in a recession and then a discussion that, yes, we are definitely (probably) in a recession.

Mixed in with this were reports of new jobs being added to the economy and jobs being taken away from the economy.

Consumer confidence was up, up, up and then it was down, down, down. And now we have the lowest consumer confidence we’ve see in five years in the midst of a housing market that has not been this bad since the Great Depression and news that consumer credit card debt has increased over 300% since 1989. Sigh.

Now my monotonous mainstays at National Public Radio have been throwing this “stagflation” buzzword around for the past couple of weeks. (A stagnant economy + inflation = Stagflation. Although the words been around for some time, I think its the economic equivalent to “Bennifer” and “Brangelino.”) Were things really this bad? Or did hearing about things being this bad make things this bad?

Sigh. Back to saving money for a rainy day.

Which, by the sounds of it, is here.

Posted in Personal Finance | 1 Comment »

Freelance at ELance.com: A Review

Every Monday, I try to write about the “good” aspects of money. You know, the fun stuff: making money, saving money, finding ways to make more money. A couple of weeks ago, I realized that it was time for me to throw my hat into the “freelancing ring.” I spend hours every week working on this blog–writing, researching, responding to emails, sending emails. I realized that I could put all this work to use and discover a way to make more money by freelancing.

THE DISCOVERY

Like most things that I find on the internet, I have no idea how I stumbled upon ELance.com. (Don’t worry, this is not an affiliate link. This is an actual post intended to help you find ways to make more money!) I sniffed around the site. I signed-up and logged on. I spent a couple of weeks dabbling on the site and in their forum in order to get a better feeling for how things operate. (This is generally an excellent first step for any new endeavor–do the research.)

THE PROs

Elance.com is basically a site for freelancers. If you work 40 hours a week or work part-time, Elance might be an excellent marketplace for you to advertise your skills and talents. There are multiple categories on Elance that speak to a myriad of different computer or writing skills (everything from website design, to article writing, to writing brochures to virtual assistance to finance management). Head on over to the site and take a look in all of the various categories to see if you have any of the skills that individuals are requesting.

THE CONs 

Like most things in life, there are a couple of issues I have discovered that are slightly problematic. After spending some time in their “Water Cooler” area (the forum), I discovered that some of the advertisers flee the scene before paying up. (There are some ways to get around this. Just ask some veterans some tips.) Also, ELance does not seem to favor the beginner. It appears as though it is difficult to get your first “job.” (However, once you win your first bid and do good work, other jobs come more easily.) Finally–and this might be the deal breaker for most people–the spectrum of freelancing opportunities are contained to a limited number of skill sets. It may work perfectly for you if you are a web designer, but the site might not benefit you if you do not have any of the necessary skills.

A GOOD RECOMMENDATION 

Overall, I think it is a fairly helpful discovery. If a friend recommended the site to me as a way to make extra money, I would think it a good tip.  Although not the perfect freelance site, I think it is much stronger and more use friendly than other freelance sites I have come across. In fact, earlier this morning I just posted a couple of bids on project.

I’ll keep you posted if they come through.

Do you have any thoughts on this or other posts? If so, please leave a comment. We would all love to hear your thoughts. 

Posted in Personal Finance | No Comments »

Six Weeks In

So, we’re six weeks in to the New Year. Usually, the resolutions that we make fall by the wayside during these six weeks. But, since I have redefined my approach to New Year’s Resolutions by creating Financial Goals for 2008. Whenever we set goals, it is important from time-to-time to redefine our goals, refuel our spirits, and reward ourselves.

Redefine My Goals — For example, while I have completely cut out that one coffee purchase every day, I have had less success in eliminating my lunches. Instead of eliminating all of my lunches, I have tweaked the goal slightly. Instead of eliminating 5 lunches a week, I have decided to eliminate 3 lunches a week (for now). By redefining this goal, I have been able to still make some headway in saving money in this area.

Refuel My Spirit — Saving money in such a drastic way can wear you down over a period of time. It may be necessary to take a day or two off and allow yourself a moment to collect yourself and cull your energy again. Indulge a bit. Buy that lunch. Buy that dinner out. Consider it a “break” and not falling in to old “habits.” Last week, I had to do this. I had to understand that a couple of nights out with friends was not going to financially destroy me.  I needed to hang out and replenish myself with friends.

Reward Myself –  Create rewards for yourself when you meet your financial goal. Rewards are an important way of making sure that we will stay focused on the goals we have set. For example, I am building a rewards system into the money that I am saving. For each dollar that I put away, I immediately move 10% of it into “Reward Yourself” account. This usually means a nice guilt-free dinner or night out.

So, six weeks in to New Year, I have created ways to make sure that I will stay focused on the previously established goals. By allowing myself some flexibility not only attaining these goals, but also adapting them, it probably means that I will experience a higher degree of success.

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Welcome Readers from Stretcher.com!

I’d like to welcome all the readers from Stretcher.com. If you are not familiar with The Dollar Stretcher, then I suggest that you head on over to Stretcher.com and sign up for the weekly newsletter today. It’s filled with great money-saving tips, covering topics from grocery shopping to taxes! It continues to be an excellent resource for those of us who are frugal or interested in getting our finances under control.

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Saying YES to Money!

This year, I have decided to say “yes” to money. A co-worker offering to pay me to help his family move this weekend? YES! An opportunity to proctor and SAT exam at the local high school on Saturday and get paid for it? SURE. A phone call from a focus group wanting me to give them my opinion about the newest Salty Banana Fish Ice Cream and offering $75 in compensation?…gulp…YES! YES! YES!

Here are some excellent ways to figure out how to say “yes” to money in your life:

1. Proctor SAT Exams — Call your local high schools in the area and ask if they need volunteers to proctor SAT exams. If the local high school does not administer the exam, figure out which school
does and contact them.

2. Remember the value of honest work…and do it! – Offer your services in your neighborhood. Never underestimate the power of babysitting! I often blog about a friend of mine who is in her 30s and lives in a good sized metropolitan area. The going rate that she receives for a Saturday night of sitting? Over $200.

3. Fit a second job into your schedule – Find a part-time job that works for you. Remember, in terms of eliminating the remaining balance on your bills, you need to throw all you can at it. Work for four hours on a Saturday morning or three hours on a Monday night. Find a part-time job that works for you.

4. Sign-up for Focus Groups — Head over the Craigslist’s “Etc” section and see if there are any focus groups that you can join. Often times, these groups pay a little money for a little bit of your time.

5.  Sell Your Crap — Tried and true. If you don’t need it, get rid of it and sell it. I just bought a book online the other day for $0.11 (yes, eleven cents). But I paid $3.99 for shipping. Then it dawned on me that this book doesn’t cost $4.00 to ship. Sell your books online and make your own $2.00 profit! I counted 379 book that I could get rid of this way (379 X $2.00 = $758 for very little work).

No matter what you do, though, remember one important thing: Put the plastic AWAY! You are now in the business of eliminating your credit card debt ENTIRELY!

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Payday & Quick Cash Loans: Why They Are Bad for You

When you’re unemployed, these cash call overnight loans look like the only option. When money is tough the quick loans and cash advance commercials are incredibly attractive. Images of smiling men and women of all races and ages describe to you in upbeat voices how great it was that a $10,000 loan is only a phone call away.
Here’s what’s not mentioned:

• These loans are targeted specifically at individuals with lower-incomes.
• The APR on these loans easily surpasses the interest rates on credit cards. (However, because of a poor credit rating, these people who end up at getting an easy loan at cash advance stores are denied credit cards.)
• The APR ranges from 35% to 59% to 96%–if everything works out.
• There are hidden fees that aren’t made clear. So often, you are paying much more money than you expect.

Knowing how damaging these lenders are, my curiosity kicked in and I decided to call a company today to see how “good’ these deals really are. Read on to see what I found out.

If I borrowed $2,600 to be paid over three and a half years, here’s what it would look like:

• Monthly payments: $216.55
• Annual interest rate: 96%
• Loan Period: 3.5 years (40 months)
• Total Interest: $6,493.82
• Total Repayment: $9,095.10

If I borrowed $5,075 to repay over ten years, here are the details:

• Monthly payments: $250.31
• Annual interest rate: 59%
• Loan Period: 10 years (120 months)
• Total Interest: $24,932.19
• Total Repayment: $30,000

These repayment plans were sent to me from an agent who works for the specific company I called. I am stunned, speechless, astonished, and dumbfounded. People who aren’t financially educated are being preyed on by those who are too financially astute. I know it’s not criminal, but it’s ridiculously immoral.

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Other Budget Busters

Last week, I wrote about My Top 5 Budget Busters. This past week, I had been thinking about other budget busters that exist in other people’s budgets.

1. Cigarettes — I don’t smoke, but I often hear about people being a pack-a-day smokers. Assuming that a pack of cigarettes cost $5/pack. ($35.00/week; $140/month) Not computed is the future health care costs associated with smoking OR the increase in health/life insurance premiums smokers have to pay. These additional costs probably reach the tens of thousands over a lifetime.

2. Vending Machines — I have to admit, every time I do my laundry, I treat myself to a soda from the vending machine. I was talking about the vending machine at the laundromat and a friend of mine says he uses the vending machine at work twice a day, costing him $1.50. ($7.50/week; $30.00/month)

3. Credit Card Interest – Using Bankrate.com, I made up what a $10,000 credit card debt costs an individual. Over the course of a month, they spend about $150/month on interest only. ($150/month; $1704.21/year)

Each of these are unnecessary expenses and only end up killing your budget–and your savings–in the long run.

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