My column for the May 30, 2007 edition of the Greenhorn Valley View:

Do you have too much month left at the end of your money? Do you never have enough money to do the things you want? Do financial emergencies leave your head spinning?

What if there was a way to make sure you have enough money for all your real needs, AND make sure you have enough money for the things you want to do? What if there was a tool that made all this simple and fun?

There is such a tool, and it can accomplish all these things.

A spending plan is a description of how much money you’re going to spend each month. You can spend money in any of several different categories: rent, food, clothing, and gasoline, for example. You determine what your categories are, and how much you want to spend in each one.

Make up an “account sheet” for each of your categories. An account sheet looks just like your checkbook register, but you just draw the columns on a piece of lined notebook paper. (Click here for an example of an account sheet.) Now every time you get paid, add your predetermined amounts to each category’s account sheet. As you spend money, subtract the amount you spent from the appropriate account sheet. The total of all the account sheets should be the same as the total in your checkbook.

A quick look at any category’s account sheet tells you how much money is available to spend in that category. If the amount in a category is getting low, you can’t spend much until you get paid again. If the amount in a category is pretty high, you may need to lower the amount you put in that category, and increase the amount going to another category.

This same system can be used for saving and emergency spending, as well. Just create a category for “Saving,” or “Emergency Auto Repair,” for example, and put a little money in those categories at every payday, just like you do with the other categories. But this time, you’re not going to take money out very often; only for emergencies or to put your saved money in a better investment.

This method is simple, can be done without a computer, and will ensure you always have at least a little bit of money for those fun activities and for emergencies.

Here is my column from the May 23, 2007 Greenhorn Valley View:

There is a new way to borrow and lend money. The website www.prosper.com is an open marketplace for loans. Borrowers and lenders can meet and decide on mutually agreeable terms. Borrowers can typically get loans funded that wouldn’t fund elsewhere, and at a better rate than they would get from a credit card. Lenders can typically get a better return for their money than they could get from their bank.

If you want to borrow money, you create a listing including how much you want to borrow, what you’re going to do with the money, and what rate you’re willing to pay. Then potential lenders will bid on your loan, much like bidders on eBay. If you want to lend money, you peruse the various online listings and bid on ones that make sense for you. You’ll be able to see details from the borrower’s credit file, as well as ask specific questions of the borrower. All loans have three-year terms, although there is no penalty for prepayment.

This can be a lot of fun. I’ve been a lender for almost a year, and I’ve enjoyed discovering and chasing down the best loans. I’ve enjoyed weighing the borrower’s ability to repay against my own risk-aversion instinct. Like the stock market, there are seemingly limitless choices. I can look for people with high credit ratings, or low debt-to-income ratios. I can look for listings under a certain dollar amount, or over a certain rate.

There is also an element of danger. Like the stock market, plunging values can be right around the corner. I currently have one delinquent loan, and it has made my expected total return drop significantly.

But it’s a fun market to dabble in, providing a decent return, with a little bit of the stock market’s roller coaster action just to make things interesting. Just use your head, be smart, and understand your risks.

I’ve discovered it’s pretty easy (and fun) to argue with the people whose quotes are on Starbucks cups.  I realize, of course, these people are probably much deeper than their quotes appear, but when I read stuff like this, I simply cannot resist.  Here’s one I read today:

A mature person is one who can say: My parents may have made some mistakes raising me, but they did the best they could: now it’s up to me.

– Shannon Fry - Starbucks customer from Ann Arbor, MI

I guess my main beef with Ms. Fry is her definition of ‘mature’.  Is she really saying that a person who can say this about their parents is mature?  It seems to me the revelation about being responsible for yourself is just the very beginning of maturity.  A person can’t even begin to start to think about maturing until they realize their behaviors, thoughts, and actions are their own, not their parents.

It was a typical day of travel.  Rescheduled flight, missing airplane crew, weather delay.  Finished a whole book before we even took off.  Yawn.  The usual.

But here’s something new.  The taxi I rode in from the airport to the hotel was pulled over by the state patrol!  The officer told him (in that unfriendly tone they must learn at the police academy) he was speeding and changing lanes without signaling.  I’ve never heard a longer, more profanity laced, English-to-Arabic-to-English rant than I heard while waiting for the officer to return with the bad news.

And bad news it was.  One ticket for speeding (73 in a 55), and another for his creative lane changing.  The officer also scolded him for the many tickets on his driving record.  I believe his exact words were, “You’re just not getting it out here, sir.”

So now I have an angry cabbie on my hands, whose mumbling must be preventing him from seeing the speedometer, it’s needle seems mysteriously stuck in the mid-70 range.  We get to the hotel without further incident, but he’s indignant when I don’t add a tip to the credit card voucher when I pay him.  He tells me they charge 10% extra for using a credit card.  The balls!

You want a tip?  Here’s a tip!  Take the rest of the night off, go home and rethink your driving skills.

So I started Not Buying It: My Year Without Shopping, by Judith Levine.  It was the inspiration for my little experiment, even before I had read it.  It seemed like such an interesting premise that I had to try it out myself.

But now that I’m reading it, I’m a little disappointed.  It’s possible the subject isn’t long enough to fill an entire book.  Or it could be possible that I’m not as interested in the subject matter as I first thought.  It could be that Levine comes at the topic from a female perspective.  But I think it’s more likely Levine simply inhabits a different universe than I.

She has closets full of shoes (so she always has the right pair, whether walking or running, in wet weather or dry).  She has a dozen pairs at her home in Vermont, and twice that many in her apartment in Manhattan.  She eats lemongrass and soy, but not meat.  She looks for new, creative ways to bash Bush.  She has no kids.  If she cut her spending in half, she would still have twice my cost of living.  It’s hard for me to stay focused on her personal struggles with spending when she strays tirelessly into anti-Bush vitriol.  And I can’t help think I’d be reading quite a bit less about sock fashions were this book written by a man.

Even though I only got to March in Levine’s account of her year, and even though the book provided the inspiration for my little experiment, I have to put it down.  I’m not buying it.  And neither should you.

My column from the May 16, 2007 edition of the Greenhorn Valley View:

Cocaine. “Asking people to quit spending is like asking them to give up their cocaine.” That’s the response from a friend of mine regarding last week’s column. Last week I issued a challenge to go a whole month without spending any money, except for what was absolutely necessary. I thought this would be an excellent opportunity for people to put their money where their mouth’s are. The far left types who think corporate executives get fat by stealing the puny resources of the poor should rejoice in the opportunity to stick it to the man. Don’t let ‘em get rich off your money! The far right types who think all spending is an insidious waste of personal resources should be ecstatic at the opportunity to practice building up their bank accounts. I’ll get rich by making my money work for me! Yet, other than my friend’s cocaine comment, I received exactly zero responses to that column.

Very well. We’ll do it alone. For the next month, my family and I will spend nothing except what is absolutely necessary. Because we’re the only ones involved in this little experiment, and because I do not have the benefit of many families’ experiences to draw on, you the readers are going to have to put up with my babbling about my own family’s experiences.

Oh boy. Now what? How do we know what is necessary? A friend of ours is in a play this weekend. We told him we’d go see the play. But is that a necessary expense? Our daughter’s birthday is coming up soon. Traditionally, I take each kid out for a donut on their birthday. But is this a necessary expense? We’re going out of town to a three day conference later this month. The conference fee and hotel are already paid for, but what about food? How much of that is necessary? What about books and other resources available at the conference, that we could potentially benefit from for years? Necessary?

The answers to these questions are what we’re going to be hashing through this next month. I hope to reap many benefits as we learn to conquer our spending addiction. And even before this experiment begins, I’ve already noticed one benefit. My wife and I just spent a lot of time talking together about our goals for our family and the best way to spend our money to achieve those goals. If that is the only long-term benefit we realize, the experiment will have been worth the trouble.

As explained in my previous entry, I have a little experiment going on. I’d like to get as many people to join me as possible. Read the previous post, ask all the questions you want, and let me know if you’d like to try it!

The text of my column from the May 9, 2007 edition of the Greenhorn Valley View:

Do you spend too much? Do you have a nagging feeling that your spending habits will spell your financial ruin? Have you tried to change your habits, but been unsuccessful? In her book, Not Buying It, Judith Levine talks about an experiment she conducted. For an entire year, she purchased nothing except what was absolutely necessary. She gave up books, movies, lattes, and clothes, among other things. Instead of going out for dinner, for example, she did really weird things like - get this - inviting friends over for dinner! By the end of the year she had saved $8000, and she had learned a whole lot about consumerism in general, and her own spending habits in particular.

All of which got me thinking, why don’t we try something like that here? Us. Right here in the valley. Let’s just try it for a month to see how it works. For an entire month, buy nothing except what is absolutely necessary. If you are married, you’ll have to sit down with your spouse and decide together what is absolutely necessary. Be brutal with yourself. You know what necessary means. Do you absolutely need that new fly rod, or would one of the four you already own suffice? Will you fall over dead if you don’t get that new pair of shoes, or can you somehow limp through the month with just the dozen pairs in your closet? Is transportation a necessity? Of course. But do you need to run to the store right now! for that half gallon of ice cream? For that matter, do you need the half gallon of ice cream?

I’m looking for ten families to join my family and me in this experiment. We’ll all start on the same day and go for thirty days. We’ll keep track of how much (or little) money we’re spending. We’ll keep track of our struggles as we fight the inevitable cravings for the happiness fix that money can buy. If you’d like to take part, write to me at the paper. If you have any ideas for reducing spending, or ideas for filling the void that will be created by our lack of spending, share those as well. I’ll report on our progress each week in this column.

Let’s make a game of this. It’s only a month, let’s see how little we can spend. What is the absolute minimum we can get by on?

Look what I ran into today:  www.globalwarmingheartland.org

This guy, Lord Monckton, has challenged Al Gore to a debate on global warming.  The wording of the challenge is too irresistible not to quote in full:

The Viscount Monckton of Brenchley presents his compliments to Vice-President Albert Gore and by these presents challenges the said former Vice-President to a head-to-head, internationally-televised debate upon the question “That our effect on climate is not dangerous,” to be held in the Library of the Oxford University Museum of Natural History at a date of the Vice-President’s choosing.

Forasmuch as it is His Lordship who now flings down the gauntlet to the Vice-President, it shall be the Vice-President’s prerogative and right to choose his weapons by specifying the form of the Great Debate. May the Truth win! Magna est veritas, et praevalet.

“these presents”!  “flings down the gauntlet”!  “choose his weapons”!  A Latin quote!  Could anything be more noble or regal?  This is a duel I would greatly like to see.  And as in duels of old, when one combatant emerged the victor, and the other combatant was reduced to a bloody lump, I would like to see this question resolved once and for all time.

What I do NOT want to see, however, is another one of those mind-numbing presidential debates.  You know, where each candidate gets up and says all the things guaranteed not to offend anyone, and thereby preventing anyone from forming any kind of opinion on the candidates.  A debate should tackle and attempt to resolve an issue, not be an extended, shared, stump speech.

Mr. Gore, be a gentleman and accept Lord Monckton’s challenge!  Pour all that you are into this debate, and don’t let the debate end until one of you, and one side of the debate, is dead.

My column from the May 2 edition of the Greenhorn Valley View:

Are credit cards a good thing, or a bad thing? The debate has raged for decades, and doesn’t look to be letting up anytime soon. On one hand are those who have been burned by credit cards. The ease of payment, the minuscule monthly minimums, and the feeling of status and power that credit cards bestow has caused many, many people to abuse their cards and financially overextend themselves. On the other hand are those like the concept of credit, in general. They say that our lives are richer and fuller than they would be without easy access to credit. It only costs a few bucks a month to dramatically extend our purchasing power.

But let’s think about that for a minute. Say I want to buy something that costs $1000. I don’t have the cash to pay for it, so I charge it on my credit card. I’ve magically increased my purchasing power by spending money I didn’t have before! But now I owe $1000 to my credit card company, which must be repaid. I decide to pay the company $100 the first month, which drops my balance to $900. Now I can spend an extra $100 and not be any worse off than I was before. But this hasn’t really given me more purchasing power, other than the initial $1000 I spent. I sent $100 to my card, and I charged $100 to my card, but I could have achieved the same effect using cash, and the interest on the $100 would have stayed in my pocket.

Well then, couldn’t I increase purchasing power by spending more than I pay off each month? Yes, I could. Now let’s say I paid $100 toward my $1000 debt, leaving me with that same $900 balance. If I spend $150 this month, I have indeed increased my purchasing power. That extra $50 is money I didn’t have before, and wouldn’t have been able to spend if not for the credit card. Every month that I charge more than I pay off is a month that I increase my purchasing power.

But this pattern of spending cannot continue very long. Eventually, I’ll have a monster of a balance, a sharp increase in minimum payment, and a maxed out card with which I cannot continue to increase my spending.

Had I used nothing but cash, however, I would only be able to purchase as much as my income allows. And in exchange for the perceived lesser amount of purchasing power, I would owe nothing to anybody, I would not be bleeding cash each month in the form of interest charges, and I would have learned to be content with my income-supported level of spending.

Is that kind of peace-of-mind worth anything? I say it’s priceless.