Archives For May 2008

Today’s Houston Chronicle reported (sorry no link) that two gas stations in Dallas were giving away $40 in free gas to the first 200 cars at each location. The article claimed that some people waited in line for 12 hours! That works out to $3.33 per hour. Not only that, at $3.80 per gallon, it only represents 10.5 gallons of gas.

Like I said last week, gas prices have people not thinking clearly. Either that or they are really hurting.

I was at a track meet this morning. My youngest son ran two events and did pretty good. They won the first relay race but didn’t do quite as well on the second relay race. It was fun but I forgot to wear a hat and now my forehead feels crispy.

Anyway, I find this very hard to believe:

OPEC unhappy with oil price surge.

What idiot is unhappy when the price of the good they are producing increases?

If they are really that unhappy, why don’t they produce as much oil as they can? Either they can’t because they are already maxed out or they don’t want to increase supplies. Either way, they’re lying if they say they are unhappy with the current price of oil.

I wish the US would quit dragging their feet and get us some alternative fuel sources (BESIDES ETHANOL) already!

Watch this video and tell me what you think. I think it looks promising and it looks like it can be done for about $2 at the pump (I’m guessing here).

While you’re at it, watch this short video too:

I thought the last video was interesting when he talked about the gallon yield per acre of various biofuel crops:

Soy 48 gallons per acre
Rapeseed (canola oil) 127 gallons per acre
Algae 10,000 gallons per acre

For more information, here’s some other interesting articles I found this evening:

The first one is a blog post I found on Gas 2.0 (cool name for a blog) from late March about the first algae biodiesel plant going live on April 1st.

The second is an article from January, 2007 with some background information on making biofuel from algae.

The third piece is an interesting post highlighting 15 algae startup companies.

I finally got around to hiring a person to fix the comments. That means that as long as your comment isn’t held for moderation, it should show up as soon as you post it. That means NO MORE LAGS!

I’m happy because it means no more comment confusion with people leaving more than one comment because the first comment didn’t show up.

YIPPY!

UPDATE: Maybe I spoke too soon. Stay tuned…

This is part of the May MoneyBlogNetwork group writing project.

Ten years ago our finances were totally different than they are today. Here’s some of the significant differences:

1. Housing

Ten years ago…

We were still renting an apartment but were looking for a house.

Today…

We have been in our house nearly nine years and love it (for the most part). We were blessed in the fact that we just happened to buy the right house in the right neighborhood. We also made some wise choices along the way. We resisted the temptation to buy more house than we were comfortable with, which was a huge benefit to us. We put off major renovations until we could comfortably afford them.

2. Spending

Ten years ago…

We made our share of mistakes. We charged silly expenses like eating out, groceries and other things. We racked up a good amount of credit card debt along the way.

Today…

We paid off ALL OUR CREDIT CARDS a couple of years ago and have been credit-card free ever since. We use our debit/Visa check card for all purchases. I really think the debit card was our saving grace because we pretty much quit charging stuff after we started using our debit card. In the past the credit card was used for convenience. However, we always tended to charge more than we anticipated and when the bill came in the following month, we were shocked at how much we had actually charged. Immature? Yes. Fortunately, we cut out that silliness and are now debt free except for our car loan and mortgage (and a TV purchase made at 0% for two years which I could pay off if I needed to).

3. Retirement Planning

Ten years ago…

My wife had been contributing to her 401(k) for about a year. That was the BEST decision we ever made!

Today…

Although I won’t mention specifics, the 401(k) has grown to a substantial amount. We could always save more but we strive for a balance between saving for the future and ENJOYING THE PRESENT.

4. Tithing

Ten years ago…

When our financial problems were at their worst, which wasn’t that bad compared to what lots of people go through, we made a commitment to tithe with the right attitude. Now some of you won’t agree with this decision but I can tell you that tithing has made a huge difference in our lives.

Today…

Although we weren’t perfect tithers in the past, we made a commitment to pay our full tithe, which is 10% of our income. Our tithe is paid twice a month automatically through our checking account.

5. Attitudes Towards Money

Ten years ago…

We wanted/needed everything back then. I think this is the trap that lots of people fall into. I think this is partly the reason we got into so much credit card debt.

Today…

It’s AWESOME to know that there are things we could just go out and buy IF we wanted to. It’s a MUCH different feeling knowing you can buy something but not buy it, than to buy something that you really can’t afford. Make sense?

Bottom line: my wife and I have made a lot of progress over the years but we still have a long way to go.

What about you? How are you different financially-speaking than you were ten years ago?

Here are links to the other contributions to this group project:

ConsumerisCommentary: Looking Back: The Difference 9 Years Makes
FiveCentNickel: Stepping Back in Time: Our Life Ten Years Ago
FreeMoneyFinance: My Finances Ten Years Ago and Now
Get Rich Slowly: Now and Then: How My Current Financial Situation Compares with a Decade Ago
Mighty Bargain Hunter: My Finances Ten Years Back
No Credit Needed: Looking Back: 10 Years Ago
Wise Bread: Money Management Lessons: Not Quite 10 Years to Life

The personal finance workshop for struggling women that I posted about earlier this week was a really eye-opening experience. Thanks to all who offered advice in the comments section; most of the topics mentioned were discussed to some degree, and it was really helpful to have read all those comments going in.

There were 20 women in attendance. It was a mostly Black audience, but the ages and backgrounds of the participants varied greatly. Women are referred to this program from many different non-profits, and the administrater let us know in advance that on this particular day a few were from a domestic violence shelter, a few from a substance abuse program, and so on.

It was a really lively, inquisitive crowd. They asked questions constantly on a variety of different topics, and none seemed embarassed to admit their various struggles, financial or otherwise. I think this was a real positive and probably added to their take-away from the workshop.

The workshop itself opened up with some discussion about “why should we care about finances?” “what does money mean to you?” and “is money a blessing or a curse?” Some points we made:

  • Strong empowered women by definition have control of their finances.
  • Women are the backbone of society; if they are educated about money their kids and families will be too.
  • Money itself isn’t good or evil. It’s just a tool, a thing that can provide you with choices and security and independence.
  • It’s not immoral or selfish to want to make or save a lot of money; the more you have the more secure your family will be, the more peace of mind you have, and the more ability you’ll have to give back to your community and to those less fortunate.

We emphasized how incredible and significant it is that they had taken the steps and the time to get educated. Most of the women seemed to agree that money is a blessing, that it can give you freedom, and that managing it was very important. So far so good.

Then we went over a budget: how to create one, how to fill in the blanks, how to calculate percentages, what the targets should be, etc. I realized midstream that the exercise itself might be futile; many of these women probably have sporadic income from a variety of sources and lots of out-of-whack expenses they can’t immediately lower (car loans, etc). So I outlined an IDEAL budget (percentage of income in each category) and suggested revisiting it often so that when you manage to decrease one expense or raise income, you’ll know which category (savings, giving, etc) you can and should increase rather than figuring you can afford to go shopping now.

We talked about the importance of setting goals and how each little financial decision adds up to make a big difference; if you splurge on $100 Nike shoes, for instance, it doesn’t seem like a big deal. But what if you bought $30 shoes instead? Imagine what a difference even $70 in a savings account would make to you! They all nodded and some began to take notes.

The discussion on credit was interesting. Many of the women didn’t seem to be able to get credit, though, and few talked about being overwhelmed by debt. Others asked how to get rid of collections items, how long different things stay on your report, what to do when creditors call you about debts you don’t know anything about. These issues were addressed, and we gave out comprehensive packets on how to pull and dispute your report, how to increase your credit, etc.

But then we started talking about banking and the importance of financial organization. And it all started to unravel a bit. Only about a third raised their hands when we asked who had a checking account. Several immediately started exclaiming about ATM fees, limitations on withdrawals, how they can’t get a debit card, how the bank won’t issue them checks…being a banker I am familiar with all these issues. But being a personal finance advisor (in this situation) I was unsure what to suggest.

One woman said bluntly that she used to have a problem writing hot checks when she was young. Now she can’t get a checking account and it’s really hard to pay bills and get organized. Another woman colorfully announced she’d been “locked up” all last year and had no idea what happened to all her records or who took her tax refund. Several complained about excessive account fees, ATM fees, etc.

I desperately wanted to just be able to offer simple solutions to these women. “Enroll in your 401k and get the full match! Open a high yield online savings account! Pay your bills online! Make saving automatic!” But when you can’t even get a debit card or checks, you have to operate in cash (or on credit cards…in which case how on earth do you pay those?). That means you have to go to the ATM constantly, purchase money orders, use Western Union. And fees – and time spent – really add up.

To my surprise the women started offering information and advice to each other. They were knowledgeable about how and where to cash checks cheaply, how many ATM withdrawals different banks would allow each day before charging you, how to get a card which would make retailers accept your checks even though you’re flagged in their “don’t accept this check” system, hotlines to call…I didn’t know anything about these issues!

We did chime in with advice about why and how to avoid payday lenders, check cashing rip-offs, credit counseling scams, identity theft, and all sorts of bank fees. A couple of these women didn’t even know they could get free checking accounts! Several didn’t know some banks offer free ATM withdrawals! I was really surprised.

These women seemed to grasp the bigger issues, they seemed as capable as anybody of saving and budgeting and goal-setting. But the day-to-day management of their finances was a chaotic mess. And that’s before you even add husbands/boyfriends, children, and others into the mix. I certainly had a lot on my mind afterwards.

I hope and think that everybody left the workshop motivated and better informed. I also provided several resources (inlcuding my contact info) for further quesitons. I am already looking forward to my next workshop; I know I will learn and grow a lot right along with the audience.

More from Meg at The World of Wealth

From an article I found on Drudge Report comes this hogwash:

“[T]he prices that we’re paying at the pump today are, I think, going to be ‘the good old days,’ because others who watch this very closely forecast that we’re going to be hitting $12 and $15 per gallon,” Hirsch said. “And then, after that, when oil – world oil production goes into decline, we’re going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we’re not going to be able to get the fuel when we want it.”

I’m starting to think that these forecasters are making money by scaring the crap out of people. I realize that supply and demand play a role in all this but I still think that markets are being manipulated by all this talk.

I must say, it’s a scary thought. At $12 per gallon, it would cost me $215 to fill up our Rendezvous.