My wife and I were both approached by people in need in the same week. People who appeared to be genuinely in need instead of folks simply pan-handling to be lazy (which is a bit of a generalization, and I apologize). One of the things that we wrestle with this is that we want to be generous, we want to look for opportunities to help others, and we really like the idea of serving people as Christians. However, we’re paying off debt because as a moron (instead of a Christian) I allowed the family finances to get way out of whack. That being said, we’re considering pulling $40.00 aside from somewhere to setup someone else’s emergency fund. That is $20.00 for each of us to help others in an emergency.

We don’t anticipate tapping into it regularly, but the opportunity to serve is great, and sometimes we may have the ability to use our finances when others are in a teachable moment. Of course, in those same moments we need to remain teachable, but we’re glad to have learned to live on less than we make. What do you think? Would you create an OPEF category in your budget?

I’m reminded of Bob at ChristianPF and his story of compassion.  God uses us, others needs are met, and we can learn something.  That’s worth more than $20.00 to me.

Have you ever wished you had an extra $200.00 a month? I know I used to wish that. The moved buffer theory is the theory that you should be putting the buffer in your budget at the ‘top’ of the budget rather than in each category. A buffer is an excess amount of money that is put in place to deal with a greater demand on your finances than is normal. If you’re familiar with “emergency funds” then you might describe the buffer as a preventative emergency fund built into your plan. If you are like me then you originally set up your budget with the buffers into different categories so that each category could absorb fluctuations in the category.

Evaluate the chart above representing a traditionally buffered set of categories. Can you see that the categories with buffers are theoretically more likely to use the buffer? By giving yourself access to more money you are more likely to absorb the buffer. The problem is that you should have some buffer somewhere because in real life all of the numbers are not known ahead of time (unless you are super lucky). By setting yourself up with a ’safe’ budget you are more likely to overspend potential savings (which is not the same as blowing out every budget category in overspending).

Instead, I would propose that you actually calculate a conservative amount for each budget category. What would you say to cutting each category by 20% and moving that buffer into its own category that goes untouched and your target for expenditure is reduced? That way if you over-spend in a category (or the water bill shows up and you find out you took showers that were too long, or watered the garden a wee more liberally than you had expected) you have a buffer category with funds for paying the water bill, but you don’t find yourself likely to spend a lot more in each category. The weakest link in your budget, the category that you’re overspending on, is dealt with, and you can review it for next month to see if it needs more funds, but you don’t just feed all of the categories excess money each month.

There is little doubt that real life will happen, and the potential for surprises is great, but by taking out some of the waste where it didn’t appear to be in the first place, you may save yourself a lot more money in the long run. If you can save $50.00 a month in reduced buffer excess and put it into an investment fund, pay off debt, or possibly grow other areas of your life, its worth considering! I have begun to see a several hundred dollar a month buffer that I didn’t know existed because before I was spending it. Consider your choices as you budget. This method may not work for everyone, but for us, it has been a real relief.

Note: The Moved Buffer Theory Budget is based on the Theory of Constraints by Eliyahu M. Goldratt - only applied where I haven’t seen it applied yet. You might consider checking out Critical Chain, a book that applies the Theory of Constraints to business management.

My sister is a brilliant cook. She and her husband are both brilliant cooks. I hate to say it but they rock my pallet better than most restaurants. Someone needs to hire them to help create menus to keep a restaurant wait list long. She’s going to, at my request, attempt to create some fun posts discussing a low cost recipe and money saving opportunities to give you some fun ideas to stay frugal and full. You should totally check out this week’s recipe on her blog The Two Foot Kitchen. This week she’s hitting up the classic French Onion Soup.

If you have not see the Strongbad “Trogdor” video, here it is.  I know its weird, but since Homestar Runner and Strongbad tend to be internet icons, I’ll let you decide if the internet is weird before the video, or after the video.  You see: my wife’s relative had her house burn down on Monday last week.  Burninated.  Most everything is gone or destroyed.  It is pretty tough since that sort of event is so life altering.  She’s still waiting on more information about insurance and hasn’t begun (to my knowledge) the process of discovering the costs of rebuilding.

As you can imagine, this post is a reminder to back up documents off-site, or to keep them in a safe-deposit box at a bank/secure location.  I need to do this, too.  Some of the documents that she had are gone forever, some can be had for a fee (reproduction and shipping and handling costs), and some are going to be sorely missed.  Things like children’s first moments, photos, some computer data, and of course various valuables that are destroyed when flames hit them.

Consider her fire as a great lesson for us to learn from.  Consider her blessing in not being home for the fire (and therefore unscathed).  Make sure you have life-important things like wills covered in duplicate.  Make sure you have considered a location to store offsite data (external hard drives or sites that offer low-cost data hosting for such cases are a good idea).  Make sure that you tell your loved ones they’re loved - you never know what might strike, but you do know it won’t be Trogdor.

Note: This post is a tiny bit light hearted because the relative is actually doing pretty well emotionally.  I’m actually feeling kind of sick, but such is life.  Gotta travel tomorrow, so we’ll see how that goes. 

If you’ve seen the television show ‘House’ then you’ve probably heard the lines about everyone lying.  In each episode something goes wrong with some patient and they have to find out what is causing the ailment.  Often the problem has to be ‘dug’ into and they have to find out who is lying about information so that they can get to the truth of the problem.  They don’t take ‘no’ from anyone.

If you have tried to get a lower interest rate from a credit card company and they’ve said no to lowering your rate and you’re paying anything like 18%: they’re lying.  Don’t take no for an answer.  Dig deeper.  Go up the chain of command until you’re speaking to Warren Buffet’s cousin.  Get to the person who can and will say yes.  Don’t put it off, don’t delay, call now.  Get a lower rate and save yourself some big cash!

Excuses that drones at the card companies will use include:

• Your rate is the best we can do - that is not possible
• Your account has been locked for rate reductions because of late payments - this is a totally bogus issue that is policy.  Policy that can be over-ridden by a higher up manager
• Your card offers you rewards, those rewards are funded by your interest rate - bull pucky.  Those rewards are paid for by any number of things - but the interest rate doesn’t fix things.  If you have to switch card companies now may be the time to do it

Kick the credit card interest rates in the butt.  We got our interest rates dropped twice and each time they dropped the rate we saved $50.o0 in interest per month!  Of course we’ve got enough debt that we’re paying a lot anyway.  However, getting the lower rate will help us pay it off faster.

My wife and sister came up with the idea of the Pantry Survivor competition wherein they would attempt to go to the store once in an entire week (at the beginning of the ’stunt’) and then combine that with whatever was already stashed in the pantry to create meals for the family for as long as possible.  The super-challenge in all of this is that it is four adults and two children (plus one on the way - no, not us, my sister).  As previously stated somewhere my sister and her husband are staying with us until they can move into a new condo they’re buying.  So the food needs to feed the whole family and last as long as possible until they just have to go to the store.  The competition stands to see what they can create, what they can make stretch, and what they can concoct out of substitutes as needed.

The first step was to organize the pantry and make sure that there was an inventory.  My sister handled this, which was good because we had a pretty crazy pantry.  I unfortunately only have pictures of the post-organizing results.  My sister, whom I will refer to as ‘Preggers’, had a pad of paper and listed item-by-item what was in the pantry and fridge so that when she and my wife went to the store they could only buy what was needed for some basic meal preparation.  Preggers is actually a great cook, as is my wife, so this isn’t a huge challenge because they have a lot of ideas between the two of them.  The challenge is that they had to have enough of a plan to have bought enough food at the store to complement what we already had to make up enough meals to last a targeted ten days with one meal having company of another family of three.

Day One:  Smoked Pork ‘Que
Alton Brown of the food network enticed me to put together my own frugal smoker last year and so we smoke meat every couple months.  This last week we smoked some Pork Butt and it has been a cheap way to add protein to salads, sandwiches, and in this case, a barbecue pork sandwich.  I have directions and recipes for those who are interested - just shoot me an email to randy@watchmymoneymaker.com.

Day Two: Chicken Pot Pie a la ‘Preggers’
My sister made a tasty variation on chicken pot pie, but instead of making an actual pie, she made a chicken soup type dish and some tasty, tasty crust rounds with a cookie cutter. You placed the soup in the bowl and garnished them with the crust ‘cookies’ (not sweet, but oh, so tasty. Have you noticed I think they’re tasty?).  Preggers did a great job with this dish, but since she made it up I have no recipe.  It did contain white pearl onions which are one of my favorite soup ingredients.

By the time anyone reads this we’ll be on day three with a week left to go.  I don’t know what we’ll run out of, but I’ll post the results as we go through the experience.  I challenge you to try the same and see if you can clear out any old ’stuff’ that you have in your pantry to keep your budget frugal, and your frugal budget interesting in the kitchen.

Next week my wife and my sister are going to play ‘Pantry Survivor!”  It won’t be as funny as Lost-Vivor, but it will be educational.  The goal is to buy a very minimal amount of produce and staple type items and empty our pantry of some of the junk that it has in it.  Their goal is to feed my family and my sister and brother-in-law (who are temporarily staying with us until their condo purchase goes through) for the week on about $75.00.  I don’t think it will be hard, but it will be amusing to see what happens.  I plan on posting pictures throughout the week of meals created and guesstimating their cost.

OK, that’s not so shocking. What is cool though is that there are sites like opensecrets.org that share things like campaign finance information - even if it is from past years. For example you can keep up on folks like Ron Paul, Hillary Clinton, Obama, and of course Mitt Romney, who is apparently quite wealthy on his own. You can check out the whole running crew, too.

As a voter, assuming you are one, this is a great way to look at the financial state of a campaign and make some conclusions about different organizations that donate funds. For example the list of top donors that includes AT&T (thanks for making communication so expensive, but turning that expense into political contributions, guys), the NRA, and various unions. You can also see what political party they favored here.

Name: American Public Marketplace
Host(s): Kai Ryssdal
Podcast file type(s): MP3
Average File Size(s): 13.3MB
Average Length: 28 minutes
Format (single concept, multiple concepts, multi-format): Multiple concepts: introduction summary, news summary, news segments
Production Quality (excellent, good, acceptable, bad): Excellent
Type of Content (practical content, philosophical content): This is a radio show being re-used as a podcast
Site URL: http://www.marketplace.org
Feed URL(s): http://marketplace.publicradio.org/tools/rss/rundown.php?show_id=14
Subjective Review:

This podcast/radio show is only partially oriented towards personal finance. The subject matter tends to vary between business news, personal finance influencing news, and world market news. Its not a podcast for the person looking for very practical day-to-day information, but instead is good for the person trying to keep a big picture view on world financial news. I don’t really enjoy this sort of news program on a personal level because some of the recorded story bits included audio clips and sound bites with no context. It made the credibility of the assertions a little lower to me.

The audio clips between the different segments had some nice music, but that’s probably not the best reason to listen to a financially oriented podcast. A few of the audio segments carried some political persuasion and I would caution various listeners to be discerning if they subscribe.

Context: I listened to the following dated shows: 01/25/2008, 01/24/2008, 01/23/2008, 01/22/2008 in one day.

There’s a reason why money is taboo: its often very, very, very personal.  This weekend as I was taking a walk down my in-law’s neighbor’s dirt road I saw this sign: Private, Dead End.  I didn’t actually trespass in case anyone was worried that I saw the sign, took a picture and kept walking.  What I was thinking about as I took this picture is that personal finance is private on one level or another.  At some point in time you are more than likely going to draw the line between what is acceptable to communicate to others, and what is not public knowledge.

Where do you draw the line?  I personal don’t speak of my income to various people I work with, but some family members know that information.  I have been timid to share the actual amount of debt we have or how much I pay in taxes on this blog and pretty much everywhere else I’m speaking about personal finances - again, a few family members know.  One thing I’ve been able to perceive about this - private or not - is that as a personal finance blogger I don’t feel comfortable dumping out everything I’m thinking or doing just to be open.  I would much rather present principles that are useful than numbers which may help you gauge where I’m at, but not communicate the concepts which matter.

My personal financial state isn’t where I’d like it to be - and I’m assuming that unless you’re a billionaire, you, too, are working on improving your financial state.  I’m reducing debt, preparing to understand more about investment opportunities and generally trying to be wise with my family’s finances.  I tend to be a very open person, in the past it has gotten me into a discussion with my wife about being too open, but when it comes to personal finance I’m not concerned about your numbers.  I don’t want to know them.  I do want to know what your operating principles are, though, so let me know where you draw the line with sharing personal finance information.