personal Finance Story

CNNMoney seems to love adding the personal touch to the economic downturn. After putting together at least two other segments just like it, the return to accepting user stories with a piece asking if readers are better or worse off since the last recession about seven years ago.

I began reading through them and the first story gave me some hope. The first family, the Krohns, consists of a graduate student and a teacher. They don’t have cable. They don’t have fancy cars. And yet their story is a very positive one. They are loving life and don’t care that they don’t have a big screen TV in the house. They are much better off today in their own words and I couldn’t agree more.

Here we have a young couple who is realistic about their lifestyle and spending. They have no other debt besides their house and their student loans. Honestly, I am just the slightest bit jealous.

Golden Years Turned to Lead

And then my hopes dropped as I read the next story, the DiGiovannis. This one reads like a hollywood sob story.

So much for financing our retirement.

I am willing to assume that they are kidding here. And yet, I am sure there is a certain truth to their statement wether or not they would be willing to admit it.

Was it the plan all along? How else would you be able to go from, looking forward to retirement and enjoying life, to eating up savings to pay the bills, in under two years?

Something is rotten in Denmark.

Normal people have adequate emergency funds.

Normal people have healthy retirement funds that are… for retirement only.

Normal people can survive a job loss without collapsing completely. This one is especially true when you have the advantage of a working partner.

Once things go bad the first thing that gets blamed is the economy. Like a toddler who lost his favorite toy cries at the top of his lungs they are irrationally placing blame on whatever is in the news.

Where did we go wrong? We trusted in the economy, and in our own strong work ethic, but it was all for nothing.

I’m not going to pretend that I know all of the details of their financial lives but my gut feeling is that there is more than they are willing to let on to CNN. My parents worked five jobs between them when times were tough. They worked hard to make ends meet and got the job done no matter what the economy was doing at the time.

Color me odd but if this is what the average American family is up to, I’ll take a rain check.

Well it just figures that the very day I announce to the world I paid off my car I would also be involved in my first psuedo accident.

I say pseudo because it was not enough to report it to the insurance company but just enough to frazzle my nerves.

I was driving home from work as usual. I am of course following the speed limit more or less, as are two cars in the left lane slightly ahead of me. Well I guess the second guy in the left lane didn’t feel like going the speed limit was fast enough, so he promptly swerved to my lane to accelerate.

Only problem was my car was in his way. Luckily I happen to have cat like reflexes. I leaned into the horn while doing a bit of swerving of my own, screeching tires and all, to avoid a collision. His rear right corner touched my front left corner, bouncing me into the curb.

He did not stop.

After pulling over I investigated the damage. I lost some paint where the two cars met, but did not end up leaving any dents. I had to wander back down the street on foot to retrieve my hub cap. Other than that, I was ok, and the car was fine too. The tires looked ok, albet a bit scratched.

So I’ve made it back home and thats that. Just thought I’d like to share. I feel better anyways.

Getting married is a very special event in any couple’s lives. My new wife and I wanted nothing less than to drive off into the sunset after getting married, leaving our troubles and stress behind as we embark on our honeymoon.

That vivid fantasy aside, we needed a plan. Our wedding cost us over $10,000 and we wanted a honeymoon that would not shortchange our future. A future where having a 20% down payment on a house featured prominently.

Together, we put our ideas on the table and looked at each for the alternatives

DO Nothing

This one definitely wins in the cost category. We thought about this one long and hard for about two seconds. We are not going to be absolute cheapskates. Completely cutting out any semblance of a honeymoon would have saved us money but it would have robbed us of an opportunity to build our new memories together as wife and husband.

Remember that line between being frugal and being cheap? Yep, this one crosses it I think.

Take a Cruise

We have done this before and loved our trip. We estimated the cost to be around $4,000 for a week long cruise to some tropical destination.

But we really had already done it. We had a collective been there done that feeling about taking another cruise. So we thought about other destinations.

Road Trip to Nova Scotia/French Canada

This idea was all the wife’s. I have to confess that I didn’t see too much into going to Canada for a week and a half. This was the one we eventually chose and I am glad we did. It was a very fun vacation!  It had all the feel of some far off European destination, without all the pain of actually going to Europe.

The budget for the trip broke out into three broad categories.

• Hotel ($200.00 / night)
• Food ($100.00 / day)
• Misc ($100.00 / day)

For a ten day total trip, that made out to roughly $4,000.00, same as the cruise.

Hitting the Road and Saving Some Money

Our destination set, we jumped in our car and headed off. Here are a few tips to save some dough on an international trip.

• Don’t exchange money at the tourist centers! They will gouge you on fees. Use a local bank which will have much more reasonable fees. You need cash for a lot of things so you might as well get the best deal possible when exchanging.
• Use a no-fee credit card whenever possible! My wife’s Capital One card has no international exchange fees. You simply pay the current exchange rate and viola! This saved us big bucks by paying with credit card for things like eating out and souvenirs.

The best part of our honeymoon above all else was the fact that our guest’s gifts more than covered the full expense.  It was a pleasant surprise to have so many loving people in our lives who together gave us an amazing honeymoon without us having to dip into our house savings.

For those of you out there who missed the news, a company called Cash America, ticker CSH revealed to investors yesterday that they would be revising their second quarter earnings upward. Their expected results would exceed prior guidance.

The news whipped investors into a frenzy and on heavy volume, the stock price of Cash America shot up a bit over 14% in yesterday’s trading.

Why is this a bad sign for the economy? Cash America is a cash advance and pawn shop company. When times are good for them, I can only conjecture that it means that times are indeed bad for the rest of the country.

From the Associated Press:

Cash America said its pawn lending business benefited from higher-than-expected revenue from pawn loans and higher gross profit dollars on the sale of merchandise.

In addition, the company said its online cash advance product offering posted strong revenue growth and lower-than-expected loan losses.

More people are getting payday loans and visiting pawn shops. The numbers don’t lie. This industry should be on the ropes in this country not posting significant gains.

State Caps are Working

Even with positive news for a company like this, I would stay far far away as an investor. There are a few bits of silver lining included in the press release. Several Cash America outlets are in the process of being closed in Ohio due to a new state law that caps interest rates at 28%. Even more store in California and Texas are being shuttered by Cash America this quarter.

Declining store numbers will eventually catch up with the company and outweigh the benefit of higher per store returns. The current 52 week high is above $48.

Better Than Expected for Now

At the very least, people are paying back their loans on time. “Lower-than-expected” loan losses means that for at least the moment, the new breed of pay day loan takers are responsible enough to pay back the loans they take. Either that or they are simply not yet been nudged off the cliff face of debt entirely.

There may be hope. Then again, this may be one more straw on the camel’s back. A few more and we may start having real problems.

In the last week or so, my fiancé and I have been been presented by two very generous gifts from friends. Only one of which we were half excpecting. Regardless, we are struggling to come to terms with actually accepting them. It would appear that despite our financial state, we would like to think that we should be better people if we did not accept our friends and family’s generous offers.

After spending much of our lives working things out on our own, we have been blown away by the magnitude of the gifts. At the same time, we feel guilty and disinclined to accept. We may not be in the best of financial situations given our geographic location and local cost of living, but we know we are doing well. Better than most of my family in fact.

The first gift was from a college roommate. He managed to overhear some of our complaints about getting lost on several short car trips in the last month or so, and a week later, he showed up with a preemptive wedding gift, a top of the line GPS unit.

After all of the bells and whistles he purchased to go along with it, the thing must have cost him a solid $1,000. My fiancé couldn’t resist looking up the full and fair market value after he had left. She is good at that sort of thing.

The second gift was a check for $2,000 from my soon to be mother-in-law. On top of that, she considered it a donation to the wedding and will be providing an actual wedding gift as well. My fiancé tried not to accept the check, but her mother managed to escape with it sitting on our kitchen table.

To Accept or Not to Accept

We had fewer issues accepting the GPS unit from our college friend than the $2,000 from family. Although, it was kinda hard to since he had already unwrapped it, activated it, and pre-loaded maps for us.

From family, it is a bit harder. My fiancé has a very good grasp on her parents finances. She knows that this gift is a very generous one for them. We would not want to put them in a poor situation from giving us too large a wedding present.

If it were only me, I would accept both with a good heaping of gratitude. Virtually every single one of our friends had some particular advantage starting out their wedded lives. I’ve talked about being green with envy in an earlier post. So when, finally, a family member bestows an advantage on us, even if it is only money, we should be willing to accept it with open arms.

No-one in our family is a real estate broker to help us buy our first house. We have no handy-men who are willing to put in time to fix things around our apartment or (hopefully soon) new house.

But people do have money. And it is their form of saying they care when they give those gifts. If they had other services to give, I am sure they would. For us to refuse them in any way is arrogant and distasteful. It tells them that we are better than them and that we don’t need or want their help.

That’s not the case. We should accept whatever help we are offered. We are not pandering or begging for cash. I would like to make it a point not to get in the way of generous people. I am sure that it makes them feel as good to give the gift as we should to receive it.

From CNN Money.

I love my wife, but her inability to keep her mouth shut about money has become a real problem. She’s got a couple of relatives whose hands come out whenever they hear that I’ve gotten a raise or that we’ve treated ourselves, for example, to a big screen TV. I handle our finances, and I’m beginning to think I shouldn’t be telling Heather as much about them as I do. Under the circumstances, would this be wrong?

What an interesting situation. The comment section was alive with many colorful remarks. Amid the valid well thought out replies there were the usual stream of semi-conscious dribble. It is amazing how many folks would actually suggest that he leave his wife. Then again, this is the internet and anonymity has that effect on people, so I shouldn’t be so surprised.

Here is my take.

There is nothing wrong with the wife. There is no reason that she should be ashamed or regretful of success. When I get a raise, I want to be able to share that good news with my friends and family. It is only natural to want to spread good news. Raises should be celebrated not hidden. So long as the tone is not obnoxious, there shouldn’t be an issue.

The real problem is with the relatives. Who are they to expect a slice of your pie just because your family has a bit of success? This is selfish and childish behavior. They need to grow up and accept the fact that they should earn their own way instead of pan handling to their relatives.

I will admit that sometimes I don’t end up telling specific relatives about my raises or personal spending for just this reason. I know that the instant they hear about any sort of windfall, they will start behaving badly. It is a sad thing when you don’t feel comfortable sharing the truth with family.

I remember very distinctly being primed for this type of behavior even before I had graduated college. It was the holidays and we were talking about my job search. I had not landed a full time job yet and was graduating in May. I was telling my family all about my recent interviews and the current leads I was chasing down. I must have impressed my Sister’s husband because he was quick to interject something along the lines of, “You better remember us when you make it big after college.”

Isn’t that just unsettling? When you are put into that awkward a situation time and time again, there is little else you can do. It is highly unlikely that they are going to change all of a sudden for the better. People don’t often change on a dime.

I’m done being an enabler. I hope that in future situations where I may be tempted to break that promise to myself, my future wife will be there to help me through it and be there to console me when I inevitably feel awful afterwards. Sometimes doing the right thing hurts.

I’ll admit it. From time to time, it seems as though the world is stacked against us. Meanwhile, the Jones are out and about, having been granted every advantage and perk imaginable. Just to recap, here are just some of the advantages I have noticed about our friends.

• Our friend’s parents provided them with a down payment for their house.
• Another couple had a family friend who happened to be a realtor. No closing costs on their house.
• We are fairly certain that several of our married friends received substantial financial aid for their weddings. Some of them we are certain did not have to pay a dime.

All the while, on our side of the lawn, things are just a little bit different.

• We are paying for our entire wedding ourselves. We are hoping to get enough in gifts to cover the honeymoon (if we are lucky).
• The wedding is depleting our house down payment fund. We will be saving for at least three years to afford a 20% payment.

Sometimes, I can’t help but feel a little green.

However, being bitter doesn’t solve a darn thing. I can walk through life being jealous of my friends or I can suck it up and realize that sometimes life is a challenge, and other times, I can’t expect to know the full story.

Life Isn’t Always Fair

It is true. I should not be so melodramatic to assume that the world is out to get me. We may not have every advantage, but we do have a few of our own. We do not have any credit card debt, we are financially independent and have good paying jobs. There are a host of people who would love to be in our situation, despite not having a family friend realtor.

Some Play Their Cards Close To Their Vest

Just because I can see the obvious advantages in someones situation does not mean I know everything about their lives. Even close friends may feel embarrassed about some of their disadvantages. While the good things about someone’s life may be easy to spot, other items may not be so obvious.

Money Comes and Goes, But Friends Last a Lifetime

Life alone would be a boring and trivial affair. The good company of friends is something we should all learn to cherish despite our different financial situations. Beyond our gross and net salaries, the reasons we became friends in the first place is still just as valid today and there is precious little that finances should get in the way of.

Cherish your friendships, for richer or poorer. It sounds corny but it should apply to most of the readers out there. Being fiscally responsible is important. However, money should not come between good friends, ever.