Wise Bread (Julie Rains)

My Poverty-Fighting Superheroes

Julie Rains — Wed, 15 Oct 2008 12:27:47 +0000

You never know -- your mild-mannered neighbor, co-worker, or long-time buddy may be a hero in the battle against poverty. He might prepare meals for the homeless; she might tutor at-risk kids. I have lots of poverty-fighting heroes but there are a few who stand out because of their fanaticism, contrarianism, or perseverance. Here are their stories in honor of Blog Action Day 2008 Poverty.

Nita unmasks evil sales messages disguised as financial advice.

She wielded her expertise to fight financial illiteracy and empower citizens to make good financial decisions. With a doctorate in Financial Education (Ed.D.), Nita ran a one-person, government-funded Money Management Center that educated community members on personal finance topics. She shared her expertise through private counseling sessions, newsletters, workshops, in-school programs, and television segments.

I met Nita at a speaking engagement and later became a member of her advisory board. At one of the board meetings, I met a church pastor who expressed concern about predatory business practices that affected members of his congregation; at the time, he was complaining about rent-to-own agreements that required payments well beyond the original purchase price. Such practices, along with unawareness regarding other purchase options, he believed, were one element in preventing the poor from acquiring wealth. But it is not just the financially naïve who need guidance; Nita helped those who were reasonably savvy (me, for example as I have a BSBA-Concentration in Finance) break down the elements of financial matters and make good decisions.

Sadly, Nita’s position was eliminated several years ago because of budget cuts.

Debbie smashes inaction.

Debbie is a member of a non-profit, all-volunteer service club of about 20 people who provide support to those with communicative disorders. Members of the group, along with sister chapters, spend a lot of hours raising money (yard sales, spaghetti dinners, bowl-a-thons, ballgame concessions) to fund yearly programs such as one-on-one summertime speech therapy for children receiving group therapy during the school year and a week of traditional camp for children who are deaf or have deaf parents or siblings.

So, when random individuals surface with requests of $500 to $1,500 for a hearing aid repair bill or a technology-driven communication device, there is an inevitable hesitation to immediately write a check. Questions about whether government sources of funds have been exhausted are tossed around. But Debbie, who is aware of bureaucratic hurdles and the dangers of long wait-times, urges prompt action so that, for example, the hard of hearing young adult can understand his boss and family (with his now-working hearing aid), and the autistic child (with a special device) can communicate with his teacher and parents as soon as possible.

Dean concocts scheme, leverages compassion.

Dean was the mastermind behind an assistance organization that started as a brainstorming session during his Sunday school class and became a long-standing crisis resource for residents of his small town. The organization provides grocery items and money to clients on a one-time or limited-time basis. Though information on each client is recorded, a lengthy interview and intake process is not involved. With immediate needs met, clients can more intentionally deal with problems that the crisis (such as a family member’s death, job loss, or house fire) created. Through quick action, his group helps to prevent escalating problems.

The group is now a coalition of more than 10 churches and receives regular support from community members and groups such as the scouts, who organize an annual collection for the pantry.

Linda fights for good nutrition for all.

Linda is an RN who teaches childbirth and nutrition classes to expectant parents in her spare time. She’ll urge any pregnant woman to look into WIC (Women, Infants, and Children), making no assumptions about the eligibility of her audience but rather emphasizing the value of good nutrition and its accessibility for everyone (USA program).

Patricia and Sarah lift large obstacles to work.

Patricia is the Executive Director and Sarah is the Director of Support Services of an inner-city child development center that serves low-income families. Access to high quality, affordable childcare is a major obstacle to work for many parents and, more recently, grandparents. By offering scholarships and sliding scale tuition rates, weekly fees are affordable. Patricia and Sarah are aided by a host of donors throughout the community as well as cyclists who participate in the agency's annual charity ride.

Want to help alleviate the causes of poverty or suffering caused by poverty? Here are a few programs that have gotten my attention recently:

Bikes for the World (donate bikes to the poor in developing countries or the Metro DC area, where the non-profit agency is located)
Crop Hunger Walk (walk and raise money or sponsor a walker to raise funds for local and global hunger-fighting agencies)
Train for Humanity (sponsor Leo or others to benefit Darfur Peace and Development Organization)

Permalink | 7 comments | Julie Rains's blog | Channel: Life Hacks

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

The 10 Things I Won’t Give Up Just To Save Money

Julie Rains — Tue, 07 Oct 2008 13:00:38 +0000

By Julie Rains

Times are tough and they may be getting tougher as inflation and unemployment rates rise. There are 10 things that I could cut out of my expenses to save money right now but these measures will likely cause my earning power to shrink and my cost of living to rise in the long term. I’ll share my plans for spending, my ideas for cutting back, and so, you won’t think I’m frivolous, my list of things I never bought in the first place.

10 things I won’t give up:

1) Internet access. The Internet has freed me from the limits of my local economy, which has been burdened with layoffs from R.J. Reynolds Tobacco Co., Hanesbrands, and Wachovia. It has allowed me to eliminate yellow-page and other forms of advertising in favor of a website and network of contacts that range from bankers, teachers, and sales reps within a 10-mile radius to engineers in Honduras, designers in New York and California, and property managers in Washington, DC. And, my Internet access enabled graduate-level distance studies in journalism, and a freelance blogging job with Wise Bread and Parenting Squad.

2) Good food. I know I could save money at the grocery store if I just bought regular peanut butter or high fructose corn syrup orange drink rather than natural peanut butter or real orange juice, but I want to consume the good stuff and avoid what I am pretty sure won’t be healthy for me. My goal is to stall the onset of disease so I can save healthcare dollars and be healthy enough to work productively for many more years.

3) Fitness expenses, which now consist of a gym membership and athletic gear, such as running shoes, Barracuda goggles, moisture wicking apparel, and concentrated carbohydrate gels.

For a while, I opted for cheaper alternatives that didn’t require planning or a membership fee, such as running and walking in my neighborhood. I also used a stationary bike and home gym. These were good options for a while but I didn’t really maintain a good fitness level as it became difficult to measure my progress. When I realized that I could start facing some serious health problems, I decided that the expense of the gym (in my case, a family membership at a nearby YMCA) was worth it. Having access to resistance training equipment, indoor and outdoor tracks, indoor pool, group classes, and more helps keep my workouts interesting. After a decade hiatus, I am now back to community road races and bike rides.

4) Health insurance. I have a high-deductible policy primarily to avoid having to sell investments in order to pay for a catastrophic health event. The policy itself isn’t particularly useful in covering day-to-day healthcare expenses though I do receive pre-negotiated discounts on medical services.

5) Cancer Screenings. The cost for these range from free for an annual skin cancer check offered on a limited basis by a local dermatologist to $50 or so for a yearly mammogram and $1,500 for a colonoscopy every 5 years. Treatment should be much less expensive in the early phases than in the latter.

6) Dental Care. My childhood dentist didn’t use novacaine when drilling so avoiding the dentist has often seemed like a rational way of saving money, time, and stress. But repairing dental problems can be pricey compared to the expense of regular cleanings, check-ups, and ultrasonic toothbrushes. And since underlying health problems can be signaled by problems in my mouth, it makes sense to get looked at (even for a moment) by a dentist. For inexpensive care, use services offered by area universities or community colleges with dental programs.

7) Dinner with the book club. Once a month, I gather with a few friends (all moms with teenage sons) to discuss our latest selection while dining at Panera Bread, where a sandwich, salad, and/or soup are somewhat extravagantly priced compared to home-prep expenses. Though we’ve considered other sites including our own homes, we haven’t yet strayed from this choice: no one has to ready her house and the folks at Panera allow us to sit and talk for hours. We meet for dinner on un-crowded Saturday nights and stay until closing. The social connections, divergent perspectives shared in a supportive environment, enlightenment regarding literature and teenage culture is invaluable, and cheaper than talk therapy (though please visit a licensed psychologist or psychiatrist if you need help).

8) Kids’ activities, now consisting of junior varsity football, scouts, and church youth group. Despite one child’s athletic injury (a $600 wrist fracture, making me realize why orthopedists are prominent sponsors of the football team), these activities are some of the least expensive available. Summer camps run a few hundred dollars and most outings typically require the cost of food and just a few dollars more. So, I am not planning on cutting these relatively minimal expenses for what I hope will yield dividends in the future, namely strong men and someone to pitch my tent when we go camping on vacation.

9) Chocolate and wine. There are some indulgences I refuse to give up. As my eighty-something dad says (paraphrasing Clement Freud’s wisdom), if you give up what you enjoy, you don’t live longer, it just feels longer.

10) Annual vacations. Getting away from my routines and having novel experiences is essential to my well-being, physically and mentally. And, according to research, vacations may help prevent cardiovascular disease.

10 things I never bought in the first place:

1) Lottery tickets. The lottery came to my home state of North Carolina a few years ago but I haven’t yet bought a ticket. It’s not that I will never, ever buy a ticket but I haven’t yet and now doesn’t seem like a good time to start. (For a lottery alternative, see Philip's post on generating a windfall).

2) A larger car than I need on a day-to-day basis. Yes, I would love to be able to haul gear around on the bed of a pick-up truck or take a vanload of kids to the swimming pool. In some cases, not having the larger car has cost me more (because I have had to buy supplies on the road or take 2 cars so that kids can be seated safely) but in general, I have saved on the initial cost of the car, insurance, property taxes, and gas.

3) Private school tuition. My kids are doing well in their district-assigned public schools and if they weren't, I would consider alternatives such as charter schools more suitable to their needs, tutoring by a professional or me, and/or the guidance of an educational psychologist. I just can't see justifying $10,000+ per year per child for private school.

4) Extra pairs of shoes for the kids. For most of their lives, my kids have had just one pair of shoes: a pair of sneakers for school, play, and nearly every social occasion. Old pairs were saved for use as river shoes on canoeing trips. There are exceptions that require a change in strategy. When a formal event is on the horizon, I wait until close to the big day to make sure that whatever pair of shoes I secure will still fit. Now that they're older, I have gotten them flip-flops or fake Crocs to wear to the pool; fortunately, these type of shoes are not as size sensitive as sneakers or dress shoes, and so have lasted multiple seasons. For hiking boots, I snagged a great deal on functionally great shoes in an unusual color from Lands' End overstocks or bought sneakers with super-duper treads.

5) Mortgage payments on a too-expensive-for-me house. Though I have, at times, regretted not spending more on a larger house that might have increased in value more rapidly than the one I am in now (my home's tax value is less than the median price in my town), I am pleased with the affordable mortgage payment.

6) Cleaning supplies. I’ll admit it – I am not a good housekeeper. Cleaning supplies for anything other than laundry, dishes, and certain parts of the bathroom, are rarely on my weekly shopping list. Soap and water seem to do well; and now that someone I trust has proven its efficacy, I am going to spend my cleaning money on baking soda.

7) Entertainment. I’ve always chafed at the cost of movies and some live shows, considering that there are usually free or cheap alternatives, funded by corporate sponsors, local groups, or my public library.

8) Expensive trips. Though I insist on annual vacations, they haven't typically been luxurious ones. And now that I've started bike riding, multi-day events with tent or gym accommodations appeals to my sense of adventure and frugality.

9) New wardrobe every season. I wouldn’t mind updating my closet more often but I don’t have a great fashion sense and rarely have face-to-face meetings with clients so my fashion clothing needs are minimal. I try to buy classic clothing that lasts nearly forever.

10) More enriching activities for the kids. If you're a parent, you'll know that there are loads of activities for kids. Fortunately for me, my kids don't beg to be signed up for lessons though I wouldn't mind partaking in martial arts, cooking school, and horseback riding. Putting a limit on these saves at least $50 each month plus gas money.

10 things I am considering cutting out or changing:

1) Using a clothes line to dry my clothes (It took 3 days for 3 t-shirts to dry but I am hopeful that the right combination of clothes and lower humidity in the fall will bring faster drying.)

2) Cancelling the newspaper (Reading the paper has been my morning ritual for years but now that the paper is trimming its print offerings, I am considering eliminating this daily habit altogether.)

3) Growing a garden (Right now, I have chard and blueberries but would like to learn how to have a real vegetable garden.)

4) Turning back the heat and air conditioning, depending on the season

5) Baking, not making, homemade gifts

6) Camping rather than staying in vacation rentals or hotels on vacation

7) Consuming cheaper sources of protein (such as applesauce protein bars found in my clean eating post)

8) Shopping more at consignment stores, discount stores, and Goodwill

9) Learning how to landscape my yard (My yard needs some work so, even if I hire a professional, I'd like to get a better handle on what I should and shouldn't do; community college classes are great for this type of information.)

10) Organizing my space (I am one of those people who need to get organized in order to avoid buying tools or other rarely used items I already own.)

So, now you see my priorities, which likely differ from yours, and my feelings about false economy, that is saving money on the front end only to have to spend more later. Feel welcome to consider my list as you ponder yours.

Permalink | 47 comments | Julie Rains's blog | Channel: Frugal Living

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

How to Throw a Kid’s Birthday Party That’s Fun, Happily Memorable, and Not So Expensive

Julie Rains — Fri, 19 Sep 2008 20:05:53 +0000

By Julie Rains

The most fun, memorable and least expensive birthday party for your child may be, figuratively and literately, right in your own backyard. I’ve attended and hosted fabulous but simple parties with cake, ice cream, and a few balloons, and participated in much bigger backyard extravaganzas. So, just because a party is at home doesn’t mean that it will be cheap and easy to orchestrate. I’ll share ideas for throwing a happy event that’s light on cash outlay and effort.

Be aware of but not intimidated by the fervor around children’s birthday parties

A few days ago, I picked up a parenting magazine for families in my area. In this 46-page publication, there are 15 ads from birthday party purveyors, ranging from magicians to nearly complete packages at a butterfly farm, party palace, and an art studio. Prices start at about $300 for eight children.

My kids (both boys so you won't see a princess party listed) have attended parties that involved:

Dinner at a nice restaurant
Mad Science presentation at a church
Backyard carnival with cotton candy machine, fishing booth, and more
Petting zoo and pony rides in the backyard
Activities led by Taekwondo instructors at a martial arts studio
Bear component selection and assembly at a Build-a-Bear Workshop
Gaming at GameFrog
Going to a movie and then hanging out with friends at a sleepover
Bowling at the bowling lanes
Baseball and cookout in the backyard

There are loads of choices or rather there are lots of businesses who are ready to take your birthday money; even my local "Y" is offering parties now and it "will guarantee a perfect day for your child's birthday."

It is the charm of the hosts and pleasantness of the guests that matter

One of the nicest parties my kids and I have ever attended was held in the apartment complex where the family of the honoree (5-year-old girl named Samantha) lived. Ten or so kids and many of their parents gathered in the family’s living room, played (or supervised play) inside, walked together to the onsite playground, played, trekked back to the apartment, enjoyed cake and ice cream, and talked.

The parents were kind enough to allow me to bring my younger child in addition to my older son (the invited guest); in fact they welcomed everyone and remarked that my then-2-year-old, who enjoyed building and taking things apart and pushing buttons (which some people find annoying), would likely become an inventor and live off royalties, just like Samantha’s uncle. What made the party great: party hosts who seemed to truly enjoy their guests’ company, unstructured play, and the chance for parents to mingle.

But backyard events are not always so simple. A few years ago, I planned what I thought was going to be a frugal, fun party: a few guests; cake and ice cream; and some cool games. I bought Harry Potter paper goods, decorations, and party favors from a birthday celebration catalog. I figured since I was holding the party at home at no cost, I could afford a themed event at a cost of about $100.

Researching, evaluating, and organizing a series of activities took awhile. Supplies for the games added some to my expenses. A game that I thought would occupy the kids for a half-hour lasted about 5 minutes; another game that I was sure would be a huge hit (sticker tag) was rejected by one child, shortening its life at the party.

Since then, I’ve opted for single activity-based parties: a basketball party for a handful of kids held on our driveway; a baseball party for a slew of classmates held a public park (rental fee of $10); and a sleepover with enough children to entertain themselves without causing property damage or personal injury. What I like most about these types of parties is that the kids are occupied but still have plenty of chances to socialize.

Consider all the costs (money and time)

I have finally realized that there are many components to party planning and each has a dimension of time and cost to consider:

Venue
Activities
Food
Decorations
Treat bags

Having a party at home can be the most frugal option or can cost you plenty, depending on your choice of activity or entertainment, extravagance or absence of decorations, food, and treat bags or party favors. For me, getting my house and yard in shape for guests is often a time-consuming challenge though others may have spotless, ready-to-have-a-party homes. Decorations for a themed party can be pricey so, learn from my mistake, and make sure that the money you save on having a party at home isn't diverted to paper goods, mylar balloons, and trinkets with images of fictional characters.

Other free or very inexpensive options include reserving space at a local park, the clubhouse in your neighborhood, or even your place of worship. Check rental fees and reservation requirements well ahead of the big day: the baseball field at a nearby park cost just $10 but it could only be reserved a few days in advance (also, don’t assume that public spaces are cheap: some sites can run $100 or more).

It’s obvious that if you hold a party on a baseball field, then you’ll play baseball or perhaps softball or kickball; skate at the skating rink; bowl at the bowling lanes; swim at the swimming pool. But you might rent space at a public facility, and arrange for entertainment and activities in which case your time and cash expenditures increase.

Evaluate the package deal

You might decide to pay a fee (or a series of fees) for a party package or menu of services. Most price lists are very specific about what is provided. Still, a busy parent might not notice that the goody bags provided by the bowling lanes are empty or that party guests will most likely share space with shoppers at the Build-A-Bear Workshop.

Here are questions to help you evaluate the deal (relevant whether you are planning a party for a 5-year-old or an 80-year-old):

What is the price and time limit for the room or facility rental?
Can I bring as many guests as I'd like or is there a maximum number?
Will I have space dedicated to my party or will I share the space?
Is there a minimum number of guests (that I need to pay for whether they come to the party or not)?
Are decorations included?
Is food included?
Are treat or goody bags included and, if so, are they filled or empty?
Do you need to bring a birthday cake or is one provided?

Treat bags are optional

You don't have to give treat bags filled with very small, probably useless toys (which I am sure I did at least once). Here are some alternatives:

A book (give everyone the same title)
Pencils and candy (parents will like one; kids, the other)
Deck of cards or other inexpensive but nice-to-have item
Crayons or markers purchased at back-to-school sales with a coloring book from the dollar store
Random items given as prizes throughout the party

What I’ve learned

More kids usually means more fun
Younger children (3-4 and younger) may enjoy a very small party that is more of a playdate with cake rather than a big birthday party; see Linsey's tips on partying with a baby
Certain activities can be overdone (for example, one of my child’s guests attended 2 bowling parties in one day)
You don’t have to spend much money but if you are going to spend money, paying for a cool activity or a place for kids to have plenty of space trumps paying for decorations
Kids who are usually ravenous don’t eat much at parties (I still make sure we have plenty but typically have leftovers)
There are a surprising number of children who do not eat cake and ice cream
Take pictures to make the day memorable

Permalink | 15 comments | Julie Rains's blog | Channel: Life Hacks, Art and Leisure

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

Book Talk On “The Offsite: A Leadership Challenge Fable”

Julie Rains — Thu, 04 Sep 2008 01:30:46 +0000

By Julie Rains

The Offsite is a quirky quick read, a short novel by leadership consultant Robert H. Thompson. There are no talking animals or inanimate objects that adopt human characteristics a la Aesop’s Fables but rather vignettes of leadership struggles and truths portrayed during an offsite team-building, leadership-development, and passion-finding session. I’ll tell you about the characters, give a glimpse on what was insightful and what was contrived, and give ideas for using the book.

My favorite character was Sam Arthur, a former CEO and leadership guru turned part-time retiree, university lecturer, and hotel gardener. He relished his gardening position not necessarily for its job content but because it gave him an opportunity to gauge the leadership potential of those he encountered, many of whom judge him as insignificant because he is working in a laborer position. (I was both intrigued and repelled by the idea that I, as a reader, may, possibly, assign worthiness to an individual based on status or title.)

Other characters include

Abby Bancroft: owner of Perfect Leadership Consulting, offsite organizer and facilitator
Mary Mitchell: hotel waitress turned assistant hotel manager, who began her journey toward transformation following a public display of appreciation by Abby Bancroft at a previous seminar
Gordon Murphy: newly appointed CEO of American Laboratory for Molecular Research (ALMR), a pharmaceutical company that is planning a joint sales venture with Advanced Biomolecular Pharmaceuticals (ABP)
Joe Vanderson: sales vice president of ALMR, a true salesperson and relationship manager who has been promoted beyond his level of competency (see Peter Principle); though he enjoys good relationships with the FDA, key accounts, and joint venture capitalists, he is portrayed as a workplace bully and leadership antithesis
Gwen Kelly: director of sales for ABP who is struggling because she is trying to manage rather than lead her sales team
Jerry Allen: vice president of business development of ABP

The setting is a luxury hotel in Tucson, Arizona, where leadership principles and practices are presented, discussed, and, presumably, adopted by session participants. The purpose of the session is to develop shared values and goals among team members of two pharmaceutical companies in preparation for a joint sales venture. The underlying goal (and focus of the novel) is to teach Joe and Gwen about leadership (rather than management) so that they can lead the sales initiative; since their successes have been based on outdated, controlling, micromanaging approaches to business, turning them into leaders is the key challenge.

Sam does have some illuminating comments such as “Leadership is the art of mobilizing others to want to struggle for shared aspirations.” And “…your passion needs to be part of a bigger picture. Do you think that Martin Luther King Jr. could have rallied a nation if he’d said ‘I have ten measurable objectives’ instead of ‘I have a dream’? Leaders share their dreams, folks. They breathe life into their visions and communicate clearly for understanding. Nobody wants to be handled like pawns in a chess game. Provide the direction, but give people the choice to make their own moves.”

Meanwhile Abby is encouraging a positive approach by telling her audience to “Let your thoughts grow flowers, not weeds” and Jerry is informing Gwen that her offhand reference to him as “boss…reminds me of the mob, and it has a negative, subservient ring to it…”

The Five Practices of Exemplary Leadership shared in the book include Challenging the Process, which may involve, for example, throwing a time sheet binder in the trashcan in front of cheering employees. How the Department of Labor or the IRS awaiting its 941 payroll tax report or the union representative responds isn’t covered. Nevertheless, there are some leadership lessons of value: have integrity, provide direction and inspiration, be passionate about what you are doing, and show appreciation. It is left unstated that those you are leading are self-motivated, ambitious, bright, and capable.

If you are looking for a step-by-step guide to leadership, you won’t find it here (unless you have been to one of these sessions and are familiar with how “creating your masterpiece” means finding your true calling and leaving a career-related legacy). If you want to get a beginner’s grasp on some leadership buzzwords or are preparing to participate in an offsite meeting, then this book could be useful.

"The Offsite" might also be of interest to a business-oriented book club for a change of pace from non-fiction titles or a traditional book club with members who want to explore business and career issues through fiction. Here are questions to spark discussion:

What character did you most identify with? Why?
Have you had a problem colleague such as Joe and how was he dealt with?
Have you participated in an offsite session? Was it similar to the one described in the book? Were you inspired by the session? What were the results six months and one year later?
Do you trust your company leadership? Why or why not?
Have you ever challenged the process? What was the outcome?
Have you solicited insight or shared ideas with others in an organization? Were the ideas translated into actions and what were the results?

If you learned something of value at an offsite or team building session, feel welcome to share.

Note: I received a free copy of this book in exchange for a book review.

Permalink | 2 comments | Julie Rains's blog | Channel: Career Building

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

6 Random Things I Have Taught My Kids About Money

Julie Rains — Sun, 31 Aug 2008 22:29:57 +0000

By Julie Rains

I’d like to say that I have taught my kids everything they need to know about personal finance, from the basics of banking to the complexities of investing and portfolio management. I haven’t. When I was ready to inform and guide, they had no interest in learning. The financial education of my children has not been progressive or linear, but rather haphazard and unorganized. Imparting wisdom, then, has been the result of random events and conversations. So, with the understanding that life keeps happening whether you are ready or not, here are 6 things I have managed to teach my children about money.

1) Beware of fees for add-on services.

Both of my sons, newly equipped with cell phones, accessed the Mobile Web during out-of-town trips. When my oldest son went away to football camp, he got bored during his downtime and checked ESPN box scores. My youngest decided to check on updates for his favorite computer game during a family vacation. Neither realized that this service was not included in our flat monthly fee.

Now they know that easily accessible services are not always (hardly ever?) free.

2) Watch your expenses if you want to have a profitable business, but don’t be so cheap that you won’t have satisfied customers.

When my youngest decided he wanted to sell Yu-Gi-Oh! cards on eBay, we worked together to set up an account linked to my credit card and checking account, both of our emails, etc. Though he seemed to understand the revenue side of business, he had to learn about expenses. He carefully considered the cost of posting multiple photos, postage, and mailers. Would an extra photo help sell the cards or just increase the eBay fee? How much is postage? And should he use a rigid mailer, as I suggested, or a flexible bubble envelope, as he preferred, to get the best buyer feedback? (He shipped the cards using the bubble envelope and earned a “well-packaged” comment from his first buyer.)

Not only did my son figure the basics of controlling expenses, he also learned how to weigh business costs vs. benefits to the customer, made easier thanks to the feedback mechanism.

3) Be certain of a purchase before you make a commitment.

For the fourth year in a row, my son decided to attend a month-long summer enrichment program. Before I sent in the $350 fee, I confirmed his interest but never mentioned the amount.

Having spent the week just prior to start of the program at Boy Scout camp, walking several miles each day, he was tired, rather than energized, for the first day of activities. Adding to his troubles were 1) a new program site (he preferred the inner-city school of prior years); 2) more watchfulness and protection on the teachers’ part, limiting his perceived freedom; and 3) no long-time friends in any of his classes.

He wanted to quit after the first day but I felt troubled having paid the non-refundable program fees and more importantly, not having taught him the value of $350. We had a series of discussions in which I managed to explain to him that while I didn’t mind paying for the program, it bothered me tremendously to waste money. Also, I made clear that I had to forgo other opportunities to allow him to participate. Our first solution was for him to repay me (he had a couple of hundred dollars in unspent birthday cash that made a dent in his debt); though he said he didn't miss the money, he decided within a couple of days to go back (thus reclaiming his cash) and found the experience enjoyable.

We both learned to consider the cost of programs and other opportunities before making a big commitment.

4) Bring cash but don’t spend everything you have.

For many years, my oldest, a saver by nature, seemed to think that he should either spend all the cash I gave him for outings or keep all the change. I would give him money for a movie with a friend, for example, but he would ask his friend’s mom to pay his way and then try to keep my cash. After I clarified that he was to use our family's money, he then proceeded to spend as much as possible. I was surprised when my youngest, the spender, gave me change when he returned from scout camp; during the entire week, he bought just one root beer and a merit-badge handbook. About that time, my oldest also returned currency and coin from a parent-funded activity.

I am not sure how it happened but they managed to learn financial restraint.

5) Just because you can afford any one thing you want doesn’t mean you can afford everything you want.

In the past year or so, my teenage son’s appetite has gone from average to outrageous. During this time, he discovered Jersey Mike's and developed a preference for giant-sized sandwiches (currently Chipotle Cheese Steak) to the extent that he began to think that having a giant every day was a normal request. During the summer break, when I had trouble keeping his hunger abated, he kept asking for Jersey Mike's. When I expressed my frustration and told him that we couldn’t afford to eat out every day, he asked if we were poor.

I did convince him that limiting your appetite doesn’t mean you are poor but thrifty and wise.

6) Having money can save you money.

Now that I’ve realized that I should involve my sons in day-to-day financial decision-making, I took my youngest with me to get his band instrument for the upcoming school year. The local music stores have rental programs, making it easier to afford an instrument, but the one we visited had a combination of offers. We could 1) rent the instrument for a monthly fee, 2) rent the instrument and have the monthly amount go toward the purchase price so that at the end of a few years, we’d own the instrument or 3) buy the instrument at nearly a 50% discount and, if my son changed his mind about band, return the instrument for the purchase price less the monthly rental fee. After some consideration, we opted for the purchase with buy-back guarantee (the rental interest rate seemed about 25%).

He found, as Philip as mentioned in "On the Importance of Having Capital" that having enough to pay now can save money; or if he missed the nuance of the salesperson's presentation, he certainly learned that band instruments are expensive.

Do I hope to be more intentional in my financial education of my children in the future? Yes. But I'll take what I can give (in terms of personal finance) as it comes along.

Permalink | 7 comments | Julie Rains's blog | Channel: Consumer Affairs, Entrepreneurship, Shopping

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

Divining Your Home’s Value, The Quick-and-Dirty Way

Julie Rains — Mon, 25 Aug 2008 20:25:48 +0000

By Julie Rains

It’s the American Nightmare: your neighbor, in an effort to avoid foreclosure, sells his house for thousands less than he paid two years ago, causing your home to plummet in value. It’s scary, but is it true? Several years ago, a real estate agent I had intended to hire seemed to think that a low sales price on one house meant a full-scale neighborhood decline. It didn’t. Since then, I’ve learned how to divine home values by looking at public records and applying the methodology used by professional appraisers. I’ll show you how to do your own public-records search, and explain why online home-valuation sites may or may not get the home-value number right.

Here are some ways of judging value:

tax value (which may be based on the price paid for the house 15 years ago, the home’s replacement cost, or other factors)
market value based on the sales comparable approach (that is comparing your house to homes that are comparable to yours in geography and construction, and then adding or subtracting value based on features and amenities, similar to the approach taken in HGTV’s My House is Worth What? and Mary's point #10 in Real Estate Appraisals)
replacement cost less depreciation plus land value
combination of all of the above

Information can be gleaned from the following sources:

public records
aggregated public records mixed with mapping technology
site inspections combined with general knowledge of construction costs and market conditions

Public Records

Public records are a goldmine of free information regarding tax values of individual homes as well as sales histories, privacy concerns notwithstanding. Your city or county will typically house these records, which are often accessible and searchable online. The most recent sales price, year of construction, square footage, number of bathrooms and bedrooms, zoning information, and more are often contained in these records. (Call your local government or do a search on real property or tax administration to find the records.)

Is there a political component to tax values? I think so. Higher home values can mean higher property taxes (depending on assessment rates) and more money in the public treasury. Except when, perhaps, there is a public disincentive to increasing property values, say in a neighborhood (like mine) where the state or municipality intends to acquire properties (or has in the past) by exercising eminent domain. For example, when I reported over $40,000 in home improvements made by a licensed general contractor to my home (such as bringing the bathroom up to new building code, replacing vinyl flooring with ceramic tile, and ripping out pressed wood and installing Maple cabinets), the tax assessor increased its value by $0.

I haven’t complained, of course, and plan to resist asking for a revaluation until I put my house on the market; for now, there is a 60+% differential between my home’s tax-assessed value and Zillow’s.

Real (Certified) Appraisals

Real appraisals are performed by licensed or certified appraisers, regulated at the state level. To get an idea of the information they gather and analyze (either through full-home inspections or drive-by inspections of single-family homes), check out the Uniform Residential Appraisal Report.

Appraisers should have an understanding of housing market trends, including sales activity relating to specific neighborhoods. Knowing the value of certain features and amenities (number of bedrooms and full baths, in-ground pools, decks, patios, 2-car garages) is especially useful for calculating replacement costs and figuring out adjustments based on differences for sales comparables, which is often the focus of the appraisal.

Sales Comparables

Appraisers find residential properties that are comparable to your house (the subject property). In a large suburban development, that’s usually pretty easy because several houses of similar size and construction type will often sell each year; in a rural area, it’s trickier because fewer houses may sell and those that do sell will often differ greatly in size and amenities.

Next the appraiser compares your house’s features (age, condition, number of bedrooms, etc.) to the comps and calculates an adjusted sales price for each of the comps; from that information, he/she can develop a market value.

Appraisers may also consider the replacement cost of the home or use the income approach (estimated monthly rent X GRM/gross rent multiplier) to develop market values.

Online Home-Valuation Sites

Sites such as Zillow, Eppraisal, and Real Estate ABC aggregate public records and, with the help of mapping technology, develop a home value (or rather a range of values) based on recent sale prices of nearby homes (but not necessarily ones that are comparable to yours). However, Real Estate ABC has an interactive feature that allows site users to select and deselect sales comparables (comps). In my case, I could keep the comps that were in my neighborhood of single-family homes and de-select the large homes with significant acreage and the condos less than a mile away. This approach, though simplified, is most similar to methods used in a real appraisal.

Appraiser Bullying or Isn't a Home Worth Whatever Someone Will Pay?

When I was in the market for the house I own now, in the 1990s, a licensed real estate agent explained the appraisal process to me like this: the appraiser starts figuring the value of the house but stops when he/she gets to the contract (sales) price. I found her comments disturbing; technically, she was wrong but she did reveal to me some gaps in the real estate sales-lending system. According to the Appraisal Standards Board, potential clients have made requests that are contrary to industry standards for real estate appraisal, such as:

"We need comps for (property description) that will support a loan of $_____; can you provide them?"

"Approximate (or Minimum) value needed: ______________."

"If this property will not appraise for at least __________, stop and call us immediately."

Making the appraisal = the sales price or loan amount is not a good idea, as the State of New York, First American, and Washington Mutual confirmed last year.

In regard to the pending nightmare awhile back, my husband and I found ourselves selling a house that we had owned for less than 6 months due to a corporate relocation; we had bought the house at a moderate bargain because it had been on the market a while and sat a couple of doors down from a foreclosed home owned by a bank. But when our first pick for a real estate agent included our house in her sales comps (for a market analysis not an appraisal), she saw a downward market trend and panicked. We quickly found a more enthusiastic and clear-thinking agent, who helped us to sell the home at a reasonable price within 30 days. Housing prices can rise and fall but one transaction doesn't make a trend.

Though my quick-and-dirty methods aren't perfect, they should give you a guess at your home's value until you are ready to get a certified appraisal.

Permalink | 8 comments | Julie Rains's blog | Channel: Real Estate and Housing

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

Fun Things For Five Dollars Or Less In And Around Winston-Salem, North Carolina

Julie Rains — Mon, 18 Aug 2008 02:21:24 +0000

By Julie Rains

Want to have a fun day but short on cash? Here are some outings around my town that I have enjoyed, nearly all for free:

Take a bike ride around Salem Lake.

What I love: The marked, mostly shaded trail with a view of the lake is suitable for cyclists of all abilities.
What you need to know: Bring an old bike, mountain bike, or hybrid as most of the trail is hard-packed dirt and there are lots of rocks; be alert to fast-moving cyclists, especially those who are riding in the opposite direction.
Bonus: The lake trail connects with a paved greenway.
Cost: $0.

Play at the playgrounds at Tanglewood Park.

What I love: Swings, slides, and sandboxes combine with modern equipment such as a kid-friendly climbing wall and a chair swing for children with physical challenges.
What you need to know: There are 2 playgrounds, both near picnicking areas that occasionally get crowded.
Bonus: Many activities are available at Tanglewood such as golf, swimming, tennis, fishing, mountain biking, and horseback riding though most require a fee.
Cost: $2 entrance fee at the gate.

Stroll in and around Reynolda Gardens.

What I love: The nature trail is quiet, peaceful, and a nice beginning or ending to a walk in the formal gardens.
What you need to know: Watch for signs after entering the Reynolda Village shopping area in order to find the gardens and trail. The nature trail ends in a meadow near the Reynolda House: you can turn around or walk through the grass to return to the gardens or parking lot.
Bonus: Reynolda House Museum of American Art hosts community days with no or nominal entrance fees.
Cost: $0.

See a play, movie, or Independence Day fireworks at Shallowford Square. (see feature photo of the Square with stage set for The Wizard of Oz.)

What I love: Enjoying great entertainment in a pleasant atmosphere is made even more fun because it costs nothing for friends to join you.
What you need to know: Bring your own lawn chair; if you are going to a play, get there early (chairs are often set up in the very early morning prior to an evening performance).
Bonus: Concessions are often available; selection is limited but the prices are reasonable.
Cost: $0.

Hike Stone Mountain (about an hour away).

What I love: The terrain of the stone and the view from the top of Stone Mountain Loop are both incredible.
What you should know: The Stone Mountain Loop is strenuous and shouldn’t be started late in the day.
Bonus: If you’re not up for the big hike, there are nice hikes to the Waterfall on the way up the mountain or side trips to Wolf Rock.
Cost: $0.

Take a computer class at the library.

What I love: You can send your teenager to a computer class so that he/she pass the state competency exam.
What you should know: You need to register in advance and classes fill quickly.
Bonus: Courses are available for adults and cover a broad range of topics; classes are offered at community sites.
Cost: $0.

Participate in “On the Same Page” reading program.

What I love: Nearly everything about this program is fantastic: the books, though often written years ago, have significant cultural relevance (this year’s selection: Farenheit 451 by Ray Bradbury); libraries stock loads of the book so getting a copy is easy; community dialogue is exciting.
What you should know: Discussions and events will vary by location and venue so visiting a site outside of your neighborhood could be enlightening.
Bonus: It will be easy to find someone who has read the book so even if you can’t make an event, you can have an impromptu book discussion.
Cost: $0.

More:

Listen to live music downtown; cost: $0.
Particpate in community dialogue (Voices of our Time series) at Wake Forest University; cost: $0.
Visit a winery or wine-related event along the Yadkin Valley Wine Trail; cost: $0 for a visit (excluding wine) to much more depending on the event.

For even more ideas on how to uncover fun things to do for $5 or less, check out Myscha's post on Family Fun for Five Dollars or Less in Houlton, Maine. If you know of fun things in your area you'd like to share, submit them to the open group write, which inspired my list and gave me a new appreciation for the cool, nearly no cost things to do in my neighborhood.

Permalink | 5 comments | Julie Rains's blog | Channel: Art and Leisure

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

How Tapping Into Home Equity Is Like Pawning A Gold Necklace

Julie Rains — Thu, 31 Jul 2008 21:31:42 +0000

By Julie Rains

It has occurred to me that tapping into one’s home equity can be like pawning a gold necklace, television set, or other personal item with resale value. Both involve using collateral, either to borrow thousands of dollars through a home equity loan or home equity line of credit aka HELOC – or to borrow $50 for a very short period of time. I think it is interesting to compare and contrast these two types of loans.

Similarities between home equity-based loans and pawnshop loans:

The borrower offers an item of value (a gold necklace or a $300,000 home) as collateral for the loan.
Transaction fees (such as appraisal fees, insurance fees, and closing costs) are added to the loan amount.
Items and homes are appraised to determine their value; the loan amount is dependent on but not necessarily equal to this value.
The borrower often uses the money to fund an expense that is unrelated to the collateral. (For example, the money is used to pay a utility bill or tuition expenses, unlike a car loan in which the borrower gets a loan to finance the purchase of the car. According to the Consumer Bankers Association in a Bankrate.com article, 40% of HELOCs and 44% of home equity loans were used for debt consolidation with 23-25% used to fund home-improvement projects, back in 2002.)
Transactions are subject to federal and/or state regulations.
If payments are not made according to the terms of the loan agreement, the borrower forfeits his/her rights to the item. (Since the pawnshop already has the gold necklace, it simply retains possession of the item; the traditional bank's or mortgage company's arrangement is more complex and varies by state but basically the lender could have some legal rights to force the sale of the home via a foreclosure, receive proceeds from the sale of the home, or keep demanding repayment after the house is sold if the sale doesn't generate enough funds for repayment).
As long as each loan is paid back, the something (home or necklace) can be used as collateral again and again.

Differences:

The pawnshop customer relinquishes the personal item in order to obtain the loan but the home-equity borrower can still enjoy use of the home.
The bank or mortgage company places a lien on the home to protect itself from losses; a lien provides the lienholder with the legal right to proceeds from the sale of the home.
The home equity loan or HELOC interest rate is typically much lower than the pawnshop interest rate (for example, 6% for a HELOC vs. 24% for a pawnshop loan).
Interest paid on the home equity-based loan is tax deductible with certain restrictions.
Homeowners may be able to obtain a high LTV (loan-to-value) and borrow more money than the collateral (home) is worth. Pawnshop owners make loans for less than the resale value.

A few months ago, a soon-to-be-out-of-work mortgage broker enlightened me on how some homeowners use home equity to meet financial goals such as saving for retirement or paying for a child’s college tuition. I was fascinated by the idea that lenders championed equity-based loans as a savvy financial strategy so for the sake of equal time, I am proposing that these loans are similar to pawning what may be one's most valuable asset.

Source on Pawnshops: Brain, Marshall. "How Pawnshops Work." 23 August 2001. HowStuffWorks.com. <http://money.howstuffworks.com/pawnshop.htm> 31 July 2008. Note: I have a client who used to manage a pawnshop so I also learned about the process from him as well.

Permalink | 13 comments | Julie Rains's blog | Channel: Consumer Affairs, Real Estate and Housing

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.

An Inexpensive Diversion

Julie Rains — Sat, 19 Jul 2008 16:03:58 +0000

By Julie Rains

My digital era middle-school-aged son has adopted the use of a low-tech, low-cost entertainment device. I have put much effort into convincing him to balance his love of technology with quieter pursuits that don’t require electricity, batteries, or cash, so when he took a break from making Youtube videos (produced using hypercam to record computer-screen action, then edited via PowerPoint), I was pleased. He loves the versatility of his newfound toy; I love the price tag.

His turnaround came after a week at Boy Scout camp, where electronics are banned and card games are taught. Shortly after coming home, he begged for a deck of cards. I couldn’t find any at the house, so I went to the dollar store, where I purchased a pack for, oddly, 50 cents plus tax. (I paid using change).

Then, he told me that cards are superior to the typical board game because you could play lots of different games and weren’t tied down to one in particular.

My scout taught our family his favorite game from camp, “Mao,” beginning with the rule that you can’t tell the rules, which the observant person will find is in violation of the rules. For more on Mao, see this Party Games website or Wikipedia’s article on Mao.

My older son had a similar, though less dramatic, experience after several days at a youth retreat in the mountains. He spends less time tinkering with the computer and more time reading so playing cards didn’t make quite the impression on him. Still, he enjoyed playing El Presidente and then teaching us (my husband, his younger brother, a friend, and me) the card game on an overnight hiking trip.

Here’s his version of the game:

Equipment: full deck of cards
Number of players: at least 3, better with 4-7
Setup: all cards are dealt, as evenly as possible; everyone sits in a circle or somehow close enough to pick up and put down cards with ease, but not see others’ cards; the person who has the 4 of clubs starts the game
Object: to get rid of all your cards and be named El Presidente
Rules:
- 3 is the highest value card, then 2, Ace, King, Queen, Jack, 10, 9, 8, 7, 6, 5, and 4.
- Each game usually involves multiple rounds; the person who starts the game or wins the most recent round, decides whether cards should be placed in singles, doubles, or triples (that is, if one 7 is placed at first, then that round is singles; two 7’s, doubles; three 7’s, triples); when the round is over, then the deck is cleared and a new round starts.
- If all 4 of the same face-value cards (such as all of the Queens) are used in a round, then the deck is cleared.
- If two cards with the same face value are played in sequence (such as a 5, followed by a 5), then the next player is skipped (this “skip” still counts as a turn).
- Game Play: after the first card is placed, then the next player (clockwise or counterclockwise depending on what the dealer decides) must place a higher value card of any suit or pass on the turn; a round is over and the deck is cleared when someone plays the highest value card (a 3 in this version); if a card can’t be topped and all players have had a turn (either skipped or passed) – the person who has placed the last card down wins the round.
- Order of winners: the first person who gets rid of all his/her cards is declared El Presidente and the second person is Vice Presidente; the last person is Bum 2 and second to last person is Bum 1; all others are Middle Men.
- For the next session, Bum 2 must give El Presidente his/her two best cards in exchange for any two cards; Bum 1 must give Vice President his/her best card in exchange for any one card. El Presidente starts the next round.

Rules for this card game or any others can vary depending on the inclinations of the players. The ability to make a game more or less complicated is yet another advantage of cards.

A deck, with all its cards tucked away in a small box, is easy to transport in a backpack or duffle bag, providing ready entertainment at home, on camping trips, at off-the-grid lodges, and in airport waiting areas. Though I played cards some as a kid, I don’t think I recognized the value of a full deck as a highly portable, flexible, and inexpensive diversion, until now.

Permalink | 10 comments | Julie Rains's blog | Channel: Art and Leisure

Similar entries:

For Wise Bread Subscribers Only! Download your FREE copy ($10 value) of our Wise Driving Guide: 108 Tips to Raise Your Fuel Economy.

This article is from Wise Bread.