One Caveman’s Financial Journey

Three years from now when I look back on finishing our basement, I’m probably going to say it was a financial mistake.  What was originally going to be a $9,000 project has easily cost us at least $13,000 if not more.  The careful planning and budgeting we set up before starting this project is all out the window and now we’re left with just days before the baby arrives and we’re as good as broke. It’s disheartening to work so hard at getting out of debt only to be undermined by one or two poor decisions along the way.

When you’re distracted by other events, it’s easy to let little receipts build up into a huge problem.  I just looked at our credit card and out of the blue it screamed “$3,700 Due!”  After tapping part of our emergency savings to help cover the piling bills and taking a family loan from my parents, it looks like I’m going to have to sign up for a new credit card (don’t worry, it’s only my 2nd card) and execute a 0% balance transfer to help our family’s cash flow problems.

Paying the balance transfer fee of 3% and spreading my payments out over 11 months will help us keep from tapping more of our savings to finish the project on time.  After doing some research, I decided on the Discover® More Card!* since they have a 0% APR promotion for balance transfers and Discover is offering a bonus $50 cash back on the More card.

I’m a little disappointed that we’re adding more debt right after we finished paying off two other debts, but that’s how it goes sometimes.  I won’t be using this card - at least until the transfer is paid off - so I’m not worried about racking up extra debt on this new credit. My basement office has to be completed before the baby arrives if I’m going to be working from home and we need to move the stuff that’s stacked in our dining room back down to the storage area.  Fortunately, the extra earnings from the blog and the extra cash we freed up by paying off the other debts will cover this “loss”.  I guess I need to add a couple more debt bars to my Financial Health list, huh?

When you’re busy and all your attention is focused on one or two major events, it helps to keep a mind on your money and a lock on your wallet. Those “little” Lowe’s trips add up quickly. We’re in for some major hurting, but it won’t break us. We just need to get smart again and handle our money properly while we work ourselves back out of debt again.

* Affiliate Link

I am a geek through-and-through and I’m not ashamed to admit it. That’s why when I saw that the Dr. Horrible’s Sing-Along Blog DVD appear on Amazon.com, I let out a small, excited yelp. (One of my co-workers gave me a strange glance as she walked down the hallway after that.)

This summer, Joss Whedon, Neil Patrick Harris, Nathan Fillion, and Felicia Day entertained us on the small (computer) screen as their product, Dr. Horrible’s Sing-Along Blog, garnered rave reviews across the world. I loved the show and passed it along to just about everyone I knew. And now, after months of waiting, the DVD is finally being released with what is sure to be a ton of entertaining extras.

This is one geek who knows what he wants and this is tops on my list. [Ed: Honey, if you haven't finished your shopping yet, please consider this! Pretty, pretty, pretty please! :) ]

If you’re a geek like me, head on over to Amazon and give Dr. Horrible your money!

Photo by: j.meunier

One week ago this morning, Charter came out and blithely disconnected my cable TV service (and internet service, temporarily).  The next evening, I made the final connections to serve the free over-the-air TV I was pulling from my new antenna to the TVs in the house.  And thus our experiment began.

Immediately upon unplugging the cable and installing the antenna, our viewing habits changed. Instead of the 70-some-odd channels we had with cable, our TV “experience” is now limited to 12.  All of the channels we see are digital and some are even in High Definition, which will be especially nice when we finally get a high-def TV.  We receive Fox, ABC, NBC, CBS (plus an all-local weather sub-channel), PBS (plus 3 sub-channels), CW, a local religious channel, and something called “My” TV.

Yes, you read that correctly: Sub-channels.  In digital over-the-air broadcasts, the broadcaster has the option to segment their signal into multiple streams. For instance, our local PBS station broadcasts the “regular” PBS in HD, has a 24-hour PBS Kids channel, an arts/food/crafts channel, and a second non-HD PBS channel with a different schedule.  So while we only really pick up 8 stations, we benefit from this segmenting with 4 extra channels.

All of the national TV stations broadcast in HD.  As I’ve stated before we don’t have a HD TV, but you can still tell the difference on high-visual impact shows such as Heroes.  Since moving to the antenna, we get a much better picture on the same TV we’ve had for 7 years. Apparently, Charter was really holding out on me…

We definitely enjoy the content we’re receiving more than before, but not everything about the switch has gone smoothly. My two-year-old daughter is starting to miss some of her favorite shows from the Disney channel.  New shows, such as Imagination Movers, aren’t available on DVD yet and we’ve run out of recorded material.  The PBS Kids channel is doing a decent job of replacing her favorites, but she still misses her Little Einsteins and Handy Manny.  Netflix is helping to fill the gap, but it isn’t a perfect fit yet.  In time, she’ll adjust, but it has been a bit of a problem so far.

And this past Saturday, I realized what I’m going to miss most: My favorite sports teams. In the winter, the only place I can watch my favorite college team is on Fox Sports.  So if I want to catch my Missouri Tigers beating up on their latest opponent, I have to trek down to my father’s house or to a local sports bar.  In the rest of the year, if the St. Louis Cardinals aren’t on the local Fox affiliate, I’m stuck in the same predicament.  Of course, I can always tune into the radio to hear the game, but it isn’t quite the same as seeing the action unfold before your eyes.

Now that we’re watching less TV, other individual and family activities are getting more attention. Avoiding the distraction of TV has allowed me to finish reading my latest book, has given my wife a chance to really advance her knitting, and has given our whole family more play time together.  No more mindless channel surfing with mediocre content.  Now we watch TV only when we know one of our favorite shows is on.  (I have yet to get a new capture card for my media server to be able to record from the antenna signal…)

So far I believe the experiment is a success. We’re saving over $30/month from our previous cable plan, which will quickly pay for our antenna and other equipment and eventually will go toward running down our debt.  And while we’re watching less TV, we’re enjoying it more.  It really seems to be a win-win situation!

A month ago, I was contacted about doing a book review for an oddly-titled book, Killing Sacred Cows. With a title like that, how could I refuse? Initially, I was taken aback by some of the claims and ideas author Garrett B. Gunderson proposed, but as I got deeper into the book, I began to see the underlying message and threads of truth.

The biggest problem I had with the book - and the same problem many of you will have - is that the author focuses on tearing down some of the strongest myths we’ve used to prop up our personal finance ideals. While I have prided myself lately on smart saving, frugal living, and minimizing expenses, this book tries to show that these aren’t ways to wealth. Instead, smart spending, living to your true purpose, and maximizing cash flow are the prescribed means to finding wealth.

I winced a bit as I read the first few chapters. It’s hard to hear that you may be doing things wrong… But as I delved deeper, the economist inside of me started seeing the truth in the author’s suggestions. Now, the application of that truth will be harder to manage for some, but the truth is there.

Each chapter sets about to examine then refute one of the firmly-entrenched myths in our financial society:

1. The Finite Pie - The myth that the supply of money is finite and that you’re only “winning” if you collect and hold as much as you can.
2. You’re in It for the Long Haul - The myth that the best way to plan for the future is to sock away every penny you can now and let compound interest fund your retirement.
3. It’s All About the Numbers - The myth that the numbers on your balance sheet describe your true wealth.
4. Financial Security - The myth that financial security comes from staying safe and collecting a salary.
5. Money is Power - The myth that more money brings you more power.
6. High Risks = High Returns - The myth that you can only expect a chance for high returns if you accept high risk.
7. Self-Insurance - The myth that insurance is an expense you should minimize and try to not ever use.
8. Avoid Debt Like the Plague - The myth that all debt is bad and should be avoided at all costs.
9. A Penny Saved is a Penny Earned - The myth that minimizing expense and buying the cheapest possible is the best way to save.

While the book is a great resource and I always encourage people to challenge their beliefs, I do not agree with all the advice the author provides in his book. For instance, instead of focusing on saving for the long term by building your 401(k) and watching your net worth, the author claims that building a positive cash flow now and focusing on what the author calls your “Soul Purpose” is the best way to deal with the future. I agree that cash flow is important and a positive cash flow is the best way to wealth, I disagree with the concept that one should avoid 401(k)s and savings accounts. Just like an emergency fund, these resources can help provide temporary cash flow when the usual streams dry up. I think it’s irresponsible to neglect saving, even if it means you’re “losing” money to inflation and under-utilized resources. I suppose I’m just more of a moderate than the author in that regard.

Overall, I enjoyed the book and it’s definitely worth the read. Like I said before, I think it’s a good idea to read and entertain ideas that challenge your beliefs - as long as you don’t go overboard and accept everything you read as the best truth for you to follow. I will certainly keep the ideas and recommendations proposed in this book in mind as I make financial decisions in the future.

If this book sounds like something you’d be interested in, visit the book’s companion site, http://www.killingsacredcows.com, and download the first two chapters for free.

Want a Copy?

I was able to secure a second copy of the book to give away to my loyal readers. I figured if I was intrigued by the book, you probably would be, too. So, if you would like a copy of Killing Sacred Cows. for your own, here’s what you have to do:

• Leave a comment below about one of the myths listed above. You can say which one you might have the hardest time letting go of, if you don’t think a listed myth is actually myth, or something else as long as it pertains to one of the above myths.
• One entry per person. Feel free to comment all you want, but only one entry will be accepted per valid e-mail and IP address.
• Contest open to US residents only. Sorry, I know that I have many international readers, but various laws and such make it much to frustrating to open this worldwide.
• Contest will end Sunday, December 7, 2008, at 11:59pm Central Standard Time. On Monday, December 8, 2008, I will announce the winner who will then need to contact me to claim their prize. Good luck!