By now, everyone should have heard that we're officially in a recession. I expect our incoming President and his team of financial advisors to act aggressively to remedy the situation, but it will likely take some time to turn this mammoth boat of an economy around. Meanwhile, it's our job to take any steps possible to ensure our individual success. The strategy I will present is a good idea even in strong economic times, but as the economy worsens, it becomes increasingly important and beneficial.
The strategy is all about weaving financial safety nets. It is by no means a new concept, and it goes by many names. Investors call it hedging. Engineers call it redundancy. Your high school math teacher called it checking your work. Microsoft calls it safe mode. Subaru calls it limp home mode. Computer network experts call it a backup. Anyone who has ever written a long paper on a computer calls it the save button. It's exactly the same as any other ass-covering situation. We do it in almost every aspect of our modern lives, but many people neglect to take similar measures with their finances.
The first measure is simply saving money. A little fiscal discipline goes a long way. Open a savings account or money market (preferably a money market), and make a habit of putting a set amount out of every paycheck into this account. If you're prone to slacking on this sort of thing, some banks can help by setting up automatic transactions. This can be a retirement fund if you never run into trouble, but if you do, it's your backup funding. Aside from the obvious benefit of saving money in case of trouble, removing money from what you allow yourself to spend trains you to keep your cost of living down. This means that the money that you do save will last longer, should you need to use it. With this measure, some redundancy can only help. For instance, I put a set amount into a money market every two weeks, but I also roll and save my coins. In addition to that, whenever I save a substantial amount in my checking account and don't have to spend a lot of money in the foreseeable future, I invest it in the stock market. This way, I keep a system of three backup funding safety nets, and even at the age of 21 and having just finished an emergency car purchase, I should still be able to survive on this money alone for at least a couple of months.
Keep debt to a minimum, but build credit. While a little debt is essential to building good credit, a lot of it can easily put you in a tight spot. I'm not sure how most people look at debt or if some simply choose to ignore it altogether, but it should be viewed as negative cash on hand. A $1,000 credit limit on a new card is not the same as having an extra $1000. It is simply the ability to ecru that amount of debt. If you keep your debt in check, it will help your credit score by improving your debt to income ratio, as well as reducing your personal stress.
Avoid living beyond your means. No-interest financing is a clever marketing tool, and it can make buying the things you want instead of the things you need a very tempting proposal. There may be no interest on that $5,000 plasma TV for a year, but if you don't have the cash on hand to buy it outright, stick with the old TV. Nothing compounds the stress of reduced job security like crippling debt. Any reasonable person will be much happier with a little cash on hand than with a fancy new toy and excessive debt.
A bit about necessary debt. Few people are able to afford a house without a mortgage. A house is different in some ways from other forms of debt. The interest rates are generally lower, and you have a very solid piece of collateral to keep it low. There are some precautions here as well. When you finance your house, be sure that you have a strong credit score. The better your credit, the lower your interest rate. Make a habit of paying your bill as soon as you get it so you don't lose it or forget about it or end up paying late. The last thing you want is for your interest rate to skyrocket on a home loan. Pay more than the minimum, too. Don't go crazy and spend more on your mortgage than you can afford, but paying it down just a little bit faster than the standard rate can pay off big in the long run. It may be hard to see the benefits of this now, but every dollar you spend above the minimum monthly payment goes toward paying down principal, which means it's essentially the same as putting the extra cash in a money market at a rate equal to your interest rate for the remainder of the loan period. The immediate benefit may be nonexistent, but you'll thank yourself in twenty years when you're debt free instead of having to make payments for another ten.
If you already have a house, consider renting out the spare bedroom. It may seem strange to some people, but taking on a boarder can bring in some much needed cash in a pinch. Under solid conditions, the extra income can make a big dent in the mortgage. In bad times, it can mean the difference between getting by and losing your home. Approach this avenue with caution, however. It's possible to run into some unsavory characters in the domicile rental market.
Get a second job. It doesn't have to be anything fancy, and it doesn't have to make as much money as your primary job, but in tough times, it becomes increasingly necessary to have something to fall back on. The benefits of this are best demonstrated with some simple statistics. Let's say, for demonstration's sake, that you stand a 10% chance of getting fired from your current job within the next year. That's 90% annual job security, which is worse than what most people have, but it's not unheard-of. Now, let's say you take a weekend job performing some relatively menial task. The odds of losing that job may be higher because the lower-level jobs tend to have high turnover rates, but even if you only stand an 80% chance of keeping that job for the next year, having both jobs puts the probability of you being unemployed next year at
0.1 x 0.2 = 0.02 = 2%
The chances of you maintaining employment just jumped from 90% to 98%. When things are going well, the second job can fund a nice vacation, or an increase in savings, or some maniacal science projects. In order for it to be a true safety net, though, you have to be able to cut off whatever it funds immediately and use it for primary income, should it become necessary. The secondary job has to be ready to become primary if the need hits. Even if it only works to slow your losses, it's significantly better than nothing.
All of these ideas will help you maintain some financial security in a rough economy, and none of them will hurt in a smooth economy. I think you'll find that some fiscal discipline and planning will make your life much less stressful and more pleasant. I apply as many of these strategies to my own life as possible, being a student and part-time worker who pays rent to live in a friend's house, and I know first-hand that they work. While it may be true that money in itself can't buy you happiness (though studies have actually shown this not to be the case), a little thoughtful financial planning can do much to that end.
Wednesday, December 10, 2008
Monday, July 7, 2008
Losing Weight: The Poor Diet
I'm pretty broke right now. I've got a car to pay off, and I have rent to pay monthly, which I've never had to do before. That's a minimum of $500 out of my pocket each month, but since I'm trying to advance my car payments before school starts, it comes out to whatever I can spare, as long as it's more than the minimum. This has led to several changes in my habits that have caused me to both save money and lose weight. I think I will keep it up even when I'm out of debt, just because I'm a cheapskate and prefer to save as much money as I can.
The biggest change I've made is in groceries. I used to eat a frozen pizza almost every night, as well as ordering half-priced meals when I work. I would also go out to eat frequently because of girls and friends and such. I still eat at work sometimes because it's not a bad deal, but I rarely patronize restaurants anymore, and I've cut the frozen pizzas out of my daily life. I'm buying the stuff that's a pain in the ass to cook because it's cheap, and I don't pig out on it because I'm too lazy to cook unless I'm really hungry. Life's too short to be spent cooking and eating.
As mentioned in the previous post, I'm also taking every possible measure to reduce my fuel consumption. This means hypermiling, carpooling, and will soon include biking to any destination within 5 miles (that means school). Of these, carpooling is the only option that doesn't provide exercise on top of the fuel savings. Hypermiling can be fairly exhausting, though you get used to it, and steering at low speeds with the power steering off may not seem like much of a workout, but it's definitely more of one than regular driving.
Because my mindset is that I'm in dire need of cash, I've been more eager to work as much as possible at my job. When I'm exhausted and normally wouldn't want another table, I actively offer to take them instead. I've been taking as many shifts as I can without getting overtime. This wouldn't do much for my health if I had an office job, but my job consists primarily of running around like an idiot, which is the best kind of exercise there is.
To top it all off, I've decided to actively work out at home. This will save money over going to the gym (ripoff), and there's no real excuse not to do it frequently. I can actually see the form of most of my muscles and a few veins now, which hasn't happened since I first got a car. I don't have a scale because, again, I'm broke. But I can feel a difference.
I feel sexy, but I'm also poor. I'm happy, but I'm also worried. I might be the most emotionally conflicted person I know right now.
The biggest change I've made is in groceries. I used to eat a frozen pizza almost every night, as well as ordering half-priced meals when I work. I would also go out to eat frequently because of girls and friends and such. I still eat at work sometimes because it's not a bad deal, but I rarely patronize restaurants anymore, and I've cut the frozen pizzas out of my daily life. I'm buying the stuff that's a pain in the ass to cook because it's cheap, and I don't pig out on it because I'm too lazy to cook unless I'm really hungry. Life's too short to be spent cooking and eating.
As mentioned in the previous post, I'm also taking every possible measure to reduce my fuel consumption. This means hypermiling, carpooling, and will soon include biking to any destination within 5 miles (that means school). Of these, carpooling is the only option that doesn't provide exercise on top of the fuel savings. Hypermiling can be fairly exhausting, though you get used to it, and steering at low speeds with the power steering off may not seem like much of a workout, but it's definitely more of one than regular driving.
Because my mindset is that I'm in dire need of cash, I've been more eager to work as much as possible at my job. When I'm exhausted and normally wouldn't want another table, I actively offer to take them instead. I've been taking as many shifts as I can without getting overtime. This wouldn't do much for my health if I had an office job, but my job consists primarily of running around like an idiot, which is the best kind of exercise there is.
To top it all off, I've decided to actively work out at home. This will save money over going to the gym (ripoff), and there's no real excuse not to do it frequently. I can actually see the form of most of my muscles and a few veins now, which hasn't happened since I first got a car. I don't have a scale because, again, I'm broke. But I can feel a difference.
I feel sexy, but I'm also poor. I'm happy, but I'm also worried. I might be the most emotionally conflicted person I know right now.
Sunday, June 22, 2008
Hypermiling. Do it.
When I was learning to drive, my parents taught me to reset my trip odometer every time I fill my tank, because most gas gauges aren't very accurate and gas mileage can be an indicator when something is going wrong with a vehicle. As a result, I know what mileage I'm getting every time I fill my tank. I normally get between 26 and 30, but I have recently begun an experiment to see if I can drastically improve on those numbers. The results so far have been to my liking.
Over the last two tanks, I averaged about 33 MPG. The image above shows 39.2 MPG, but that was probably due to a faulty filler that shut off early. That's in a '99 Subaru Outback, a car that is rated at 18 city, 25 highway by the newly adjusted ratings. I used just a couple of techniques in different situations in order to optimize my mileage to this point. I went the speed limit, and I tried to turn the engine off whenever I could without compromising safety. I drove with the air conditioner off, and I rolled the windows up on the highway, using the vent fan but not the compressor to cool myself on hot days. I also inflated my tires to a safe but hard 41 psi, several pounds above Subaru's specification, but still well within the reasonable range for the tires (max cold pressure 44 psi). They actually seem a bit quieter at this pressure, so having them overinflated actually improves my comfort when driving.
The biggest thing I've done to improve my mileage beyond what I normally do is turning off the engine. I've always kept my tire pressures near the top of the range and been mindful of when I was using air conditioning. As previously stated, I've tried to turn the engine off whenever I can safely do so. That means practically all red lights, including the time spent coasting up to them, as well as anytime I'm on a downhill slope steep enough to maintain a comfortable speed. Since my car is wired to turn the headlights off when the ignition is turned to 'accessory', I avoid turning it off at any time that headlights are necessary (night, rain, fog). Even so, I try to gently engine brake whenever I'm approaching a stop.
Slowing down has played an important role in improving my recent mileage as well. There's no need to speed. I always give myself plenty of time when I drive, so there's no hurry. On highways, I go exactly the speed limit or a little under. It is supposed to be an upper limit, after all. I rarely use route 288, the local 65-zone, so it's easy to keep my speed under 60 at all times. Practically all cars with four-cylinder engines like mine are most efficient at 40-55 MPH. This is due to a number of factors, especially wind resistance and engine speed. As a rule of thumb, if you're turning 2500 RPM in top gear, you're probably getting about the best gas mileage you can get.
Literature on hypermiling websites talks frequently about the 'pulse-and-glide' technique. This has proven the most effective way to drive for gas mileage, but frankly, I don't have the balls to do it with any traffic around. I'm not trying to piss off other motorists, just trying to save some money and some fossil fuel. We'll see how this works out over the next several months as I test different brands and types of gas, as well as hopefully get a ScanGauge in order to more accurately track my mileage. For now, though, I'm just excited about my little improvement in mileage.
Over the last two tanks, I averaged about 33 MPG. The image above shows 39.2 MPG, but that was probably due to a faulty filler that shut off early. That's in a '99 Subaru Outback, a car that is rated at 18 city, 25 highway by the newly adjusted ratings. I used just a couple of techniques in different situations in order to optimize my mileage to this point. I went the speed limit, and I tried to turn the engine off whenever I could without compromising safety. I drove with the air conditioner off, and I rolled the windows up on the highway, using the vent fan but not the compressor to cool myself on hot days. I also inflated my tires to a safe but hard 41 psi, several pounds above Subaru's specification, but still well within the reasonable range for the tires (max cold pressure 44 psi). They actually seem a bit quieter at this pressure, so having them overinflated actually improves my comfort when driving.
The biggest thing I've done to improve my mileage beyond what I normally do is turning off the engine. I've always kept my tire pressures near the top of the range and been mindful of when I was using air conditioning. As previously stated, I've tried to turn the engine off whenever I can safely do so. That means practically all red lights, including the time spent coasting up to them, as well as anytime I'm on a downhill slope steep enough to maintain a comfortable speed. Since my car is wired to turn the headlights off when the ignition is turned to 'accessory', I avoid turning it off at any time that headlights are necessary (night, rain, fog). Even so, I try to gently engine brake whenever I'm approaching a stop.
Slowing down has played an important role in improving my recent mileage as well. There's no need to speed. I always give myself plenty of time when I drive, so there's no hurry. On highways, I go exactly the speed limit or a little under. It is supposed to be an upper limit, after all. I rarely use route 288, the local 65-zone, so it's easy to keep my speed under 60 at all times. Practically all cars with four-cylinder engines like mine are most efficient at 40-55 MPH. This is due to a number of factors, especially wind resistance and engine speed. As a rule of thumb, if you're turning 2500 RPM in top gear, you're probably getting about the best gas mileage you can get.
Literature on hypermiling websites talks frequently about the 'pulse-and-glide' technique. This has proven the most effective way to drive for gas mileage, but frankly, I don't have the balls to do it with any traffic around. I'm not trying to piss off other motorists, just trying to save some money and some fossil fuel. We'll see how this works out over the next several months as I test different brands and types of gas, as well as hopefully get a ScanGauge in order to more accurately track my mileage. For now, though, I'm just excited about my little improvement in mileage.
Wednesday, May 14, 2008
Road Rage
Today was my first full day driving my new car (pictures and discussion forthcoming). I worked, then I hung out with my girlfriend until it was time to go bowling. I could talk more about my day, but that's not the point of this post. I was taking Kelly home at about 1:30 AM, and someone decided that tailgating was the ideal course of action. This is the story of that event. It might be a little dry, but I think there are valuable lessons to be learned.
There's construction on Route 288 at night in the summer, pretty much always. I'm not really sure what they're doing. They seem to be replacing whole sections of road. At any rate, one lane is usually blocked off in one direction for a couple of miles at night. The speed limit on the highway is 65, but it was a construction zone and I was starting to get tired, so I was going 60, slowing down for the parts where they're cutting pavement and spraying aqueous concrete on the road. There was no vehicle behind me when I entered the construction zone, then suddenly there was. I don't know what exit it came from, but it must have been flying. Blue Saturn sedan. Stupid. I wasn't up for games, so I kept my slow pace through the parts where there was actually construction, then accelerated to see if I could get a little cushion behind me. Once I got up to 80, I was finally starting to pull away. I didn't look at my top speed, but I probably topped 90 before I coasted back down to the speed limit. By the time I got to the next section of construction, the Saturn had caught up with me. He didn't high-beam me, but he was definitely riding my ass.
Construction ended, and I resumed a normal 70-MPH speed with cruise control set to maintain it. The fool rode behind me for a minute, then decided to find the most annoying places possible to drive around me. I was in no mood for this. I didn't really want to get another gun pointed at me on 288, and I wasn't exactly excited about the prospect of wrecking my new car. This is all on top of my more permanent notion that road rage is fucking retarded in the first place. He sat in my blind spot, so I accelerated. He pulled up and matched my speed again, so I hit the brakes. There were no other cars around, so there seemed to be no other danger than this fool. Once he started matching my speed at 50 in a 65, I decided to hit the flashers and stop the car. I pulled over for a minute and basically forced him to move along. Once the taillights disappeared over the next hill, I decided my distance was sufficient and started driving again. I noticed he got off at the same exit I did, and I saw him turning at a light. I don't know if he noticed me again, nor do I care. He didn't follow me, and I saw him turn when the light changed, so that's all I cared about at that point.
My point in telling this story is to explain how we should all drive in such a situation. I can think of at least two other occasions when I was confronted with a similar issue. There is always a choice to avoid road rage, even when another driver is being an irrational dick and trying to fuck you up. Even if you're the best driver in the world, there will sometimes be someone who hates you just for using the same road he's on. You're (I assume) the one who has the level head and wants to avoid trouble, so you have to be the smart one. It's not difficult, since people who have road rage almost by definition are temporarily stupid.
I guess the key to dealing with road rage is really the key to driving well in general, which is to stay calm and not do stupid things. It's easy to freak out in these situations. I thought Kelly was going to hyperventilate tonight. There's no time for freaking out or doubting yourself. You know what to do. Just get away from the dangerous driver as quickly and as safely as you can, preferably within the limits of the law.
It's important to know these things. Road rage is one of the scariest phenomena of the human psyche. Coincidentally, the road has very little to do with it. Give these people a dangerous weapon in a crowded room, and I have no doubt most of them would issue the same sorts of threats to strangers. Driving is just something that nearly everyone does, often in the wrong state of mind, and that wrong state of mind combined with the high level of responsibility involved in driving is what makes a handful of drivers so dangerous.
For further reading on this topic, I direct you to something I wrote a while back on the topic which was apparently pretty good. I don't mean to brag, but it got good peer reviews and was featured on the site. It's not very long, and yes, I am Frank Lobsterman on that site. Check it out.
There's construction on Route 288 at night in the summer, pretty much always. I'm not really sure what they're doing. They seem to be replacing whole sections of road. At any rate, one lane is usually blocked off in one direction for a couple of miles at night. The speed limit on the highway is 65, but it was a construction zone and I was starting to get tired, so I was going 60, slowing down for the parts where they're cutting pavement and spraying aqueous concrete on the road. There was no vehicle behind me when I entered the construction zone, then suddenly there was. I don't know what exit it came from, but it must have been flying. Blue Saturn sedan. Stupid. I wasn't up for games, so I kept my slow pace through the parts where there was actually construction, then accelerated to see if I could get a little cushion behind me. Once I got up to 80, I was finally starting to pull away. I didn't look at my top speed, but I probably topped 90 before I coasted back down to the speed limit. By the time I got to the next section of construction, the Saturn had caught up with me. He didn't high-beam me, but he was definitely riding my ass.
Construction ended, and I resumed a normal 70-MPH speed with cruise control set to maintain it. The fool rode behind me for a minute, then decided to find the most annoying places possible to drive around me. I was in no mood for this. I didn't really want to get another gun pointed at me on 288, and I wasn't exactly excited about the prospect of wrecking my new car. This is all on top of my more permanent notion that road rage is fucking retarded in the first place. He sat in my blind spot, so I accelerated. He pulled up and matched my speed again, so I hit the brakes. There were no other cars around, so there seemed to be no other danger than this fool. Once he started matching my speed at 50 in a 65, I decided to hit the flashers and stop the car. I pulled over for a minute and basically forced him to move along. Once the taillights disappeared over the next hill, I decided my distance was sufficient and started driving again. I noticed he got off at the same exit I did, and I saw him turning at a light. I don't know if he noticed me again, nor do I care. He didn't follow me, and I saw him turn when the light changed, so that's all I cared about at that point.
My point in telling this story is to explain how we should all drive in such a situation. I can think of at least two other occasions when I was confronted with a similar issue. There is always a choice to avoid road rage, even when another driver is being an irrational dick and trying to fuck you up. Even if you're the best driver in the world, there will sometimes be someone who hates you just for using the same road he's on. You're (I assume) the one who has the level head and wants to avoid trouble, so you have to be the smart one. It's not difficult, since people who have road rage almost by definition are temporarily stupid.
I guess the key to dealing with road rage is really the key to driving well in general, which is to stay calm and not do stupid things. It's easy to freak out in these situations. I thought Kelly was going to hyperventilate tonight. There's no time for freaking out or doubting yourself. You know what to do. Just get away from the dangerous driver as quickly and as safely as you can, preferably within the limits of the law.
It's important to know these things. Road rage is one of the scariest phenomena of the human psyche. Coincidentally, the road has very little to do with it. Give these people a dangerous weapon in a crowded room, and I have no doubt most of them would issue the same sorts of threats to strangers. Driving is just something that nearly everyone does, often in the wrong state of mind, and that wrong state of mind combined with the high level of responsibility involved in driving is what makes a handful of drivers so dangerous.
For further reading on this topic, I direct you to something I wrote a while back on the topic which was apparently pretty good. I don't mean to brag, but it got good peer reviews and was featured on the site. It's not very long, and yes, I am Frank Lobsterman on that site. Check it out.
Sunday, April 27, 2008
Patriotism
Here it is, as promised. We have a nasty habit of taking words with clear meanings and making less of them. In doing so, we not only make our language more difficult to understand, but we also make the ideas that these words represent more ambiguous. There are countless examples of this occurrence, but I will use the one that I feel has been bastardized the most in the last six years and some change. The word, predictably enough, is the title of this post.
Case 1: Barack Obama. We've all seen the media scratching around for something to throw at the Illinois Senator and presidential candidate. Maybe it's just the fact that they can't find anything substantial that has caused them to go after his lack of a lapel pin displaying the American flag. Who the hell wears one of those on a day-to-day basis? I would consider it tacky to wear one on any day other than a distinctly American holiday. This is an issue that doesn't need my defense. Barack has done a wonderful job downplaying the issue. Wearing a lapel pin has nothing to do with one's patriotism. While an anarchist or soviet loyalist probably wouldn't wear one (except as part of a disguise), it's reasonable to believe that most people of a reasonably indifferent opinion on the matter would wear a flag pin some days and not others. In fact, the only presidential candidate (still in or dropped out) of whom I was able to find a picture with the flag pin was Giuliani. Apparently, that was his whole campaign.
Case 2: Flag merchandise. Right after September 11th, sales of American flag merchandise skyrocketed. By merchandise, I mean decals and magnets for cars, t-shirts, actual flags of all sizes, and miscellaneous other objects, as long as they somehow proudly displayed the Stars and Stripes. I recall hearing something about there actually being a shortage of flag merchandise following this. Since then, the patriotic merchandise market has managed to continue its boom with 'support our troops' ribbon magnets, and 'never forget' propaganda. What does this have to do with patriotism? Not much, really. It has plenty to do with consumerism, which is a uniquely American value, I suppose, but it has very little to do with love of one's country.
This all really boils down to something pretty simple. Patriotism is not external. I could go the rest of my life without buying, wearing, or even seeing a flag, and it wouldn't make me any less patriotic. There are ways of expressing it, just as there are ways of expressing any emotion, but ultimately, patriotism is internal. Express it as you would express any other type of love, by doing what's best for the country. Work hard, support American companies, and do your part to make the country look good. We used to have a pretty good handle on it. I'm not really feeling it anymore. Let's bring patriotism back.
Case 1: Barack Obama. We've all seen the media scratching around for something to throw at the Illinois Senator and presidential candidate. Maybe it's just the fact that they can't find anything substantial that has caused them to go after his lack of a lapel pin displaying the American flag. Who the hell wears one of those on a day-to-day basis? I would consider it tacky to wear one on any day other than a distinctly American holiday. This is an issue that doesn't need my defense. Barack has done a wonderful job downplaying the issue. Wearing a lapel pin has nothing to do with one's patriotism. While an anarchist or soviet loyalist probably wouldn't wear one (except as part of a disguise), it's reasonable to believe that most people of a reasonably indifferent opinion on the matter would wear a flag pin some days and not others. In fact, the only presidential candidate (still in or dropped out) of whom I was able to find a picture with the flag pin was Giuliani. Apparently, that was his whole campaign.
Case 2: Flag merchandise. Right after September 11th, sales of American flag merchandise skyrocketed. By merchandise, I mean decals and magnets for cars, t-shirts, actual flags of all sizes, and miscellaneous other objects, as long as they somehow proudly displayed the Stars and Stripes. I recall hearing something about there actually being a shortage of flag merchandise following this. Since then, the patriotic merchandise market has managed to continue its boom with 'support our troops' ribbon magnets, and 'never forget' propaganda. What does this have to do with patriotism? Not much, really. It has plenty to do with consumerism, which is a uniquely American value, I suppose, but it has very little to do with love of one's country.
This all really boils down to something pretty simple. Patriotism is not external. I could go the rest of my life without buying, wearing, or even seeing a flag, and it wouldn't make me any less patriotic. There are ways of expressing it, just as there are ways of expressing any emotion, but ultimately, patriotism is internal. Express it as you would express any other type of love, by doing what's best for the country. Work hard, support American companies, and do your part to make the country look good. We used to have a pretty good handle on it. I'm not really feeling it anymore. Let's bring patriotism back.
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