March 2011

The Incredible Shrinking Food

Have you noticed the size of your cans lately? Don't look in the mirror - check your pantry! Manufacturers are cutting corners by reducing the size of their containers, while keeping prices the same.

The New York Times is calling it "food inflation," and profiles a woman who bought three boxes of pasta for dinner as usual - only to come up short. Turns out those 16 ounce boxes of pasta are now only 13 or 14 ounces.

I have noticed this, too; Barilla boxes are the worst culprits. The box stays the same size, but it's only half full.

Should You Buy Life Insurance For A Baby?

I watch a lot of Adult Swim, which is the block of animated shows aimed at adults (Family Guy, Robot Chicken, etc) that airs every night on the Cartoon Network. Apparently a lot of new parents watch Adult Swim, too, because one ad that crops up consistently is the Gerber Baby Life Insurance ad.

This ad has always perplexed me. First of all, I question the assumption that Adult Swim viewers are breeding. Second of all, why should you buy life insurance for a baby?

Chase To Cap Debit Card Purchases At $50 or $100?

JPMorgan Chase has announced that they are considering a spending cap on debit cards of either $50 or $100. This would be in effect whether you purchase in person or online, and regardless of whether you run your debit card as debit (using a PIN) or credit (using a signature, or the CVV).

Why?

First, and most obviously, because they are evil and they hate us, and want to squeeze every cent from our dry, brittle bones.

How else to explain that, in exchange for bailing their asses out last year, they now want to cap our purchase amounts? Keep in mind that banks only stay alive because we give them our money in the first place. Now they don't want to let us have it back for more than a hundy a pop?

"But There's Nothing I Can Cut From My Budget!"

Oh yes, this is the biggest lie we tell ourselves. I tell myself this lie on a regular basis! Then I sigh, and stop, and think, and you know what? There is ALWAYS something you can cut from your budget. Any person anywhere has about 30% of their budget going to something that can be cut. I don't care how rich or poor you are - there is always room to cut. The tricky part is admitting it!

But how do you find it? The first thing you have to do is take an honest accounting of your expenditures. Don't judge, don't try to change - just spend a month writing down everything that you spend, and what category it belongs to.

How To Avoid The Payday Loan Trap

I've been there, my friend. It's been many years since I had to take out a payday loan, but I have taken out far too many in my life. Especially in my 20s, when I knew nothing about money or finances. All I knew was, I didn't have any!

If you find yourself in a position where you are seriously considering taking out a payday loan, it should be a financial red flag. It's not a convenience or a fast and easy transaction (which is incredibly embarrassing, no matter how respectfully they treat you, I always wanted to slink in and out of the store with my jacket pulled up over my head).

If I could travel back in time and intercept my young self on her way to get a payday loan, I would say: stop. Stop! Turn around, go home, and make some drastic changes in your finances. Nay, your life.

Is Gold A Good Disaster Hedge?

For most investors gold is a "fear based" purchase, which means that in uncertain times - like these - the wolves come out for the frenzy. You can't throw a rock at late night television or conspiracy talk radio without hitting an ad urging you to invest in gold. Buy now! It's never been worth zero! Stockpile! STOCKPILE!

But is it worthwhile?

First of all, if you want to buy a few American Eagle coins or Krugerrands, I won't slight you. They're neat! These coins are beautiful, and who doesn't harbor a childhood fantasy of owning a hidden sack of gold coins?

Too Frugal? No Way!

I see a lot of push-back against various "frugality" straw men arguments online. Most of these strike me as being the work of someone who's annoyed at one particular person, and just magnifies that annoyance to encompass frugality as a whole.

Hey, I get it. If you're not into frugality, it can be annoying to hear people talking about it. Frugality is one of those "holier than thou" things, like eating right, or exercising regularly. And if you don't want to be frugal, then get down with your bad self. It's your money - spend it how you want.

All I ask is that you be honest. With me, with yourself, with the internet at large.

The Trap: Buying Something To Save Money

It's a common marketing gimmick in These Troubled Economic Times: "Buy our thing and save money!" It's so alluring - partly because all it's doing is giving us a plausible excuse (saving money) to do something we wanted to do anyway (buy the thing).

You can see this pitch everywhere, from As Seen On TV infomercials to the Toyota Prius. But how do you know when the claim is legit?

I'll give you a hint: at least 90% of the time, it's a crock.

So how are you supposed to know? What distinguishes an actual money-saving thing from a thing that you're just spending money on, like any other thing?