Budget Musings

Archive for June, 2008

According to an article that I came across recently, The Dangers of Joint Accounts, having a joint account doesn’t mean that inheritance money will remain in your hands when your parent/spouse/other joint account holder dies or the inheritance you are leaving will go into the right hands. Having a plan in place and having a clearly identified legal will can help ensure that your wishes will be carried out. Remember to keep your will and other associated documents up to date with any changes along the way (for example, if you decide to give one of the willed items away early remove that item from the will).

Wikipedia gives an outline of what a will or testament is and what it’s requirements are.

Wow, I just saw a new program my bank is offering, and the idea is great.

Its from ScotiaBank, called Bank the Rest. Read the rest of this entry »

People, especially women, are increasingly are buying time at significant cost. We are hiring people to do housework, care for our children, have personal chefs cook for our families, maintain our cars, furnaces, etc… Wherever there is a need, there is likely to be someone willing to perform that task for you in exchange for your money.

Some discussion points include:

• affect on our basic skill set if we don’t perform these tasks ourself. What happens in an emergency or if we can no longer afford these services? Will we feel confident enough to act in these capacities if we need to? Read the rest of this entry »

Here’s an amusing email I received that gave a great example of the need to be aware of hidden costs when you’re out shopping. The email was as follows:

I was shopping and noticed a little old lady following me around. I stopped, she stopped. Furthermore, she kept staring at me. She finally overtook me at the checkout, and she turned to me and said, “I hope I haven’t made you feel ill at ease, it’s just that you look so much like my late son.”

I answered, “That’s okay.”

“I know it’s silly, but if you’d call out ‘Goodbye Mom’, as I leave the store, it would make me feel so happy.”

She then went through the checkout, and as she was on her way out of the store, I called out, “Goodbye Mom.”

The little old lady smiled and waved back at me.

Pleased that I had brought a little sunshine into someone’s day, I went to pay for my groceries.

“That comes to $121.85,” said the clerk.

Shocked, I asked, “How come so much!? I only bought five items.”

The clerk replied, “Yeah, but your Mom said you’d be paying for her things too”

The moral of the story is to be aware of what you are paying for with each purchase. Know ahead of time what to expect to pay and what are any and all possible hidden costs. One to usually expect is taxes.

When I do any shopping, I try to do a rough tally in my head as I’m shopping so I know what to expect to pay when I get to the checkout (also helps me stay in budget). I watch as the cashier scans each item so I can catch any costs that weren’t as I expected. Also a subtotal comes up on the screen as each item is scanned so I know exactly when I reach my budgeted amount.

What have you done to be fully prepared for your purchases of any size?

I went to pay online for CalendarBudget’s web server and the transaction was refused… Even a phone call to the hosting provider yielded a refused transaction. I called my Visa provider and they put me through to the security division. They told me that the card was locked because the transaction didn’t fit my usage profile and it was a precautionary measure. Also, because they’ve had a lot of online fraud recently, they were being extra vigilant checking suspicious transactions. They unlocked it right away and then when I tried the transaction again it worked great.

Although this case was a mistake because I actually wanted the transaction, the inconvenience is completely acceptable knowing that they have systems in place to try to prevent misuse of my card and identity.

Good job financial institution!

Someone asked me the other day if I thought a recession could be avoided by people having better personal finance management habits (having savings, living within their means, etc). I’m no economist, but I thought the question was interesting. I responded that it would very likely postpone or even eliminate recessions, reasoning that if people actually had some savings, and were living within their means, they could keep the economy afloat during cyclical recessionary periods.

With proper savings, you can even lose your job for a period of time and have no change in your standard of living. This kind of savings would help keep the economy going during hard times, but of course it would require an overwhelming majority of people to be doing the right thing financially, which is definitely not the case. But it leads one to think that in a way, recession is the punishment or resultant effect of society’s poor money habits.

What do you think? Can we avoid recessions with better money management habits?