Monthly Archives: October 2020

Procrastination

Procrastination.  Sometimes I feel like it’s my lifestyle.  But I know it shouldn’t be.  Procrastination almost never makes things go better.  It usually makes things go worse.  And it frequently makes things more expensive.

I have a lot of deferred maintenance happening at my house.  There’s a super-long list of things that I keep saying I’m going to work on myself “when I have time” or hire someone to do “when I have more money.”  But reality dictates that I’m never going to have enough time or money to take care of everything.  So things remain undone until it becomes urgent–like when my water heater died a few weeks ago.  If I had tended to the water heater BEFORE it failed I would have had time to shop around for a better deal.  Because I was dealing with an emergency, I got the water heater and the plumber that were available the quickest.  And I’m sure that I paid more than I would have in a less urgent situation.

The same theory applies when you defer maintenance on your body or your teeth.  Preventative medicine costs a lot less money (and time) than if you get really sick or let a whole tooth rot away before you seek help.

Managing your money also goes a lot more smoothly if you don’t procrastinate.  When you pay your bills on time you avoid late fees.  When you time your deposits with your outgoing money, you avoid overdraft fees.  When you plan food in advance you save money by avoiding convenience foods and restaurants.  Typically anything that is planned in advance is cheaper than just flying by the seat of your pants.  Textbooks are cheaper if you buy online or buy used (which requires buying early).  My personal favorite “early is better” (in normal times) is music festival tickets—they are almost always less expensive if you buy super-early (usually before the lineup is announced).

Procrastination can cause a number of problems.  Many of them will require money you don’t need to spend.  The quick and easy cure is to STOP PROCRASTINATING!  I’m sure I can do that.  I’ll get around to it someday…

Running on Empty

I’ve been running on empty lately.  With an assortment of time-consuming things going on in my personal life, I haven’t had any time to take care of myself.  When your physical being is running on empty you add fuel by either sleeping or eating (or both).  But when your emotional being is running on empty your only cure is to find some time to feed your soul.  For me this means some physical activity (like running or walking), some social activity (like attending a concert), or some purely down time (like watching Netflix and knitting with a cat on my lap).  I haven’t really been able to fit any of those in for the last week or so, and it’s had me focusing on situations where it hurts you to be unfueled.

It’s never a good idea to be running around without fuel in the tank.  With your car that means get to the gas station before you run out of gas. (Pro tip:  the Rutter’s in Bellefonte has had their unleaded price at $2.059 for over a week now—definitely worth the drive for the savings!)  Running out of gas can cause you a multitude of larger expenses (towing, potential damage to fuel pump), so it’s best to fill up before you absolutely have to.

When your wallet is running on empty you may find yourself in a situation where you need cash (because believe it or not there are still situations where plastic is not accepted) and have none.  To brace myself against these situations I keep what I call my “emergency $20” tucked away behind my driver’s license in my wallet.  I put it there and forget about it.  It’s never a part of my cash on hand.  Until I need it.  And then I have it.  And I replace it as soon as possible after it is used.  This way my wallet is never running on empty.

When I’m out and about I always try to make sure I have emergency snacks and beverage.  I try to keep granola bars in my car or my purse.  And I always have a travel coffee cup or water bottle (or both) with me when I leave the house for more than a few minutes.  That way if things don’t go according to plan, I don’t have to high tail it to the closest Sheetz because I’m hangry or thirsty.  I can keep my physical body fueled up without having to spend extra money to do so.

I have a vacation coming up next week that will likely serve to refuel my emotional being.  I’m hoping that my anticipation of that event will carry me through this week (likely with the help of the cheesecake I made yesterday).  It’s never a good idea to run on empty.  A little planning can make it so your car, your wallet, and your physical being never have to.

The Best Kind of Super-Spreader

In elementary school we all learned about multiplication. And we all know how practical that is in solving math problems. But it’s pretty important in other issues as well. Today I’m going to focus on compound interest. Compound interest means that as your investments grow, you earn interest on your accruing interest. This makes your investments grow faster and faster as time passes. This is why it is so important to start your retirement savings when you are young.

Until recently, the best example I had of how compound interest multiplies is this shampoo commercial from my childhood:

But this is 2020. Everything is being viewed in a new light this year. So I’m going to go ahead and say it. Compound interest on investments is like a Covid super-spreader event. A group of people gather and one of them unknowingly carries the coronavirus. By the end of the even, the virus has spread to 10 more people. Each of those 10 goes home and spreads the virus to one or two more people. Who then spread it to another one or two. Who then spread it to another one or two. And so on. And so on. And so on. Before you know it there are 100 cases of Covid that all link back to that super-spreader event.

Ok. Enough of the 2020 doom and gloom. Let’s get back to talking about money. When I was in graduate school (back when dinosaurs roamed the earth) I was furious that the Community College where I was externing withheld $300 per year from my meager stipend to go into the Ohio State Employees Retirement Fund. Retirement was the last thing on my mind at that point when I was having trouble making rent. But I couldn’t stop it. Fast forward a few years and I rolled it into an IRA and forgot about it. Now I look at that tiny $600 investment in an entirely new light. That IRA has grown more than tenfold (despite the Gen-X curse of having three “once in a lifetime” stock market crashes [2001, 2008, and 2020] between the initial investment and now). And the bigger it gets, the faster it grows. I wouldn’t want to try to retire on just that, but it never ceases to amaze me how that tiny amount has grown over the years…all because I’m earning interest not just on the original $600, but also on all of the interest that has accrued on it over the years.

Invest early. Even if it’s only a little bit. It could (and SHOULD) turn into a super-spreader!

It’s an Emergency!

Emergencies happen.  You never know when.  But they always seem to cost money that you don’t have.  And sometimes they come in rapid-fire succession.  It really seems like when it rains it pours.  And it sure has been pouring at my house lately!

Two weeks ago one of my cats fell ill very suddenly.  She had to spend a night at the emergency vet, which didn’t come cheap.  Thankfully she recovered and I get to continue loving and petting her for the foreseeable future.  And before my credit card even had a chance to cool down, last week I went to wash dishes after dinner and discovered there was no hot water.  When I ventured into the basement to investigate, I found the worst possible scenario.  My aging water heater had died a very ugly death, bathing my basement in the last of its lukewarm water.  The next day I found myself writing a very large check to a plumber to cover a new water heater and its installation.  Within a week and a half I had incurred two very significant unexpected expenses.

Situations like what I just faced are exactly why it is so important to have money saved for an emergency.  In a perfect world I would have had a designated emergency fund in a savings account at the ready to deal with all of this.  But my world is rarely perfect.  This year demonstrates that over and over and over again.  So I had to scramble around to several different bank accounts and investment accounts to cobble together the money to cover these expenses.  But the money was there.  Thank goodness.

It may seem impossible at this point in your life to build an emergency fund.  But like anything else, it’s overwhelming if you start by looking at the end goal.  The trick to success is to start small.  I often think of this old adage:  How do you eat an elephant?  One bite at a time.  Starting an emergency fund is exactly the same.  One bite at a time.  Five dollars here.  Twenty dollars there.  Empty the coin jar.  Clean the couch cushions.  The random $10 bill in the pocket of the coat you last wore in February.  Each of these goes into the designated account that you don’t touch except for in emergencies—preferably one that doesn’t have an ATM card.  And you have to acknowledge that something you WANT rather than NEED is not an emergency.  Then the account balance builds when you aren’t paying attention.  You go on with life and add the stray money when you can.  Next thing you know you have $100.  Then $500.  Then $1,000.  Then enough to cover a sick pet and a new water heater all within a week and a half.  And then the rebuilding starts again.

Do you have an emergency fund?  If not, it’s time to start one.