Happy Birthday to the Carnival of Personal Finance, it’s hard to believe it’s been around an entire year…
And, for those of you keeping score at home, the 28th Festival of Frugality will be hosted here tomorrow, so get your submissions in if you haven’t already.
Did we just experience a dead cat bounce or are we in the midst of an actual rally? Are the bears going to take over or were the bulls just getting a drink before they plow onward? Correction or actual sustained downturn? I have the answer.
Don’t worry about it.
If you’re like me, all your investments are in either a 401(k) or a Roth IRA. No matter how the market moves, up up down down left right left right (A B Select Start), you won’t “benefit” until you have retired. Even if you have non-retirement accounts, are you in it for the long haul or are you day trading? If you’re a day-trader, you probably aren’t reading this because you know a lot more than I do and shouldn’t be considering my opinions. (If you’re a day-trader and don’t know more than I do, get out, you’re the sucker the table!) A month-long slide followed by a week-long bounce shouldn’t bother you at all because you won’t see any of it until you’re pushing 65. In fact, in 20 years you won’t even remember what happened that fateful May in 2006 when commodities and emerging markets dropped from near all-time highs.
Don’t bother timing the market, go enjoy the outdoors, do something you can enjoy now (Spend some money at the mall! Keep our economic engine humming!) - don’t spend your time worrying about something you won’t see for another few decades.
What’s good this week? Well…
While it never bit me, I wish I had checked my house’s CLUE record which is like a credit history for your house, except for insurance claims. CLUE stands for Claims Loss Underwriting Exchange and it’s a database of insurance claims run by ChoicePoint (yeah, that same ChoicePoint). As it turns out, only the owner of the home can request it (so if you make it a contingency, they have to look it up and send it to you) and it’s pretty painless. If you go to their website, you can get your report absolutely free and the only two bits of sensitive information you need to provide is your social security number and date of birth (and address of course). It’s very much like a credit history report request in that they pull four bits of information from your history to verify your identity (such as what streets did you live on, what’s your mortgage, etc.)
The CLUE record, superficially, will give you an idea of how insurable the house is but it also gives you greater insight on what sort of problems may exist in the house or the neighborhood. For example, I discovered two water damage claims in 2001 and 2003 - should I be getting myself some flood insurance? What was the nature of the water damage? (The claims were both for around $2,800) My girlfriend reminds me that Hurricane Isabel was in 2003 and dropped a lot of water on Baltimore (parts were severely flooded) so the claims may not be systemic of an unknown home problem.
In fact, it seems as this is a fairly common contingency in buying contracts when the market isn’t blazing white hot. Unfortunately I probably wouldn’t have received consideration if I requested the home sale be contingent on my acceptance of the CLUE report but it didn’t hurt so no big deal. It would’ve been terrible to buy the house and then find out insurance premiums would be off the charts for some unknown reason.
Laura Rowley, Yahoo! Finance columnist, culled some of her reader’s tips for raising money-smart kids and I think some of these are absolutely brilliant.
Rebecca A. Gushue takes the top prize with her 401(k)-esq savings plan for her nephew where she matches what he invests every year. Every single year that kid gets a 100% match! How incredible is that? I don’t know how old that kid is but when you start learning how to invest in companies at an early age (especially overcoming the emotional roller coasters) you are set to succeed in a lot of different areas.
Mark Adams teaches his kids about how quickly things depreciate with the help of eBay, showing his children that something they bought for $100 is really only worth $10 now. It’s a pretty big lesson for kids to wrap their heads around but learning the whole buy used (on some things) over new is key. The worst thing is for someone to develop a love affair with “new.”
There are several tips that revolve around chores and earning money, as if those chores are a job. I’m not convinced that’s the correct strategy with those because I’ve found that doing chores around my own house is a matter of pride. However, chores as jobs do teach a certain amount of responsibility and work ethic… so it’s not entirely objectionable.
How many emails have you received, meant to respond, but then forgot about? Exactly. It’s not that you don’t mean to act on them, it’s just that you had a few minutes to check your email, saw something important but couldn’t act on it right away so you put it aside. The problem is when you get the electronic statement from your credit card because when you forget to schedule a payment, it costs you money. That offer of $5 to go all electronic, while good, may be a losing proposition.
Consider that when you get a statement in the mail, it’s something tangible you can leave on your desk, so it can serve as a more physical reminder to schedule your payments. Now, if you have some sort of autopay feature that knows how much your statement balance is then you should take the $5 and run. Otherwise, just keep getting the paper statements and shred/recycle them after six months.
Hot diggity, more pfbloggers were mentioned in the press! Just when you thought this crazy ride was over, Vanessa Richardson of MSNBC did a piece on several pfbloggers including MoneyBlogNetwork member JLP of AllThingsFinancial, newcomer Thinkingaboutmoney.com, Nicole Mladic of BudgetingBabe, Jane Dough of Boston Gal’s Open Wallet (interviewed here first!), the couple at MakeLoveNotDebt.com, and even ad-free blog aggregator PFBlogs.org.
Sometimes in life being frugal can be a smart move (negotiating a percent off a real estate agent’s commission) and sometimes it can be a counter-productive move (I’ll explain some). Sometimes it’s easy to find out when it’s smart and when it’s not so smart (you can always try to negotiate the price of that platter of pancakes, but will the server spit in your coffee?) to needle out a few extra bucks. That’s what the “When Frugality is Foolish” series comes in and this edition has to do with the thing guys love buying for their ladyfriends - flowers. You get what you pay for.
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