Too Smart to Live Like This

I’ve been quiet for a few days as I come to grips with where I’m heading. The past ten days were a blinding rush of exposition and self examination that, honestly, caught me by surprise.

The main thought in my head the past few days has been simple. It should be easier than this. It should not be this difficult to “get by”.

Don’t get me wrong. I’m not saying that I should be able to spend at will with no repercussions, or that some mystical force should deliver the hidden monies of the world to my doorstep (despite what The Secret people will tell you.) In no way do I believe that there should be some lower standard of responsibility, or effort.

What I’m saying is, I read about personal finance — books, magazines, a ton of website feeds — and what I read is, on some level, discouraging.

Many pundits like to talk about giving up your $6 lattés, but I don’t drink coffee.

Dave Ramsey’s sermons against credit cards are epic, but I haven’t had an actual credit card (one with a line of credit, not just a debit or prepaid card) in ten years.

And online discussions, probably due to their sheer volume of commentary, are absolutely filled with discussions on the symbolism of cash, tales of unorthodox frugality, or admonitions to trick yourself.

This is no slam against any of the links above. I chose those specifically because I enjoyed them, not as any sort of insult. All are forthright attempts to put some sort of face on a problem that, at its core, makes no sense.

On the other hand, it feels like everything I’ve read so far misses an important point.

I disagree with Ramsey, for example, about the evils of credit cards. The problem isn’t the card, it’s the end user mishandling the credit line attached. There are things that can be accomplished with an Amex or a high limit Visa that are, at best, difficult with cash, check or debit card.

Shouldn’t the goal be to make the psychology around the USE of credit more rational? Shouldn’t it be to get to a point where there is no “symbolism” to a dollar, whether it’s spent with a credit card, or as a dirty piece of paper?

Isn’t tricking yourself into saving money counterproductive? It seems to me that the real thing that needs to be worked on is the fact that have to trick yourself to do something. (Or better yet, the fact that you can.)

I like to cook. When I was first married (15 years ago today, for the record) I realized, for the first time in my life, that cooking for myself and my wife was something I really enjoyed. Unfortunately, I didn’t have a clue how to do it. Through trial and error, and fifteen years of repetition, I now cook fairly well.

When I cook, I don’t think about all the little tricks (hot pan, cold oil), about the physical aspect (how to hold a knife, how to flip an omelet in a pan), I just stand there and do it. It’s second nature.

So why is it that, over the same period of time, I never gained that second nature about money?

The goal, I think, for all of us, should be moving towards a place where the disposition of our money during each moment of every day, should be as natural as breathing. No tricks, no agonizing, just an innate sense that says “this purchase does not fit in my budget” before the urge pops up in the first place.

Naïve? Perhaps. But I like to think that as rational, intelligent beings, we all should be able to make rational choices without resorting to trickery.

We’re all too smart to live like this.

Jun 27th, 2008 6 Comments »

I want to thank all those who have joined me here, I had a bunch of kind comments to moderate. Thanks for your support.

I’ve had my posts included in several blog carnivals. Most recently my post Payroll Advance: Hitting Rock Bottom was chosen as an Editor’s Choice in the 145th Carnival of Debt Reduction. I’m proud of that.

I set out, just over a week ago, to try and get my head straight. I was posting as much for my own edification as for something I wanted other people to read.

I’ve had a rather ugly weekend. I spent most of friday and all of the weekend in a funk. I didn’t want to write because I’m concerned that the blog has taken on a life of its own.

It seems that when I write about how bad things are, or how I got to where I’m at, I tap into something primal and the words just tumble out. But these aren’t the things I want to write about, at least not completely. I want to be taking positive steps and writing about what I’m doing to get out of my situation, but when I try the words just dry up.

It makes sense, I guess. My whole psyche is based around the behaviors that got me where I am. I don’t really know the guy who wants to make changes, and so the words are forced.

I’ve got a few more posts about “rock bottom” in my mind, but I want to get some more positive, constructive posts out of the way first.

As a side note, I suspect there’s something wrong with my feeds. I have three feeds at feedburner, one for all posts, one for health only and one for money only. But the “all posts” feed doesn’t seem to be working. I’m going to fix that shortly, and I’m considering going back to one feed. I think I need TWO blogs, not one combined one. I’ll figure it out shortly. This may mean that all five of you who subscribe to my feeds may have to move. Sorry about that.

Jun 23rd, 2008 3 Comments »

I’ve spent a week doing “reflection”. Writing things about “how I got here”. It might make for decent copy, but, as always, it’s not really moving me any towards my goals.

This is a common problem with me. I have big ideas, big plans. I’m a great “thinker”, I’m a horrible “do-er”.

I have to do something to improve my situation before I go to bed tonight.

I’ve got some old musical equipment kicking around that I really don’t need. Tonight it’s getting photographed and placed on ebay. Should be at least $250 worth of stuff there I can use to snowflake some debt away.

Jun 20th, 2008 2 Comments »

The aptly name Mrs. Accountability has called me out, looking for more information on my recent post What’s My Life-Changing Money? That’s fair. And it just calls up a post that I’ve had kicking in my brain for some time.

Every vice has its bottom. For drug addicts it might be resorting to burglary or prostitution in order to get the next fix.

For the Moneystupid, it’s Payroll Advance. For those who are unfamiliar with the practice, first, congratulate yourself. You’re better off. The best description I’ve read is at Wikipedia.

The key phrase to take out of that is:

Typical loans are between $100 and $500 and are due in two weeks, with interest rates of up to 400% APR.

You walk in with a checkbook, you walk out with $800 in cash (give or take). What you’ve left behind is $912.50 worth of checks dated two weeks out. $112.50 in Interest and Fees for two weeks. Some places will only lend $700. Some only $600. In Ohio, at least, the maximum is $800.

Now, I know what you’re thinking. There’s no possible way that anyone would be so stupid as to take that deal. It doesn’t even meet the most rudimentary tests of rational behavior.

Which is just it. It’s not rational, because there was no rational behavior involved in getting you to the situation where you have to make the choice in the first place. It usually starts as something like “The power has been turned off. They want $400 to turn it back on. They will not take a check.” or some similar crisis. Ignoring the fact that your moneystupid got you into that situation in the first place.

So you make the hard, dumb decision, and write the check to the Payroll Advance. What you’ve done, in reality, is added $225 to your monthly bills, because when the check comes due two weeks later, you certainly don’t have that much spare to pay off and walk away. If you did, you wouldn’t be in this position in the first place. So you pay off the check for $912.50, and (at least under Ohio Law), take out another $800 the next day. Some states you can just pay the $112.50 and be done for another two weeks.

Then the dominos start to fall. Two weeks end and you don’t have $912.50. If you don’t pay, they’ll submit the check to your bank. When it bounces, they can, and will, call the police for “passing bad checks.” They’ve got you, and in desperation you go to the Payroll Advance company across the street and repeat the cycle. Once you’re in with one place, you’re really caught, and the second, third, or fourth place isn’t that hard. You’re already in the trap, one more doesn’t seem that bad. In for a penny, in for a pound.

We float checks every two weeks at three different payroll advance places. The balance is around $2000. The Interest and Fees are approximately $300 each time we flip. That’s about $600/mo.

This is the third cycle we’ve gotten into with these leeches. I’ve paid them off completely twice, only to have perceived misfortune suck us right back in.  The $1600 loan from a friend is what’s left after the last time I paid them off.

Please understand. I’m not proud of this. I’m under no delusion that this is a good idea or even socially acceptable behavior.

As to how to fix it, after many years of relying on friends and family the well is dry. I can’t borrow from anyone anymore. So I’ve begun fixing it the only way I can, snowflaking the balance down. Finding bits of money here and there so that when the check rolls the next time a $600 check becomes a $550 check.

We’ve already killed our fourth payroll advance check through various methods, and we’re applying this method to the rest.

I’m working hard on creating a list of debts and payments, so that I can implement Ramsey’s snowball. The Checks, not the smallest debt, are the #1 item on my list, due to the absolutely ridiculous interest rates.

Honestly, it’s only been a week since I started down this path, that I woke up and decided that something had to be done. I’ve got some things about to hit ebay and craigslist, and I’ve got a few ideas for other snowflakes. I’ve spent my life letting other people bail me out of my mistakes, so for better or worse, I’m inclined to do this through my own determination.

Of all of my money issues, this is the facet that embarrasses me the most. I feel it deeply. This situation is what caused me to say to my wife the phrase that became the title of this blog.

I really am too smart to live like this.

Jun 19th, 2008 7 Comments »

My sub $5 shirts post was picked up by the Money Hacks Carnival over at Mrs. Nespy’s Frugal World and had the good graces to put me under a picture of Loverboy. How cool is that?

There are a ton of other great Money Hacks type links over there, well worth the visit.

Jun 18th, 2008 1 Comment »

Can you do a hundred push-ups?

I guarantee I can’t. Honestly, before today, I’d have told you I couldn’t do a single one.

I just got up off the floor, where I did four. Yes, four. The sad thing is, it’s almost like a victory. I’ve got no history of having any muscle mass, so even four seemed like a lot.

The website hundredpushups.com is a challenge to get people doing one hundred pushups at the end of six weeks. I’ve signed up, and so should you.

Honestly, if I’m going to get my weight under control, it will need a bit more than just push ups (and it’s hard to do a deep pushup with your belly in the way) but every little bit helps.

Jun 18th, 2008 4 Comments »

There’s a great post over at I’ve Paid for This Twice Already about What’s Your Life-Changing Money?

One thing I’ve learned as I’ve buried myself in painful self-analysis is how much cash flow impacts our money troubles. Our monthly cash flow is a carefully orchestrated house of cards that barely stays together. There is no room for either error, or fixes.

It’s not that we don’t make much money, we actually do quite well in that regard, it’s that our monthly payments seem to take it all long before we have a chance to do anything positive.

While I am beginning to work on fixing the problems from the bottom-up, I can’t help think of the positive impact we would realize if we were able to knock a few of these debts out of the way. (And really, that’s the whole point behind Ramsey’s Debt-Snowball)

It would be easy to just use the value of all of my outstanding debt, which would be nearly $250,000, when you include the house. That’s a bit disingenuous though, as I believe the spirit of the question is “What’s the smallest amount…”.

$1600 would eliminate a $300/mo payment. This is a loan I took from a close friend that’s been paying down at $150 per paycheck for some time. I have the money direct deposited into his account.

$2000 would clear out the remaining Payroll Advance checks (and no, I’m not proud of that) that we are forced to roll over every two weeks. This works out to around $600 per month.

Think about that for a second. I just wrote it and I’m sitting here a bit stunned. $3600 would increase my monthly cash flow by $900.

The process of learning about where my money was actually going has been eye opening, humbling, and more than a bit painful.

The title of this blog was meant tongue in cheek, in a self-deprecating manner. But honestly, I really am Too Smart to have gotten into this situation.

Jun 18th, 2008 3 Comments »

60 Minutes had a fascinating story on sleep deprivation on recently. (the other story, about Denmark being the most content country in the world was also very good, but that’s another post.)

I make it a point to get at least eight hours of sleep per day, because I realized some time ago that I am deeply affected by sleep deprivation.

As if to underscore that, I got almost no good sleep last night. It seemed that I couldn’t relax, and spent most of the night tossing and turning. I woke up this morning… impaired, to put it mildly.

I have spent the entire day angry, which, since I’m watching my kids this week, is a bad thing. I wasn’t even angry at anything real, I would just focus my anger on whatever was in front of me.

The 60 Minutes report talks of there being a physical impact from sleep deprivation after a single night. One otherwise healthy test subject began exhibiting pre-diabetic syptoms after just six days of being limited to just 4 hours of “deep sleep” per night.

Fascinating report, and well worth the watch.

Jun 18th, 2008 1 Comment »

Yet again the Carnivals come a-calling. My post, Dress for Less: The sub $5 shirt, has been included in today’s Carnival of Frugality over at Out of Debt Again.

I’m honored. Welcome to all! This is a very young blog, started when I realized I had to change my life, my entire life, pretty much from the ground up. I hope you enjoy what you read.

Big thanks to Mrs. Accountability for including me.

Jun 17th, 2008 1 Comment »

This blog is about making changes to my entire life. Every facet, whether health, money, relationships, or otherwise is fair game for painful reflection and radical overhaul.

That said, I realize that not everyone wants to read all of that. There are health blogs, and people who read those might not care about my financial woes. The same goes for personal finance blogs and their readers not wanting to read about me being a big fat guy.

I’ve made some tweaks to the site layout, so that if you’re one of those who doesn’t want the full site, you can just get what you want.

On the right, you’ll see a box listing my RSS feeds. I’ve added two, for only Health and Money posts, to the main feed which has all the posts.

If you aren’t the feed-reading type you can view the site by category like so:

http://www.too-smart.info/health/

http://www.too-smart.info/money/

In addition to the main site.

While I’d love to have all readers along for the whole experience, feel free to use one of these resources if you really only care about one piece of the puzzle.

Jun 16th, 2008 No Comments »