• Like a bad penny, debt always turns up…

    unless we change how we interact with money, of course!

    The Bad Penny is dedicated to two pursuits: getting out of debt and staying out of debt! It recognizes that frugality and caring for our planet go hand in hand, and that our unsatiated need for stuff is hurting us in so many ways.

    Easier said than done!

    Disclaimer

    I am not a finance professional. I write about the world as I know it, and my advice may not be the best course of action for you! Please seek qualified advice for your particular situation.

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Maxed Out!

I just finished watching Maxed Out – a documentary about predatory credit card lending. Or, as Jay Antani from stated on the review site I linked to: ” a Dante-esque descent into a distinctly American form of Hell.”

If you haven’t seen it, I’d recommend you check it out from your local library. It was interesting, although I think I enjoyed “Super Size Me” a bit more, at least from an entertainment standpoint.

As with any documentary, I’m careful to keep in mind that the film is not an unbiased source. And there were portions of the movie that were obviously edited to provide the greatest emotional and logical response. But I think the importance of a film like this lies deeper.

“Maxed Out” really focused on the credit card companies and how the government has failed to protect the consumers adequately from irreputable lending practices.

But what they only hinted at was the other half of the problem – we have become accustomed to getting what we want when we want it. We don’t want to wait, and we don’t want to consider whether or not it’s a smart purchase. It’s so easy to just drive down to the local Walmart and get whatever we want. If it’s not at Walmart, it’s on the internet. And if we don’t have cash? No problem. Just charge it!

When we get to the root of consumerism, it’s this exact mentality that destroys our financial freedom – not the credit card companies. They are definitely a problem, and there is no doubt in my mind that predatory lending practices take advantage of consumers. But when we start to look at our own behavior, it’s easy to see that the desire to have things – to store up for ourselves – is what very often puts people in a position to start thinking of credit as an acceptable means to acquire. Obviously, there are also people who had no choice but to finance necessities – medical care, car repairs, etc. But what I really want to concentrate on is the “Acquisition Mentality” so many of us have. What can we do to combat it?

I don’t know when I started thinking as if I deserved and should have every little thing. That if I am bored, an acceptable way to pass the time is to go to the mall and shop. I don’t think it was my childhood, because we simply couldn’t live like that. But somewhere between my teen years and today, I started to believe that it wasn’t a big deal to use credit for every little thing I didn’t have cash for – and that’s exactly what the credit card companies want you to think.

It’s been hard to change that mentality. I can finally say that shopping for entertainment, especially at the mall – holds little allure for me. And I believe that change came when I started really thinking about my wants and needs. Do I need it? Or do I want it?

When it comes right down to it, I need very little. I need food. I need water. Shelter, and clothing. Heat during the winter. If I have these things, I’ll survive. There are other things that are needs, but just barely – I’ll survive without them, but they really do make life more pleasant – toilet paper, shampoo, hot water. A computer with internet access. These are my priorities if I have to make a choice.

And there are lots of things I want – junk food, or a new outfit. A new car, or curtains for the dining room. Those come last.

But the funny thing is that when I start to think about each item I want to get and try to decide whether it’s a want or a need, more and more I find myself deciding I don’t even want to buy the things we don’t need – for the most part anyway. I want to wait until we have more money in the savings, or we pay off a credit card. I’d rather make do with what I have. I don’t want to buy on credit anymore. I want to own it free and clear. I don’t want to be “Maxed Out” because I’ve bought things I think I need when really I need to get out from under the thumb of other, richer people and corporations.

To close, I wanted to share something that happened in a conversation between me and a new friend of mine. I really respect her and her husband – they don’t do things conventionally, and their choices often go back to a poem I quoted in my very first post:

Use it up,
Wear it out,
Make it do,
Or do without.

My friend came up to me after church on Sunday and showed me a rash on her hand. She was wondering if I knew what it was from. I didn’t, but I asked her if it itched, and if she had tried hydrocortizone cream for the itching. She said, yes, it did itch, and she had tried using a baby wipe on it to see if the alcohol would kill the itch. She didn’t want to have to buy a tube of hydrocortizone.

What would I have done? I would have driven to Walmart just to pick up a little tube of cream! What a difference! And yet, she found a solution that worked just as well (even if it did dry out her hands a bit) and didn’t have to pay a bit extra or make an extra trip.

Now, if I could just always think more creatively!

And how does it relate to the movie I watched tonight? Well, it really doesn’t. But it does have a lot to do with my thoughts after finishing the movie. Our debts inevitably come down to our own decisions about what we want and need. Sometimes it’s absolutely necessary. But so much of it is from buying things we don’t need! What gets me most when I think about this, is that often we think we do need those things!

It was a reminder to me that I need to think more and buy less!

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The Desk of My Dreams – and the Bane of My Wallet

I found the perfect desk at Sam’s Club.  It’s a secretary desk – and it’s an organized person’s dream – lots of drawers, even a built in file cabinet.  Perfect for my needs.  But it’s $400!

But let me give you some background – part of our business equipment is a large corner desk.  Each “wing” measures about 5 feet, so this desk is huge!  It’s also basically a table.  It has a flat top and no drawers.  It is perfect as a shipping area  up in our office.  But as we sell our product and get rid of the business, we aren’t going to need it.  It’s too big.  Too useless!  The office will become a bedroom again, and we needed something small that would hide our bills, my laptop, and our files in plain sight in the living area.  Brian and I discussed it, and we decided that selling the current office furniture and buying something to fit our needs would be a much wiser idea.

And so when we went to Sam’s Club to pick up cat litter and cat food, this desk stood out to us.  But we weren’t planning on buying a new desk until we were done with the old one – we needed to sell it to afford the new one!  At the same time, furniture at Sam’s seems to be seasonal.  Right now there is one in stock at our Sam’s.   We don’t want to charge it.  That’s not a good idea.  So we came up with a plan.

We could use the extra money in our paycheck and some from ebay.  And we’ll do that to make up the difference.  But we’ve got a huge black filing cabinet sitting empty upstairs.  It’s being used to put random items on.  We also have a few store displays to sell.  And I’ve been storing some soap base from my stint with making soap – which was very, very fun, but now I have enough soap to last me the rest of my life, and half of the soap base still left.  We also have some baby clothes I’ve been meaning to sell.  So we’ll sell all these things that have really just been cluttering up our lives (remember the Container Theory?  The office is the exact opposite of what this theory proposes, but selling the stuff will help a lot!)  And with the money, we’ll buy something that will simplify our office into one little corner of the room.  That feels a whole lot better than going into more debt!

The Peanut Butter Cup Problem

Just after Halloween, I bought 2 bags of Reeses Peanut Butter Cups. The fun size.

Why? Because they were half off. And I like the taste of Peanut Butter Cups.

Most of them are still sitting in my pantry – along with the Halloween candy my two-year-old got from trick-or-treating.

Gabe Trick or Treating - Halloween 2007

The thing is, as much as I like the taste of that candy, it makes me feel sick afterwards. The sugar in it makes my blood race and my stomach feel strange. Yet I keep buying it, and eating it!

Shopping is a lot like that candy for many of us. It’s exciting to buy something – exciting to imagine the “taste” of our selection when we get home.

But if any of you are anything like me, it’s easy to buy things that aren’t good for us – things we don’t need.  That we might even not use, even if we think we will.  Some of us even go so far as to buy things we don’t even want – simply for the sake of the purchase. I’m sure many of my readers can all relate me when I talk about the shirt we thought we would love that we never wear. Or another magazine subscription we don’t have time to read. What about the healthy box of granola in the pantry that routinely gets passed over for the chocolate puffs?   We feel ill that we aren’t using the items, but we ignore the fact that those items are in our house the next time we want a taste out at the mall or the grocery store.

The thing is, the “sick” feeling isn’t just from the fact that it’s sitting in your house, unused and unwanted. It’s because of the money you wasted on that purchase.  It might even be because you are still paying it off and accumulating interest in the meantime!

The only solution I can think of to my Peanut Butter Cup Problem (PBCP) is simple hindsight: I shouldn’t have bought them. Yes, they are delicious, but it doesn’t take long before I feel ill from the sugar, and it’s just not worth it. Will I remember that the next time I want to purchase Peanut Butter Cups at half off? Hopefully. Probably not. 🙂

Take the next step: The next time you want to make a purchase, ask yourself if it will make you “sick” in the future. If it will, don’t buy it!

It’s not quite regifting, but…

Merry Christmas! I hope your time with friends and family was most fulfilling, and that you received the gifts you were really hoping for! We celebrated here at our house with my parents-in-law and my sister-in-law, her husband, and their two kids. It was a lot of fun seeing the kids enjoying their presents, and the food was really yummy! Especially the lefse, which I’m still perfecting!

So…

Right now I’m sitting in my living room. And there are three -yes, three garbage bags of wrapping paper, ribbons, and toy packaging sitting in front of me. On top of that, there’s another bag in the kitchen full of the disposable plates and cups we ate off of (all given to us when we moved in to our new home.) And one more bag – the only bag I’m not completely disgusted with – a bag of pop cans, foil, and plastic to be brought to our recycling center.

I tried to figure out what I could do to reduce this trash before I filled the bags. I kept tissue paper and boxes that weren’t completely destroyed, and recycled what I could. Obviously I still have a lot left, and I hate the fact that this trash is simply going to a landfill to sit. But I don’t know what else to do with it. Since the majority of the presents were for the kids (2, 5, and 7) the paper is completely unusable for rewrapping presents.

So help me readers! What are some ways that you reduce the trash that comes with Christmas? I’d especially love to hear what you do when you have family who isn’t as concerned about it as you are. After all, not only are bags of wrapping paper sitting in a landfill taxing to the environment, but they are taxing to your pocketbooks as well – you have to pay to have it removed.  And with my family coming next weekend, we’ll have more to dispose of, so I need some ideas!

I’m a crazy freecycling fool!

Ah, the wonders of freecycling. I’m sure most of my readers have heard of freecycling and all the problems and pleasures involved therein, but for the ancient few (just kidding Dad!) I’m going to explain a bit.

Freecycling is the distribution and acquisition of free used goods, generally through an organized network of people. It’s a mixture of the words “free” and “recycle” – and that pretty much sums up it’s purpose too. When you hear the word “freecycle,” you can safely assume they are talking about the website I linked above.

I freecycled today, but actually not through the .org site. I gave away an old cot we found in the attic to grandparents looking for someplace for their grandson to sleep besides the floor. It’s nice to have the floor space back in our garage!

I’ve given quite a bit of stuff I didn’t need or want on freecycle – from egg cartons and baby food jars to electronics we didn’t use anymore.

I’ve also gotten many things – most recently, a woman was giving away plastic window seals – the kind you use a hairdryer on – which we desperately need upstairs! I’ve also gotten baby clothes, toys, moving boxes and free appliance removal!

Craigslist has a free section too. They don’t call it freecycling on craigslist – but it is. Anytime you recycle an item that would normally get thrown away, you are freecycling.

The original intent of freecycle.org, based on what I’ve read on that site, was to allow people to give away stuff they considered rubbish – that were invaluable to others – cardboard boxes, scrap paper, egg cartons, used jars, broken appliances (think teachers and repairmen.) But you can find some pretty good stuff on there.

One man’s trash is another’s treasure, right?

The major benefit to freecycling, of course, is that not only is it good for the recipient’s budget and the giver’s trash can, but it’s reusing the item. Obvious, yes, but the implications may not be.Every product we purchase has to be made – that requires several steps:

1. First the materials for the product have to be mined, farmed, raised, grown, harvested, etc. This costs more than just money – the miners, farmers, and corporations use fuel, which reduces the world’s supply as well as adding more dangerous chemicals and excess carbon monoxide to the air. Renewable items, like trees, may take years to grow back. Ore will not renew in our lifetimes, or the lifetimes of our great-great grandchildren.
2. Next the raw materials are processed into useable forms – raw ore may be melted to purify it and then formed into sheets and rods for manufacturing. Trees are cut into boards and and cotton is cleaned of the seeds. This step also adds to the reduction of fossil fuels and adds chemicals to the air.
3. Now it’s time to make usable stuff! The materials are sent to factories, where they are made into clothes, cars, toys, and packaging. Then they are individually packaged, packaged again in larger boxes of several individual products, and then put on a pallet and wrapped in plastic. I don’t feel the need to tell you what gets taken out of the earth and put in the air and ground – you can guess!
4. Now it gets to the store, and they remove the pallet, remove the plastic, remove the cardboard boxes – much of this will get thrown in the trash, but many responsible companies will recycle or reuse most of it.
5. You buy it and take it home. You remove the outer packaging, and if you are environmental conscious, you will recycle what you can. Maybe even reuse it. But say you weren’t environmentally conscious – you’ll throw it into a white garbage bag which will go into your trash can and eventually sit in a landfill.
6. The product breaks, or you tire of it, and you throw it in the trash. You go buy another, which has already gone through the first 4 steps of our process.

But say you got that same item used somewhere – we’ve already gone through the cycle once – but that’s where it stops. After step four, there is a distinct change in what happens!

5. You buy it and take it home. Since there isn’t any packaging, you immediately put it to use. No need to unwrap or throw away, so you can use that trashcan to store rainwater (I’m just kidding – I know you’re still using it for something though.)
6. The product breaks, or you tire of it. If it’s broken, you either salvage parts for other items, offer it on freecycle for someone else to salvage, or you take it down to the metal and plastic recycling facility, where they’ll give you a few cents for it. If you tire of it, you give it to someone else who can use it, and the cycle is broken.

My challenge to you is to find ways to reuse or recycle your items. In other words – Don’t buy new!
Your wallet (and the earth) will benefit in many different ways – you will pay less for the item and have less trash. But you will also be helping by not being a part of the deadly cycle of buying new products that require new materials!