Two people I will never let in my home

Top: Gail Vaz-Oxlade of Til Debt do us part. Why: This woman is seriously scary. I would never want to let her examine my finances!

Bottom: Vincent D'Onofrio as Det. Robert "Bobby" Goren in Law & Order: Criminal Intent. Why: He could get me to confess to any crime. And I would be sobbing!

Do we need a 'Sputnik Moment'?

Obama's Not the First to Use 'Sputnik Moment'

Excerpt:

Then-Gov. Mitt Romney of Massachusetts, testifying before the House Committee on Education and the Workforce in May, 2005, warned that, “Our generation has not had a Sputnik moment…yet. But our Sputnik is on its way.” He was speaking about education.

So were then-Govs. Janet Napolitano of Arizona and Tim Pawlenty of Minnesota when they spoke to the Minneapolis Star-Tribune in April, 2007. “One thing we haven't been successful at is creating a sense of urgency about this,” Napolitano said. “We haven't had a Sputnik moment.” Agreed Pawlenty: “The Sputnik moment will come, but it may come too late for us to fix things.”

Much more on Sputnik here


Comment: I suggest that we need a national Gail Vaz-Oxlade moment (She's Canadian but that's OK ... we can watch her show "Til Debt do us Part" on CNBC). The Gail Vaz-Oxlade moment I'm talking about is when she confronts couples about their debt.

Perhaps we should have a "Ross Perot" moment (if you remember the '92 election)

He now has an entire website dedicated to taxation and the federal budget deficit. Here's a sample:

For a moment (a Gail Vaz-Oxlade moment), pretend that the title of the above chart is "Receipts and Outlays for the Peet Household for 2009") (obviously the numbers on the "Y" axis would not be "billions"! But the green represents income and the red outlays. Gail would say to the Peet's ... "your finances are a disaster ... you ought to be ashamed of yourself". Kathee would sob ashamedly and I would wipe a tear from my own eyes for the remorse of our fiscal mistakes! Gail would confiscate our credit cards (she might even cut them up right in front of us!). She would put us on a budget and after a struggle to accept the realities of our fiscal situiation we would vow to improve and make necessary adjustments!

Our 'Sputnik Moment' needs to be that our nation will be financially bankrupt (perhaps mirroring our moral bankruptsy!) in less than a generation!

Tracking one's spending

Where’s the Money, Honey? Why You MUST Track Your Spending

Excerpts:

If you’re determined to live a financially stress-free life, the first question you must answer is, “Where’s the money, honey?” Do that, and you’re well on your way to becoming conscious about your money and how you’re using it.

...

Don’t even know where to start? Grab your last month’s bank statement(s), credit card statement(s), and line of credit statement(s). Now, break every transaction into one of the following categories:

• Shelter (mortgage, rent, hydro, heat, taxes, maintenance)
  
• Services (cable, telephone, security, home-cleaning, cell, internet, childcare, health, pets)
  
• Food (everything you put in your mouth and swallow, including restaurants)
  
• Shopping (any Stuff you bought for yourself and anyone else — everything)
  
• Transportation (car payment, gas, repairs, highway tolls, taxis, bus, train)
  
• Entertainment (movies, books, magazines, hobbies, gym, club, sports)
  
• Bank fees (service charges, ATM fees, NSF fees — don’t include interest)
  
• Interest costs (from everywhere)
  
• Debt repayment (don’t worry about splitting out interest and principal, just add all your debt repayment amounts together)
  
• Savings
  

In the best of all worlds, you’d do this for six months’ worth of your paperwork. Why? Well, a half-year is just about enough time to catch all the things that only pop up periodically. Less than six months will give you some insight, but not clearest picture.

Comments:

• If you've never watched Til Debt Do Us Part, I highly recommend it!
  
• My 90 year old Mother, a trained bookkeeper, keeps a detailed accounting of every penny spent. She does this month by month - MANUALLY! It can be done! (I've encouraged her to use Excel but some habits are hard to change!
  
• We use an account aggregator service called Yodlee. Our little process is that we have a weekly meeting (Tuesday nights) where we review all of our finances. It only takes about half an hour. We view our online banking account, our INGDirect account, our three credit cards, and Yodlee. I maintain a spreadsheet of our checking account showing the last time the checkbook was balanced, activity up to today's date, and anticipated bills going out 3 months.
  
• We are basically "pay-as-you-go" (the practice of paying debts as they are incurred.). Plan, save for, execute, pay. For example
  
  • We just returned from a 10 day vacation to Dallas (to see my Mother). This involved three nights in a hotel, approx 2000 miles driven, meals on the road, some entertainment, etc. We saved for this. Now have returned. And all bills paid
    
  • Christmas is coming up. We have it budgeted and saved for. (We are modest in Christmas gifting!)
    
  • I have to have oral surgery in December. We have an estimate of the cost. And a plan to save up for it by that time.
    
  • My middle son is getting married on January 1st, 2011 (exciting). We've budgeted the wedding gift and the rehearsal dinner. We have that already saved for.
    
  • We have planned to replace the battery and tires on my truck (2002 Chevy S-10) next Summer. We will save for that and when we have the money execute the plan we will purchase using a CC, and then pay off the CC at the end of the month
    
  • We have a short term saving account for the "pay-as-you-go" system.