Personal Finance QuickTake: Tax Rebate - Senate Version

The Senate version of the stimulus package is too complex and apt to have even more added to it over the coming days. This according to Treasury Secretary Hank Paulson.

The Senate lowers the rebate to $500/$1000 from the House $600/$1200. It does increase the recipient count though buy adding 20 million seniors that were not going to get anything under the House Version. It also raises the maximum income level to $150,000 for individuals and $300,000 for couples.

The interesting thing was that it showed that higher income families were less likely to spend the rebate and to put it into savings...this is opposite of a trickle down theory...It would be interesting to see the data.

Any-who, this still has to go to the floor and be pork-ified as well. Frankly, I believe the only hope to get these by May-July is gone unless they get it done fast. This is because the next step is to get it into committee to hammer out the compromise. The more difference in the bills the longer it will take.

Christmas Cash?

(Photo Reuters)

Zen Through Better Budgeting...

It has been three full days since Christmas morn and I feel something strange. A much lower stress level! I was asking myself, why I was truly not stressed out Christmas Night. Then it hit me, it was through better budgeting, managing our bills and cash management. I just wasn't as stressed out as usual Christmas night.

"It is all paid for!" I told myself. I have made it through the month of December actually lowering my indebtedness rather than adding to the pile. There are NO bills coming in January, as we saved and paid for everything in cash. In fact we have begun (albeit slowly) to save for next Christmas.

Here is how we did it this year:

When we decided to get real with ourselves, one of the realisations was, " What will we do about Christmas this year?" We just couldn't do what we had before and rack up huge credit card bills. One we cut them ALL up, except our debt card. And secondly we wanted off that Tilt-a-Whirl of Doom.

So the next step was to determine how much we wanted to spend in total (a top-down approach) then we said here is our list of people we usually shop for along with us and the kids. At first it worked out to about ,47 cents per person...a bit low. So we went and paired the list to who really was close to us. With having 3 kids, it was still below what we wanted to do so we made two categories of people, Us and Them (pretty original, huh). We came up with a budget per person for the Us category and a pool of funds for the Them's (my English teacher would kill me if he saw that statement...).

The next step was harder, we talked with the kids about expectation level, which we had set WAY too high up until now. We then asked them for their list and reminded them their fate was in their own hands. If they wanted a big gift...that was probably it, or they could have a series of smaller gifts.

We also dropped another bomb...we wouldn't give them money to shop for us or each other, but we expected them to at least shop for each other and established a minimum present price of $5 on each. This price floor avoided my middle Daughter (who will never be broke) from buying a pencil for each of her siblings which was her first offer! She is why the rule was established! Since we started this discussion at the end of September they had plenty of time to save.

Next...the Them's...They are all really good people, but they aren't my kids or wife so they are lower priority. We wracked our brains for what to do here, then we decided to have family pictures shot and given out as many had asked for these. To be fair ,we warned all that we were doing something like this so we could avoid the big gift vs small gift possibility. We also asked those Them's to focus on the kids if they were to buy presents at all, or to do exactly what we did, as we would love to get family pics from them as well.

Now the test...we've saved the money, taken out cash so we couldn't go over, then prepped our list. In order to keep track of what was who's money we separated the money in a bigger envelope with 3x5 cards with the gift receivers name. This kept us fair between the kids, and if we did want to go over, we have to take it out right then, from someone else's present money. This avoided many prior years issues of going over on one, then making up to the other, now #3 wasn't balanced...a never-ending spend spiral!

So how'd we do? Exactly on budget (well, actually a received a gift-card from work so I went over on her, but I used the gift card to do it!). We managed our money, we kept to cash so it was easy to track, and everybody had a great Christmas. Oh yeah, and it looks like we reduced our debt this month by $2,940!

All I can say is this worked for us, we are planning to do the same every year and enjoy our Zen...

A Tribute to Banana Nut Bread and Grandma...

I was planning to write something else tonight, but my mind kept coming back to Banana Nut Bread. Truth is I don't really like it, but yet right now I am desperately craving it.

You see every Christmas Eve growing up (the longest day of the year for a kid) we would pack up the car and drive up to Logan Iowa. 99.9% sure you have never heard of it, but it was a very special place. It was where my Grandma lived during all of my childhood.

All of my Father's brothers and sisters (10 total children, 9 who lived into adulthood) and all of my cousins (7000 of them :) ) would gather at Grandma's house to get together, run around, drive the adults nuts, talk about our Christmas wishes, be teased about the whereabouts of Mr. Santa, eat, do our present exchange, then collapse into a pile to be carried back to the car and whisked back to our beds with visions of...you get the idea.

We would also get a loaf of Grandma's Famous Banana Bread to take home for the next day. Like I said, I could take it or leave it, I was really a fudge kind of kid. But even after we all grew up and moved away every year we would get our little loaf of bread. It was the family inside joke; "Wonder what we are getting from Grandma?"

Unfortunately not this year. Grandma passed away right before her 88th birthday. And as these things go I wasn't able to get out there to see her much. Really less than 4-5 times after college. Just too busy. My mom and her husband as well as my brother, sister-in-law and brand new niece are all out here so it was hard to get out there, cause we'll do it next year.

So for all of the presents that I will get and give on Christmas, the one thing I want most won't be there...

So when you are in the bustle of Christmas running to and fro, think about what your Banana Nut Bread is and really gives thanks for it. It may be the last time you have a chance...

I miss you Grandma, God Bless

The Christmas Gift Returning Bandito...

Let me first say that I am a very grateful and gracious person, not to mention humble...OK, I fail at all of those often, but I do have a big ol' soft spot; presents.

I enjoy getting them, and I truly do appreciate the effort that one goes through. You have to decide what to give (which is the hardest part for me), you have to buy it, then wrap or ship it and wait to hear the reaction (my second hardest part of the gift-giving experience).

This empathy may go to far though based on what I know about retail. January is a great sales month for stores.

Know why? People return items and then add in some "Grandma Money" and buy what they really wanted. Add this to the grundle of broken things that aren't directly replaced and you probably have 10% (a number completely pulled out of my mistletoe) of gifts that don't stick.

Confession time: I can't do it...I feel too bad to return something. I think the only time I have returned something is when it was broken and I actually liked it. I was the only one excited to get the same item back from customer service!

I am normally a very practical person. I have no problem when someone returns something I gave them. I want them to enjoy their gift. My wife and daughters have no issue returning anything. Their dying great-grand Uncle could have bought them a gift, told them the meticulous planning that went into getting it, and then the next day they will be in line ready to exchange it for a Narato backpack. Well ,at least my daughter would.

I really think it is Rankin-Bass' fault. Who are they? All of those Christmas shows that are playing right now with the faux 3D people...You know, "Rudolph the Red Nose Reindeer"...

Anyway Rudolph and this wannabe Dentist Elf go on an adventure (you would have to see it, that made it sound like a Tarantino movie) and they find the Land of the Forgotten Toys. Toys no one wanted...totally depressing. Kids in third world countries asking for bread and kids just dumped these poor toys. Sure the Elephant has a Pirate Hook and lead paint, but come on, cut him some slack...But I digress...

For me it really is the thought that counts. It may mean that I won't get the Super Death Star I wanted, but at least my Light-up Reindeer tie won't get deported to that horrible island and I won't feel like the guy in the picture...

Just Seven More Shopping Days...

I saw that sign outside of the mall on the way home tonight. I guess for people that have never heard of Christmas, that may be helpful. If you are Jack Bauer from 24 and cannot see the little clock on the lower part of the screen it is also helpful. For most though it is a way to goad one more purchase out of you, or maybe even more.

By the way Black Friday (the day after US Thanksgiving) isn't called that due to the crush of people in a Black Plague sort of way. It is named as such as the day when retailer profits for the year turn to the Black (or positive).

Imagine that...a whole year of losses, then just 40-ish days to cover everything!

It isn't that the margins get better, it is that people who normally wouldn't think of shopping for Uncle Stu any other time, including his birthday, frantically search for the perfect gift for the person that they barely know or perhaps even don't like. It is actually rude not to! I have seen a lot of blogs talking about buying for in-laws that expect gifts even when the person is really trying to get their finances in order.

Not to say I haven't done the same thing!

Not this year though. By setting an exact amount to spend and using cash, it really came down to priorities for me and my wife...the kids. If that offends some people...Bah Humbug :)

However...I would be remiss if I didn't at least act gracious to anyone reading this. I am truly grateful that you take your time to read these entries, and I probably read yours! Thank you!

With that said I still need to get Uncle Stu a pipe cleaner organizer. Quickly, since there are only seven shopping days left...

A MAP to Christmas...

I am not sure how familiar you will all be with the concept, but I thought that it may be a neat topic to discuss MAP.

No I don't mean Map Quest, Google Maps, or those 180-panel maps that cannot be refolded. I am talking about Minimum Advertised Price! Most stores that you will shop in this holiday adhere to this policy and those that don't, well you either see key products advertised or potentially even available.

Ever wonder that, for the most part, everywhere you go the Wii is $249 no matter pretty much where you get it? Don't cha thick Wal-Mart would try to under-sell Best Buy on this (if they had them) just to get you into their stores?

No can do.

There is probably a Minimum Advertised Price for the piece or perhaps even an Minimum Selling Price.

But why would Nintendo care, they make their money selling to Wal-Mart and Best Buy, locking in their profit? Basically to make sure that all of their dealers have a chance to make some margin on the product. Nintendo cannot afford to just have Best Buy and Wal-Mart as their only dealers, because they probably (deservedly so) get better pricing based on the volume they buy.

Basically without this protection, little Mom and Pop shops could be crushed.

In fact, in many cases if you won't adhere to the policy the vendor won't open (or keep you) you as a reseller. This is why you rarely see Sony in Costco. Costco won't sell at an agreed upon price as they are an EDLP reseller, or Everyday Low Price. This means the generally they price cost up. They want to make X on light bulbs so they charge their cost plus X margin. So if they want to sell Sony they have to find a whole seller that will sell to them, albeit at a higher price.

Until recently all this policy was kind of on the fringes as it walked a tight line to price fixing which is illegal...until recently.

The Supreme Court (not to be confused with the Supremes in court) recently handed down a verdict that made it legal for manufactures to be able to set Minimum Sell Prices for the first time officially. Basically a Costco-type place sued a high-end Purse manufacturer saying that they violated price fixing laws by cutting them off from reselling the purses.

After all the arguments the Court agreed with the manufacturer, basically agreeing that the manufacture can sometimes take steps in order to protect their brick and mortar dealers from over zealous competition.

So where will this end up? Well discounters are a smart bunch and this is why you see new promotions like "Gift Card Sales" or "Come in and Save" type promos.

While MAP means that it can be tough to get lower prices on top-flight gear, at least there is bio-diversity in what stores you can shop...

Work Christmas Parties and the folks that love them too much...

Just got back from the Executive Christmas party (although i am not an Exec, I guess I am the closest thing in my group!). This is held at the CEO's house, which is unbelievable.

Copious amounts of really good wine as well as other beverages flow, but I now know (it only took 38 years) that this isn't intended as a Frat party :) it is a party at the CEO's really expensive, nice house.

That being said it never fails to amaze me that some still believe that this is a great time to get liquored up and let "the man" know what is REALLY up. Or the spouse who thinks that they need to "really let the Boss know how unfair the Boss is to the worker.

My advise: Treat holiday parties as if it was and office meeting with cocktails! The job you may save, may be your own!

Surviving Christmas by Charles Dickens...

Basically two weeks until Christmas and the tension is palpable.

Living up to an impossible standard (Christmas Past) Kids with unreal expectations (Christmas Present), trying to stick with a budget (Saving Christmas Future). The ghost of Jacob Marley (Bob's Son) visiting and telling me not to be cheap while the chains made by CitiBank rattle on the floor.

Well this year we are trying something else. We saved $1200 in order to pay for Christmas. $200 for each person in the house, $200 more for presents for others. Given that this is the annual GNP of Ghana on one hand it really is a ton of money, but less than we have spent before (not budgeted, but spent :) ). I don't know about you, but pull the tinsel out of my eyes and I generally don't drop a grand+ on anything. But, every year get me all liquored up on egg-nog and off we go. Buying plastic crap in the shape of; Barbie and her Bio-Engineered Pets, Various remote controlled creatures and don't forget the latest (and outdated in January) electronic gizmo's of doom.

So this year we went cash only, ala Dave Ramsey and we have pretty much stuck to it, although we went over by $83 on the gifts for others as family portraits (along with the requisite new clothes) went a bit over.

And you know what...

There is still plenty for everyone.

Sure we had to plan a bit better. My wife fought the good Black Friday fight and got some Massive deals (Thanks Hustler Blog $$$ - Great tips). We tried to manage expectations for everyone, but in January there will be no panic...no, "Oh my Gosh, we spent $X!!!" No one died (except Marley...but that was awhile ago) and we go into the new year chipping awayat the debt instead of adding to the pile.

And it feels pretty darn good...

Found Money is the Best of All...

'Tis the Season I guess, but since Friday I have come across an extra $206!

First, I just recieved a gift card for $100 from work, normally most would be bummed at that for a Christmas bonus, but since I wasn't counting on it (my regular bonus is in Mar/April) I will take it smiling.

I addition in the mail I recieved two checks; one for $25 on a balance I had with my old doctor in SLC (we moved a year ago) and second an $81 refund on my State Taxes last year, since Oregon didn't use enough of the money and by law they can only keep so much overdraft (like that will ever happen again!).

So what will I do with my surprise funds? The gift card will allow me to get my wife something extra and the rest will go to debt snowball.

Every little bit helps!