7 and Holding…

Whew! Back above 7,000 after that scary skirting of 6,000. Maybe (hopefully) the number is 7. So, I’m pulling weeds yesterday ($8 – $10 for  weed killer – bad for the environment or free and 157 squats – good for the pear in me – no brainer) and thinking, what more can we do?  We lost $11 TRILLION  last year!  A few coupons ain’t gonna cover that…

But just like the market’s 400 point surge on two little pieces of positive info (Bernanke saying it’ll be over this year and Citigroup having, woohoo, two profitable months) we can realize a big positive as well by combining LOTS of little things. Pulling weeds, using coupons, becoming DIY’ers, bartering, giving things up, settling for less. There’s no one thing that’ll do it, but a combined attack on your expenditures can deliver strong results.

So, from the person who (yes, I admit it) washes out her baggies  to reuse them, which saves $ and landfill space, I searched out some things to think about.

First thing I found – a free haircut thanks to Herbal Essences.  Well, sorta. You have to buy stuff, and then do a rebate kind of thing to get the free cut. If you find it on sale and have coupons and would use the stuff anyway, it might make sense. But, if any of these is not true, free costs you more than that $9 cut at wherever. This week I’m buying Fructis at .99 with $1 off coupons. I did find, however, that this site also offers coupons. The right sale and you might score. Personally, I like Herbal Essences. I just like free better.

Must be spring time means a new “do” because I found two other hair articles. This one, “Haircuts and car repairs on the cheap,” seemed like an odd pairing. Then it clicked – chop shops!  Kidding. Actually, it points out a way to save money and help education at the same time : Use tech school labor.  Yes, you may be a little leery of that tattooed, green-haired, piercings everywhere tech touching your hair or your car, but relax. My parents freaked when boys let their hair touch the collar. Things change, and I’m thinking, if anything, this younger generation has an incredibly high tolerance for pain. Given the economic conditions, good for them. It’ll come in handy.

The last one didn’t wow me., but this is about finding lots of little ideas. Catchy title – “I’d Rather be a Brunette.”  Personally, I’d rather be bald and only have to worry about the cost of razors…

Need a vacation? Volunteer! Need repairs? Strap on that tool belt! Want to talk to your spouse/parent/child who moved to India for a job? Want more deals? Become a secret agent. (I think the ol’ saying is “ask and you shall receive.”) Can’t hurt to try. Have some money? That’s pretty trick (yes, I know, showing my age. That went out in ???) Need some new duds? Think thrift shops. Consignment shops are filled thanks to people trying to generate cash and you can score. Really desperate? You may be worth something.Not in my top ten ideas for generating income, but blood banks are always thirsty. Speaking of which, how about some income those IRS rascals can’t touch? Now, ready to  stock away some money since you’ve found all these savings? Banks want it. May them pay for it!

My “I love you, man” award of the week goes to a Chicago sheriff who’s reluctant to process evictions. Since we’ve got the self-proclaimed “toughest sheriff in America,” Joe Arpaio, I’m not holding out much hope for folks here, but I applaud the efforts of someone who’s not letting lenders get another freebie. I’m thinking the bailout dollars are enough. If they need to foreclose, let ’em actually follow the proper processes.

But, in the end, the best advice for these tumultuous times is the same thing that brought the market back to 7 – a little positive thought. Letting all the gloom and doom control your life won’t change whatever’s going to happen out there. But, a little Zen in our lives might make it easier to deal with. Here’s to optimism!

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Frugal Requires Focused Funding…

7500. That’s where the Dow is. Ok, rounded up it’s 7600, and (supposedly) set for a big open. Are you holding your breath? Open doesn’t count. It’s where it closes that matters. I read recently (can’t find the link) that 7000 would be the number. I’m beginning to believe.

Best I can tell, the latest freefall centers on two things: GM and jobs. I’m torn. We can’t afford to lose more jobs. But we can’t save every poorly run company either.

I studied the recent round of expertise on GM’s impact on our economy. Bailout or bankruptcy the pundits ask. So much at stake. Their demise could lead to 3 million more lost jobs. The kicker in that figure? GM employs just 123k people. The big three (if you can call them that) employ about 240k. But… each person accounts for another 4 jobs – another million people. AND, another 1.7 million people have jobs thanks to those 1.2 million. Which lead us to a key reason why GM and the others are floundering. Big wages – 1.2 million people buy enough to keep another 1.7 million in jobs. And that leads us to the root problem –  Mfg. only accounts for about 12% of our GDP now. Services (as in people who make far less) accounts for 67%. 

That figure made frugal crystal clear to me. We, the generation who wanted our children to have more, spoiled them on mfg. wages. They, the generation who believed us and acquired more, live on service wages. Any wonder we’re in this mess?

I’m not intellectually well-versed enough to analyze the macro/micro implications of GM. Here’s what I do understand:

If you give a failing company more money to continue under the same management to do the same things that made them a failing company…  (I believe AIG’s 2nd run to the money trough proves this point.)

Yes, the government successfully bailed out Chrysler years ago. But, Lee Iacocca took over – a new leader, new team, new ideas.  And, we still had a strong manufacturing base back then – people still bought American. Today, we’re trying to fix things (personally as well as nationally) based on the definition of insanity: continuing to do the same things (when everything has changed!) and expecting different results.

The time to save manufacturing was long ago: Ten years ago when 76% of socks were US made; twenty years ago when we started losing the 3.7 million jobs now in China and India; fourteen years ago when the million jobs in apparel and footwear began vanishing.  

I have nothing against GM, Ford, and Chrysler. I wish they were better businessmen/women. I wish 3 million jobs didn’t hinge on a larger deficit for the American public. I wish someone had the foresight to address our dwindling manufacturing economy  before it, well, dwindled. But they didn’t. The reality is this: The more we move to service-sector wages, the more mfg. jobs we will lose. BECAUSE WE CAN’T AFFORD AMERICAN. That’s why jobs moved overseas to begin with – COST. A bailout won’t change that. The question shouldn’t be, “How do we save GM,” it should be, “How do we fix our service-based economy?” 16 million, maybe 19 million jobless folks are counting on that answer.

I watched the election coverage diligently. To me, the historic implications of this choice had nothing to do with age or color. It had to do with the devastating economic challenges our new leader would face.  I needed to know how that person intended to fix this disaster. What I learned? Obama is a brilliant politician. It wasn’t until his acceptance speech that he used the two words that summarize, truthfully, the only things that can salvage our financial future, the two words that if bantered about during campaign stops quite probably would have derailed him. Sacrifice and Service. We are now a service-based economy. That requires sacrifice.  

A chicken in every pot is still possible given good couponing and attention to the weekly ads. A house, new car, DVD and plasma screen TV are not. Those of us living frugal lifestyles understand this. I wish our government did. Manufacturing doesn’t drive our economy. Service does. Period. We have to live on service wages. The government has to collect taxes and budget their spending based on service wages. 12% of the GDP won’t change that.

So, my question is this – do we save 3 million jobs in the short-term, or find ways to employ the 16 million already out of work? Do we save three businesses, or spread that money over the multitude of small businesses failing daily because even after round one of the bailout program there’s no financing available?   Do we start now living the new American dream – sacrifice and service? Or, do we just continue the insanity?

Formerly Known as the Bailout

Like many of you, I followed the bailout plan this week, renamed the Economic Recovery Package when it failed to pass. Now, lacking a degree in economics, I’ll admit, the ramifications are beyond me. That’s a macro position that I am not equipped to analyze. I’m too busy in my micro position worrying about, well, ME!

But, I have to tell you, I’m not thrilled. When the market dropped 777 points, one for each of those billion dollars our government wanted to give away, I thought poetic justice. Since the market dropped another 157 points AFTER the bill passed, guess I’m not alone in my disgust. It’s not that the package doesn’t affect me, believe me, I know it does. But that effect is “out there,”  and trust me, today is all the struggle I can handle.

In my early career I managed a credit department. Here’s how things went. Companies started up. They bid on jobs. They got lots of business, usually because they bid too low (poor management.) They went broke. Other companies bid well and secured jobs. But they had lots of toys – trucks and boats and motorhomes – (greed.) They went broke. The smart companies bid well, completed jobs and lived like there wouldn’t be another job for awhile. They saved. And, they’re still in business today, probably with lots of toys because they managed well and saved for them.

Bailing out AIG means rewarding poor management and greed. It means tacking another $770 billion in deficit onto the backs of our kids and grandkids and great-grandkids. It means that our politicians found a way to get all their earmarks in one place by turning 3 pages into thousands. It means, once again, the taxpayer got the shaft.

You might say, well, what about the lost jobs if AIG failed, or what about the people who invested in AIG who’d lose everything? I bet we could have written each of them a check to cover their losses for a whole lot less than $770 billion.

Let me ask you, if you overspent (poor management) and bought things you couldn’t afford (greed), who is bailing you out? As I recall, not too long ago our government tightened bankruptcy rules because our fiscal foolishness was costing companies too much money.  Yet, their  financial failings become another cost to you because somewhere, somehow, $770 billion has to come back to the coffers. That means a tax increase.

So, while AIG and friends keep making millions running (into the ground) their companies, many of us will find that all our efforts to cut coupons, use the buddy system, do without, take the bus, walk, or bike to save on gas, and buy second-hand aren’t enough. Increased taxes, tightened credit, more “rightsizing,” and spiralling costs will force us into bankruptcy court. Where AIG should have been. But, like I said, I don’t have a degree in economics.

Vote November 4 – it’s your money!