This weekend my wife and I finally made it out to our local farmer’s market. It was fun to walk around and check out the stands, although there wasn’t much to see. A few observations I made.
First, the prices were not as cheap as I thought they would be, and in some cases the prices were higher than at the local Whole Foods. I brought along a small notebook to record the prices we paid for everything. I am going to compare what’s cheap and what’s not so we can focus on buying the cheaper stuff there.
Second, the quality of the fruits and vegetables was very high. This is probably due to the fact that everything was grown locally, so it was fresh and in season. The quality of the food partly makes up for the prices paid, although if something is in season it is likely to be cheap at the grocery store as well.
Last, and something that will make it worth going back every week, was coupons for Whole Foods. Someone was handing out $5 off $25 and gave us two. This is 20% off a $50 purchase, not too shabby. Coupled with finding things on sale, we managed to get a lot of food for a pretty good price.
Overall it was a fun trip for the morning, and definitely something we will try to do every weekend going forward.
As of today my wife’s student loan and credit card are both paid off. Next week I will pay off the first of my credit cards, leaving us with my student loan and a credit card at 0% interest. It is a great feeling to be hitting these milestones.
We are still using the debt snowball method to pay off our debt which has been great for keeping the motivation up. We are also fans of the debt snowflake, which has helped pay off our debt much faster than we originally thought by putting extra money towards paying off debt.
It looks like the Corn Refiners Association is starting to fight back against the slew of bad press that high fructose corn syrup has gotten over the past few years. This, coupled with high corn prices thanks to the push for corn-based ethanol, has put a serious dent in the consumption of high fructose corn syrup based foods. I don’t watch much television, but I managed to catch two of their ads this weekend.
And the second ad:
First off, I wouldn’t go out of my way to tell someone how to eat or how they should feed their children (except for now of course, but hey, you could stop reading right now if you wanted). But in my opinion high fructose corn syrup is something to stay away from.
In case you ever find yourself in this situation, here are a few of the problems associated with high fructose corn syrup:
1. High fructose corn syrupdoes not trigger the “I’m full” response in our body. Think about the last time someone baked cookies or brownies and you ate too many. Did you feel sick afterwords? That is your body telling you that too much sugar is bad for you. But how often do you feel like that after drinking a huge amount of high fructose corn syrup sweetened soda or eating a ton of Oreos? From The Seattle Times:
Fructose adds to overeating because it does not trigger chemical messengers that tell the brain the stomach is full and no longer hungry, like food and drinks that contain regular refined sugar do.
So besides the fact that sugar is bad for you, consuming foods sweetened with hfcs does not actually satisfy a sweet tooth the same way sugar does.
2. It is generally found only in the United States, where excessive lobbying has decreased the cost of corn to an artificial low, and the tariffs on sugar has increased the cost of sugar for food producers.
3. It is not “all natural.” All natural implies that you could go outside and find it. High fructose corn syrup is a processed food, and is thus unnatural.
The use of synthetic fixing agents in the enzyme preparation, which is then used to produce HFCS, would not be consistent with our (…) policy regarding the use of the term ‘natural’
Again, not my business what parents do, but I wouldn’t want my children eating excessive amounts of processed foods.
4. High fructose corn syrup is everywhere. The amount of products that use high fructose corn syrup is staggering. A partial list can be found over at the Accidental Hedonist website. It’s interesting to see how many foods that are not considered ’sweet’ have high fructose corn syrup in them, probably as a perservative. Wheat Thins, Salad Dressing, and Oscar Myers Lunchables are standouts for having hidden sugar content.
Both commercials use the line “fine in moderation,” but thanks to high fructose corn syrup being so ubiquitous it’s easy for the average shopper to consume too much,.
I think the majority of the backlash against high fructose corn syrup isn’t necessarily due to it being unhealthy for you (although thats part of it). The backlash comes from the fact that consumers are given little choice in whether they consume it or not. In situations where you do have a choice, such as natural sugar sodas, the all-natural sugar alternative tends to be more expensive.
How does this affect you?
What you eat fuels your body and affects your health. Health care costs keep getting higher and form a significant portion of most senior’s budgets, so it makes sense to eat a healthy diet now to save money later. Food expenses also tend to be a significant part of most family’s budgets, so it’s important to make smart choices when you shop. Cutting out processed foods, sugary sodas, and candies is an easy way to save money.
If you have kids keeping them away from excessive amounts of sugar should be common sense, whether it comes from corn or if it comes from sugar cane.
If you’re interested in learning a little bit more about high fructose corn syrup, here are a few links to check out:
One of my first posts on this blog was thinking about my New Year’s resolutions for 2008. I thought I might go back and look at my goals and see where I’m at.
1. I have been reading more, but not as much as I planned. The pull of the internet is too strong, and this is something I still need to work on. I would especially like to start reviewing more books on Free From Money, which could potentially help bring in income from Amazon Associates.
2. My sweet tooth is as strong as ever, but I have stopped getting candy out of the vending machines at work, which has probably saved a few dollars every month. My caffeine addiction is getting weaker, but it’s a tough thing to crack. Teas drinking hasn’t happened.
3. My goal to write more has been on and off, butt it is something I need to do more still.
4. This goal is something I have managed to keep up with. We get out every few weeks, which is free entertainment for us. We also got out for a backpacking trip last month, which was fun but far from free after accounting for the costs of equipment.
5. I volunteered for the trail maintenance crew at Mt. Diablo, but only once. It was okay, but not something I would be excited to do again. Eventually I will look around for more opportunities to volunteer, but for now I need to refocus my efforts into other things.
Overall I’m not too disappointed with my progress. Looking back I wish I had kept up with this blog more, but I still think I’m doing pretty good.
So I realize many of you probably hate me already for starting off this post by saying that high prices are a good thing, but hear me out for a second.
Think about the benefits of higher prices. High prices cause people to rethink there commute, either by carpooling or taking public transportation. Less people driving means less slow moving traffic, less chance of an accident, and less pollution.
It also means we are more likely to see innovation in the automotive world. The internal combustion engine has been around for 100 years, and it’s time we find something better and more efficient. Electricity comes to mind as an obvious choice as ethanol was simply a terrible idea. Wired magazine’s feature article lays out Shai Agassi’s electric car plans, something that I think could help build momentum for the electric motor. Basically he is going to start the battery and electric supply business so that the car manufactures can simply build cars. Could it work? I hope so.
One year ago Steven Levitt, author of Freakonomics, wrote that the gas tax should be increased. I would be curious to know if he still feels that way. While I don’t enjoy spending an ever increasing amount of money on gasoline, I do realize that oil consumption and peak oil are something we need to take very seriously. So many things come from petroleum, it’s almost stupid to waste it on driving when there are alternatives available.
Next time you’re at the pump, wincing in pain as the price on the pump goes up and up, try to look on the bright side. And maybe hope that changes come around soon.
The New York Times is reporting that Fannie Mae and Freddie Mac will be taken over by the U.S. government. This is huge news because now the government is responsible for billions of dollars of bad mortgage debt. There is only two ways to pay of that debt: raise taxes or print more money. Neither of these options is good for you.
For further reading check out Barry Ritholtz’s analysis over at The Big Picture. Now is the time to start paying very close attention to what the government does.
Part 2 gave you a basic idea on what to invest in.
Part 3 will help you learn what you need to do to maintain your accounts until retirement. Depending on when you open your accounts, that could be a very long time. The good news is that once your accounts are open, maintaining them can be very easy.
Rebalancing
After reading part 2 you should have an ideal investment mix that you would like to use. Over time it is natural for one asset class to outperform another. At that point you need to decide if you will increase the allocation to the highest returning class, let everything stay as it is, or if you will rebalance your funds so that the allocations are back inline with your original plan.
How often you rebalance is up to you. I feel that a six month time frame is long enough that you can let your winners ride, yet not so long that your portfolio no longer resembles what you had envisioned.
Generally I think that it is a wise decision to rebalance your funds to your original plan. Why should you rebalance? In stock markets there is often a reversion to the mean, so putting more money in underperforming assets may allow you to buy shares when prices are low, and sell when the prices are higher at your next rebalance. On the other hand, the market may be different enough from when you originally started that you decide to change the amount going to each fund.
Another thing to consider is the mix of risky assets you own in your portfolio as a function of your age. The younger you are the more you should allocate to risky investments. As you get closer to retirement age remember to move more money into less risky assets like CDs. You wouldn’t want a major stock market downturn to wreak havoc on your retirement portfolio.
Consolidating
Over-time you may find that your retirement accounts become spread out among multiple companies, especially 401(k) accounts. Whenever you change jobs you will likely open a new 401(k) while your former account remains open. This presents two problems. First, a large number of accounts is obviously more difficult to track than a single account. Second, the more accounts you have the more likely it is that you will stray from you investment mix.
To keep your money together it is necessary for you to rollover your accounts from your old ones into the current one that you want to maintain. Unfortunately there is no one single process that every fund company uses for dispersing money. Some companies may remit funds directly to your new account, while others may require you to receive the money and then transfer it into your new account.
Moving funds between two accounts can be a little tricky. You do not want the funds to be sent to you in your name, or you may be hit with hefty fees and taxes. I recommend talking to your HR department at work, or a customer service rep of your new fund company to find out what is needed to transfer funds from an old account into your new one.
That’s It!
Simple right? Managing your own money doesn’t need to be difficult. In fact, the more simple your plan the more likely you are to stick with it for the long run. A few hours of maintenance once or twice a year will keep your accounts earning for you while you’re out doing whatever you want.
While owning a house is not a huge priority to me, it is something that I think I would like to do one day when it’s time for a family. Being able to work on my own backyard, being able to paint the house the colors I want (okay, the colors my wife wants) and generally being able to do things however I want are all appealing to me.
Unfortunately for me, I live in the San Francisco Bay Area, which is far from friendly for first time home buyers. If you’re curious just how much it costs to buy a decent place out here, check out burbed.com. The site is pretty funny to read, until you realize that the insanity means its harder than ever to find a place to live.
Let’s do a little math. I am unsure of the median home price, but I do know the average homes in our area that we rent go from nine-hundred thousand to over a million. We would have to move to a cheaper area for sure, but I’m not willing to give up a decent commute and buy outside the bay area. I also wouldn’t buy in a bad neighborhood. So I am going to pull a number out of thin air and say an actual house (not a condo) would cost us about $700,000 to buy.
The first hurdle is saving the 20% down-payment of $140,000. If we stuck to our current budget, we could probably save two thousand dollars a month, or about twenty four thousand a year. At a 4% interest rate, it would take almost 6 years to save that much. But that would mean no vacations, no retirement savings, and almost definitely no kids. So more than likely $1k a month is a more reasonable, but still high, amount to save for a house, which means we’re now looking at 10 years to save for the down payment.
Now to affordability. I believe 28% debt-to-income is a recommended amount to shoot for when you consider only your base mortgage. At that debt to income I would need to make one hundred and fifty thousand dollars a year to comfortably afford the mortgage. That is assuming a 30 year mortgage at 6.75%. If you think this is a ridiculous amount, you’re right. But don’t forgot maintenance, HOA fees, and taxes. A 1.25% property tax on a $700,000 house is going to cost you over $700 a month, not a small amount. Even if you increase the debt-to-income amount to something higher, say 40%, we would still require over one hundred thousand a year. Of course that probably means going back to no vacations and very little retirement savings, so it might not be worth it to try and squeak by.
Also remember that it took 10 years to save that down-payment, so we’re likely going to be facing a higher purchase price than we initially planned for, as well as inflation in our budget.
I’m not trying to complain here, I’m simply trying to explain that thinking a home is out of reach is probably the reality for a lot of people, especially those in major metropolitan areas.
As for me, I’m on the fence. I would like to dream that 10 years from now I will be pulling in $150k a year, but it’s not something I will be counting on. In the meantime I will continue to try and make good financial decisions and hope everything turns out for the best as the years go buy. If this blog is still around in 10 years maybe my post will read “I bought a house!”
4. Pay no heed to the nutritional science or health claims on packages
5. Shop at the farmer’s market
6. How you eat is as important as what you eat
So these are the rules to think about when we buy food and eat, but how are they for saving money?
#1, #4, #5 and #6 are steps that are likely to save you money. #2, avoiding HFCS, might actually be bad for the budget, since high-fructose corn syrup is cheap compared to sugar. On the other hand cutting these things out will save you money if you don’t replace them with sugary equivalents. Soda, for instance, is a big place to cut back on HFCS and save some money.
#3 is obviously telling you spend more right? Maybe not. If you reduce the volume of your food consumption enough, you might be able to overcome the expense of eating healthy food. Also keep in mind the long term costs of eating poor food, as the author notes in the health care spending stats.
While my wife and I work on our food budgeting, we will keep these rules in mind. If you’ve been thinking about changing up the way you eat, these rules are a good place to start. Another place to look if you want some recipes is Tosca Reno’s Clean Eating Diet Cookbook. I love many of the recipes in there, and I feel like the clean eating principles are very practical for a long term solution, and fall right into line with Michael Pollen’s advice, especially rule #1.
So Diebold has finally admitted that their machines are faulty and have had problems losing votes for 10 years. Why is this not raising a ton of red flags around the country? In a country founded on democracy and voting I don’t understand why people are not up in arms about this.
Thanks to Wise Bread for pointing me towards the Engadget link.
