Beating Broke

Personal Finance from the Broke Perspective

Early Morning Reality Check

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Early yesterday morning, I awoke to my wife jumping out of bed.  “Do you smell smoke?” She asked.  Let me tell you, there are few things that will pull you out of that just woke up groggy state than a question like that.  And, sure enough, I did.  A quick check told me that there was no visible fire or smoke in the upstairs portion of our house.  It wasn’t clear what the source of the smell was.  I quickly ran downstairs to check the rest of the house, fully expecting to find a smoldering spot somewhere.  Nothing.  Down to the basement.  Nothing.  Back upstairs.  Still nothing, but the smell is still there.  I went from room to room, floor to floor, sniffing the air trying to pinpoint where the smell was strongest.  The good news was that it wasn’t getting any stronger, but I still didn’t have  source for it. The only thing that I can find is that the furnace doesn’t seem to be working.

By this point, my wife has gotten the kids up, and is working on getting them dressed just in case we have to make a hasty exit from the house.  There isn’t any immediate danger, I don’t think, but you just never know.  It just so happens that a close friend is a member of the rural fire department here.  We’re in the city fire department district, but it doesn’t hurt to ask, so we called him for some quick advice.  I quickly fill him in, and he suggests that I call the city fire department and have them come check the house for carbon monoxide and also do a hotspot check with their thermal imager.  I certainly didn’t have to be told twice, so that’s exactly what I did.

A couple firefighters show up, give the house a quick once over and come to the same conclusion that I have.  The furnace has gone out.  And, for some reason, has filled the house with the smell that we awoke to.  They can find no hot spots, and the CO tester is not indicating any CO threat.  We cut the power to the furnace, and everyone agrees that there is no immediate threat.  We can go about our business.  Well, with the exception of calling the furnace repair folks in to figure out what’s wrong with the furnace.  Some of you might not think it’s a big deal, but we still haven’t seen 30 degrees in March.  The nightly lows are in the single digits.  In just the short time that the furnace has been out, the temperature in the house has dropped 10 degrees.

Gas Furnace Blower Motor -- IMG_9823I called the furnace repair company, and, to my surprise, they sent one out right away.  Luckily, I caught the guy as he was headed out the door for a call, so he could easily be rerouted to our house.  A couple hours later, and we had a working furnace again.  Turns out, the blower motor that pushes the air through the ductwork and into the house had stopped working.  It lost its bearings.  Literally.  The result was that it started to leak some lubricant oil and actually melted some of the electrical work in its housing which is what made the stink.  The company bills for the repair, so we only have an estimate as to what the cost of the repair will be.  The repairman thinks less than $200.

We’re lucky.  We’re lucky, because our house didn’t catch fire.  We’re lucky, because we aren’t trying to figure out how we can live out of a motel room until our fire damaged house can be repaired, or, worse, until we can find a new house to replace our destroyed house.  We’re lucky, because we aren’t trying to figure out how we’ll replace any of our belongings.  We’re lucky, because we’re safe.

But, to a lesser degree, we’re lucky, because we can afford the repair.  It wasn’t that long ago that an unexpected bill for $200 would have had us wondering if we were going to have to choose bills to go unpaid.  But, we took control of our finances.  We’ve got a long way to go, but, a $200 emergency doesn’t mean that a bill goes unpaid.  And, that makes us feel safe too.

photo credit: stevendepolo

Supply and Demand Goes Both Ways

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Supply and Demand.  We all learn about this tenet of the capitalist market at a rather early age.  It’s a pretty simple concept really.  When one increases the other decreases.  As supply grows, demand diminishes.  As does the price for that product.  As demand grows, supply diminishes.  And price goes up. It’s a function of our market.  And, I think parts of it are broken.

As a frugal blogger, I’m constantly wracking my brain trying to find new ways to be more frugal, and new ways to present that information to you. Part of that includes keeping an eye on the market.  And as such, I’ve come to the conclusion that the law of supply and demand has become more of a guideline than a law.

How so?

Take airfare for instance.  According to this CNN Money article, airfare prices have been raised twice as many times this year as they were all of last year.  And we’re only in March.  What allows them to do that and get away with it?  You keep paying for the tickets.  Gas goes up, and we still fill up our SUVs.  As long as you continue to pay the prices they are asking, the prices will continue to go up.  And, recently, they’ve gone up anyways.

We all know that some of the things that we are buying are too expensive.  I read several articles a day about how expensive somethings have gotten and ways to save money by making your own, or frugally using what you do buy.  And, to some extent, that does work.  For a select few.  But, there are others who are willingly paying that price and then complain about it afterwards.  Why?  They’ve been conditioned to do that.  When was the last time you heard of a boycott based on the price of a good, rather than something the company did to offend you?  Do you think that if even half of the consumers boycotted flying for a month, that prices wouldn’t drop?  They’d have to or they’d have to go out of business.

Why can I buy a ticket from Fargo, ND to Las Vegas, NV for less than $150, but it costs me 3x that much to fly to San Antonio?  It’s not 3x as far.  Why can I buy a bag of malt-o-meal cereal for $2 that tastes exactly the same as a name brand cereal but I can’t buy that name brand cereal for less than $3.50?  The examples of this are plentiful.

We aren’t just consumers.  We have brains and are capable (in most cases) of thinking with them.  It’s time we used them to demand fair prices for products.  We’ve forgotten that supply and demand goes both ways.  We do have some small modicum of control here, but we’ve grown complacent and forgotten that we have it at all.  Many of you are frugalers.  But, we always say that we’re doing it to save money.  And, that’s true, but maybe it’s time we also say that we’re doing it to protest the high prices that we’re being charged.  Oddly, saving money isn’t always a good enough excuse for some people.  Sometimes they need a moral soapbox to stand on.  And, maybe that’s the way to take back supply and demand, and turn it into a working machine again rather than a pleasant theory in economics textbooks.

What say you? (So Say we All.  If you’d watched BSG, you’d get that.)

Car Trouble Part 3: Not Quite the End

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I was hoping that when I wrote this third part of the recent car troubles series (part 1 and part 2), that it would be the last of them for a long while.  Unfortunately, it doesn’t seem like the car karma is with us on that.  On the bright side, it doesn’t appear that anything has gotten any worse.  Before I get too far ahead of myself, let me just tell you what’s been going on.

Shortly after I wrote and posted part 2 of the car trouble series, my employer (a Credit Union), came into possession of a Suburban.  The astute reader will realize that for a credit union to come into possession of a car means that it is was  repossession.  When they have repos, they generally open them up to public bidding to try and
get rid of them.  After a lot of careful deliberation and even more careful number crunching, my wife and I decided that we would be remiss in not bidding on the Suburban if we could get a good deal on it.  It’s got 135,000 miles on it, but we’ve talked to several Suburban owners who have seen theirs drive 200,000 miles.  The retail value on it was just under $9000.  We decided that we would go to $6500.  If we couldn’t get it for that, we’d let it go.

A sign of the timesI feel that I should explain some of our rational for deciding to purchase (or attempt to purchase) the vehicle.  We are a family of four.  We also have a large Golden Retriever.  The cars that we currently own are a Chevy Cavalier, and an Oldsmobile Alero.  Neither of those will allow for taking the entire family, dog included, anywhere.  If we want to go anywhere with the dog along, we have to take both cars, or not go at all.  That particular problem doesn’t arise often, but it does arise.  The second problem is that as the kids get bigger, so do their needs for luggage space.  It’s already gotten to the point where we can’t go anywhere for more than a night or two and still get away with everything fitting in the smaller Cavalier.  A larger vehicle has been on our wish list for a while, but we haven’t been able to justify the cost or afford the payments, considering that most of the reliable ones all cost somewhere around $9-10,000 at a car dealership.  So, we figured that if we can get the Suburban for $6500 or less, we could make it work.

The final day for the bidding on the Suburban came around, and it was fast and furious.  For several hours, I was responding to either an email or a text message with the new high bid in it, and raising our bid if needed.  The price edged closer and closer to the $6500 mark and eventually passed it.  And as it did, I dropped out of the bidding.  With just me and one other bidder involved at that point, the other bidder won the auction at $6600.  It stunk, but we set a mark and stuck with it.  We were disappointed that we couldn’t get it, but sometimes that’s just the way it works.

Fast forward a couple of days.  I get an email from one of the collections officers.  The high bidder decided he couldn’t afford the vehicle and backed out.  If I still wanted it, it was mine.  I quickly called my wife to double-double check that it was still a go and then emailed him back to tell him that we’d take it.  The best part?  Because the high bidder backed out, I got it for the price of the first bid that outbid the other (3rd) bidder who dropped out at $5600.  Final price, we paid?  $5690.  After the loan paperwork was all taken care of, and about $100 was added to the total of the loan for licensing and a bit more for tax, the total of the loan was just a hair over $6100.  As a reminder, the retail value on this car is about $8900.  Even if I decided to just sell it, I would likely come out ahead.  I don’t intend to sell it, but I could if I wanted to and smell like roses afterward.

With the addition of this vehicle, we also decided to sell one of the cars to help offset the cost of the rebuilt motor in the Alero.  We’ll end up selling the Cavalier, simply because it is the smallest of the bunch and least likely to be able to transport our growing family as time goes on.  I suppose I should update you on the rebuilt motor too, as that continues to be a bit of an adventure.  We still don’t know how much it is going to cost.  Why?  Because, in the several weeks that the mechanic has had the car, they haven’t been able to tear the motor apart to assess the damage.  They’ve got a trouble car that’s in the queue in front of us, and until that car is done, they don’t have the mechanics to spare to work on ours.  Because we bought the Suburban, not having the other car hasn’t really been an issue.  If we hadn’t done that though, we’d be looking at more carpooling or a rental car.  I’m sure insurance would have picked up some of the rental, but not all of it.  And the carpooling only works on certain days.  It would have been difficult to be sure.

There you have it.  Our car troubles haven’t gotten any worse.  And, you could argue that the Suburban part actually makes it a bit better (I would).  But, the car troubles certainly aren’t entirely resolved either.  Hopefully, I’ll be able to write part 4 soon and maybe one last closing part on selling a used car too!

photo credit: M Glasgow