Beating Broke

Personal Finance from the Broke Perspective

The Cost of Civic Duty

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As this is posting, (thank you scheduler) I’ll be arriving at my local court house to perform the civic duty of jury duty.  It’s an interesting civic duty; one that’s is both afforded us if we are ever persecuted, and one that we must perform for those that are.  But, what is the cost of doing your civic duty?

Jury Duty SummonsIn the letter I received, it states that I’ll be paid $25 if my service is four hours or less and $50 if I’m there longer than $50.  I’ll also be paid $50 for each day after the first day.  My employment cannot be threatened due to serving on a jury (that’s good), but my employer doesn’t have to pay me for time spent away from work while serving on a jury.

In a very basic math sense, the cost of serving on a jury, then, is my pay for however many hours of work I miss minus the fees I’ll be paid for serving.  Different employers have different policies for jury duty as well.  My previous employer’s policy was that you could serve on a jury and be paid your wages provided you turned over your jury duty check to the company when you received it.  That’s a pretty good policy.  My current employer allows for unpaid time off to serve on a jury only.  Not as good of a policy.  I can take vacation time during that time so that I don’t lose any pay if I have it available.

As it happens, I don’t really have any vacation time to use.  So, I’ll be going without pay for as long as I have to serve.  It’s not exactly ideal.  But, I do get something for it at least.  Unfortunately, if I’m there a full 8 hours, it’s far less than minimum wage.  A token amount, really, to help offset the lost opportunity to earn my wage.

Have you served on a jury?  Is the pay the same everywhere, or does it differ by location?

img credit:zzpza, on flickr

Dollar Cost Averaging; Not Just For Stocks

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Most of the time, when you hear or read the phrase “Dollar Cost Averaging”, it’s being applied to the stock market.  It’s the practice of buying a set amount of stock at a regular interval whereby the average cost per share of stock ends up normalizing.  So, if you buy stock high one time, and low the next, and then high, your average cost is going to be lower than the high cost and more than the low cost.  So long as the stock doesn’t pull an Enron, and slowly increases in value, you come out ahead in the long term.

But, does it have to apply to just stocks?  Absolutely not.  It really can apply to anything that you buy on a regular basis.  Gas for example.  A couple of weeks ago, I filled up the car at about $3.89 a gallon.  Today, as I drove by the gas station, it was at $3.69 a gallon.  I filled up at $3.89, so I don’t really need any gas right now, but I seriously considered stopping and topping off the tank to bring the overall cost of the gas I bought over the last several weeks down a few pennies.

There might be some argument that dollar cost averaging doesn’t work very well for consumables.  After all, if I had bought a few gallons at $3.69, my overall reserves of gas would not increase.  I’ve already consumed those few gallons that I paid $3.89 a gallon for.  But, I would have increased the total amount I had bought, and the average price would have been less than $3.89.

Dollar cost averaging works especially well for things that regularly fluctuate in price.  If you’re building a stockpile of food in your basement, it’s chili bean season.  There’s sales all over the place for chili beans.  Now, you could buy 50 or so cans at the sale price, but you might be tight on storage space.  Or, they might expire before you get to use them all.  Instead, you can use dollar cost averaging to buy slightly more than you might normally buy, and bring down the average cost of the ones you have to buy later in the season when they aren’t on sale any more.

O.K.  This does seem a little silly.  After all, who’s going to go out and figure out the average cost of a can of chili beans in the basement?  But, there’s a point in there.  There’s a certain rationality in buying things in set increments over time rather than trying to time the market (or chili bean sale) and buying a whole lot of the item at once.  How many times have you bought something only to find that it was on sale the next week?

And, don’t forget that the same principle goes the other way.  There are many normal things that we do on an everyday basis that can apply to the stock market too!  When we shop, we tend to stick to the brand names we know.  Even if those brand names are generic names.  Go far enough out of town and stop at a grocery store and try and convince yourself that the generic brand at that store is the same as the generic at home.  It takes a bit of thought!  Sticking to companies (brands) that you know when investing can be beneficial too.  More often than not, those brands and companies are companies that have been around for a long time and built a certain amount of trust in the marketplace.  They’re unlikely to just be an overnight sensation, or to quickly fall from favor.  In short, they’re stalwart investing options.

What other everyday habits do we all have that can be carried over to the stock market?  And what other stock market habits do we have that can carry over to everyday life?

img credit:Nick Harris1, on Flickr

Is Free Money the Best Money?

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How many of you would turn down free money?  If someone just walked up to you in the middle of the street and offered you some money?  How about if the Publishers Clearinghouse van pulled up in front of your house, and they presented you with a big ol’ check with your name on it for $5000 a week for life!?  Would you turn it down and walk away?

Not many would.  Heck, I don’t know if anyone would actually say no.  I know I probably wouldn’t.  And, if I had to guess, I’d say you wouldn’t either.  The fact of the matter is that we all like stuff for free.  Free money is great (although rare), but we hunt down free products, free trips, and anything else that someone might be giving away for free.  Some of us spend entirely too much time hunting down free.  But, is free money (or items) really the best money?

What we obtain too cheap, we esteem to lightly; it is dearness only that gives everything it’s value.

-Thomas Paine

Paine was on to something, I think.  After all, how many stories have you heard about lottery winners spending all their millions only to end up on the docket at the local bankruptcy court?  The truth, should we really think about it, is that we do assess a portion (at least) of a things value based on how much effort it took to get it.  For you and I, a nice sandwich at the corner deli might not be something of great value simply because it can be easily attained.  An hour or so of work, and a short walk down the road and there you have it.  Those starving kids in Ethiopia that our mothers were always telling us about, on the other hand, would likely value that sandwich a little higher.  It’s not every day that they have the opportunity to eat bread or meat.  They may have to work for days in order to actually afford something like that.  If they can find work.

Don’t get so carried away in your search for free money that you forget the true value of the thing.  A dollar bill still has the same value no matter the method of getting.  Or, maybe spend some time assessing the value that you have for things, and making adjustments.  Maybe it’s not the thing you want, so much as the feeling it gives.  Freedom doesn’t have a price.  Freedom is free, but you have to be unchained from your debts and you desk in order to attain it.  It’s the long battle to unchain ourselves that gives freedom it’s value, even if it’s price is free.