Beating Broke

Personal Finance from the Broke Perspective

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.

Don’t Be A Fool, Focus On School

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The back to school season is upon us, and many newly graduated high school students will head off to college for the first time.  More than ever, college students feel financial pressure.  The cost of college tuition continues to rise, and a student is often forced to decide to go into student loan debt to pay for her education or to work many hours to try to pay for the tuition without going into debt.

As a former college teacher I have a few thoughts on the subject.  If a student is going to college full-time, I cannot stress enough that school should be the main focus.  If a student needs to work, he should work part-time, 10 to 20 hours a week.  Yes, there are plenty of college graduates who brag that they worked full-time and went to school full-time and did just fine.   Yet, what were their grades?

Graduated!

I routinely had students in my class who worked full-time and went to school full-time.  In this scenario, education almost always gets shortchanged.  A student cannot neglect their employment, or they will be fired.  Instead they neglect their school work and get low grades, often not even passing grades.  A good rule of thumb is that for every hour in a credit course, plan to study three hours outside the class for a liberal arts class and four hours for a science or math class.  That means a student taking a 3 credit hour rhetoric course should plan on spending 9 hours outside the classroom doing homework.  If the student is taking a 4 hour anatomy class, he should plan on spending 16 hours outside the classroom on homework.  A full load of classes can range anywhere from 12 to 18 credit hours.  Those hours represent the time spent in the classroom.  Even if all the classes are liberal arts classes, the student should still be putting in 36 to 54 hours on homework a week to obtain optimal grades.  So, be sure to take your degree options into consideration when deciding on a job. Because, unless the student doesn’t plan on sleeping, working a full-time job is too much.

There is nothing wrong with reversing the situation and working full-time to avoid taking on student loan debt.  However, the student should only commit to taking a maximum of 2 classes a semester to obtain optimal grades.

College students should accept that they can’t do it all.  Either go to school full-time and work part-time and accept that you will have to pay off debt when you graduate or work full-time and go to school part-time and accept that you will graduate debt free, but it will take longer.  If a student takes on too much and earns low or failing grades, they have ultimately just wasted their time AND money.

photo credit: ralph and jenny

Do Fitness and Frugality go Together?

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Maybe it’s just because of the impending spring-like weather.  But, it seems like I’ve seen a large number of fitness related posts on many of the personal finance sites that I read.  Which made me pose the question.  Do fitness and frugality go together?

I think the answer is yes.  By it’s very definition, frugality is the rationing of resources and the careful spending or resources.  In being frugal, we carefully budget our money.  We carefully check over the fliers and find the best deal on groceries.  Eventually, as we continue doing these things, they become second nature.  We do them almost without consciously knowing that we are.  It becomes a way of life.

Fitness is very much the same.  In being fit, we ration our resources; eating only what our body needs.  We keep close track of how we are spending our resources and are constantly trying to find ways to improve our outcomes.  We want to run a faster mile.  Do more sit-ups, pull-ups, and bench press more.

So, it’s only natural I suppose that the two attract each other.  If you’re spending your time being frugal (and like it), there’s a pretty good chance you might either be fit, or should give it a try.