An absolutely critical step in emergency preparation is getting out of debt. JoAnneh Nagler used an electronic version of Envelopes to categorize her money and allocate it to her different budget categories, so she’d have money to spend, money to save, and money to pay off debt.
I came up with a simple division of bills and daily needs, from food, fuel, dry cleaning, and household items. And then ways to make savings meaningful by creating free multiple savings accounts. In my household, we have a travel account, car repair accounts, short-term savings accounts for unexpected expenses, and money for Christmas and the holidays. You have to make savings real for yourself. If you want an outlet shopping day, great, make an account for that.
Debtors usually are mindlessly spending on [what they think of as] daily needs. We might spend $300 on a bulk warehouse and expensive wine. We have no accountability. Now, with a spending plan, you learn to prioritize what you need and love. It’s not a constricting tool—it’s an eye-opening tool.
It’d be worthwhile to have a “year’s supply” account, too.
via How One Woman Paid Off $80,000 in Credit Card Debt – US News and World Report.
This is a priority:
Step 3: Start Paying Off those Large, High Interest Debts Automatically
via How to Change Your Spending Habits when Your Salary Goes Up (or Down).
In the file labeled: “Famous Predictions of Ben Bernanke.”
“It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis.” (July 2005)
“We see no serious broad spillover to banks or thrift institutions from the problems in the subprime market.” (May 2007)
“The Federal Reserve is not currently forecasting a recession.” (January 2008, a month after the recession began)
“Currently, we don’t think [the unemployment rate] will get to 10%.” (May 2009, six months before it hit 10.2%).
It’s almost amazing how consistently wrong the guy is — he’s mis-predicted every major economic event — and he’s in charge of the money supply! He decides whether stimulate or starve the economy based on what he thinks it’s going to do next, and he gets it wrong, every time!
Yet another reason to switch to a gold standard money supply, which cannot be manipulated by bankers.
via Target Date for a Bubble Bursting | 5 Min. Forecast.
via The Ultimate Counterfeiter Isn’t a Crook—He’s an Artist | Threat Level | Wired.com – a very interesting story on a German counterfeiter.
However, the irony of the last paragraph really caught my eye:
Yet later, over a slice of cake and a cigarette at the museum café, he confesses that he sometimes wakes up wanting to make just one more $100 bill. “But perfect this time. You could take it to a bank, show it to the US Secret Service, anyone—they would say it’s real. That’s what I want, you know? I can’t explain it. It’s stupid,” he says with a bemused shrug. “But it’d be my Oscar. And then I could just tear it up.”
The US Treasury and Mint are the largest counterfeiters in the world, and they pass their wares through the US Secret Service and banks throughout the world, and everyone says it’s real.
It isn’t, of course; the US currency in circulation today simply declares itself to be “money,” when “money” is constitutionally defined as gold and silver in specific weights. What we pass around today is mere tokens in remembrance of real money. The coins look almost real, unless you inspect the edge and see the brownish base metal peeking out between the outer layer of imitation silver.
In my opinion, the two saddest parts of this article are:
But since 1969, the inflationary monetary policy of the Fed has caused the US dollar to depreciate by over 80 percent, so that a $100 note in 2010 possessed a purchasing power of only $16.83 in 1969 dollars. That is less purchasing power than a $20 bill in 1969!
While he gets charged 5 kronor (80¢) for every credit-card transaction, he is prevented by law from passing this on to his customers. In his words, “For them (the banks), this is a very good way to earn a lot of money, that’s what it’s all about. They make huge profits.”
Governments push to eliminate cash because they can monitor and control electronic transactions, while banks favor them because they can charge you for them and make more money off electronic payment processing.
So banks and governments together favor what benefits them, at our expense.
via Laundered Money by Joseph T. Salerno.