$600 rebate check rich.

Michael Bloomberg, the plucky mayor of New York, recently compared the tax rebate checks to giving an alcoholic a drink: "This country has a balance sheet that’s starting to look more and more like a Third World country," Bloomberg said.

In which case, we’ll all be tested. Binge, or resist temptation? Splurge, or save?

Nevermind the moral questions regarding this tax rebate deal (here are the details, from the IRS) - others have done more thinking on this than me.

All I know is, I’m probably getting $600. And most of you are, too.

But what to do with all that cheddar?

Because I’m like most Americans (and especially like most people our age), I have what’s called a "negative self worth," meaning I owe more money (car loan, student loans) than I have in the credit union. So I’ll tip the balance at least a few hundred dollars in the "savings" column. A nice deposit of $300 into my emergency fund would do well for my security gland (that one in your head that beeps and swells every time you write a check you don’t know if you can cash). That’s smart thing number one. There are many others.

Smart thing number two would be to donate some of it to my favorite charity or cause. Right now our local organizations are hurting because Michigan’s economy (and, good lord, Jackson’s) sucks right now. So a few dollars here and there would do a lot of good.

Then the fun part comes in (we’ll call it "not-so-smart-thing number one"). I’m leaving for my New England trip sometime this spring, and a few hundred dollars would be welcome in my gas and food budget. This depends on when I get the check, of course, but most signs point to sometime in May.

If it doesn’t come in time, I’ll just consider it a New England trip rebate, and the rest of money can pad my checking account for rent or an emergency.

An iPhone? Not with this money. I’ve already set aside the funds for the Jesus Phone, thankyouverymuch, so it’s already a given.

How about you? What will you do with YOUR tax rebate check?

On a "stuff"-free March.

"As the world goes 'round / It's got me thinkin'
That the things I want / Keep me sinking / Down." - Zwan, 'Ride a Black Swan'


Last Thursday, while waiting for a meeting that never happened, I browsed around our nifty Nomad Bookhouse in downtown Jackson for an entire hour. The best part? I had a great time, and didn't buy one book. Same goes for our downtown library; I get lost in there for hours on end, and it doesn't cost me a dime.

As the world goes 'round, it's got me thinking, too - that less of what makes me happy is possessions, and more of what makes me happy is experiences.

I always have to remind myself of that, but maybe it was Steven Stoll's article in the March edition of Harper's, titled "Fear of Fallowing: The spectre of a no-growth world," where he argues that - after the basics are taken care of - the accrual of possessions makes us no more happier as time goes on.

The opposite effect, in fact, could be true. American happiness peaked in 1950, says Bill McKibben in Deep Economy, and afterwards has dripped down a few percentage points. "The point is not that [economic] growth has caused depression and anxiety," he writes, but beyond basic needs like food, shelter, and a few material possessions, it fails to deliver the joy marketers want us to believe.

Stoll goes on to say that our current rate of economic growth is unsustainable and that, by 2050, we'll need two planets to provide the natural resources to furnish everything we're producing. The solution? To stop growing, and devout our productivity to, say, more leisure or better efficiency.

Says Stoll:

The end of growth will not mean the end of progress, to the extent that we can redefine progress as consisting of something other than accumulation.

Imagine that - working hard for something other than buying more stuff.

That's inspiring. So inspiring, in fact, that I'm devoting the month of March to reducing my strain on the nature of things. A Washington Post article I read called it the "Enoughasaurus."

It's a mighty Buddhist philosophy: the impermanence of things offers nothing but desire (for more) and suffering (at lack), and so provide no value. Jesus, too, said that the quickest way to heaven was to give up all possessions and go do good for our fellow humans.

That doesn't mean I'm going to give up everything I own. I'll admit, I do love my Macs and my music. But it does mean I can give up a lot of my stuff without any adverse affects on my spirit.

To whit: I've saved countless magazines from the subscriptions I've had over the years. How often to I go back and read them?

And books? I do plan on having a library for myself and my kids, but there's a lot of books that I'll never want to read again, or have no intention of reading. Someone else may find a better use for them.

Even my comics. Good lord, I went through a spell in college where I would gather comics to read and store away, and retain only for their "value." Now I'm old enough to recognize the lessons of the early 1990s, when the comics market (as it is) bottomed out. I remember my dad collecting Batman comics when I was a teenager just because he thought they would be worth something "someday." Now they sit in a box in his basement, and they aren't worth the paper they're printed on.

Selling off some of my stuff, as I did in a big eBay spree a year ago, can help me fund the things I do enjoy. I want to get back to running come spring, and I have a big trip planned. And a few little projects I want to undertake - it all takes capital, and I can acquire the needed funds through reducing my dependency on "stuff." I don't need stuff. What I do need are the things I really enjoy, which are experiences I'll never forget. That's how life is lived.

Some of this will be hard. People develop an emotional attachment to their stuff, and I'm no different. I'm mighty proud of the Apple collection I've acquired, but I sure as heck don't need any more. I like doing stuff on Macs. A few dusty computers just sitting there bring me no true happiness. I'm scared I'll end up like my grandma, who is so swimming in material possessions that she's miserable and looking for a way out.

I'd rather be able to see New England, go visit friends, help out the organizations I belong to, and do a bit of writing and designing when I can.

We could call it a "no growth life." But that's misleading. I'll be growing, just not in possessions.

On selling one's soul with membership dues.

When you lose faith in the very institutions you put your trust in, what hope is there of a better tomorrow?

Such Camus-like existentialism is bred when companies like Bank of America take the names of Iowa University alumni from the very organization that represents that alumni, and keeps the exchange of money a secret.

Now, I didn't go to Iowa, and thankfully I closed my BoA account long ago (after the 0% interest rate expired), but now my own goddamn fraternity is in the business of offering credit cards to members.

That's right: perhaps, if you're a brother, you've received these mail solicitations. I sure as hell have, and each one promises to support my fraternity.

Well I'm calling "bullshit."

For a while now, even Rotary International has customized a credit card for those Rotarians who are foolish enough to believe that MasterCard and Visa have the world's best interest at heart. What they're really interested in is earning that 17% interest above the 1% they give to our Rotary Foundation fund. It's marketing in the mode of philanthropy, and smarter folks than me should be able to see through it.

Using a credit card to help your favorite foundation or organization definitely has a "feel good" aspect to it, but here's an idea: give a charity the 1% yourself, and keep from wasting the other 12-20% in finance charges.

I like the idea of giving a charity I check that I wrote. MasterCard and Visa can send their own damn check.

They can rest assured it won't be me helping them to write it.

Money, it's a hit.

Using cash for things changes the entire spending-money dynamic.

I used to be a bona-fide debit card guy - everything from groceries to online shopping to visits to the bar, they all got paid with my checking plastic. It was easy; all I had to do was sign for my purchases.

But then things got forgotten. Sure, I'd check my account every day at work (one of the many benefits of working for a credit union). Every once in a while, thought, I'd forget about some debit transaction that was "pending," where my available cash was different than my actual account balance.

Some folks take care of this by balancing their checkbook on the fly. As soon as a purchase is made, it gets noted in the check ledger.

Well, that didn't work for me. I'd try it, but it wasn't very convenient. And I was all about convenience.

Now for the past year, since switching to the Dave Ramsey plan, I've been using strictly cash for my everyday spending, and it's opened up quite a different world for me.

Ramsey's plan has me putting cash in actual envelopes that are labelled "FOOD," "GAS," Or "BLOW" (spending money, not prostitute money - sicko), etc. I'd budget myself so much each week in the "FOOD" envelope, and then use that cash to buy groceries. "BLOW" would be my fun money, "GAS" my gas money, and so on, and when the money ran out of the envelope I didn't spend any more in that category.

Ramsey's basis for doing this involves people like me who didn't think about their overall spending patterns. I spent until the money was gone, and didn't keep track of where it goes.

Now I do track where it goes by the simple act of keeping my receipts: everytime I make a purchase I take the receipt, stick it in the envelope, and then - later, on an Excel file - note every dollar spent.

Anal? Maybe. But the five minutes it takes to do this per week has kept me from overspending. Any time spent on finances is worth something.

I'm finding there are all these fun dynamics at work when using cash, like paying tips in the new presidential gold dollars. With Mr. Washington and Mr. Jefferson, I can leave the waitstaff a fun souvinir to spend or save. It makes more of an impact than a plain ol' dollar.

For some reason, it feels better to leave someone a gold coin rather than signing off on some slip of paper they may not look at. Actually leaving some cash for someone makes me feel better, and lets them know I appreciate the work they do.

Have you seen that new Visa commercial, where the economic process is running like clockwork until some goof pulls out actual paper money to pay for something?

I say that's bunk. A visual record and the actual physical exchange of money feels better than using plastic now. When I need it, my debit card is there. But not everyone accepts plastic, and everyone accepts cash.

My attitude about cash has definitely changed. Maybe someday cash will be like the snail mail to plastics slick e-mail interface, but the old way of doing things still has its uses.

After the stamp collectors are long dead and gone, maybe I'll be the old guy still pulling out his two dollar bill, hoping to get a smile from the waitress.

If I had a million dollars.

Let's say you play the lottery this weekend, and win $50 million.

Now what?

A post on Consumerist.com got me thinking about what I would do if I ever hit it big. Now, first of all, it's a rare day when I step into a store and buy a lotto ticket. Usually my grandma has to tell me what the jackpot is, and I'll mosey in and grab one. But then I forget about the drawing, and don't even check my ticket until weeks later.

I think we've all had those "what if" moments, right? Some folks I know even have every last dollar spent, before it even hits their hand. Now that's wishful thinking.

The typical response includes - and I'm just guessing - paying off debt, buying parents a house/car, buying self a house/car, traveling, and investing. Those are pretty standard responses.

But the funny thing is, that almost never happens. Those of us halfway decently educated on financial matters aren't the ones playing the lottery; we know what the odds are, after all, and wouldn't be caught dead using Power Ball as an investment tool.

Everyone, I'd bet, has that fleeting sense of euphoria when they buy the ticket that could win $140 million, though. "Wouldn't it be nice?" we ask ourselves, knowing full-well we're living in fantasy. Unicorns will spring, full-grown, out of my butt as I get struck by lightning. Then I'll win the lotto.

Tons of neurons have wastefully fired on this subject. So - just for fun - we'll fire some of our own. Ready?

Let's say, by picking the numbers 8, 12, 16, 21, and 27, you hit the jackpot and win $13 million - a modest sum, perhaps, but a better chance than winning anything over $100 million.

Now there's a choice: take payments (about $312k/year, after taxes) or take a lump sum (about $5 million after taxes - calculated here). Either way, with a $300,000 annual income or as the new recipient of a cool five mil, you're sitting pretty well off.

Conventional wisdom holds that the lump sum is the smarter choice, because you - as an investor - can better manage your money and help it grow over time. So let's figure $5 million as the payout, after taxes, and after they give you the big cardboard check and take pictures, you're on your own.

There are actually companies out there that do nothing other than cash-out annuities. I listened to an interview with a guy on "This American Life" who started with one of those companies, and the misery and desperation he saw broke his heart. Lotto winners usually end up spending all their money before they even get it, so this guy's company would swoop in to the "rescue" and buy out the winner's remaining funds.

Well, in the case of our thought experiment, we ignore those bastards. Because the first thing we're going to look into is some kind of trust or LLC that could give us protection from taxes. And frankly, a little time to cool off wouldn't hurt. We'll say a month or two. It's not that long to wait.

Now, we've got $5 million sitting in the bank. If we just left that money alone, at a modest rate of return - say, 5% - we could earn $250,000 a year. Which is actually less than we'd receive if we took the payment schedule from the state lottery association. So we won't do that.

Instead, let's do some good with our new found wealth. First, we think of family.

My dad's house ($150,000) would be paid for. And a car or truck for him and his girlfriend ($40,000). My sister would get a modest house and car ($150,000). My grandma's house would be paid for, and she'd get a new car and a new garage door ($166,784 - we'll round to $170,000).

That's $510,000 spent, about $4.5 million left over. What's next?

Debt. My car ($6,000), my student loans (about $17,000), and a few things here and there ($5,000). Plus my roommates debt (unknown, but we'll say $2,000) and a new car for him ($20,000). Katie gets a new car, too ($25,000).

That's $75,000, or $585,000 all together. Not too shabby. We're still left with $4.4 million.

Next we'll say a new house in a decent neighborhood, but nothing too fancy. About $250,000 should do us. Plus a BMW of some sort ($50,000), a boat ($20,000), and a Mac Pro with 30-inch Cinema Display and Adobe Creative Suite 3 ($4,000).

That's $324,000, or $909,000 all together. We'll round that up to a million, just to be safe, leaving us with $4 million.

Now the Bible says to give 10% off the top of your income to tithe. If I start with my original winnings, that would be about $500,000. We'll double that. I would donate, flat-out, $100,000 each to the Juvenile Diabetes Association, the Interfaith Homeless Shelter here in Jackson, a west-coast environment group (here, here, and here, perhaps), the Rotary Foundation, and an organization I would set up myself to help get people out of hard times. Maybe we'd call it the "You're in trouble, so here's $1,000" fund. With few questions asked.

With the half-million left over for charity, I'd do something huge. I'm not sure what, but it would be in the style of the Carnegie Library project. Something that has value, and lasting impact, on small towns all across the country. I'm thinking internet-ready Macs in the hands of inner city school kids, or a cure for diabetes, or kids-themed, hands-on science museums in small farm towns, or a non-profit veterans health center - fully funded, unlike our current government - that gives needed health and psychological aid to our soldiers. These are just off the top of my head.

Now there's $3 million left. For kicks, let's put a million dollars into travel, take a year off, and go see the world. The whole thing - all seven continents, and the big islands. Months in Europe, and India, and a week or two in the Canadian Rockies wilderness, living in a cabin and eating off the elk I'd kill with sticks and rocks and my two bare hands. I'd stop moving when the money ran out.

Exhausted, I'd put away the rest of the $2 million and live off a steady interest. Even earning a modest 5% in some internet savings account, I could make $100,000 a year, which is more than enough. But if I invested aggressively - say, at 10% - I could live off the $200k/year.

Until I'm dead.

In the meantime, I'm sure I'd give plenty of money to my fraternity and maybe to Adrian, if they'd ever get their act together. But I'd do it anonymously, because nothing ticks me off more than those giant cardboard checks and someone's name slapped on the side of a building. If you're going to give, to it for the right reasons.

All of this is dreaming, of course, but I think a plan always helps - you know, just in case. A plan for everything, in fact, because there could come a time when you have to make some split-second decisions. As methodical as I am, I'd have to do it right.

Now give me a fortune cookie: I need some numbers to play...




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Now playing: Milow - Waking Up
http://foxytunes.com/artist/milow/track/waking+up

Deals with the devil.

There's a big difference between making cookies and buying cookies.

For one, the first is a helluva lot more fun to do. Right now Katie is licking the spatula clean - and for good reason. The batch she just whipped up can't be beat. After a tough day at work, baking is a great way to take your mind off things. You lose some of yourself in the creation, and that's a good thing.

But also, in the end you save a bit of money. The cost of a bunch of sugar, flour, eggs, and chocolate chips is cheaper than going out and buying a pack of Oreos or Chips Ahoy. Plus, the homemade variety taste better. Straight out of the bowl, even.

It's thoughts like these that are helping me come to grips with the horrors of living in middle class America. Every little bit helps. Example: ING's and WaMu's free checking (check out the fun web site!) and higher-yield savings accounts. Or Citi's $100-bonus "ultimate" savings account.

In my quest for financial peace, there's a certain amount of glee that comes with pilfering $100 from some megabank. Working at a credit union builds enough animosity toward the big Bs, but giant corporations in general give me the willies. So it's with great pleasure that I will gladly take a 5% interest rate and a Ben Franklin for doing nothing more than depositing $1 to start the account.

According to the Dave Ramsey plan, your first step is to build up a $1,000 emergency fund. When Murphy's Law strikes, he says, it's good to have a grand for those just-in-cases - and it's a preventative method to stop using your credit card for things like car repairs or doctor's bills, should they strike.

Then, after you've built up your emergency fund, you tackle your debts with ferocity. Instead of saving any extra money, you use your funds to get rid of debt. After THAT, you go back to your emergency fund and save for three to six months of expenses (for things like car accidents or job loss - you know, real emergencies).

I've been looking for a good, non-CD, non-money market account to store my baby emergency fund. Well, at a 4.5-5% interest rate, I can't find a good reason not to take advantage of some of these internet savings accounts, even though they're with banks. My measly .5% rate at American 1 just can't compete.

But then I find that Citi will pay you $100 - no strings attached - to open one of their high-yield accounts. Sold. There are few better ways to earn a quick $100. The only stairs to climb are a signature you have to mail in, a 90-day waiting period for the deposit to hit, and a few personal questions about your financial life.

I have my emergency fund set, but an extra $100 added to that keeps Mr. Murphy at bay, in my mind.

These new internet savings accounts are a fairly recent phenomenon. A few months back I recieved a mailing from ING (which has really cool company colors) about their checking account that offers a 4% interest rate. Now, if you know much about checking accounts, you know they don't typically offer any sort of dividend. ING can afford to do such a thing because everything's done online. You can offer bigger incentives when you don't have tellers working in brick-and-mortar branches. No doubt they make up some of the cost from investments and fees on some of their other account. The idea is to get customers in the virtual door, and boy is it working.

Hey, they got me.

Now credit unions are trying to figure out a way to compete (by, say, requiring direct deposit, e-statements, a debit card - all either save or earn money for CUs), but I say don't bother. Something tells me these interest rates can't last forever. Maybe it's a fad. Maybe it'll all go away when the big banks get the customer penetration (pun intended) they want.

Little things along the way have boosted my financial confidence. I've waved goodbye to my 19%-interest-rate Bank of American Visa and hello to a 0% Chase card that will let me tackle my debt barrier-free. I've paid off three other credit card, and one is about to bite the dust in the months to come. I'm making money on eBay. I've got overtime at work. And I've got a written budget that I'm actually using and following.

I remember money used to be a big stress point for me back in college. It seemed my money always had control of me, not the other way around. Not any more.

The discipline I've discovered in my new workout routine has sprung up in other areas, but education and a bit of research helps.

Maybe deals with devils aren't so bad after all.