For  ThrowBack Thursday I’d like to look back on something I wrote almost 10 years ago, $301 for a $90 Cat ?

Unfortunately the center of the story, my cat Jinx, has passed away a few years ago, and also unfortunately the economics of the situation described has changed as well, but this one paragraph from the original post sums the previous article nicely:

Cats can make you a basket case with their vet bills

Cats can make you a basket case with their vet bills

This year, Jinx gets so sick he goes to the vet, who rehydrates him (intravenously!), and suggests he stays over night, but luckily Mrs. Cheapy C8j convinces them that Jinxy should go home instead. Final cost of fixing this $90 cat (no complaints about that price, it went to the Humane Society)? $301.00 and at the end of it we saved $200.00 by him not staying over night Whoo Hoo!

The problems with the story are that you can’t buy a cat from the humane society (in Ottawa) for $90 any more the cat in the basket picture was $230 (because she was a kitten), so that part of the story is off by 250% (or so).

The cost of rehydrating a cat, I am confident, might be a great deal more expensive as well, as the whole Veterenary world is much more pricey.  How can I make that kind of broad statement? The Pet Insurance business also seems to be growing.

According to IBISworld’s report, in 2012 the Pet Insurance Biz in the US  had revenues of $651 Million and an annual growth of 6.0% from 2007-2012, which is very impressive.

My point is that if the industry that underwrites the insurance for the Veterenary world is growing that fast, my assumption is the Vet Biz is growing at a similar (if not maybe even higher) rate, and all of this to say that the cost of owning a pet is becoming a more and more expensive luxury for families.

Is it cheaper to have a hamster or a fish?

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Schrödinger’s Financial Cat

Schrödinger’s Financial Cat

I enjoy discussions of Schrödinger’s cat  because it can spawn off some very interesting ideas, so what if we think of his cat in a financial model?

SchrodingersCat

The interpretation of his original thought experiment ( from Wikipedia (about the Copenhagen interpretation)):

Schrödinger’s cat: a cat, a flask of poison, and a radioactive source are placed in a sealed box. If an internal monitor detects radioactivity (i.e. a single atom decaying), the flask is shattered, releasing the poison that kills the cat. The Copenhagen interpretation of quantum mechanics implies that after a while, the cat is simultaneously alive and dead.

What does this have to do with Personal Finances? Suppose we weren’t actually talking about a cat, but your level of debt instead, and yes I know people who think the following:

If I simply spend my money, without checking the status of my savings, investments, debts or anything financial, I am then in a calm state because I am both rich and poor, I am in a state of financial equilibrium.

On the surface this is not that far off base because, “According to Schrödinger, the Copenhagen interpretation implies that the cat remains both alive and dead (to the universe outside the box) until the box is opened….” , thus this idea of being both Rich and Poor is like the cat being both Dead and Alive.

Schrödinger’s idea that if you didn’t see things, the answer is not known thus both answers can be true is an interesting thought experiment, but not really applicable to your financial life. Allow me to make the same comment I have made when this way of dealing with your finances was proposed to me, “You may be in a state of equilibrium, but you are also insane!“.

If you don’t plan on keeping close tabs on your financial state, you are going to end up in a bad financial place, that will take a long time to clean up, and it will happen whether you open your financial box or keep it closed (and assume that you are OK because you don’t know).

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Financial Wastefulness

The Pope in his Easter message had one very interesting line:

Help us to overcome the scourge of hunger, aggravated by conflicts and by the immense wastefulness for which we are often responsible.

The phrase that really caught my eye was “.. the immense wastefulness for which we are often responsible…”, and specifically in terms of what this does to our finances. Overcoming hunger is very important but I will leave that to the religious blogs to discuss, but monetarily there are countless examples of waste financially, do any of these ring a bell?

  • How much clothing have you donated to whatever “charity” called you that still had the price tag on them?
  • How much food do you throw out, that is still in the package?
  • How many “fees” are you paying for being late paying for things, or because you can’t be bothered to go an extra mile to use a non-fee ATM?

Pope Francis

Pope and his peeps

The word convenience seems to have become synonymous these days with waste.  It’s inconvenient to go that extra mile, so I’ll just pay the $1.50 fee from the ATM (and then the $1.50 fee from my bank) to take only $20 out of the bank, because I need some cash. I know people who have said that to me, I believe my eye twitched a bit when I heard it (nervous tic), it takes a lot not to ask what is wrong with them.

What other wasteful lifestyle things have I missed?

 

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Fiscal Fasting

Now we have reached the Christian tradition of Lent, and for those who are religious, or just gluttons for punishment,  are looking for things to take up (or give up) for this time of the year, fiscal fasting might be an idea for you.

Allow me to suggest “Fiscal Fasting” , which is a delightfully obtuse switcheroo on the Lenten tradition of Fasting. Good Christians (in the day) might take up fasting to emulate Christ’s 40 days in the desert by giving up Meat or the like, I am not suggesting that (although I could do with giving up say Snacks and specifically potato chips for Lent) with this concept.

Fiscal Fasting would be simply denying discretionary spending for a week (to start). Can you live the same $20 you had in your pocket Monday all the way until next Sunday?

Pay the bills that must be paid (e.g. Mortgage Payment, Rent, Electrical Bill, etc.,), I am suggesting cutting out spending on things like eating out, buying clothes, etc., . No this does not mean that you should have an orgy of spending the day before and “coast” for a week either. If you wish to cheat that kind of defeats the purpose of this idea.

Fiscal Fasting Ideas

Maybe the best thing to do is:

  • Automate your bill payments so they don’t end up in arrears. Try to be like that woman they found who kept paying her bills 6 years after her death.
  • Plan how you aren’t going to spend money, or how you will avoid buying crap you don’t need (or worse can’t afford)
  • Take $20 out of the bank

Start on Sunday, if by Saturday you still have that $20 bill you win, and should try again for another week. How long can you keep that bill intact ?

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Best Budgeting Tip?

I got asked on the Tweety on Saturday what is my best budgeting tip, and it got me thinking that I really don’t have a “budgeting” tip, as budgeting is really a tool for an entire lifestyle you are choosing. My response was a bit flippant:

 

But it’s not like I haven’t talked about Lifestyle Creep before, it’s insidious in many folks lives. Budgeting tips are fine, but budgeting is really kind of useless if you just make up a list of things you think you can save money on, without thinking about things first.

Best Budgeting Techniques?

The easiest budgeting method from my book is, if you use Quicken or something like that to track your spending, look at how much you spent last year in major areas, and try to do that again this year. I hear you saying, “But BCM that isn’t saving”, no not really but it proves that you can follow a budget. If you get a pay raise then suddenly you are ahead of the game. Next year, do the same thing again, and you’ll be a little farther ahead, etc., etc.,. Sounds simple doesn’t it? It can be, if you want to do it.

Getting rid of debt is another budgeting tool too (in an obtuse way). If  you can get rid of each debt, and then use the payments you used to get rid of that debt to save (or better still pay down other debts) (while continuing to live within your means, and not increase your debt), you are budgeting too (or at least spending within your means).

Any other budgeting tips out there?

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