I kind of get it. As a young man I got excited about car shows on TV as well. All week, the excitement built until finally I perched in front of the tube to watch Hasselhof guide KITT through another episode of “Knight Rider” or the Duke boys jump through the windows of the General Lee. But then, it was over. The hour elapsed and the countdown clock reset for another 7 day countdown.

Not so for my sons and their “Top Gear” obsession. Our digital world makes instantly available to them ten years worth of the show — over 100 episodes — enough for a cataclysmic, personality warping binge on the politically incorrect, anti-American, paunchy, opinionated, blowhard Englishmen relentlessly peddling absurdly expensive mechanisms that will hasten the doom of the planet, all the while tossing off overcooked similes, as in, “The Porsche Cayenne is about as sexy as a camel.”

Which is to say, I love the show, too.

Or I did for the first fifty episodes anyway.

That was about the time my oldest began characterizing his “maths” homework as “rubbish” and my youngest started asking how many valves our minivan featured.

I started to wonder, what’s the real digital threat to parents? Cyberstalkers and perverts schooling through Facebook or these wonderfully snotty Brits and their seemingly endless availability?  Finally, the plummy accents and the thousand clever ways of saying a car is awful got to me. I’m uncertain if understanding scarcity and anticipation will have much value in the future, but we’re going to watch “Top Gear” once a week. Thursdays, I think.

Of course, kids being kids, by next Thursday they’ll probably be on to a show all about macrame hosted by a hippy in Portland. Until then, I’ll buckle up and enjoy the ride.

Over the past several weeks I’ve been receiving a number of notices from retailers (furniture stores, car lots, etc.) offering me “no payments for 90 days” promotions. I used to jump at these opportunities, but now I shrug and toss them in the trash.

What those notices often fail to point out, except in the 4-point italicized font at the bottom of the back of the postcard, is that during the 90 days of no payments they are still accruing interest on your balance. You still owe a debt, and it gets more expensive every day.

This is like telling an overweight person, “Wait 90 days to start that diet, and just eat whatever you want to until then.” At some point, the dieter and the borrower, have to face their battle and start working things off. The problem is, in three months, they now have a bigger problem.

Most of these types of “creative financing” arrangements are offered to consumers who refuse to face one single reality – they can’t afford to buy whatever is being offered. That’s it; you can’t afford it. If you don’t have the cash to pay for something outright, or when the bill comes due at the end of the month, you simply cannot afford to buy it.

Alternatives to “No Payment for 90 Days” Offers

Save Money. Open a savings account if you don’t already have one and get started saving towards the item you would like to purchase. In 90 days, you will either have enough money saved, or decide the item isn’t worth three months of your savings.

Be Content. Let’s face it, most “No Payment for 90 Days” offers are made on things we can probably live without – new cars, new furniture, new jewelry, big screen televisions, etc. My grocery store doesn’t offer 90 days same as cash on meats and produce. The gas station will not let me start an interest-free tab. So, chances are, whatever it is you are thinking of buying can probably wait.

You can keep sitting on your old sofa (or buy a yard sale sofa, like we did).

You can live with your current television, and if dies, can live without one – lots of people do it.

If your car dies, buy a cheap one and save up the money to buy a more expensive one with cash down the road.

Of course, it is much easier to walk into a showroom and pick out something brand new with a big price tag and a financing agreement to go with it. But remember, by delaying the inevitable bill all you are doing is tying up future earnings in debt payments.

Who knows what your life might be like 90 days from now? Could you survive getting laid off? What if you get sick, or a loved one falls ill? What if your car dies the week after your big screen television arrives. Trust me; these things happen.

I’m not advocating you sit around and consider the worst case scenario, but I am advocating a practical approach to managing your finances and acquiring new stuff. If the aforementioned things do happen, you’ll be better off minus a bunch of debt payments on things you don’t own.

Pride of Ownership Goes Up When You Actually Own It

Here lately, I’ve taken a hard look at the things I own. Do they bring me joy? Do they add quality to my life? I find that the things that were acquired with my own money, not with debt or a gimmicky financing arrangement, often bring me the greatest joy. Why? Because I don’t resent them, like I used to resent a financed Silverado, and a bedroom suite purchased on a credit card.

When I make the conscious decision to part ways with my money in exchange for some item, I want to own it as soon as I leave the store. This way I can enjoy it for its intended purpose without worrying over how much it cost, or how I will afford the monthly payments.

When it somes to stuff, own it or get rid of it. That’s my only two options from here on out.

Post by Frugal Dad

My grandfather grew up in a rural setting during the Great Depression, and for much of his young life had no running water or electricity. He often joked that they really did have running water–he ran to the well with a bucket and ran back.  During particularly lean summer months, my grandfather and his brothers and sisters often went barefoot. He often joked that he doesn’t know why people refer to those times as “the good ol’ days,” because there wasn’t much good about them.

Of course, I cherish these stories and the time spent with my grandparents because they made me the “frugal dad” I am today. When I find myself drooling over a new gadget I think back to stories of my great-grandmother searching the cupboards for a missing dime that meant a can of soup for her kids’ dinner. It puts life in perspective to remember that people did manage to get by without today’s modern conveniences.

Don’t get me wrong – this is not an indictment of today’s modern conveniences, because frankly, many of them make life much more enjoyable. However, we should be reminded that many of these things are luxuries, not necessities, even though media and peer pressure would have us believe otherwise.

15 Things Our Grandparents Lived Without (and We Probably Could, Too)

1. GPS Devices.For me, the jury is still out on GPS devices for your car. I hear about more people arriving late because they took the “GPS directions” than I hear success stories. I don’t know what’s wrong with a road atlas – I just bought a new one from Sams Club for a few dollars. Besides, some of the best discoveries are found when you are lost.

2. Tanning Bed Salons. Direct quote from my grandfather: “Why pay hard-earned money to cook your skin when the good Lord shines a sun over your head that does the same for free?” 

3. Cell Phones. Yes, people can live without a cell phone. In fact, many still do, as hard as that is to imagine. If you are concerned with safety while traveling, consider a prepaid phone and keep it charged. Heck, even a cell phone without a calling plan, but a charged battery, can call 911 in an emergency. While I do consider cell phones more of a utility these days, I consider data plans and all the bells and whistles a luxury. Disclosure: I own a DroidX, and curse the bill every time it hits the mailbox!

4. Microwaves. I’ve yet to taste anything out of a microwave that tastes as good or better than stove-top or grilled. Still, it’s a time saver, and since we all have so little of it these days I suppose it helps.

5. Credit Cards/Debit Cards. The concept of borrowing has been around for centuries, but it has only evolved into plastic over the last century. Speaking of plastic, my grandfather didn’t use an ATM card until he was in his 70?s, instead he always went inside the bank, walked up to the teller, and did business ”eye-to-eye.” They knew him by name and were always happy to help with customer service issues he ran across over the 40 years he banked with this particular bank.

6. Electronic Book Readers (Kindle). Why spend money on something with a screen the size of a book when you could simply…read a book. They even let you borrow them for a couple weeks at libraries for free. Yes, I know toys like the Kindle do other stuff, but its primary role is an electronic book reader. Disclosure: I purchased a Kindle in the hopes it would make me read more. Truthfully, it did not, and do miss the smell of an old book. Guess I’ll be re-gifting it.

7. Digital Cable. Even I can remember growing up with only a handful of channels from rabbit ears on top of the television. My grandfather could remember times before television! Imagine getting all of your news and entertainment from a radio, instead of Fox News and MTV. Speaking of MTV – didn’t that used to stand for “music” television?

8. Health Insurance. If our grandparents got sick, I mean bad sick (not a simple cold or poison ivy), they went to the doct0r and paid for their services. The first “health insurance” plans only covered long hospitalizations or major illnesses, not the routine things we see doctors for today. However, one could certainly make the argument preventative medicine has helped us live longer, healthier lives, and much of that is made more affordable thanks to health insurance plans.

9. Plasma Televisions. Up until 2004 my grandfather owned a decades old, 27-inch floor model console television.  He eventually got rid of it when the picture began to have problems around the edges, and now has a basic 19-inch screen on a shelf. When I asked him about a plasma screen once he said, “There is nothing wrong with the picture on my screen now. Besides, I’ve heard those ‘plasma things’ cost as much as a small car.” Indeed, although it had been a while since he priced a small car!

10. SiriusXM Radio. Why pay to listen to something that is available for free over the airwaves? I did get an XM satellite receiver for my grandfather’s car to use on trips, and he found one feature worth paying for – not having to listen to commercials. Unfortunately, this is not true today as I’ve heard commercials have made their way into satellite programming.

11. Xbox, Playstation and Wii. I remember one Christmas while staying with my grandparents I got an Atari 2600 game system. I hooked it up to the television and ran through games like Combat, Frogger and Pole Position. He thought it was interesting enough, but those little game cartridges sure were expensive! Imagine what he’d think about today’s game prices!

12. Health Clubs. Why pay $30 a month to pick up heavy weights and walk on a belt that runs underneath your feet? You can get the same workout walking outside, lifting things in the garden or filled milk jugs, using your own body weight, etc.

13. Calculators and electronic cash registers. People knew how to perform basic math computations and make change. Enough said.

14. Student Loans. Student loans are also a relatively new (I mean, last 50 years or so) phenomenon. People used to simply pay for college, but that was before the days of college tuition costing an arm and a leg. Which begs the question: Has the federal student loan program encouraged colleges to increase costs by allowing students to spread payments out over a quarter of their lifetimes? Reminds me of what happened to housing prices when more and more previously disqualified people were allowed to borrow big money on mortgages.

15. Disposable Items. Ziploc bags didn’t really hit the market until the 1960s, although some “resealable bags” were around a decade earlier. My grandparents used to put things in containers (jars, dishes, etc.) and store them. When they used the item, they washed the container and reused.

Post by Frugal Dad

When my son was little he had a mild addiction to Thomas the Train collectibles. Those things were everywhere (you may remember Harold the Helicopter’s flight to the bottom of our guest toilet and my mission to retrieve him)! Then it was monster trucks. Now, Legos are all the rage.

And what about these new Legos? When I was a kid you could buy a ton of plastic Legos blocks for cheap. They came in four colors – red, blue, green and yellow. Now, a larger Star Wars Lego set runs about $99, and includes hundreds of tiny pieces and 37-step instructions for assembly! I digress.

You see a pattern developing here? My son, like many kids, goes from one greatest thing to the next. Individually, these things are not that expensive (save the aforementioned Star Wars Lego sets), but collectively they can add up.

In addition to being expensive for parents, they do have a cost for kids, too. And I’m not just referring to toys’ way of eating into allowance savings.

Too many toys usually means too many distractions. Between the television, the Wii, the computer, the buckets of army men, trucks, Legos, etc, etc. there is little time to devote to things like books, and outside play.

I’m certainly not advocating getting rid of all toys. In fact, some toys can be quite educational. Others can be incorporated into outside play (my kids love the game Hyper Dash). But often toys are played with a while and then tossed aside, collecting dust and taking up space in the kids’ closets and toy boxes.

The number of toys accumulating never seems to diminish, nor does our kids’ appetite for more of them. Are kids born with a consumer gene?

Hey Mom and Dad – Make Sure You Don’t Own Too Many Toys

Kids learn much from the behavior modeled for them by their parents. Many parents are guilty of buying too many toys themselves. And many of us fall for the same toy fads that kids do, although our “toys” are often much more expensive.

Need evidence? Just hang out around a Best Buy store the morning Apple releases a new product – any product. I’m quite certain most people in line for the iPhone 4 already owned a phone – maybe even an iPhone 3. But they had to have the latest and greatest.

Kids notice this stuff. Maybe Dad buys a new pickup truck every two years. Mom picks up a new laptop with the first hint of a problem with the one she just bought 6 months ago. And both parents are always buying new shoes, new clothes, new jewelry and watches, etc.

Allow Kids to Buy Their Own Toys…At Least a Few of Them

At around age 5 we started giving our kids an allowance. Over the years we’ve gone back and forth on whether or not this allowance should be tied to chores. A final compromise was to identify a set of basic chores to be performed throughout the week that must be completed as a contributing member of the household. Additional chores could be performed to earn extra money, or not, depending on school schedules, motivation, etc.

We encourage the kids to use a portion of their allowance for spending, a portion for saving and some for giving. With their spending allotment, they usually pick up something small during weekly grocery/household supply trips – a magazine, a CD, a movie, a game, etc.

Of course, we still buy them a few things all along (I rarely turn down a request for a new book), and don’t expect them to pay for things like clothing (not yet, at least) and basic supplies. Eventually, as they mature, I’d like to increase their budget and include more spending categories for which they are responsible.

We’ve noticed that the kids are much more selective about what they buy, and often fret over “spending all their dollars” on a new game – leaving them with an empty wallet for another week.

I’m not unlike any other parent. I want my kids to have things better than I did. I want them to have more. I want them to have the best. But I also want them to grasp the connection between having nice things and the sacrifice required to earn them. I want them to be able to say “no” to themselves; to avoid the trappings of debt and consumerism as they grow older. Maybe they will avoid some of the mistakes I made along the way, or at least be prepared to learn from the ones they are bound to make themselves.

Post by Frugal Dad

These are the types of bills I remember my mom paying:

• Rent
• Car payment
• Power/Gas bill
• Home telephone
• Cable television
• Car Insurance

Admittedly, our situation was somewhat simplified because my mom rented, but it seems everyone’s situation was much simpler back then. Compare her monthly bills to the list I came up with:

• Mortgage (including property taxes and homeowners insurance)
• Power bill
• Home telephone
• Cable television
• Car insurance
• Internet service
• TiVo
• Netflix
• Gym membership
• Cell phone
• Onstar

In addition to those recurring bills, you could expand the list of modern conveniences (that cost additional dollars) even further. Divorced Dad did just that in his post listing what he calls, The New “Necessities” of Modern Life. From his list, I’m reminded that things like bottled water, cell phone texting, gourmet coffee, and $200 iPods were not around when I grew up, and certainly not around when my mom was young.

A number of these modern “necessities” do add value to our lives, but they do not come without costs. Because of this larger monthly outflow, most families have to work more, and more members of the family have to work more, to cover these expenses. And that phenomenon has brought about even more “situational” expenses such as the need to for two vehicles, two professional wardrobes, additional childcare expenses, increased commuting costs, etc. Makes you yearn for a simple time, doesn’t it?

So who’s to blame for this lifestyle inflation that led to higher expenses and less time with family? Marketers could certainly share some of the blame, as their artificial hype leads many to products they wouldn’t normally buy. I’m not immune. Those Onstar crash commercials replay in my head every time I consider canceling the service. What if my wife is in a crash and can’t call for help and the kids are with her and…panic sets in. I instantly rationalize the monthly fee.

If marketers are to blame for a portion of the lifestyle inflation we’ve experienced, then we need only to look at ourselves for the remainder of the blame. Let’s face it; we’re a spoiled people in many ways. We strive for the bigger and better, never content with good enough. Over the last few decades, the size of our homes has doubled from 1,400 square feet in 1970 to 2,330 square feet in 2004 (National Association of Home Builders). We build bigger homes just because we can, not because we necessarily need to. Or maybe we do need to. After all, where would we put all our toys in a small home?

These bigger homes come with bigger mortgages, and more expensive furniture, and the need to fill a two-car garage with, well, two cars. You see where this is headed.

In an era where people are beginning to share concerns over inflation (or maybe more accurately, currency deflation), thanks to exorbitant government spending, perhaps we should first consider our own lifestyle inflation. Perhaps we should start voluntarily moving towards simplicity, before we are forced to.

In my own life, I’ve decided to draw a line in the sand. I have nice things, and am perfectly content with them. My desire to have the latest thing will not override the contentment I have with my current thing, and the fact these “things” are paid-for is even better. We plan to stay in this home, keep driving our current vehicles, look at the same television, use the same cell phones, and keep the same basic expenses regardless of what others do, or try to convince us to do.

If you are like me, and have been “unfrugal” at times in your life, you don’t have to sell all your possessions and live the life of a pauper. Simply be happy with what you have now, and let that mantra guide future spending decisions.

Post by Frugal Dad