Impulse Buy

It is that time of the year when people spend money buying gifts for friends and loved ones. The other day I saw an advertisement from my Credit Union for a loan to help pay for Christmas Gifts. This disturbing message got me to thinking about gift giving and, in particular, the idea of impulse buying. Before getting into the heart of my thoughts, let me be clear, borrowing money to buy Christmas gifts is a really bad idea. By now you probably know I frown upon acquiring any debt, but I understand the occasional need of a house, car or paying for an illness. Borrowing money to purchase Christmas gifts doesn’t make sense at any level.

Now back to our regularly scheduled program. I don’t think of myself as an impulse buyer. In fact, my family will say I take way too long to make most purchases. You see, I like to research products to find the best value. With the internet, there is almost an endless supply of product information and reviews available to the discerning buyer. Many times, the search for the perfect product is more interesting to me than the acquiring the actual product. After making my purchase, I am disappointed because the search has ended.

Recently my methodical shopping instincts flew completely off the rails. After the Astros won the World Series, I become strangely obsessed with memorabilia.  The day after the series win I found myself wildly purchasing hats and shirts. This free-for-all continued with the purchase of several Sports Illustrated covers and a poster. I knew I hit the wall when I bought an Astros Christmas ornament from, wait for it, The Bradford Exchange.

Astros Ornament

What caused my usual methodical shopping methods to go so far awry? I got caught up in the emotion of the Astros World Series victory. I never wanted the good feeling of winning to fade away. Weddings, the birth of a child, and vacations are other events where there is risk of extreme impulse buying.

Some people struggle with impulse buying on a daily basis. Retailers are acutely aware of this phenomenon and do their best to instigate such spending activity. Impulse buying is the reason many people end up in severe and unmanageable debt. Is all impulse spending bad? I don’t think so, occasionally spending money driven by emotions is a good thing. Impulse buying crosses the line when it causes debt or damages our financial stability. Emotional spending is okay, but it must be balanced by a sense of the value or need of the purchase. Our financial ability to make the purchase is also a critical component.

As with anything else in life, impulse buying is okay if only practiced occasionally and is checked by the reality of our financial plan or otherwise known as a budget. Even though I temporarily lost control with my spending on Astros memorabilia, I feel good about my frivolous expenditures. The Astros World Series win was a huge emotional event for me, so it was okay to go crazy for a while. Eventually I was able to balance my temporary passion for overspending with the reality that I had spent enough money on Astros stuff. Are you an out of control impulse buyer? If so, now is a great time to create a budget for 2018!  Not sure where to start in creating your budget? Listed below are a few web sites that can get you started.

Start your 2018 budget today.

Make the most of this day!


The Equifax hacking has been all over the news. Over 140 million personal records have been stolen. The early response from Equifax has been very disappointing. Equifax proposed charging people to freeze their credit. Equifax makes money from analyzing sensitive personal data they were never asked to manage. Then Equifax loses this data and wants to charge the same customers a fee to protect themselves from identity theft. Clearly, Equifax doesn’t get it. This is the biggest issue their company will ever face and may bankrupt or destroy their business. Lawsuits are already being filed. Waiting over 6 weeks to report the hack is egregious. There are some reports of executives dumping stock prior to the announcement. This will not end well for Equifax.

So as a person minding my own business while the mother of all hacks (MOAH) is revealed, what should I do? The best place to go for information is:

This website is providing more information daily and the FAQ section is helpful. You will be able to find out if you were affected by the hack and get connected with options for protecting yourself. Even if Equifax reports you are not affected, I recommend signing up for as much protection as possible. I do not trust Equifax.

Equifax needs to provide a free credit freeze at all three credit monitoring services. This is the only way to stop potential identity theft. Only freezing credit at Equifax is not enough as thieves can use the hacked information to open accounts at Trans Union and Experian (the other two credit bureaus). What is a credit freeze? This is a lock on your credit that stops any entity from reviewing and opening credit in your name. While a credit freeze is secure it can be inconvenient. Whenever you are taking out a loan or even signing up for cable TV, you will need to temporarily unfreeze your credit. You can do this online with a PIN number provided by the credit bureau. The credit bureaus do charge an annoying fee for this service. If you can find out which bureau the company where you are buying uses, you can just unfreeze your credit for the one transaction.

Why should you be concerned about all of this? The answer is, you want to do everything possible to avoid identity theft. My identity was stolen in 2008. I started receiving bills from stores I never visited either in person or online. Someone was opening credit card accounts in my name and charging thousands of dollars worth of goods. I called the police and filed a report. I then managed to immediately freeze my credit. It took me 6 months to clean up the last of the fraudulent credit cards. In the end, there was over $60,000 worth of fraudulent charges. I did not have to pay for any of the charges, however, I spent an enormous amount of time sorting out the mess. I am not sure what my credit score was during this time but I assume it took a significant drop. Fortunately, I did not need to use my credit during this time. There was also the expense borne by the companies who delivered products and did not receive payment. This fraud must be recovered in higher prices passed on to the consumer. Make no mistake about it, identity theft is a big deal and we all pay for it.

Since my identity information was “out there” I decided to leave my credit frozen. For me, the peace of mind of having frozen credit is worth the occasional hassle and minor expense of unfreezing the information. Having frozen credit can also be an additional barrier to slow someone down and be more thoughtful about incurring new or additional debt. There are some services out there that claim to protect the consumer from identity theft. I have never tried them but I am skeptical that they could do anything more than set up fraud alerts and monitor credit reports. At this point in my life, I would like to completely remove myself from all three credit bureaus but I have not figured out how to make this happen. It is annoying to have to pay to protect yourself from a company losing information they were never given in the first place, but such is the way of the world today.

Do not assume identity theft will not happen to you. Stay on top of your credit report and investigate any suspicious activity. Decide what you are going to do about the Equifax hack because you are likely affected. Be as aggressive as you can in securing your credit information.

Make the most of this day!


I have entered a phase of my life where I am living off my savings. I have been planning this early retirement for many years. Part of retiring, whether early or not, is to develop a saving program. I opened my first savings account when I was 6 years old at the Sharpstown State Bank. A few years after I opened my account the Sharpstown State Bank was closed by the FDIC due to fraud. Eventually, I received a payout check from the FDIC. This was an impactful lesson for me about fraud and white-collar crime. Now back to the idea of consistently saving money.

I received a passbook from the bank and learned my first lesson about earning interest. My father encouraged me to make regular deposits from my weekly allowance. I enjoyed tracking my balance with my passbook. I recall being excited when my balance matched the bank statement. I believe this early start to saving developed a useful discipline that has stuck with me my entire life. I recommend talking with your children about saving and helping them get started with their own account.

We hear a lot about how we should invest and save in preparation for retirement. The objective of this article is to provide a balanced perspective on saving.

You hear commercials all the time asking the following question. Are you saving enough for retirement? These commercials are usually from Banks, Investment, and Insurance Companies. Do you think these companies are genuinely concerned about your retirement? Maybe, for sure they are trying to make money. Whenever you invest for retirement, some corporate entity is making money off your financial decision. While the message is good, it is important to be aware of the motivation for the plea to save for retirement.

There is nothing wrong with making a profit for offering retirement investments. Making a profit is a key tenant of capitalism. As a consumer of these retirement investment products, we need to be aware of the cost and value of these they provide.

As I mentioned, saving for retirement is a good thing. That being said, like everything else in life balance must be considered. If the investor saves too much, they run the risk of being retirement poor. It is important to have enough money available to live the life here and now. A young person has no idea what their retirement will be like from a health and family perspective. Not to sound morbid, but there is the possibility of dying before reaching retirement age.

The concept of retirement is evolving. A hundred years ago retiring from work was a foreign concept. Most people worked if they were physically and mentally able. Upon reaching an age where they could no longer work, folks depended on their families to provide care. With the advent of the Social Security program, the time of retirement began to focus on age 65. These days people are living longer and can work well past age 65. Many times, the financial reality of today’s society causes people to keep working well into their golden years. Poor economic conditions or bad financial decisions can contribute to a lifetime of employment. Of course, some people just want to work their entire lives.

It is never too early to think about long-term goals for your career. This goal setting can then be the start of developing your own retirement plan. I remember having the goal of retiring at 40 and buying a Porsche. Well, I never achieved that specific goal but setting it did cause me to start saving. There are plenty of tools for developing a retirement plan on your own. You can also consult a financial advisor. I will probably write an entire article on financial advisors but for now, I recommend an advisor who just sells advice. Stay away from those advisors trying to sell financial instruments.

I strongly advocate developing a savings plan for retirement or possibly a second career. If your company offers a 401k plan, at a minimum you should be investing up to any matching funds. Company 401k matching funds are free money. You should always take free money.  Part of developing a savings plan is to make sure you have money to spend today. I wrote about budgeting in a previous article. A budget is an essential tool for developing a retirement plan and living a financially healthy life today. You really do want to spend some of your money today. You should not spend to the point of accumulating debt or jeopardizing your retirement plan. You should spend money to help you enjoy the time and people who are part of your daily life. Time is a precious and limited commodity and spending some money to enjoy life’s experiences is a great investment.

Start saving today.

Make the most of this day!

Spare Tire

I know what you are thinking, this article must be about that extra weight some of us carry around our mid-section after reaching a certain age. I hate to disappoint you but shedding extra pounds is not the subject of this article. I am not exposing any revelations in the area of weight loss. If you have seen me in person in the last few years, you know I am not an expert in weight loss. No, this article is about an actual spare tire.

My daughter bought a car late last year. I helped her with the car search and purchase process. She bought a Kia Soul which has so far been a great car.  One item I overlooked during the purchase process was the Kia Soul does not have a spare tire. Instead it has a tire inflator. At first I was shocked and disappointed to discover the lack of a spare tire. I did some research and realized that many newer cars have eliminated the spare tire to save weight and cost. I began to think that maybe times have changed and a spare tire is not necessary. After all, tires are much better these days.  I don’t have as many flats as I did in previous years.

I tried to get comfortable with the idea of no spare tire but something was gnawing at me. I found out I could purchase a complete spare tire kit from, you guessed it, I made the purchase and put the tire kit in my daughter’s car. I told myself that she would probably never need it but it was reassuring knowing the spare tire was in the car.

A few months ago, my daughter picked up my wife and me at the airport. As we were putting bags in the car she noticed that her tire was flat. This is that busy area of the airport where many people are making pickups and the airport employees are doing their best to move traffic along. A couple of workers came over and put cones next to the car to sort of protect me while I changed the tire. With all the commotion and constant traffic, this tire change was a stressful event. I managed to successfully change the tire and we were soon on our way home and then to the tire store.

Upon arrival at the tire store, the technician told me the inflator would not have worked due to the large gash in the tire. In this case, the spare tire saved the day or at a minimum saved us from an expensive tow. For our situation, the spare tire was a better backup plan than an inflator.

Establishing a good back up plan is a wise move. Many years ago, while taking flying lessons, my instructor told me to play the “what if” game. The “what if” game is played by constantly asking a mental question about the current situation. For example, what would happen if my engine died or what if my primary airport is closed or what if I get lost. The idea is to think about things that might go wrong before they happen. By playing this mental game, a pilot is better able to react to an urgent situation because the surprise is limited and there is a chance a recovery plan has already been considered.

While I don’t advocate playing the “what if” game all the time, there are situations where the concept is very helpful. A great place to play the “what if” game is when developing a financial plan. Here are a few examples of financial “what if” questions.

  • What if I lose my job?
  • What if I get sick?
  • What if the economy goes bad?
  • What if my car breaks down?
  • What if I need a major house repair?

I am not advocating a life of paranoia with this suggestion but the events listed above can be serious with significant and possibly long term affects. It is not a question of if these sorts of things will happen but when. A mistake many people make is spending money and accruing debt as if they will never have any significant life issues. In other words, they never play the “what if” game.

A financial crisis happens when people spend more than they make and there is a call to reconcile the difference. One tool that can help avoid a financial crisis is a budget. Budgeting is not a very exciting topic but it is a positive step in avoiding a crisis. Part of the budgeting process is to set aside some money in an emergency fund in preparation for the “what if” questions that will certainly arise. Maintaining an emergency fund can bring peace of mind.

Do you have a budget? There are plenty of budgeting tools and training online.  Have you played the “what if” game with your finances? Give yourself some margin from a financial crisis, start budgeting today.

Make the most of this day!