How Worrying Costs Me $6,500 a Year

I estimate that wheel-spinning worries cost me about $6,500 a year. With a 5 percent annual return, my worry machine will cost $36,000 in five years and $81,700 in 10 years. That's a high tab for running in circles.




Here's how I did the math:

• my hourly rate: $50 (an estimate based on writing fees)


• time spent worrying: 30 minutes a day (a really low-ball figure)


• weekly cost in lost time/wages: 2.5 hours or $125


• yearly cost: $6,500

How I used one of Hugh Chou's On-line Calculators:

• plugged in $25 in the Sharon's Muffin Calculator . The calculator's comment: "Wow, a $ 25 muffin! What is in that thing, truffles?"


• plugged in five times a week


• arrived at annual cost of $6,500


• used 5 percent interest, which equals $325 annually

My Anti-Worry Strategy

1. Better planning. A large portion of my worries will be solved with better time management. I've been creating streamlined to-do lists, with priorities and realistic deadlines.

2. Learn to say no. Over-commitment (too much work with unrealistic deadlines) is very expensive. My inflated ego periodically prompts me to accept more work than I can handle. Cutting back on commitments requires honesty and self-awareness.

3. Learn to let go of past regrets. This is a big one. And a lot of management gurus echo the new-age advice from Deepak Chopra: "Only the present moment exists; past and future are mental projections," Chopra says, adding that we can liberate ourselves from the jail of regrets by "trying neither to relive the past nor to control the future." --Ageless Body, Timeless Mind (page 31).

With that in mind, I'm halting the old movie clips in my head and cutting out the trailers of future scenes. The only picture on my screen is the here-and-now.

4. Reading: From business to mysticism, reading relaxes and educates me.

5. Write a letter or call someone: If we feel as if we have wronged someone: we should call, apologize and move on.

6. Try to find the lesson: Usually when I'm obsessing about something, there is a hidden lesson or insight that I need tap into. Maybe I'm secretly worried about my financial well-being or I'm worried about an old fracture that never healed properly. It could be anything, but I try to honestly find the real source of worry.

In Year to Success, (the book) Bo Bennett recommends these steps:

• Let go of grudges.


• Reality check: "Ask yourself: Is feeling this way doing me any good?"


• Stay focused on goals.


• Gain a sense of perspective. Put a new frame on the issue. Try to see the positives.


• Fix what you can: "Make Amends and start living with a clean slate today."

--page 266, "Day 148: Let it Go" Year to Success

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Previous Posts
Today:
Airhead vs Workaholic: What I Learned about Money from Writing a Book
Uncle Sam’s “Stocking Stuffers:” A Guest Post From a CPA

Yesterday:
Wait 'Til January & Other Great Last-Minute Shopping Tips
Free Online Typing Drills: 10 Frugal Business & Craft Classes
Frugal & Green Rx for Post-Holiday Cabin Fever

Are You Frugal or Just Downwardly Mobile, in Denial or Just Poor?

I recently spoke to a personal finance coach and she raised some tough issues: Are we frugal because we're simply committed to a thrifty lifestyle or are we struggling with other issues? Here's the deal: Sometimes a thrifty lifestyle masks a long list of hidden problems. The list is based on my recent telephone conversation with Mikelann R. Valterra, the author of Why Women Earn Less .

1) Under-earning: Your income is less than you need to take care of basic expenses (health care, housing, emergencies, clothing), a few perks (vacations, entertainment, hobbies) and savings/retirement goals. In this case, you're using thrift to avoid one big hard reality: You need to earn more, get a better job or raise your rates.

In this case, we're in denial. The push to be frugal may come from a dishonest place. We cut corners instead of earning more money. We call our lifestyle thrifty because we don't have the courage to ask for a raise or move out of a comfy-but unrewarding situation. Bottom line: We're not mindfully frugal; we're frugal by default.

2. Clueless about accounting. We may live on a shoestring because we don't track our finances or save enough to buy a longer shoe string. It sounds like a paradox, but in this situation, we may opt for sacrifices (no health care, broken down car, no vacations) because we lack the discipline to really track our money and to really save.

3. Starving artist myth: Under this scenario, a "lack of monetary success is often an integral part" of the starving artist image, Valterra says. Financial success is considered a "sell-out."

4. Noble poverty scenario: Like the starving artist syndrome, some of us distrust wealth and the strategies that lead to wealth. Here's what Valterra says: "Under-earners who live a life of noble poverty often follow the maxim: It is better to be good and poor, than rich and evil."

So where do I fit on that scale of financial honesty?

Quite frankly, I need to (#1) earn more and (#2) track my money better. Those issues represent about 85 percent of my financial goals. And yeah, in my heart of hearts, my inner poet subscribes to the starving artist myth (10 percent of my problem) and with that subscription, I also have a share in the noble poverty scenario (5 percent for me).


But as I've written earlier, even if I were wealthy I would still aim for a frugal life. It would remain a conscious choice. Valterrra calls it: "Voluntary Simplicity," and yeah, that's my bottom line goal. What about you? Please send an email: Sharonhr@bellsouth.net or leave a comment. Thanks!
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Related Post:
"So When You're Rich, You Won't Have To Be Frugal," He Told Me

My Previous Posts
Today:
Recycled Cinderella: Same Outfits, Different Holiday Balls
Saving Money with CFLs: A Formula for Bright Lights & Lower Expenses
Yesterday:
My Jane Austen Biz Plan: 10 Smart Career Moves: An English Major's Aria
Turn Garbage Into Liquid Cash: Save 1000s of Gallons of Water

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The Frugal Duchess Booktique
The Frugal Duchess of Beauty Store

Book Shop of Fear
The Poetry & Drama Queen
Frugal Jazz & Blues
Frugal Comic Book Connection
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$300 Camera Now Sells for $30 (New)

Less than five years ago, we purchased a digital camera. It sold for $300 and we purchased it for $170, because we snapped up a floor model at an Office Depot store that was going out of business in Downtown Miami.

With our 43 percent discount, the digital deal seemed like a pretty savvy, very frugal move on our part. But fast forward to the 2006 holiday shopping season in which we spotted our camera (or a model pretty close to ours, with the same memory and features) selling new for $30.

That steep fall -- from $300 to $30 -- shows how sharply the prices of must-have objects drop given the steady pace of innovation and consumer demand. I've seen the same trends in video games for kids. Hot, hot, hot games that sell for $50 to $70 are sold used for less than $15 --just weeks or months later.

My teenage son just told me that games for GameBoy Advance are now selling for 2 bucks each.

Those sharp price drops make me think about the real value of so-called must-have gadgets, games and gizmos. Sometimes it pays to wait for a newer, cheaper model. Maybe.

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The Frugal Duchess Boutique
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Don't Cut These Five Corners

When to spend and where to save? It's hard to split a penny, but we pay more in the long term if we low-ball certain pockets of our budgets. That's the wisdom behind a past post from Flexo
at www.consumerismcommentary and a more recent post from Liz Pulliam at MSN, who wrote a piece called 10 Things You Can't Afford to Skimp On.

Flexo's list of 10 included: preventive health care, tax preparation, and shoddy wardrobe. Here's a sample:

Saving money by taking advantage of tens of thousands of dollars in 0% credit card balance transfer offers to gain a few hundred dollars, but being offered a higher mortgage percentage rate because of the temporary decrease in your credit score, costing thousands.--Flexo

Pulliam's List includes many of the same items such as: "classic clothing," and "health" She also adds sections on car maintenance and family safety vs thrift.


In that spirit, I've created:

Five Uncuttable Corners

1. Family vacations. Even if you have no money, become a tourist in your own town. There are many free civic and community events that will make you and your kids feel like you are on a holiday.

One of my best vacations was a family cruise with my parents and siblings in honor of my mom's recent 70th birthday. The value of those memories is priceless and my parents were generous enough to make our tickets a gift. Thanks M&D. Love you guys!

We also had a great vacation at a high-end resort in Miami. We went off-season and scored a $600-a-night room for about $149.

And I've also taken advantage of no and low-cost community activities in Southern Florida. It's not the money, or the place, but the time spent together.

2. Preventive health: Eat organic vegetables, exercise and be aggressive about healthcare & checkups. I take Yoga classes to reduce stress, a factor in many illnesses.


3. Home computer system: For work, kids, and recreation, a home computer system is invaluable.

4. Home gourmet coffee set-up; I love Starbucks, Cuban coffee and other caffeinated treats, but I spend less for take-out coffee because we have an excellent home set-up, including fresh beans, a bean crusher and a French-press coffee maker. The savings far exceed the $40-plus investment.

5. Buy a home. This is my big regret. Living in a beautiful ocean-view apartment with a cheap rent had a hidden downside. We were too lazy and too comfortable to buy a home. Now the $200,000 home we almost purchased is selling for about $1 million. Don't make my mistake.

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The Frugal Duchess Boutique
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Financial Tips from a Crack Addict

You can learn a lot about personal finance from a crack addict. I did when I read Confessions of a Crack Addict, in today's Wall Street Journal. But the subject is not drugs, but rather mountain climbing -- scaling cracks in tall, vertical surfaces.

"Perhaps I should explain. I've been hooked on crack for two years now. To get a fix, I've done things I'm not proud of: spent money I didn't have, blown off friends and family, traveled across oceans, lied to bosses about my whereabouts, risked my life in scary places most people with common sense would be afraid to set foot.

I'm talking about rock climbing, of course. Crack climbing, to be precise." --Wall Street Journal.

From that excellent piece by Micheal J. Ybarra, I've mined a few frugal and financial lessons.

Here's what I've learned:

1) It's good to be a girl. "Climb like a girl," is a tip the author received from a crack maven.

...use technique and finesse instead of trying to muscle up a route -- WSJ

In my personal finance efforts, I've had the best results when I've taken an easy-does-it, very modertated approach to my budget. Overly strict fiscal measures prompt rebellion and then I shop like a Paris Hilton-type of girl, albeit without Hilton's cash, extensions, blue contact lenses or expensive pumps. Oooh.. and I get snarky also.

2. Inches count. I save the most when I look for extra frugal and financial frothy inches in my budget. I look for the small cracks, which as the author explains can ruin your manicure:

And then there's crack, where you wedge your body or whatever parts of it you can -- fingers, hands, arms -- into fissures and inch your way up. Crack climbers have lousy manicures and many scabs. --WSJ

3. Recognize your addictions: Hi, My name is Sharon and I'm a former addictive shopper. That knowledge is power and therefore, I try to avoid my favorite crack houses: Ann Taylor Loft and Anthropologie (except for my once a year, end of season, massive sale splurge).

But otherwise, I'm careful. I can even do serious damage at CVS or Walgreens, where I've been known to spend $50-$80 on so-called sale merchandise.


5. Enjoy the process. It's just a game. It's just money. It's just stuff! The process, the discipline and fellow climbers are the real deals.


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The Frugal Duchess Boutique
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Life Lesson from Joe Girardi, NL Manager of the Year

In money and life, vindication is sweet, but a long-term view is even better. That's the snapshot of Joe Girardi, National League Manager of the Year.

Girardi received that honor today from the Baseball Writers Association of America and it's a sweet tonic after he was rudely booted from his position by the cranky owners of the Florida Marlins. (Can you hear me booing management from Miami!!!)

The Florida Marlins did not believe Joe Girardi was the right person to continue as their manager after his performance in 2006. But the Baseball Writers Association of America felt that no one in the National League did a better job than Girardi and named him its manager of the year yesterday. Source: New York Times

In the face of a job loss, Girardi had a healthy outlook that applies to financial, professional and personal difficulties:

“We just move on, and there will be bigger and better things ahead of us,” Girardi said in a published report today.

Here's the link to the complete text of a New York Times sports article.

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The Frugal Duchess Boutique
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Savers vs Shoppers: A Vogue Analysis

Why would someone spend $9,000-plus on a Carolina Herrera coat, but think twice about a $100 belt? Personally, I wouldn't spend $100 on a belt or $9,000 on a coat, but if you leave aside the numbers, Vogue magazine offers a thoughtful, and even frugal debate, about the emotional side of spending in the November issue.

"There's much more to shopping than pure, hard economics. We purchase things even when we know we shouldn't. We spend small fortunes on shoes but buy our dresses only after they've gone on sale," writes Jane Herman, author of the article: The Psychology of Spending.


There are a few basic spenders and savers, according to the Vogue profile.

"The Basics Junkies": These shoppers are addicted to basic items: For example, they'll stock up (and spend a fortune) on tee shirts with 10 or so in the same color or style, but the Basiss Junkies refuse to spend a lot for a special piece of clothing.
nickname: "Repeat Offenders"
Frugal Duchess Comment: Stocking up on wardrobe basics is a good thing. But how many black tee shirts do you really need?


"Cost-Per-Wear" shoppers: These shop-for-quality shoppers crunch the numbers to justify big-ticket purchases. For example: a $300 garment costs only $30 per wear if you wear it ten times.
"I prefer to buy things that I feel I'll wear forever," said one shopper.
nickname: Calculators
Frugal Duchess comment: I buy quality gaments but I think my cost-per-wear must be around $3.00....lol

The Multiple-Use Shopper: One shopper only buys items that have the "highest potential" for matching other garments from her wardrobe.
Nickname: Preview Shopper
Frugal Duchess comment: I use this strategy.


Other Shopping Profiles

Cash Only: One New York Fashion editor only buys impulse items if she has enough cash in her wallet to cover the purchase (no credit, no debit charges!)


Recycle: One bi-coastal decorator will only buy a new piece of clothing, if she "revives" an older piece from her wardrobe by wearing it several times.


Resale: Some shoppers buy new clothes only after selling older clothes through a consignment shop.


Vacation Splurgers: "I'm in Paris, and what's $2,000 for a souvenir, I'll actually treasure forever?"

Frugal Duchess comment: I'd use the $2,000 to bankroll another trip or to save the money in an emergency fund.
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The Frugal Duchess Boutique

Your Money or Your Time: A Frugal Debate

About 10 days ago, I requested help for a newspaper story about saving money or saving time. Here's the article that appeared in the Miami Herald.

In the tug-of-war between time and money, sometimes convenience wins out. And more importantly, sometimes costly shortcuts save money in the long run.

For example, I'm more likely to make a money-saving homemade pizza when I have a stock of pre-shredded mozzarella cheese on hand. My justification: Shredded cheese is more expensive than a block of cheese, but ultimately, I save more money by making my own pie.

Time pressures prompt many families and singles to eat out. But in that scenario, spending $6 to $10 for frozen dinners for a family of four ($1.50 to $2.50 per person) is cheaper than spending $40 at a restaurant, according to Terri Gault, founder of The GroceryGame.com an online shopping and coupon service.

It's a case-by-case judgment call, according to a recent Internet-based survey I created through Pollhost.com. ''How do you balance cost versus convenience,'' I asked bloggers and readers. An overwhelming majority (82 percent) of participants in my unscientific poll ''strike a balance'' between saving time and saving money.

Nine percent are willing to walk an extra mile to save a few bucks. But an equal amount of the respondents pay little attention to price tags during a time crunch.

''It's a constant battle. There are certainly times when everything goes out the window and anything that offers convenience at any price is worth it,'' wrote a personal finance blogger named 2million. ``I find balance by going the extra mile to save money as a normal practice. I don't even consider the convenience factor unless I'm in crisis mode.''

It's important to know the real-world value of your time, ''Rich Slick'' said. For example, he refuses to mow his own lawn. He feels his time is better spent earning money or playing with his kids.

''It would take me about two hours [on Saturday] to mow my lawn, trim the edges, pick up the grass/leaves and toss them in a bag. Two hours of my time equals $150. I can pay a lawn service company to do the exact same job (even better than I could do it) for $25. If on the other hand, I made $10/hour, then I'd probably mow the lawn myself,'' Rich Slick wrote.

Blogger Simplicity in Kansas says last-minute shopping for presents and other events can create a financial crunch. He avoids costly deadline spending by careful planning.

''I have found a little planning and patience, (waiting for sales), usually ends up saving me money. Keeping an active list of items I am looking for allows me to shop over time and find the best deal,'' Simplicity in Kansas wrote. For one-time, small-ticket savings of less than $10, the author of the popular website 1st Million at 33 (www.1stmillionat33.com) opts for convenience. ''The higher the dollar amount, the more time I will take to decide and comparison-shop,'' the author wrote.

There were other great posts in the comment section.

From my email box:

From www.scottonmoney.com

The rational choice is to simply figure out the additional cost of convenience, usually in terms of higher price, versus the benefit. This works well for me most of the time. But we have to deal with the powerful force of emotions as well. If something really bothers you or makes you happy you might not be able to easily measure the impact that it has on your life.

A case in point for me is soda. I like diet soda. It is ridiculously expensive at fast-food joints and I could save a dollar a soda easily by pouring one at home in less than 20 seconds. That works out to $120 dollars an hour which is by most measures a great return, but I buy the fast-food sodas anyway. Why? I like the fountain experience. I like the ease. It is worth it for me even though a rational analysis would say “don’t do it”.

Scott

Meg's Rules: Buyout Tips from eBay CEO

Meg Whitman, chairman and CEO of eBay, ranked the most powerful woman in business in a Nov. 2005 ranking from Fortune magazine. "The Empress of eBay," operates with a three acquisiton rules for big-ticket corporate buyouts, such as the $2.6 billion move to purchase Skype and the purchae of several other $1 billion-plus companies.

Those rules, however, are applicable to my small-ticket purchases. Here's a rundown of "Meg's Rules," based on a profile from Fortune.

1. Look for Synergy:

In corporate deals: Target buyouts that fit with the rest of the operations.

In personal life: Buy clothes, furniture, trinkets & gadgets that are compatible with other items I own.

For second income: Make extra bucks in business opportunities or select freelance writing assignments that match or feed off my basic skills.


2. Does the acquistion target work as a "standalone business?"

In corporate deals: Every buyout should be a viable and attractive business on its own.

In personal life: Does the garment, computer, sofa or whatever work as a single piece? Do I have to buy more stuff to make a new purchase work? If I have to spend more to make a new purchase work: let it go.

For second income: Is this a hobby or a business? Is the reward worth the investment of my time or energy?


3. Examine the Corporate Fit

In corporate deals: Does the culture of the acquired company match the business philosophy of the parent company? Are both companies on the same page?

In personal life: Is this purchase, investment or business consistent with my core values? Am I mindlessly living and spending?

For second income: Is my heart in it? Does this part-time job really fit in with my life style and home life? Do I need to earn more money or should I just cut back on spending?

A little while ago, I posted a piece about selling your soul for money.

And on the subject of high-powered women, No Limits Ladies featured an interesting post about Oprah, wealth and plans.

I also enjoyed this piece about from Forbes magazine about Ebay. Here's a snippet of the article:

Just 11 years old, the online auctioneer makes piles of money--$339 million on $1.4 billion in sales in the third quarter--by charging sellers fees for posting merchandise online and by taking a cut of the final transaction. According to ACNielsen International Research, more than 724,000 Americans say eBay is their primary or secondary source of income. Millions more sell stuff there from time to time. --Forbes.com