September 15, 2008 was a sad day on Wall St.  Yesterday, three well respected, heavy hitters died.  Lehman Brothers, AIG & Merrill Lynch were all taken out in one foul swoop.

As I reminiscence about the better days, I can hardly hold back my tears.

The Lehman Brothers… high hopes, big dreams and endless optimism.

One of the world’s largest investment banks, Been around over 158 years, Managed over 280 billion dollars in assets, 30,000 employees, named one of Business Weeks best performing companies in 2008… as of yesterday BANKRUPT.

I can remember when AIG just a baby waddling around, trying to make his way to the top of the finance world.

One of the world’s leading insurance corporations, been around 41 years (the baby of the group), over 100,000 fulltime employees, made it to number 10 on the 2007 Fortune 500… One foot in the grave, the other on a banana peel.

Merrill Lynch, ahhh… Merrill, there are so many things I can say about Merrill.  He was the tenacious, strong willed… the driven type.  There was never an obstacle he could not overcome.

Another one of the world’s largest investment banks, been around over 94 years, 60,000 employees, Fortune 500 company… and as of yesterday SOLD to Bank of America.

The Lehman Brothers, AIG & Merrill Lynch each had their own methods, but they all had the same goal… to be industry leaders in the world of finance.  And they were the leaders… and this is why I am deeply saddened by their untimely demise.

The collapse of these three highly respected mega giants has got me seriously thinking about the poor state of the US economy.

What is the cause of this economic crisis?

Yeah, we all understand that the market must correct itself every now and then, but these current economic conditions are unheard of. We are living through the most massive market collapse since the Great Depression.  And why?

Well there have been several major events that lead to this.  The one that gets the most attention is the real estate market.  Call it incompetence, call it greed… but for whatever reason bankers were handing out loans to anyone who walked in the door.  This was their dastardly attempt to milk consumers and increase the bottom line…. And the plan backfired.

Even if you overstuff a money bag, it will start busting at the seams.  Eventually, the bag will have to give way and all the money will start flying out.  But the bankers gave no regard for the eventual consequences.  And my goodness… what a destructive consequence it has been?  Financial institutions are crumbling all around us.  And not just the little local bank in Podunk, KY… no I am talking HUGE - everybody knows their name - institutions are being chopped at the knees… one after another, falling all over each other… it is like they are in a competition to see who can hit the ground the fastest… and the hardest.

And what else contributed to this crisis… the unveiling of creative accounting that exists to create an illusion of financial stability.  Believe me folks, creative accounting is alive and well.  In the midst of the crisis, executives are doing everything they can to make their companies appear stable.  I do not see how Lehman Brothers can be on the Fortune 500 list a few months ago and bankrupt today.  It just sounds fishy to me.  But in the end… it will all come to light (Enron).

Another contributing factor… a loss of investor confidence.  With all the trickery, lies and deceit… how can and why would investors be optimistic?  I, for one, have lost complete confidence in those companies I once admired and respected.

The culmination of all of this has resulted in the worse financial crisis in history.

The government has made some modest attempts to save the economy…  brokering deals between drowning institutions (Merrill Lynch) and damn near drowning institutions (Bank of America), coming to the rescue of Fannie Mae and Freddie Mac, insuring billions of losses from deposit accounts. But is it not just the financial markets that have us in a rut… our own federal government is in a four billion dollar… no, I am sorry… I mean four hundred billion dollar deficit!  With a $400 billion dollar deficit already, the Iraqi war that seems as if it will never end, rising unemployment rates, and the domino effects of bank failures…  how many more hand outs can the feds afford to give?

Can the economy be revived?

The economy will fixed itself.  It has no choice… eventually it will hit the bottom and the only place to go is up.  By the time the market rebounds it would have shaken off all of the dead weight… no more greedy executives, no more careless boards of directors,  more accountability, and  many new lessons learned from those companies that did not make it.

This massive market correction is a test.  The survival of the fittest… and in the end… the best of the best will be revealed…  badly damaged and bleeding all over… but stronger, more learned and ready to propel back to the top.

The high price of gas has been affecting all of us… big and small… huge corporations and little ole you and me.  For you and I… we have to fill a 10 maybe 20 gallon gas tank at the most.  But imagine the hit if we had to fuel a few jet engines several times a day.  The cost could run into the tens of thousands of dollars… and possibly more.

Well this exuberant fuel cost is common place in the airline industry.  And of course they find ways to pass these costs down to the consumer.  $15 dollars to check your first bag, $25 for the second, $100 for bags 3, 4, and 5… $200 for number 6!!

But just recently Jet Blue tacked on yet another fee.

Anyone who flies knows how uncomfortable airline seats can be.  You don’t have enough room to stretch your legs, you are forced to rub elbows (literally) with your neighbor, the awkwardly shaped head rest exists only put a crook in your neck… just a miserable experience all around.  The only bit of comfort we get is a salty bag of peanuts (that’ll cost you about $2 or 3 bucks on some flights), a two ounce cup of soda, and a 3 by 4 inch barely fluffy pillow… a pillow that now costs $7 bucks on board Jet Blue flights!

$7 bucks for those scanty airplane pillows?  Yes, you heard it right… seven dollars! (ok well a blanket comes with it, but still…this nickel and diming is getting ridiculous) That equates to roughly two gallons of gas in my part of the world.

This new $7 pillow charge has gotten a few folks a bit annoyed.  And rightfully so… those skimpy pillows hardly help to prevent the crook in your neck.  But the thing I don’t get is who came up with this bright idea?

Of course charging seven dollars for a pillow is going to cause some bad press.  But didn’t Jet Blue’s PR folks realize that before they made this big announcement?

Don’t get me wrong… free enterprise is a beautiful thing.  I am all for businesses improving the bottom line.  But if I were the Jet Blue people, I would have went about it a different way.

Ok let’s say I am Jet Blue. Gas prices are killing me, so I need to figure a way to mitigate the losses.  After thinking of several ways, I pick the easiest… stick it to the consumer.  I do some calculating… 129 plus 10 divided by 19 squared, carry the three, take the natural log and round up to 7.  Alright so $7 is the magic number.  Now I gotta shift it to the customers.

So do I come right out and tell the customer something as preposterous as “I need $7 for that pillow, please Mr. Had A Long Day, Had One Too Many Drinks, Wife Is Sleeping Around, Kids Hate My Guts.”  No, I don’t say that… that might set someone off.

Or at the very least… Reporters start reporting, Bloggers start blogging, Bad PR starts rolling in… all about this $7 pillow fee.

What I would do is… slide it under the radar by jacking up the ticket price by $7.  Will anyone even notice that the $542 ticket is now $549… I seriously doubt it.  Then I would put a spin on it.  I would give every passenger a lovely airline pillow and blanket kit, free… courtesy of me, Jet Blue.  So you see, now I look like the good guy… is Delta or American Airlines giving away free pillows?… No.  But here at Jet Blue we do… and we do because we value our customers!

Problem solved… I got my seven dollars, you got your pillow, no bad press, plus a lil good press for giving away free pillows… and no one is the wiser to the whole plan.  No, it is not deceit, is it a play on words… marketing, PR, whatever you wanna call it.

Extreme Makeover Home Edition… have you seen it?  It is the cousin to Extreme Makeover (People Edition).

Anyway, the premise of the show… they select a family that has a very sad and heart wrenching story (disabled children, poor living conditions, too many children, you name it, they’ve shown it).  The show pays off the family’s mortgage.  Then a team of architects, plumbers, designers, electricians, builders, and hundreds of other volunteers demolish the family’s existing home.  After that, the team rebuilds a luxurious, mammoth-sized, fairytale like dream home in its place.

The fantasy home, all of its contents, and usually other gifts like scholarships, cash, cars, etc. are bestowed onto the family… scot-free! This copious gesture serves to uplift the family and to help them better cope with their unfortunate circumstances.  Well… at least for the time being…

Recently stories have been surfacing about how some Extreme Makeover Home Edition families have been losing their mansions!  So they no longer have their extravagant made over house, but they also no longer have the shabby house that it replaced.

Case # 2382G - The Harper’s

Patricia and Milton Harper of Lake City, GA, married 24 years, three children, the wife - a homemaker, the husband - works in the home security business.

Their tragic story: They lived in the projects of New York.  They lost a child that choked to death while eating his food.  The incident motivated them to seek something better.  They decided to work hard, save up and finally moved to Georgia and purchased their first home.

The house, however, was a doozy.  Every time it rained, raw sewerage would back up into their house. The horrid conditions forced the family to live in their van.  The van was totalled in an accident. Long story short… they got dealt a bad hand.

Three years ago, Extreme Makeover decided to help them out.  Nearly 1800 people took on the task of overhauling the Harper’s house. And what an overhaul it was? 6500 square feet, 5 bedrooms, 7 bathrooms, stone fireplaces (with an “s”), a music room, a theater room, an office… a castle! On top of the house, they also received nearly a quarter of a million dollars in cash.

How’s that for a gift?

But apparently the Harper’s fell onto hard times.  Back in May, they put the house up for sale… asking price, $950,000.  The house did not sell back then.  However, due to some unfortunate circumstance, the house will be up for sale… or rather up for auction on August 5^th.  The house is being auctioned off as a result of a foreclosure.

This auction comes as the sad and final end to an unbelievable story.  But I am left to ponder… who is to blame?

Most people are blaming the Harper’s.  Some have called them ungrateful… and even stupid.  While I feel that they are partially to blame… I also want to point a finger at the bank, Chase, and at the show, Extreme Makeover.

Here is my question to Chase… Why would you loan nearly a half a million dollars to a couple that survives on the income of a home security worker?  Seriously, did you really think they were going to be able to pay you back?

And to the Extreme Makeover folks… Ok, so you want to help a family that is down and out. Really, I applaud your philanthropy.  But have ya’ll ever heard the old Chinese proverb: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.  For an extra four or five hundred dollars, ya’ll could have thrown in a financial planning class as a part of the package.

Well that’s my 2 cents, for what it’s worth.

Hey, who doesn’t love to get free stuff?

I know I do, so even though I’m not a pop drinker and haven’t personally had an ice cold Coca Cola since I was 14, when I learned that I could get free stuff at www.mycokerewards.com just by entering the numbers inside the bottle caps, I was on it like Sherlock on Watson.

Everyone else in family drinks Coke of course, and so do all the people around me at work. Do they save their bottle caps so they can get the free stuff at the My Coke Rewards website? No they do not. They are busy people. I’m a busy person too, but come on, FREE STUFF! We’re talking F-R-E-E here, just for entering some numbers at a soft drink website.

So now, guess who volunteers to dispose of everyone’s pesky bottle caps? You got it: that little old tea drinker, Me! I don’t feel guilty either, because like I said, I buy tanker truckloads of this fizzy stuff for my loved ones, and have for years.

It’s kind of like when you don’t have kids and you go to all the wedding showers and then baby showers for the kids of people you know, and then finally, after many years of being bored out of your mind and never winning the door prize, it’s your kid’s turn. So even though you think showers were invented by God as a punishment for women’s descent from Eve (and a harsh punishment too) you invite every single person whose shower you ever attended and all their relatives too. It’s your right. It’s your turn. And they damn well better show up!

But wait, you say, maybe you don’t want to have free stuff all over your house that has the words Coca Cola plastered all over it. Maybe you don’t want red Coke pants and a white Coke T-shirt with red lettering and a red Coke gym bag to carry with your red Coke sneakers, and so on, and so forth.

No problem!

You can use your reward points to enter sweepstakes at www.mycokerewards.com for everything from tickets to Six Flags to Nascar events. You can also save up your rewards points to earn discounts at other cool retailers like Best Buy, use your points for music downloads for your phone or I-Pod, save your points for coupons for free Blockbuster movie rentals, or you can donate your rewards points to your favorite school.

Best of all, you don’t have to only drink Coke to qualify for the rewards points. You can find these points on the inside of the caps of all Coca Cola soft drink products, including Dasani bottled water, Barq’s Root Beer, Vault Energy Drinks, Powerade, Fanta and Faygo drinks.

So, drink pop, or don’t. But do register at My Coke Rewards and enter those bottle cap numbers whenever you have a few spare minutes. They add up really fast, and you know what that means…

FREE STUFF!!

Dear Exxon,

Last year you made $40.6 billion in profit. I made $24,600. (Mine wasn’t all profit though.) Clearly, we move in different circles. Your ways are not my ways. Your kung fu is greater than my kung fu. Your gross receipts for 2007 alone topped out at over $404 billion, which is bigger than the gross domestic product of no fewer than 120 nations.

Wow.

My writing profits for 2007 totaled about $78, (which is what the US is currently shooting for in terms of gross domestic product. We’ll get there, I’ve no doubt.)

I have a question to ask you, if you have just a minute.

I am doing much better this year, and I see that so are you, with over $10 billion in profits in the first 2008 quarter alone, and the price of gasoline now pushing $4.50 or higher in lots of parts of the US, and diesel even higher, so high, truck drivers in Spain are acting up. Good for you. That’s what capitalism is all about, right? Profit, profit, profit. And you are leading the pack, holding the torch as it were (don’t hold it too close to all that oil though…you know what happened at that BP refinery). I commend you for your initiative and success.

Here’s my question:

Why did you find it necessary to fight the $2.5 billion in punitive damages for the 1989 Exxon Valdez spill, a spill that released 10.8 million gallons of crude oil into Alaska’s Prudhoe Bay and covered 11,000 square miles of ocean, a spill you admit was your fault and no one else’s. I mean, you have the money, right? We’re talking 1989 here. Since 1989, you’ve made so much profit that all the zeros won’t even fit into this blog, so let’s not even go there.

Perhaps you have forgotten that the Exxon Valdez oil spill instantly killed somewhere between 250 and 500 thousand sea birds, 250 bald eagles (an American icon which at that time I believe was actually an endangered species to boot), and 22 Orca whales, not to mention sea creatures of all kinds too numerous to list much less count.

Thousands of volunteers saved you most of the painful and hopeless work of trying to save these rare, suffering animals so you could instead take way too long finding a subcontractor to spray deadly chemical dispersants, surfactants, and solvents (which, damn the bad luck, didn’t work very well) all over the already poisoned Bay. So it’s not like you didn’t try at all, and to be perfectly fair, cleaning up oily messes is not really your thing. You are in the business of finding and selling oily messes.

Still, what did it cost you to fight this thing legally for 19 years running?

Corporate lawyers don’t work cheap. Even the ambulance chasers around here get $100 an hour, so I know you had to spend far more than the penalty just arguing the penalty in court after court after court.

What’s up with that?

Were you afraid that if you were held to some basic, minimal standard of corporate responsibility it would end up cutting into your impressive profits? If so, I wish you’d have called me first. You don’t have sic a squad of corporate attorneys on people and birds and fish already drenched in oil to preserve your right to be irresponsible. All you really have to do is get one of your pals elected President (oh, I forgot, you did that already), and then hire a big, glossy advertising firm to make beautiful commercials with lots of politically correct ‘green’ imagery and multinational persons wandering around on sand dunes and seashores and stuff like that, all to show how sensitive and environmental you are. That’s what BP and Dow Chemical do, and it works great.

People will believe anything if it’s on TV.

I know you won’t answer my letter. I know you are busy. It’s just that, for the life of me, I can’t understand why you would spend more than the original $2.5 billion, just to get it reduced to $500 million 19 years later. Maybe you aren’t aware of this, but right now, people in this country don’t like you very much. People think you are greedy and uncaring and tyrannical. People think you are gouging them and doing whatever you please and damn the consequences. When you don’t bother to even respond to those kinds of feelings, we start to feel like you don’t really care about us very much.

At the beginning of 2007 NOAA determined that you still have 26,000 gallons of crude oil poisoning the sandy soil of Pruhoe Bay Alaska. I just want to ask you this one favor:

Please don’t charge them for that oil.

Thanks for listening. Your little capitalist fan,

Pam, PFA

Today’s insurance topic concerns something near and dear to most of our hearts: Our stuff!

Is your stuff adequately covered by your insurance policy?

If you have homeowners or renters insurance you may assume that all your stuff is automatically covered, and that if something happens to it you will have no trouble getting it replaced. Just a quick call to your insurance carrier and they cut you a check, right?

Not necessarily.

The first thing you want to do to make sure that your stuff is covered is check your policy to see if you have replacement cost coverage or actual cash value coverage (often referred to as ACV). Replacement cost coverage means just what it sounds like it means: your stuff is insured for what it would actually cost you to go out and buy a new one of whatever it was that just got stolen or destroyed. So if you have a ten year old refrigerator that burns up in a house fire, even if you could only get $50 for it at a garage sale before it burned, your insurance company will give you $600 or $800 or whatever amount of money it takes to buy a similar refrigerator new. If you have ACV, you get $50 and that’s it, (after your deductible is met).

Replacement cost coverage on your personal property is usually not much more expensive than ACV coverage, and it is worth every cent. You may think you don’t need it, but consider what it would cost you to replace every spoon, washcloth, shirt, and piece of furniture you own in the event of a total loss. You’d be surprised how fast that all adds up. So don’t scrimp in this area of your policy.

Now that we’ve made sure you have replacement cost coverage on your home or renter’s policy for all your stuff, you can relax, right?

No, not yet.

Some categories of personal property are covered for very limited amounts on a standard homeowners policy, and usually for theft only; not fire, windstorm, or any number of other normally covered perils. If you own any items in any of these categories, you have to add them one by one to your policy by ’scheduling’ them. Usually this involves getting appraisals, sending the appraisals to your insurance company, and paying a small additional premium each year. By scheduling special kinds of property at a small additional cost, you can insure them for their actual value and insure them against all perils instead of just theft.

Property that falls into this category includes fine jewelry and precious metals, coin collections, antiques, fine art and other collectible items, firearms and other weapons, money, bonds, and some kinds of electronic and business equipment. If you have anything of special value to you, call your agent right now and make sure it doesn’t fall into a category that leaves you with limited coverage. Wedding rings are a good example of a type of personal property that people often neglect to schedule, only to discover later that the rings aren’t fully covered under the terms of their policy.

Another special category of property you might want to consider purchasing additional coverage for is your computer and all its peripheral equipment and software. Many companies have restrictions on how much they will cover when it comes to computers and software, but they offer inexpensive additional coverage that can be purchased. A computer rider is worth every cent, especially if you travel frequently with a laptop.

Do you have a basement family room or office? If so, check with your agent before you assume your property is covered for basement water damage. In some states you can add this coverage, but in others you can’t. Most people don’t realize that a homeowners policy only covers the home from the foundation up, and the foundation itself is excluded. So if water comes in through foundation cracks or seepage, you may find you have no coverage at all if your stuff is damaged while in your basement. Ask if you can purchase “water back-up coverage,” which if available typically can be purchased in $10,000 increments.

How about some good news? I do have some of that too. If your son or daughter is away at college in a dorm room, all of their stuff will usually be covered under the terms of your policy just as if it was still in your house. If they move to an off-campus apartment though, you have to purchase them a renter’s policy, (if you can find someone to write one for a college rental!)

Finally, if you travel, your stuff is covered for up to 10% of the total personal property limit, anywhere in the world. So if you have $150,000 of personal property coverage on your home policy, you have $15,000 in coverage for the stuff you pack in your suitcase. Good to know!

The best ways to make sure you have the coverage you need for the stuff you have are 1) to ask lots of questions, and 2) to read your policy!

When you don’t need that coverage, you never think about it; but the last thing you want is to be surprised in a bad way when you do need it! So take a minute now, dig that policy out, call your agent, and make sure all your ducks are in a nice, neat row.

One day, you’ll be glad you did!

PFA is happily participating in the Carnival of Financial Goals hosted by Cash Money Life, a sort of internet-wide blogger party taking on a variety of themes revolving around various topics related to goal setting. This month’s topic is Declare Your Financial Independence.

But how do you declare your financial independence when you are afraid of losing your job, prices on everything are skyrocketing, and you can’t even afford to drive your SUV anywhere anymore?

Actually, I’ve been thinking lately that the tough economic times we are going through right now do have another side, a silver lining of sorts. That silver lining is the opportunity to make yourself over completely. Part of that make-over is out of necessity. You can’t afford to drive so you walk now and take the bus. You can’t afford your favorite supermarket anymore so now you shop at Sam’s Club and the Dollar Store and Aldi’s. The mall? Forget it. When you need new pants it’s Goodwill or K-Mart for you.

Why not take it to the next level?

Ask yourself, “If I could do anything I wanted, what would it be?” Once you have the answer to that question, ask yourself if you might be able to actually do that thing if you were free of the debt and constant purchasing your old, pre-recession lifestyle involved. Sometimes it takes a crisis to force us to look at ourselves and our world a different way.

It is possible to pay off debt, but you have to be willing to cut up your credit cards and never use them first. If you can make yourself do that, you’re halfway there. Once they are all cut up, start paying as much as you can on the one with the highest interest rate, and pay the minimum on each of the others until that first one is paid off. So say the minimum on your highest rate card is $90 and you can pay $200. You pay $200 until your balance is paid off, then you close that card and apply that same $200 on top of the minimum payment on whatever card has the second highest interest rate. You do that until they are all gone.

You can find a great list of calculators, including a calculator that shows what it will take to pay off your credit card, at Bankrate.com. Calculators are a great tool for helping you to see what is possible, and also what the true cost of credit is. For example if you carry a $15,000 credit card balance at 21% (which, sad to say, is about average in the US), and you make the minimum payment each month of $375, you will pay $34,360.87 in interest on that original $15,000 in purchases, and it will only take you 554 months (or, a little over 46 years) to pay it off. Ouch.

Now, what if throw just $15 extra a month at that debt? Couldn’t help much, right? Wrong! If you pay $390 on that same card, just $15 extra each month, you will pay the card off in 65 months, or about five and a half years, and pay $10,134.33 in interest. That’s a savings of over 40 years and over $24,000!

What else could you lose right now that would open up a world of choices? What if you didn’t have a $2000 mortgage payment? If two of you are living in a 3000 square foot newer home in the suburbs, and if you don’t plan on children soon or have already had your children, you might want to dump the mini-mansion (if you can). A modest ranch in a decent city neighborhood, or an older home with all the charm and fireplaces, will save you money on transportation and save you money on your mortgage.

If you live in the midwest, a nice older home closer in can be had for around 100K, give or take ten thousand dollars; even less if it’s a repo and you can negotiate a short sale. Even with no down payment, that’s only about $730 a month at 7% interest. If you can put $20K down on it, you’re looking at a house payment of $531!

What kind of life could you chose to lead if you had no unsecured debt and a house payment if $500 or so?

That may not be what you want at all. Maybe financial independence to you means lots of money coming in, not small amounts going out. If that’s the case, this is your moment.

When Billy Vasquez, the blogger who writes and maintains The 99 Cent Chef first started his blog on cooking with dollar store ingredients, he was getting five or six hits a day. Now he’s averaging 5 or 6 thousand hits a day, and like they say, the hits just keep right on comin’. In times of crisis, the person with the bright idea gets the cash, and it doesn’t have to be a bright idea that costs a lot of money to start up.

I’ll be honest with you. I took some of my own advice last year in late October, early November. I wanted my unsecured debt to be gone, I wanted to do something I cared about more than my depressing day job. Specifically, I wanted to write for a living, something I equated to wanting to be a Ballerina or Space Barbie. That was my general sense of how possible my goals were.

As of today, I’ve paid off my car and two credit cards, and have two cards left to pay off. In March, I cut back my day job to 20 hours instead of 40, because I was so deluged with writing work I could not keep up, and what’s more, it paid better. Last September, if someone had told me that was even possible, let alone that it would actually happen, I’d have laughed myself silly. Yeah right! And yet, here I am. Currently I’m looking for a way to ditch the day job altogether (hint: health insurance is the stickler), because I have a couple of book ideas I’m pitching and my freelance work continues to grow.

None of this would have happened for me though if I hadn’t taken some time to 1) figure out what it was I really wanted in my life (I’m 55–midlife crisis time, dontchaknow), and 2) DECLARE MY FINANCIAL INDEPENDENCE, which is known less dramatically as goal setting.

Knowing what you want isn’t half the battle: It’s 99% of the battle.

What do you really want? It might just be that the world is waiting to give it to you.

This week PFA took part in the Carnival of Personal Finance #157 hosted by Consumerism Commentary and our post, Jobs For 16-Year-Olds: Recession-Proof Summer Work, was kindly included by Flexo.

The following are the Editors Picks from this weeks edition:

• What’s Your Financial IQ? Here’s a Test
• Politics and Your Money
• My Top 5 Personal Finance Blunders
• Too Much Debt Can Ruin Your Health
• Become Rich By Helping Others
• Financial Super Powers Series: Time Control and Super Speed
• How to Teach Your Kids About Money
• The Four Pariahs

There are many more great articles at the carnival so be sure to head on over and check them out!

You’ve probably heard about the recent rice scare and about Sam’s Club and Costco putting a limit on 100 pound bags to keep people from buying them completely out of rice. That was over a month ago, and while it provoked lots of great parody, now I am starting to see serious articles about the recession that suggest, um, ‘hoarding’ as one strategy.

No less an organization than Newsweek has jumped on the hoarding bandwagon, for the simple reason that it actually happens to make sense. It’s ‘icky’, but sensible. Whatever it costs today, it’s going to cost more tomorrow. End of story.

It isn’t necessary however to go all insane with it. You don’t have to turn into one of those squirrelish people who saves every newspaper delivered since 1931 until the stacks reach the ceiling and only little narrow paths remain to take you from room to room. Seriously, don’t do that.

Instead of that, here instead are a few positive ways to hoard, (if in fact you can use those two words sanely in the same sentence):

1) Buy Paper Products in Bulk.

This is a good idea even when inflation is nil, for the simple reason that you can usually save a good bit of money by doing this, and also because running out of toilet paper is one of the least fun occurrences daily life has to offer. Paper towels, tissues, toilet paper, and office supplies can be purchased in large quantities both to save money and to make sure they are always on hand.

2) Hoard Only Items You Will Actually Use.

You wouldn’t think it necessary to write this one out, but the truth is, many people just can’t resist a good buy. If you happen to be at Big Lots just as a shipment of ramen noodles with jalepeno and raisins comes in and the only teensy flaw is that the writing on them is in Turkish, resist the impulse to buy up an entire case of them just because it averages out to only 10 cents a serving. You will be looking at that case of ramen noodles when you are 90, or worse, you will foist it upon poor people during next Thanksgiving’s food drive. What did those poor people ever do to you?

3) Keep Some Powdered Milk and Eggs Onhand.

The reason for this is that during power outages and storms the real thing can be hard to find, plus, if the price of these perishable necessities gets out of hand, you can always use the powdered variety for cooking while you look for a cheaper source.

4) Stock Up On Staples, but Do Your Homework.

Rice, pasta, flour, cornmeal, oats, cereal, and sugar don’t spoil, and you can keep them for years if you freeze them. Put them in heavy duty plastic bags or airtight containers and keep as much on hand as you can. With the floods in the midwest already forecast to hurt this year’s corn and wheat crop, prices are not likely to come down anytime soon. Before you rush off to Costco though, make sure you’ve compared their bulk prices to grocery store prices by calculating the cost per pound. Sometimes wholesale stores can trick you with off sizes that make you think you’re getting a bargain when actually that giant package works out to more per pound than if you’d just purchase 5 generic five pound bags of the same thing at the supermarket.

5) Consider Freezing and Canning Your Own Produce.

If you live near orchards, or near any kind of food grower, consider buying in bulk while items are in season and getting together as a family to process and share your fruits and vegetables. With the cost of diesel climbing by the day, the cost of supermarket fruits and veggies is bound to reflect the cost of transport. Already, the cost of peppers is insane, even in season. Think about what you and your family actually like to eat, and buy bushels of it direct from the grower, then can or freeze it for later use.

6) Buy Local Meat in Bulk.

Again, not only can this save you money, you have the advantage of knowing exactly what you are getting. So much of the meat in the supermarket these days is processed and made to look artificially fresh for shipping purposes. It can be full of hormones and other unnecessary, potentially dangerous poisons. So many good reasons exist for finding a good source locally, it would take an entire article to list them all. For the sake of your hoarding strategy, consider the cost savings alone.

You don’t have to feel guilty about providing for your family. Buying 50 100 pound bags of rice is excessive. But stocking up on items that are sure to spike in the coming months is just good sense.

Trust me, you won’t be the only one doing it.

I sorta have this peculiar love affair with Netflix.  We’ve been together on and off for 10 years.  The off part is because a couple of times I was lured away by other companies who offered me Netflix-esque services at a lower price.  I wanted to see if the grass was greener on the other side… so, yeah, I strayed.   But I soon saw for myself that the grass ain’t greener… it’s dry and wilted.  The others could not give me the selection of movies, quick delivery and great service like Netflix did.  I missed my Netflix and I wanted to go home.  But my pride would not let me go running back to admit I was wrong. But my sweetie must have felt my distress because he sent me a email saying if I returned home… he’d promise not to get upset about my affair.  He even said he’d give me a free month of service to prove that there were no hard feelings.  And like a love sick puppy missing her honey… I went back home!  Netflix and I are a solid couple now.  No one else will come between us. 

My Netflix has this sexy, monopolistic prowess that keeps him on top.  Others have tried to penetrate the online DVD rental market, but Netflix is a beast… he just swallows ‘em whole.  The fight to stay on top ain’t been easy.  Blockbuster knocked Netflix down once or twice… and for a second I even thought the fight was over.  But on the 9 count, my baby rose from the ashes even stronger than before… towering over and pissing on the wannabes.  (Pardon my potty mouth, but it is what it is…)

Netflix invents ways to retain existing customers, bring back old customers and create new customers.  Yeah, sometimes I get a little jealous that I can’t have my Netflix all to myself.  But I understand that aside from being my love, he’s also a business and having to share him with 8 million others is an unfortunate consequence.

A couple of years ago Netflix began letting subscribers stream movies directly from their computer.  Now subscribers can stream movies directly to their TV.  For a $100, I got Roku’s Netflix player… and voola!!!  the movie is on my tv.  I don’t have to wait for the mailman to deliver that adorable red envelope anymore… I have Instant Netflix… Netflix On Demand… Netflix All Day, Everyday… only a remote click away.  And if all goes well, my baby will start delivering movies to me (and you too I suppose *small sigh of jealousy*) by way of  Xbox 360.

Let me tell you… Netflix… my honey… is wheeling and dealing and making big moves. I’m so proud of him… he’s always giving me (and you too I suppose *small sigh of jealousy*) exactly what I (we) want… quality movies that are convenient and inexpensive. 

Have you tried Netflix yet?  If you haven’t, then you gotta check it out.  I’m willing to share him with my PFA family since ya’ll are always so kind to me.  But don’t sign up until I tell you how you can save some money. 

 2 week free trial offer

 One month free

 Never pay late fees

 Plans as low as $4.99 a month

 $4.40 cash back rebate

 $15 cashbaq for Netflix subscription

 $12 from Netflix to your Upromise account

 1,000 MyPoints

 Also, here is how you can win one million dollars from Netflix!