Your Personal Finance Voter Guide

I love October.

I mean really; what’s not to love about it?

October is the first full month of autumn and you know what that brings: milder temperatures, cooler evenings, beautiful colors and, um, a never-ending stream of shameless cut-throat political advertisements.

I know. But an informed electorate is absolutely essential for ensuring the health of any representative democracy.

Of course, it’s just as important to make the right decisions when it comes to your personal finances. So, in order to help, I’ve developed the following handy personal finance voter guide:

Proposition 1: THE PERSONAL FINANCES IGNORANCE ACT

Ballot Summary: This act provides additional free time to household CEOs that choose to forgo the work required to maintain a proper budget.
My Opinion: I’ve said it before and I’ll say it again: trying to get a handle on your personal finances without knowing how much money you are earning and where it is all going is tantamount to trying to drive with a blindfold around your eyes.
Vote “Yes” If: You’ve got a mind like a steel trap when it comes to tracking expenses (or, at the very least, the bank account of Warren Buffett).
Vote “No” If: You’re living on a modest income and want to maintain a sense of financial discipline.

Proposition 2: BUY NOW, LET IT RIDE, AND (MAYBE) WORRY ABOUT THE CONSEQUENCES LATER ACT

Ballot Summary: This act encourages consumers to buy goods and services on credit when they are unable to pay off the balance in full at the end of the month.
My Opinion: If you can’t afford to pay cash for something, then you can’t afford it.
Vote “Yes” If: You don’t mind potentially becoming an indentured servant to your credit card company.
Vote “No” If: You have no desire to sacrifice your future financial flexibility in exchange for impulsive short term gratification.

Proposition 3: THE “IN GOD WE TRUST OUR CREDIT REPORT TO BE ACCURATE” ACT

Ballot Summary: This act reinforces the public’s indifference toward checking personal credit report information at least once per year.
My Opinion: Inaccurate credit records can result in lower credit scores and higher interest rates. Not only that, but by failing to periodically check your credit report you deprive yourself of the ability to potentially stop an identity thief from devastating your good credit.
Vote “Yes” If: You don’t mind paying for unwarranted higher interest rates — or letting identity thieves leech off your good credit.
Vote “No” If: If you truly value your credit rating.

Proposition 4: THE PAY YOURSELF FIRST ACT

Ballot Summary: This act makes it mandatory for people to save a portion of their income in a savings or retirement account each month before they pay any of their bills.
My Opinion: The government pays itself first every time it withholds money from your paycheck. Why shouldn’t you do the same? Start by taking advantage of your employer’s matching contribution to your retirement savings plan, and also building an emergency fund amounting to at least three months of expenses. Take advantage of the automatic deductions and start slowly, then gradually increase your savings rate over time.
Vote “Yes” If: You are serious about building your savings as quickly as possible.
Vote “No” If: You don’t mind the thought of working into your 70s.

Proposition 5: THE HOUSEHOLD BUDGET ARMAGEDDON ACT

Ballot Summary: This act would give full and unconditional pardons to the Four Horsemen of Personal Finance.
My Opinion: The Four Horsemen of Personal Finance can unleash Armageddon on the household budget, thereby impairing one’s ability to save any appreciable amount of money for the future.
Vote “Yes” If: You enjoy the struggle to stick to your budget and/or make ends meet.
Vote “No” If: You want to free up a significant amount of income for more important things, like your nest egg.

Proposition 6: THE WINDFALL SPENDING ACT

Ballot Summary: This act would make it a crime to devote any portion of a cash windfall to retirement and other savings accounts, or eliminating debt.
My Opinion: While it would be almost unfair to expect folks to not spend at least some portion of a large cash windfall, for most people an unexpected influx of money can usually be better spent building an adequate emergency fund and paying down debt.
Vote “Yes” If: You are not only debt free, but you’ve already got more than enough saved up for your retirement.
Vote “No” If: Financial freedom is your number one priority.

Proposition 7: STORE BRAND GROCERY PRODUCTS ARE FOR CHEAPSKATES ACT

Ballot Summary: This act will provide unspecified funds for a commercial campaign produced by a washed-up television actor nobody has ever heard of proclaiming grocery store-brand labels to be inferior to their name-brand counterparts.
My Opinion: I’ve conducted extensive taste test experiments with real expert panels that consistently show the store-brand labels often hold their own against the higher-priced name-brand labels.
Vote “Yes” If: You’re afraid you’ll lose your “street cred” if you get caught with store-brand label groceries in your shopping basket.
Vote “No” If: You’re a savvy shopper who realizes that store-brand labels often offer equivalent taste and quality for as much as 40% less.

So there you have it. And although you won’t find these propositions on your local election-day ballot, you will end up voting on them — with your wallet.

Photo Credit: Ho John Lee

(This is an updated version of an article originally posted on October 13, 2010.)



Comments

  1. 1

    says

    Great post Len!

    I must say I cannot fully go along with the ‘store brand’ proposal. I do like the ‘corn bits’ cereal, but the fabric softener sheets can lead to nasty rashes!

    I think ‘worry’, even though it is parenthetical, needs to be removed from the 2nd proposition. What you need to do is to have your debt forgiven and brag about it to friends. That is probably too much to put into the title of a proposal though.

  2. 2

    sewingirl says

    Geez Len, I can’t imagine why any of those so-called “candidates” haven’t snapped you up to be a policy chief for their campaigns! What a lack of foresight and judgement! Just think, the tea party could have been the “Penzo Party”! We could be quoting YOU in a couple of hundred years, just like Thomas Jefferson! Oh yeah, he died broke and miserable, right. Sorry.

  3. 3

    Sharon says

    Where do you come up with this stuff Len?

    I don’t think there is an official secretary of Personal Finance in the gov’t but if there was you’d get my vote!

  4. 4

    says

    I am a firm believe in “The Store Brand”. I work in retail, and I meet a lot of different people from different companies. I was recently talking to my Milk Sales Rep, and we were commenting about how we sell a lot of Name Brand Milk, which is a full $1 more than the store brand. He laughs, pulls out his cell phone, and shows me a picture of the milk processing plant shelf, that has rolls of stickers of the name brand, and about 10 different store brands side-by-side. He quipped that it is the same milk, just a different sticker!

  5. 5

    Sal says

    I already voted no on 6. I recently received $10,000 when my grandmother died and most of it went to pay off my credit card bills and I used the rest to pay down my car loan. I have to say though that the temptation was there to spend some of that on a new dirt bike.

  6. 7

    says

    Len, being an elected official, you really hurt my feelings…..

    Not really. I love the idea here. But you know, nobody ever reads the amendments on the ballot before they go to the polls.

    Hope you have better luck here!
    PS I like 4 and 6 best!

  7. 9

    says

    I’m a big fan of number 4 and number 7. I do the 401K thing no matter how much debt I’m in and I’m sneaky enough to fool my family into thinking that I still buy name brands. I just drop the store brand products into old name brand boxes. I’m so eeeevil.

  8. 10

    says

    Len – You’re too creative – how did you come up with this idea? Thanks for the awesome, entertaining post!

    I’ve been so busy lately that of all the PF blogs in my Google Reader, yours is the only one with no unread posts.

    • 11

      says

      @Everyday: I don’t go 100% store brand, Kris. Not by a longshot. It probably breaks down to a 40/60 split (store brand/name brand).
      @Sewin: The “Penzo Party.” Awwww, thanks, but no. LOL
      I do have one money quote that is attributable to me: “Over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.” It ain’t Thomas Jefferson, but it’ll have to do. LOL
      @Sharon: Thanks, but we don’t need yet another government position being supported by the taxpayers!
      @College: It’s true. Often, the only difference between store and name-brands is the label!
      @Sal: Good for you my man! (And my apologies if Sal short for Sally!)
      @Spedie: Where you been, Spedie! Haven’t heard from you in a while! I’m glad you enjoyed it. :-)
      @Dr. Dean: Elected official? Please share! My M.O. is to always vote NO on any proposition that requires a bond or tax to pay for it.
      @Jenna: That’s my fave too!
      @Sandy: Not evil, Sandy. Genius. Pure genius. :-)
      @Tom: It’s a gift. Just kidding. I don’t know, I guess I have too much time on my hands. LOL I assure you though that comments like yours (and others here) are what motivate me to keep on writing though. Thank you so much, Tom!

  9. 12

    says

    Your propositions are much better than those on the ballot. I think I’d vote for you any day!

    As a side note, I was on a college campus yesterday and some young woman was promoting the “go out and vote” to the college students. Instead of saying “proposition” she was saying “preposition” as in “Which preposition is the one where…” I was dumbfounded.

  10. 13

    says

    You know, Jen, it’s really sad but that’s pretty common now. There are a lot of kids in college who use their freshman and sophomore years just to get their English (and math, too) skills to high school graduate level.

  11. 14

    says

    Ha! I love it! I especially love Props 2 and 4. I am in full agreement that you can’t afford to buy something if you can’t pay cash for it.

    This post reminds me, is there anything important on TV tonight? Any sort of political discussion of any type? Hmmm…just curious.

  12. 15

    says

    I am a great fan of your Proposition #s 4 and 5. I definitely agree with you on Proposition 2. If you cannot pay something in cash, then you cannot afford it. My tip here is to save up for something that you really, really want before you buy it or keep an extra savings account so that when you see something that you want to buy, you have the money to spend. However, I do not totally agree with Proposition #7 as I have tried some store brands that cause allergies and irritation to my children. Similarly, we also tried a store brand cereal and pancake mix but my children preferred the taste and texture of branded ones.

  13. 17

    says

    Love these propositions and acts. too many people buy on credit those things which they can’t afford, unfortunatly it is part of our culture – even our own government has a debt ceiling coming up – how can they expect americans to be debt free when they themselves can’t even pay the u.s debt.

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