So before I go to a store, I typically do an online search for coupons. This can be hit or miss. Sometimes I find a printable coupon, sometimes not. I can always seem to find a Border’s or Barnes & Noble coupon if I need one, but there are alot of retailers that just don’t make it easy. If I go to a retailer’s web site, I’ll often sign up for their mailing list using one of my spam-catching emails on the off chance that they auto-send me a discount of some type.

One common trick I do when I want a D’Angelo’s pastrami reuben is use my smartphone to order the sandwich online (while I’m sitting in the restaraunt’s parking lot). I google for a coupon code and usually save either $2 or $3 off the sandwich when I walk in 10 minutes later.

What I try to avoid are situations where I have to install coupon printing software, or have to wait for a coupon to be snail-mailed to me. I don’t like getting on mailing lists, electronic or otherwise, and I don’t like waiting.

Oh, so back to Lowes. I recently made a list of some home improvement projects I want to get done, and figured I would look for a Lowe’s coupon. Just a few weeks ago, my mailbox was lousy with those 10% off coupons, but I used them up and no more have been forthcoming.

And then the other day I heard about a way to get more: go to the post office and ask for a “Change of Address packet”. Boom! 10% off coupon inside, valued up to $500. Actually, I got 2. Told the guy I had a summer place I was selling. He didn’t give a shit; he would have given me a few more if I wanted.

If you want to do this, make sure you get the packet. It has other coupons inside it. My post office also had a little self-serve flyer that invited me to change my addy online and then sign up for some Lowes-sponsored discounts. No thanks. I wanted my coupon TODAY.

FOLLOW UP: This hack works at Home Depot, too, since they take competitor’s coupons. Just used one today for a builder’s square, some concrete patch, and a roll of landscape fabric.

So I made a big chart for the Net Worth page, in which you can drill down into categories, and toggle between net worth, assets, and liabilities. I also built a little badge that I put in the the right gutter of every page.

The charts are driven by the Data page, which I can update at any time from anywhere — no need to build a database entry form or FTP a data file or anything.

But there are downsides to having an emergency fund. Sides that are as dirty and insidious as any family secret.

Desensitized to windfalls

I have been waiting for our tax refund (about $3,200) since we filed in late February. According to my accountant, I should have gotten the check within 4 weeks of filing. So I went to the IRS’s Where’s My Refund? website and found out: the $3,200 had been deposited in my account almost a month ago, way back on March 14… and I didn’t notice. Turns out that the refund accounted for a third of my March change in net worth, and I didn’t even realize it. Next year, I am not getting a direct deposit. There’s just no joy in it. I want to get my check in the mail. And next time, it won’t go unnoticed.

Oh, and the tax rebate stimulus will arrive soon. Ours will be $2,100. That’ll hardly move the needle. Ask me what I am going to do with it… nothing. If I needed $2,100 for something, I would have spent it already. I’ll use it when I use it.

Spousal abuse

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But having an emergency fund has a dark side. An insidious side that eats away at the benefits. I’ll explain those in Part 2 of this blog entry. But for Part A, a little history of the Stupid emergency fund, and a little insight into how I define an emergency fund.

History of Mr. Stupid’s emergency fund

When Mrs. Stupid and I built our house in 1999, we basically spent all of our savings. I had carefully planned for all the expenses, but then just as carefully, I tucked them up into little balls and threw our plans out the window, as bills for cabinet upgrades, AC ducts, sprinkler systems, and all manner of household items came rolling in. Building a house was more expensive than we had anticipated, so by the time we moved in, we were left with close to zero in liquid assets.

During the first couple of years, before our first child came along, we slowly rebuilt our emergency fund. We were making more than ever, but also spending more than ever, too. You wouldn’t believe some of the shit I bought during that time period.

Also during that period, my company’s stock price had hit rock bottom because of the dot-com bust. It was then that I started aggressively adding to my ESPP. Eventually, the share price rebounded to a sensible level, and I was making about 500% on my money. I would divert about $2,000 of my salary into the ESPP, and at the end of 6 months, it would be worth $10,000.

As with all gravy trains, this one ended. The ESPP shares repriced, but the damage to my emergency fund was undone. I had built up some substantial assets to play with. I set the target size of my emergency fund at $25,000, and have rarely dipped below that since. $25,000 should be enough to live off of for 6 months without any lifestyle changes.

Currently, my emergency fund is $28,605. It’s invested in a money market fund earning a sweet 1.63%. I suppose I could do laddered CDs or something to squeeze another point out of it.

Types of emergency funds

There are three types of emergency funds:

1. Primary emergency fund — Strictly speaking, an emergency fund is what cash or cash equivalents you have direct, immediate access to. It is meant to be available in, well, cases of emergencies.
2. Extended emergency fund — This is my money market cash plus the additional resources like loan markers, Roth IRAs, and education IRA monies.
   • Loan markers — These are loans I have blogged about before. One loan in particular, I don’t think I can ever get back, unless I have an emergency.
   • Liquid assets — This includes all stocks, ETFs, and mutual funds that I could sell without incurring penalties.
3. Kidnapping fund — This is the money I would be able to put together if I had to pay kidnappers. This includes all assets I have access to… 401Ks, 403Bs, Roth IRAs, 529s, credit card cash advances, whatever it takes. It also includes most of my digits. If a kidnapper wants my thumb, then he can go Pope of Greenwich Village on it. The thumb for my family. Easy trade.

In Part B, I am going to talk about the downsides to having a large primary emergency fund.

But now McDonald’s and Dunkin’ Donuts are getting in on the free food craze. And they’re hoping to convert your excitement about free food into cash money in their pockets.

According to an article in yesterday’s Wall Street Journal, McDonald’s will be giving away free Southern-style chicken sandwiches “around May 15″. For McDonald’s the idea is that around the time tax rebate checks arrive, a free sandwich will draw you into the store and you’ll spend some of your new-found cheddar on the side items like fries and Cokes. Folks will be feeling temporarily flush, goes the thinking.

I’ve already blogged about what I am planning to do when folks are feeling this way. I just didn’t realize it extended to $2 and $3 menu items. I would have thought higher-end retailers would be trying to take advantage.

And Dunkins will be giving away a free donut to customers who buy a cup of coffee on tax day (April 15). Sweet.

I think of these guys every time I go into a convenience store. Inevitably, there’s an overflowing barrel of trash by the door, mostly made up of discarded lottery tickets.

The first guy was a big winner. He had won a million dollars a year or two before I met him. He took the annual payout, so after taxes, he was netting about $20,000 per year. I was only making $36,000 per year at the time so I asked him why he was still working. He shrugged and told me he was supporting most of his family, too, so he still had to work. Fair enough.

The other guy won $100,000 in the lottery. I think it was Megabuck’s second place prize at the time. He won it with 9 other people that each put in $10 every week to buy 100 tickets. When they won, each person got $10,000.

I remember telling him that was cool, but asked him who was going to pay the taxes on the winnings. He told me that after the group won, they set up a corporation of some kind, and each person got $10,000 from the corporation.

But then he told me that he didn’t pay taxes on any of his winnings.

Huh?

Turns out, you can deduct gambling expenses against winnings. This includes scratch tickets and other ticket stubs that you had bought during that year.

What this guy did was hang around outside of convenience stores and collect losing tickets that people threw away. He told me that he collected $10,000 worth of losing tickets so he was able to write off all of his winnings. All he had to do was keep those losing tickets for, I guess, 7 years or so, to ensure that he could defend the write-offs in case he got audited.

Genius? You bet.

Stupid? With a capital “S”.

Shady? Sure. But I guess the statute of limitations is up so I can blog about it now. Plus I don’t even remember his name. I just remember that he was one slick mutha. And knowing him, he probably spent about that much on lottery-related shit anyway.

One man’s trash is another man’s treasure, I guess.

I started out loving Netflix. A movie I wanted to see came. I watched it. I sent it back. I got another one.

I quickly ran out of movies that I wanted to see. So now I just try to get new releases, since Mrs. Stupid and I don’t really go the movies any more. When we do go out, it’s usually for dinner and a blowie.

But the blush started coming off that Netflix rose. I started hearing accusations of throttling. Some folks claim that if you are too efficient at watching and returning movies, Netflix starts slowing you down with subtle changes to your movies’ movements through their system.

My wait times for new movies started getting longer. I’ve been waiting for American Gangster since it came out on DVD, some 3 weeks ago.

Right now, my queue includes I Am Legend, Atonement, American Gangster, and The Assassination of Jesse James. They all have Long Waits or Very Long Waits associated with them. Jesus, even The Mist has a Very Long Wait. Some people get to watch I Am Legend, but not me. No…
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Anyway, when I say “free cheese” I mean good cheese that is free.

Trader Joe’s is having free cheese tastings April 15-17th from 5-7pm at all locations.

Might even get to wrap my mouth around a nice Chevre log. Mmm.

At the two convenience stores nearest to my house, a pack of Camel Lights is $4.98 and $5.49. When I asked one of the proprietors how much a carton would be, he said I could have one for $50 (actually, he said “I can give you $50″, which I took to mean it would cost me $50.). So I’ll put the average price of a pack of cigarettes at $5.00.

If you smoke a pack a day (I don’t smoke that much, but it seems like a good rule of thumb to use for this discussion), then you’re spending $1,825 per year on cigarettes (or $1,830 per year during leap years).

You can reduce the cost of a pack of cigarettes by as much as 77% — without ordering them online, without driving to a reservation, and without buying cartons off the back of a truck. You do this by rolling your own.
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So he called me up the other day to tell me he was depressed. I asked him why, seeing as how he’s my best friend. He said, “I was driving around a neighborhood today and saw a woman playing with her kid on her front lawn. She was pulling him in one of those open wagons.” I quickly responded with “So you’re depressed ’cause she was hot and you knew you could never get her?”

“No, that’s not why,” he said. “It’s because I know I’ll never have a front lawn.” It’s true, he rents a small apartment and has no clue how to save for a down payment on a house. He continued, “And I got to thinking about that, and thinking about how I could ever afford to buy a house. The only thing I came up with is that I could try and win the lottery.”

“Uh huh.”

“So I bought two lottery tickets.”

What followed was the typical conversation about the evils of the lottery system and how it just excacerbates the situations of many lower and lower-middle class families. Eventually we got around to discussing the odds of his winning that night. He had two tickets, both MegaBucks. His chances to win MegaBucks were 1 in 5,245,786.

Probability is definitely a big mystery to me.

I know that if I roll a die, I have a 1 in 6 chance of getting a 6. If I flip a coin, I have a 1 in 2 (or 50%) chance of getting heads. If I need that 5th club for the flush, I have a 4 in 23 chance(*). If I forget to bring home flowers on Mother’s Day… Wow… I don’t even wanna calculate the probability of getting laid that night.

The big numbers

The big numbers are just so… big. And abstract. If I play MegaBucks, I have a 1 in 5,245,786 chance of winning the grand prize. Does that mean if I roll a 5,245,786-sided die… I just can’t picture the odds of that.

So I like to put things into perspective, into concrete terms that I can understand. I like to think of things in black and white, zeros and ones, heads and tails. How many times would a coin have to land on heads — in a row — in order for me to say, “Wow, that happens only one in a 5,245,786 times”?
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So I am reflecting on the night’s hands. I almost had that flush. I almost called a big bluff. I almost came in 3rd.

But I am also looking over my financial almosts for the past year or so.

My net worth was almost half a million dollars. In early November of last year, I peaked at $494,852. Then it all went to shit.

My retirement savings almost hit a quarter million. In the first week of December, my retirement accounts totalled $220,491.

I almost sold my company’s stock at it’s all-time high. I didn’t, and it has since fallen 20%.

I almost didn’t buy ExxonMobil for $54. I did. And I made more than 50% on it.

I almost sold all of my MasterCard shares when they went up 20%. Now they’re up 70% and I am glad I hung onto it.

I almost didn’t by EMC, but I did. And now it’s down 20%.

I can celebrate the almosts that worked out in my favor. And I know that at some point I’ll blow through those milestones and recover from those mistakes. My net worth will rebound; my retirement savings will be much greater than a quarter million by the time I retire; my company’s stock will return.

But I can’t get my $20 poker tourney buy-in back. I almost did, but I didn’t.

When I first heard I was getting the bonus, I figured that my after-tax takehome would be about half of the gross. I figured I’d clear $3,750, which would go a long way toward fully funding the car fund. But even 50% turned out to be a bit too optimistic.

I received the bonus last Friday. The actual amount deposited into my account: $2,693.99. Ouch.

What the hell happened?
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Like The Simple Dollar, I already carry a small notebook in my pocket, so it isn’t much of a stretch for me to draw up a price comparison sheet of the top dozen or so items my family buys.

Here’s a scan of my notebook:

The first column is the product. I listed some of the most common items that we buy (excluding diapers and wipes — wish I had remembered to include them). The second column is the price at WalMart; the third is the big “Super” Stop & Shop that is kinda far from me; the fourth column is the smaller Stop & Shop that is nearest (and therefor most convenient) to me. I’ll do my comparisons against the larger Stop & Shop, since the smaller one obviously just gouges its customers.

When you can see all the prices laid out like this, it’s easy to see that WalMart is the better place to shop… with two exceptions. Our coffee is a whopping 26% more expensive at WalMart. And cream cheese is over 16% more expensive. (My WalMart doesn’t sell Philadelphia/Kraft Cream Cheese in the 16 ounce container, so I used the unit price of the biggest size they do sell.)

If you take the cream cheese and coffee out of the equation, WalMart’s prices are better than Stop & Shop by an average of 11.7%. If I bought one of each of the items on my list in one trip, I’d save $3.61. Per trip. On just those items. The trick, then, is to identify the items that are cheapest at each store, and buy just those items at the right place.

I don’t care if the company helps out Katrina victims or screws people with head injuries… with very few exceptions, WalMart is the clear winner when it comes to price. And price is my only consideration when I decide where to shop for commodities like food.

There are plenty of reasons to not do your grocery shopping at WalMart. Their deli is disappointing and the bread is anything but sublime. They don’t double coupons. They have surly cashiers and long lines. They don’t give out coupons for gas, and they don’t print out other promotional coupons like Stop & Shop does. Some people just hate it because it’s chaotic and makes their brain hurt.

But WalMart is the clear winner on prices and I’ll continue to give them (most of) my business until they start doing otherwise.

Have you ever noticed that anybody that saves less than you is a dickhead, and anybody that saves more than you is an asshole?

There are a lot of dickheads out there.

There’s the dickhead that complains about his credit card payments, just after he buys a flat-screen HD TV. He doesn’t even think about the higher cable bills that come along with HD service.

And the other dickhead who can’t afford to save enough for retirement because he’s paying for his kids to go to private school. He thinks he needs to do it so his kids will love him and take care of him in his old age. The irony is that that dickhead will have nothing in retirement and his kids will still be looking for someone to take care of them.

And then there are the asshoes, as in that asshole who earned 18% last year, when I actually lost money. He spends alot of time watching his portfolio, using complicated financial instruments, and listening to the experts.

That other asshole has over $100K in 0% credit card loans that he has invested in money market accounts. What kind of asshole has that kind of time to set up all those accounts and maintain the regular payments, just to earn a few thousand more a year?

Dickheads complain about money. They never have enough of it, they are never satisfied when they do have any. They think that they are the only people on the planet with lots of bills. The real problem with dickheads is that they think you’re an asshole.

Yeah, yeah, I know the real quote is:

But George Carlin said that 20 years ago and the words idiot and maniac have lost a lot of their gravitas. I thought the line needed a little more punch.

Misc. Assets, which includes my checking account, autos, outstanding personal debts owed to me, PayPal and other online accounts, had such a big drawdown most likely because I adjusted the auto values down (after getting the excise tax bills) for the year. I also probably hadn’t yet transferred some money out of checking to my main accounts.

I have only limited info on liabilities for February because up until now I only recorded the total liabilities, not the individual amounts. This changed with this month, so I’ll have that data going forward.