Claire's Random Thoughts

I have thought a little bit more about my 42 Thing Challenge and done a little spring cleaning. My conclusion? Wow, this is more difficult than I thought it would be.

Thus, I have decided that since my magic number is 42, I will allow more grouping of items than the original 100 Thing challenger, David, allowed, especially for small items. Once again, my main objective is to reduce clutter and make moving in and out of college dorms easier. The original author’s main objective was to combat American consumerism habits. Since I’m more interested in reducing clutter, I will group smaller items into a single entity. For example, my box of writing instruments counts as one item, as does my disc wallet with miscellaneous loose CD’s and DVD’s.

I am also excluding important documents (passport, license, etc). I don’t think the original author included them either. And anything else that goes in my wallet. Oh, and keys don’t count either. Storage containers are also excluded, as they actually help create less clutter and make it easier to pack and move around (but I shouldn’t need many of them once I get rid of the junk, right?).

Rather than completely excluding clothing, shoes, accessories, toiletries, makeup, etc, I decided to count each category as one conglomerate. I have enough in these categories already and still hope to downsize on them. The rule for to prevent me from splurging in these categories is follows: No increasing the size of any conglomerate. Just like my 42 item limit, when I get one new thing (i.e. a new shirt) that belongs in a conglomerate, I must get rid of another thing in that conglomerate. However, if I decide to reduce the size of a conglomerate voluntarily, I can’t “save” up the disposal of items and replenish later.

Strategies to make this work:
1. Think twice before buying. As I discussed in the previous post, this should help me save money by reducing my huge number of unnecessary purchases.

2. Digital all the way!
Hello! It’s 2010, for God’s sake! Digital downloads are the way to go now for media, not annoying books and discs. My goal is to have digital videos and music on my 640GB external hard drive exclusively (so that’s one thing, as opposed to several hundred or thousand). Keep everything digital and sell the media if it has any value. I don’t need any more paperback books either. Ebooks on my Sony Reader are the way to go. As for textbooks, I have not yet decide if I’m going to count all of my textbooks as one item or each textbook as an item.

3. ONE of each thing
Why the hell did I have two laptops, two digital cameras, three calculators, and two cell phones anyway?

4. Sell old gadgets as I upgrade
Well, I kind of do this already, but I still need to slim down on the gadgets. Yes, I’m kind of a gadgetholic. It’s better to get rid of some now that they still have value instead of waiting and rarely using them.

5. Don’t be afraid to get rid of old, large, worthless, and useless junk
Sounds pretty logical, right? I need to stop being a pack rat and be more willing to throw things away when necessary.

I have also decided on a time frame. My goal is to slim down to 42 things by the end of the semester (when I have to move out) and keep my possessions at 42 until I graduate and move into a permanent residence.

Without farther ado, here is my tentative list (please note that some things on this list include more than one item, so I’m in trouble if it gets to 42 already). Once I get the list finalize, I can get sell/store everything else!
1. Clothes
2. Shoes
3. Purses
4. Toiletries
5. Make-up
6. Vitamins/Medication
7. Kitchenware
8. Class Notes
9. Textbooks
10. Scientific and Financial Calculators
11. Writing Instruments and other desk supplies
12. Laptop
13. External DVD-RW Drive
14. Camera
15. Camcorder
16. Portable hard drive
17. Sony ebook reader
18. Cell phone (hmm…but I have two on contract right now)
19. Sony Walkman MP3 Player
20. Bose QuietComfort 15 Headphones
21. Bose Computer Speakers
22. LCD TV
23. Playstation 3 with accessories and games
24. AA and AAA batteries and charger
25. Disc wallet
26. Rubik’s Cubes

Haha, I’m a huge techie. Is everything here really necessary? No. I guess I can’t play minimalist, which was the original idea of the 100 Thing Challenge. I can, however, simplify my life by cutting down to things I most frequently use.

This is my response to David Michael Bruno’s famous 100 Thing Challenge.

My philosophy: Less clutter, less hassle moving (I live in college dorms), less waste, and more money (aren’t college students supposed to be poor?). Simple, right?

Quality over quantity. I can no longer even keep track of how much money I’ve wasted on things that I buy and never use or only use for a short period of time. If I have quality stuff, it should last me for longer, and I can waste less.

I have been known to have multiples of things that most people only have one of (laptops, cameras, cell phones, etc), and I’m trying to change this.

No more impulsive buying. If I have to get rid of something in order to get something new, this should greatly reduce if not eliminate impulsive buying urges.

I also agree with his Reduce (existing stuff), Refuse (new stuff), and Rejigger (prioritize) concept. He said he was trying this challenge to fight bad American consumerism habits, not to reduce clutter, which I disagree with. It is, however, in my best interest to reduce clutter. I’m tired of moving excess junk multiple times per year (again, I live in college dorms) and figuring out where to store everything (currently grandparents’ basement).

My rules:
1. The magical number of 42 items instead of his 100.

2. I, however, will have more exclusions.

David excludes shared and household things, books, and household tools.

I will exclude things that come with my dorm (which makes sense because I don’t actually own them), food/drink related items, apparel/accessories, and grooming items.

Quite simply, food and things related to food (pots and pans, silverware, etc) are too hard to devise a system to keep a count of. David probably counts items related to food as household items, which would also be excluded under his system anyway.

If you look at David’s list, approximately half of his items consist of clothing. He also doesn’t need as many grooming items and accessories as a female would. Since I am only allowing myself 42 items instead of 100, excluding apparel and accessories does not seem unreasonable. I am a single and job-seeking female, so I don’t wish for this challenge to compromise the way I look, dress, and smell, which is why I’m excluding apparel/accessories and grooming.

Does this mean I can just splurge in these categories? No, I am planning to pack and store things I don’t wear and avoid buying multiples of the same color/style. The idea here is to minimize but look the same way I do currently (I.e. I don’t need any more suit jackets. I have one of every color, one short-sleeved, etc. already. I only need one pair of shoes for each type of occasion/weather, so I won’t buy any more. No new make-up until it gets gross or I run out).

3. If something is only sold in a cluster, then I’m counting it as one item. Some other similar and complementary groups may also count as one (similar to David’s rule about grouping)

4. When I get new things to replace old things, I have 7 days to get rid of the old thing I’m replacing. I’m allowing this extra 7 days, because it takes time to sell stuff on eBay. Also, since I order most things from the internet, I can’t accurately anticipate exactly which day I will receive the new thing, so this prevents me from being without.

5. Gifts: I haven’t quite figured out what to do with gifts yet. I feel bad getting rid of gifts, but it wouldn’t be right if I didn’t count them either.

6. If something is in storage (currently at my grandparents’ basement) and I don’t plan to use it, then it doesn’t count. If I pack something in a paper box I am planning to store or ship out (if I sold it on eBay), then it doesn’t count either. It would be ridiculous if I had to put something in storage every time I exchange one of my 42 things.

My time frame for this? Not sure yet, but I’m going to start making a list of essentials and gauge how long it will take to get rid of everything else.

That’s right, calling the new bill, H.R. 627, the Credit Cardholders’ Bill of Rights is misnomer if not a disgrace to what any “Bill of Rights” should stand for. In fact, for responsible cardholders, this may prove to be the opposite of a bill of rights, because it will ultimately detract from responsible cardholders to pay for the revenue lost from irresponsible cardholders.

Here’s why:

On the surface, and in the land of unicorns and fairies (which is the land politicians are trying to convince us we live in), this bill appears to have good intentions to protect consumers from being taken advantage of by creditors. The reforms listed here sound good, don’t they?

The main changes:

1. Universal default eliminated. That is, if a consumer defaults on one account, other creditors do not have the right to assign the default rate to other non-delinquent accounts.

2. No charging over the credit limit fees when a consumer has exceeded the credit limit due to finance charges or other fees imposed by the credit card company.

3. No interest rate increases allowed for late payments unless the payments are over 60 days late. Consumers must also be notified at least 45 days in advance of any rate changes.

4. No more double-cycle billing method for computing interest, that is calculating interest over two billing cycles, a method was previously used to ruin grace periods.

5. A cap on credit lines for college students or people under 21 of $500 or 20% of annual income.

These are not all the provisions of the bill, but they are some of the most important. The full text of H.R. 627 can be found here. This bill is known as a “bill of rights” because it typically means that banks are less able to use tricks to trap laypeople into excessive interest and fees. However, most of the new provisions are most beneficial to less responsible cardholders who usually fail to do their research in the terms of their contracts as well as borrow excessively.

1. This is perhaps the only provision that I do not find unreasonable. In the past, some credit card companies would raise interest rates for non-delinquent accounts simply because the consumer defaulted on another account. This can be argued to be unjust, so I won’t argue against this provision for now.

2. No matter what causes a consumer to exceed a credit line, he/she should be responsible enough not to “max out” credit cards in the first place. Consumers who normally have more trouble paying back debt and are regarded higher risk are the ones who tend to max out their cards. Consequently, it is not unreasonable for them to be charged extra for their irresponsibility, especially since they pose a higher risk to creditors, and creditors do charge higher risk groups more. In summation, exceeding a credit line is exceeding a credit line, no matter what the cause. The consumer should take the responsibility to stay under the credit limit to avoid the “over the credit limit” fee that the credit card company has every right to charge, regardless of the cause.

3. This provides less of an incentive for consumers to pay on time. Revolving credit is extremely flexible, and minimum payments are rather low, so it is not unreasonable for creditors to expect timely payments. If a consumer cannot even afford to pay the minimum payment on time, then that is a sign of financial trouble and higher risk, which means that the credit card company should be allowed to charge more to compensate for such risk.

4. When a consumer applies for a credit card, it is his/her responsibility to read the contract and know how payments are calculated. Don’t like this billing method? Don’t get the card. Or just don’t carry a balance on that particular card.

5. This provision, out of everything in the bill, bothers me, personally, the most. “College student” is defined as either someone in college (go figure) or under the age of 21 (or both, of course). This bill will cap credit lines on any single card to either 20% of the student’s annual income or $500, whichever greater. It also caps the total amount of available credit to 30% of the student’s annual income “Unless a parent, legal guardian, or spouse of a college student assumes joint liability for debts incurred by the student in connection with a college student credit card account”
Actually, I’m wondering what happens to existing credit lines that are far greater than these limits. It will be ridiculous if I have to give up my tens of thousands in credit lines that the banks voluntarily assigned me and I have always used responsibly because of this new ridiculous regulation. Sure, college students often don’t have much money, but shouldn’t the amount of credit extended still be up to the creditor-debtor relationship? This is why credit card companies should start small for college students and increase based on responsibility. There is nothing wrong with credit card companies electing to give out low $500 credit lines to college students, but it definitely shouldn’t be a limit if the cardholder can handle more responsibly. Again, these credit card companies increased my credit lines voluntarily because I proved myself as a responsible and deserving cardholder. I always have cash to back my purchases, so what’s the problem with giving me a little more leeway? Sometimes that $500 limit isn’t even enough for a single purchase! Such ridiculously low limits, which mean practically no borrowing, will make it extremely difficult for young adults to build a good credit history, which will make it more difficult for them to apply for mortgages or car loans in the future.

How does this ridiculous for responsible consumers?
The credit card adviser from bankrate even agrees that good cardholders may suffer under this new law. This new bill will cause credit card companies to lose an estimated $10 billion per year in pre-tax income. Thus, credit card companies will have to think of new ways to raise revenue or reduce expenses, and this will result in good cardholders subsidizing the $10 billion loss caused by lost revenue from irresponsible cardholders. This may include shorter or the elimination grace periods, and reduction of rewards programs. Shorter grace periods affect responsible consumers, because people who use credit cards for convenience and rewards and pay their balances in full will be charged interest for their purchases, even when they have cash to properly back such purchases. Rewards programs are the main reason such responsible consumers use credit cards. Using a credit card while you have cash to back the purchase, collecting rewards points, paying the balance in full without interest, and redeeming the rewards for purchases that would have been otherwise made with cash doesn’t sound too shabby, does it? Too bad the era of grace periods and rewards may end, or at least be considerably reduced.

While this bill may appear to have good intentions, it is flawed in a way that unfairly hurts creditors, which in turn, will cost responsible consumers. It also unjustly penalizes younger consumers, like myself, who have demonstrated the ability to use credit responsibly. Is it right to give irresponsible cardholders a break when the creditors’ lost revenue will be subsidized by responsible cardholders?

“A penny saved is a penny earned” –Benjamin Franklin

Roughly 2.5 centuries ago, a very wise man, Benjamin Franklin, introduced a new proverb that we still hear today. I’m sure he simply meant that spending less money was a great way to build wealth, and that’s still true if not even more true today.

First, let’s break down the US tax system:
25% federal income tax
9.3% state income tax
6.2% social security
1.45% medicare
…58.08% to keep
This is neglecting additional taxes that we all pay, such as sales tax and property tax. The above calculation is above is also missing payroll tax.

Sorry Ben, your overall concept behind this quote is wise, but your quote may need to be updated due to the way our government in the 21st century is run. I would trust that you wouldn’t approve of the tax system changing so drastically that your proverb isn’t even accurate anymore.

This “proverb” may need to be updated to “A penny saved is two pennies earned.” And my dad also added “A penny taxed by the US government is two pennies spent” when I discussed this earlier today with my family.

So, I am thinking of pennies in a brand new way from now on. I’ll either have to mentally cut the taxable income I am making in half as I am earning it or double the price of everything I’m spending money on in order to get an accurate estimate of the real price I am paying for goods/services.

We would think that it would be more logical for Americans today to save a penny once in a while, which is roughly equivalent to earning two pennies. Unfortunately, most Americans tend to make one penny and spend two, just like the US government does. The proverb may need a slight update (although I wish it could go back to being earn one = save one), but the overall concept behind it should not be forgotten.