Lottery Savings Plan

Posted on May 13, 2012 by Jonathan Creekmore

While listening to the Freakonomics podcast the other day, I ran across the episode entitled “Lottery Loopholes and Deadly Doctors”. The episode put forth a problem: how can you increase the savings rate, especially for the poorest people? Stephen Dubner states that, even though the poorest do not have enough money in the bank to help counter the smallest of emergencies, many are still willing to put a few dollars a week into the lottery in the hopes of winning big. His argument is that the poorest believe that a few dollars a week will not hurt them, will never get them out of their financial mess, but winning the lottery big would make their problems go away even though the chances of winning are very, very small.

As a possible solution, Dubner describes something called Prize-Linked Savings (PLS) accounts. Basically, it is a special savings account where you get slightly less interest than normal. Periodically, maybe once a month or once a quarter, one winner is chosen from those that contributed (likely proportional to their contributions) for a big prize that is composed of the reduced interest on all of the contributions. That way, it is revenue-neutral for the banks offering the product and it plays on the needs of people to gamble on the “big win” to get them to save. Even better, if you don’t win, you still get to keep the money in the savings account, plus the interest that it accrued. Nobody loses.

Well, that isn’t quite true. You see, even though no one is actually risking any money, the States still consider it gambling and in competition with their own, State-run lotteries. The States argue that they would lose revenue for things like education if people were not participating in their lotteries. So, it is actually illegal to have the PLS accounts in most States. Personally, I think that the PLS accounts are a great idea. If the States see revenue fall from a lack of people playing the lottery, then the programs that revenue stream supports should be re-evaluated for necessity. If the programs are necessary, taxes should be raised according so everyone shares the burden of the necessary programs. That would reveal more about the true costs to each citizen of government and open the door to programs like the PLS accounts that might actually get people to save money for emergencies.

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The Neverending Story

Posted on March 2, 2012 by Jonathan Creekmore

As an adult, I cannot believe I have never read this endearing book that was the inspiration for one of my favorite movies as a child. The Neverending Story, by Michael Ende, goes far beyond the plot of the movie, whose end occurs around half-way through the book. The book is much darker than the movie ever thought about being. I have had a hard time deciding how much to talk about here; on one hand, the English translation of the book is 29 years old. On the other hand, how many of my contemporaries have actually read the book versus just thinking they know the story since they have seen the movie?

In the book, Ende covers the nature of the Nothing, what happens to the Fantasticans (I actually like the name Fantasians much better) when they are taken by the Nothing, and how the Nothing affects the real world. The scene with Gmork, where all of this is explained, could not be more different than it was in the movie since the brief spurt of action found in the movie is not present. Once Ende gets beyond the end of the movie, he starts to explore the idea of what happens when you allow yourself to get too wrapped up in fantasy and who you wish you can be and begin to forget who you really are.

if you loved The Neverending Story as a child, I highly recommend reading this book as an adult. Be prepared for your conception of Fantasia to be forever altered, though.

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New iPhone means new videos

Posted on November 29, 2011 by Jonathan Creekmore

Since Ashley and I have gotten new iPhones, I have been playing around with the still and video camera on the iPhone 4S. I think that the photo quality is very good — in fact, it is better than our old point-and-shoot Kodak camera that we bought when we finished graduate school. I am having the most fun the video camera, though. When Emily was born, Ashley and I bought a hand-held video camera but, like the point-and-shoot, the quality was not great and I rarely had it on me. With the video functionality in my phone, I am more likely to use it.

A few weeks ago, we went to Bridge Street to walk around on a Friday night, when the bands are out playing. Since Emily loves to dance, she just had to show off her moves.

Then, over Thanksgiving, Emily got together with her cousin Colin and had a good time playing at the park. I took some video and stitched together a couple of clips and still shots into this little movie.

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Posted in Family Matters | 1 Comment

Tired of Children’s Media

Posted on September 4, 2011 by Jonathan Creekmore

With Emily now a bit older than four years old, I have gotten extremely tired of reading children’s books to her. Now, this does not mean that I am tired of reading to her. While stories like the Berenstain Bears, Curious George, and the Golden Books are fantastic compared to most of the children’s books that have been written, I have read all of the ones we own to Emily (and that is a lot of those books). So, starting this week, I have decided to rebel. Over Christmas, we brought back a lot of Ashley’s old story books from her parent’s house. This included ten or so of the Great Illustrated Classics. So, this week, I picked up Heidi and began to read it to Emily. At first, I was a little worried about how she would deal with that, because my daughter is very opinionated, especially with regards to the story she listens to at bedtime. However, she seems to really be enjoying Heidi so far. We are reading 3–4 chapters a night, with each chapter being 10–15 pages each, with illustrations every other page. Once we get through the classics we have, I may look at introducing her to Nancy Drew, since Ashley and her Mom have collected virtually every Nancy Drew known to man and we have them all stashed in Emily’s room.

I also have a goal to get Emily off of her Disney movie obsession. We have watched about half of My Fair Lady and she likes that so far, so I am going to let her watch the original movie version starring Rex Harrison. After we finish reading Heidi, I am going to show her the Shirley Temple version of the movie. This won’t break her of the Mouse, but it will expose her to other classic films that will not drive me nuts to watch.

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September Challenge

Posted on August 31, 2011 by Jonathan Creekmore

I read a lot about personal finance. I read several books a year on it — most recently I finished the 2005 edition of The Only Investment Guide You’ll Ever Need and I am currently working my way through The Millionaire Mind. In addition, I follow numerous personal finance blogs. All of this recent reading has started me thinking about what I really need and whether there is a way to cut back on spending. So, to that end, I have two cuts that I am implementing for the month of September and, at least one of them, for beyond.

Since before Emily was born, Ashley and I have paid the extra money every month for digital cable because we wanted to get high-definition channels. However, the past few months, I have realized at we, as a family, really watch very little TV. Further, the TV that we do watch is mainly found either on the local channels or on Netflix Instant. So, after talking it over with Ashley, we are going to drop cable entirely in favor of receiving our local HD channels over e air. The one show that we really enjoy and are current on that is not on local networks can easily be downloaded to the Apple TV for a small charge per episode. All in all, I expect this to be a fairly easy transition that should save us somewhere around $70-80 every month.

The second challenge for September is more of a personal challenge for me. Since I do most of the cooking around here, when I get home and don’t feel like making anything, it has become entirely to easy for me to declare that we are going out to eat. Lately, we have been eating out at least one weeknight and just about every meal except for breakfast on the weekends. Also, this does not count the 3–4 days a week that I have been eating lunch out instead of taking a lunch or coming home to eat. Now, that is really ridiculous since I work five minutes from home and it almost certainly takes me longer to grab something for lunch that to come home and heat up leftovers or make a sandwich. So, for the month of September, I am challenging myself to not eat out unless it is meaningful to me. I am making an exception for Ashley and my date night this Saturday and I am debating whether or not I will make an exception for the weekly lunch group I meet with. Hopefully, by the end of this month, I will have broken the eating out habit. It is a bit on the embarrassing side, but we spent almost $500 on eating out this last month so by breaking this habit for me, we will probably save at least 80% of that for September.

These personal spending cuts are inspired by financial reading, but the reason is not really austerity related. While the amounts that we spend, both of cable and dining out, are high, neither one is really breaking the bank for us. Granted, I can find better things to do with the money, but this challenge is more about just making myself do it.

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