Community Supported Agriculture (CSA) Basics

Question: What enables you to both eat healthy and be a good steward of your community? 

Answer: Buy a share membership to your local Community Supported Agriculture (CSA). Through a CSA membership, you are buying seasonal food directly from a local farmer. In a CSA, the farmer offers a set number of "shares" to the public. A share consists of a box of farm produce. You purchase a share up front at the beginning of the year and in return, you receive a box of seasonal produce each week throughout the season. Information about CSAs and how to find one in your community can be found at http://www.localharvest.org/

Advantages for the Farmer

• Market your produce prior to the growing season
• Receive payment early in the season, which provides cash flow
• Connect with those who will be consuming your produce

Advantages for You

• Fresh food, packed with flavor and vitamins as they will be consumed or frozen very soon after they are harvested
• Exposure to new fruits and vegetables and new ways to prepare them keeps you from getting bored with eating healthy options
• Good for the environment as you have a lower carbon footprint when there is a shorter distance from field to table

Consideration

• CSA will not meet 100% of your fruit and vegetable needs. For example, depending on the CSA, they may focus only on vegetables. You probably will find that you need to supplement your CSA share
• Eating seasonally is an adjustment. If you are not accustomed to eating seasonally, it may take you some time to transition from eating whatever is at the grocery store to a focus as to what is in season from the current week’s CSA box.  Many CSAs provide a list of what produce to expect and when
• Quantity varies. Farmers try to provide a variety of items in a reasonable quantity on a weekly basis. An important question to ask before you sign up with your local CSA is how much produce to expect to be delivered weekly as well as the expected variances throughout the full season
• Policies vary. For example, learn what arrangements can be made if you are out of town for a week; What does it mean for you if there is a bunker crop or low productions due to influences from Mother Nature

All in all, buying a share in a CSA provides you a way to invest both in your local community and in your own health, as well as it helps keep your environment healthy. Bon Appetite!

Skirts to Shirts

Gaining weight?

No fun.

Not fitting into your clothes?

No fun.

Buying new clothes for a temporary larger size?

No fun.

Remaking old skinny-butt skirts into funky fun tops for the afternoon graduation parties?

So fugal. So fun!



Student Loan Bill

Congress is getting the idea....maybe.  The Wall Street Journal’s article “Trying to Shed Student Debt” inspired this blog.  The article states that Senator Dick Durban is proposing a bill that would allow forgiveness of "private" student loans in bankruptcy so that private lenders will become more cautious about making student loans. Federal student loans would not be forgiven.

I have two problems with this legislation: 1) it is an uneven playing field. Why should private lenders have different standards than government lenders? 2: this is treating the symptoms, not the cause. The causes, as I see them, are many and complicated but the top three are the high cost of education, lack of financial literacy, and lack of personal responsibility.

1. The high cost of education. Reduced government support and increased college cost, along with a recession has left college more expensive and students with less in savings. We also need to ask if a college education is a benefit only to the student or to society as well.  If we determine that society benefits from a well-educated workforce and community, then we, as part of this community, need to make a commitment of help keep the cost of higher education affordable to everyone. This means increasing government financial support to education.

2. Financial literacy or lack thereof.  We need a financially literate society, where individuals know how to make wise financial decisions.  This starts with parents teaching and involving their children in decisions about money.  We all need to be reminded that money is it a limited resource with opportunity cost, that you have to make tough choices about needs and wants, and that every investment has risks and rewards.  A college education is an investment with risk and rewards, and the calculated pay-back, return on investment (ROI), should be considered when choosing a major and/or career.  Will my ROI be greater if I attend a two-year technical or community college, attend a private college or university, or attend a public college or university?  One has to be realistic about future income potential when taking out student loans.  Even with the best major and the best education, no job or future income is guaranteed.  You have to work hard to get the job, salary, and career that you want.

3. Personal responsibility.  If you borrow money, you need to be responsible and pay back your loan.  This needs to be communicated to students at the time they take out a loan.  Just like the CARD act, where your credit card statement tells you how long it will take to pay off your credit card, students need to be aware of their future payments, the time it will take to repay the loan, and the total cost of interest on the student loan.  When they sign their student loan documentation, they are signing away part of their future income for a minimum of 10 years!  They need to be fully aware of the cost of repayment, and the opportunity cost for the next 10 years of repayments; the opportunity of buying a house, car, or going on vacation.

As I stated in the beginning, there are a lot of causes to high student loan debt and hopefully these three ideas can be implemented to treat the cause, not the symptoms.  If you like this idea and want to work for solutions to the problem, not reacting to the symptoms, please forward it on to your congressional representative and/or the White House. The e-mail for the House of Representative can be found at http://www.house.gov/representatives/ , your Senator’s at http://www.senate.gov/general/contact_information/senators_cfm.cfm 

or contact the White House at http://www.whitehouse.gov/contact/submit-questions-and-comments.

High Cost of STD (STudent Debt)

Can you believe that both agree!?! Yes, it might be really cold and someplace is freezing over, but President Barack Obama and Mitt Romney both agree that student loan interest rates should not be increased.  This would keep current interest rates at 3.4%, not raising them to 6.8% on July 1^st.   By not increasing the rate on student loan interest rates, the government is stating that it will “cost” $5.9 billion.

Woo, wait just a minute-- did anyone question that figure?  Being an old banker, we tried to have a 3%-4% spread on money; the cost of deposits verses the cost of loans to make money.  The government can borrow money (cost of deposits) at almost zero percent, yet they are charging 3.4%.  Even the ten-year treasury is at 2%. Not a bad positive spread.  I also just financed a new car for 60 months at 1.9% at my local credit union.  Why is the government charging so much on student loan interest and want to raise it even higher?

I know, the “cost” of $5.9 billion is really forgone profit if rates were higher. Yes, I am very bias towards higher education and feel that this is the way we can recover from our recession and the only way to continue to be a leader in the world.  China, India and other countries are catching up or have caught up in technology and education.  We need an educated nation to survive and thrive in the future.

According to the Federal Reserve Bank in New York, it estimates that about 15 percent of Americans (not students) have outstanding student loan debt totaling $870 billion.  Other estimate student loan amounts as high as $1 trillion ($1,000,000,000,000.00) Yes that is a lot of zeros!  This amount exceeds the total borrowed on credit cards and auto loans according to the New York Times. Two thirds of the student loan debt is held by people under 30. The average 2011 graduated walked across the stage with over $25,500 in student loan debt.  Is this our next housing bubble that will put us in another recession?

How do student loans affect students?  Living back with parents, not buying houses, cars, delaying marriage, and the list goes on.  If we truly believe that education is an investment and benefits society as a whole, as well as the individual, we need to keep it affordable and attainable. Here is a short, fun little video about the effects of STDs (STudent loan Debts)  Enjoy the video; don't play the lottery.

IRS Blues

Yes, we had two extra days this year before your tax bill was due. Even with two extra days, it is still painful. Make sure it is postmarked by April 17 at midnight. Need a playlist to help numb off the sting? If you are working late on your taxes, here is some music to keep you motivated:

-Taxman by the Beatles
-Money by Pink Floyd
-It’s Money that I Love by Randy Newman
-Take the Money and Run by the Steve Miller Band
-Tax Free by Jimi Hendrix
-Who Will Buy My Memories by Willie Nelson
-Taxman, Mr. Thief by Cheap Trick
-I Want to be a Billionaire by the cast of Glee
-Mo Money Mo Problems by the Notorious B.i.G. ft. Mase & Puff Daddy
-Sweetest Girl by Wycliff Jean
-If I had a Million Dollars by Bear Naked Ladies
-Take this Job and Shove It by David Allen Coe

Filing Bankruptcy While Averaging $115,881 per Month?

Yes, this is what Warren Sapp, former NFL player and Dancing with the Stars contestant did on March 30, 2012.  Mr. Sapp filed for Chapter 7 in South Florida stating that he owes more than $6.7 million to creditors and back-child support and alimony.  His reported assets are $6.45 million.  What does this mean and how did it happen?

It happens because Mr. Sapp was spending more than he could afford, even more than his income of $115,000 a month.  Bankruptcy happened because of poor financial decisions, poor financial planning and thinking of the short-term, immediate gratification--not the long-term gain.  It happened because he was living life beyond his means.

Chapter 7 bankruptcy is also known as “straight” bankruptcy or liquidation and allows an individual to keep certain exempt property.    Assets are sold by a bankruptcy trustee to repay creditors and many unsecured debts are discharged.  Florida does not allow the bankruptcy courts to sell your home because the equity is protected by the Florida Constitution.  Florida also exempts IRS approved retirement and pension funds and personal property valued at $1,000 or less.  Chapter 7 bankruptcy also allows you to reaffirm your secured debt so you can keep your car, furniture or house by renegotiating with your lender.

For Mr. Sapp, he has 240 pairs of Nike Jordan shoes worth $6,500, a watch worth $2,250 and a lion skin rug worth $1,200 that will likely be liquidated by the bankruptcy courts.  However, his Super Bowl ring and 1991 national championship ring will not be auctioned off because he lost them.

Lessons Learned:

Ø  One can always spend more than he or she makes.
Ø  You need to have a budget and keep a spending limit to what you can afford.
Ø  When is enough ‘enough’? Really…how many Jordan athletic shoes do you need?
Ø  Review your values and make sure you are using money as a resource to reflect your values.
Ø  Live below your means; always pay yourself first and save at least 10% of your income.

If you want a pair of Nike Jordan shoes, contact the South Florida bankruptcy court!

Budgeting Household Chores

Spring is here in two hours. Spring cleaning officially starts in two hours. Do you share a household with others? Do those of the household not share an equal level of desire to maintain an orderly and clean environment?

Whether a husband and wife or roommates, sharing this responsibility can be a challenging task. How do you peaceful resolve the differences? One option: the envelope. How much would it cost to have a cleaning service come in weekly and keep the home in a 'guest-ready' state?

Each of you contribute proportionally to the envelope. Each of you record your contribution to the clean environment for the past week. If the effort has been equally shared then divide the contents of envelope equally back to all of you. Somewhat lopsided? You get that percentage of the envelope that equates to your percentage of exerted work. No one worked at it - you have the budget collected to hire out.

Either way, the "envelope" method helps for everyone to feel fair about how much effort they contribute and the household stays orderly. Budgeting the work and budgeting the pay helps everyone feel compensated for extra effort and the house stays organized. Try this one at home and let us know how it plays out.