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We live in an era of cheap, disposable goods. My closet full of clothing, much of it rarely worn, even though I sort through my wardrobe about once a year to eliminate items I no longer need, is a good indicator of this situation. For a good period when I was a kid, I wore hand-me-down clothes — as the eldest child, I received clothing from a family friend — and when an item became damaged, my mother fixed it with her sewing machine.

Prices for clothes have certainly increased over the last few decades, but clothing is not expected to last. When a piece of clothing becomes damaged, it’s easier and cheap enough to replace.

Broken ToasterBroken kitchen appliances, lamps, and other household devices past their warranty periods can’t be fixed with a sewing machine. Many would need specialized care by a professional, and with today’s disposable consumer culture, many people just opt for replacement rather than finding a repair shop and paying nearly as much money as they would to buy a new item.

Additionally, retailers and manufacturers have embraced the concept of planned obsolescence. To keep manufacturing costs low and to maximize profits, there is little concern for making products that last as long as their owners. This is a primary feature of high technology — a house phone sold fifty years ago may still function properly today, but a cell phone purchased five years ago not only doesn’t keep up with the latest technology, but it likely doesn’t work at all. Furniture built in the eighteenth century was made to last in a family for generations; IKEA furniture might last a few years under regular stress of use.

In Amsterdam, there is a small movement in opposition to this disposable consumer culture. The community has come together to repair its members’ broken items. Volunteers bring their tools and sewing machines to an open building several times a month and offer to fix any broken item brought to the gathering. This Repair Café helps reduce waste by encouraging reuse of broken items, and makes fixing an affordable alternative to replacement.

The government in the Netherlands, private groups, and individual donors have helped the Repair Café Foundation raise $525,000 over the past few years, and these funds have helped the organization create these gatherings at various locations across the country. These Repair Cafés provide a chance for consumers to make better use of their goods and for volunteers, particularly those with repair skills that might no longer be in demand, use those skills for a good cause.

Would Repair Cafés; be welcome in the United States? It’s not exactly a profitable business venture, and as such, is unlikely to draw much attention. The model, however, could easily be recreated, perhaps in low socioeconomic neighborhoods, to provide a money-saving alternative for spending money to replace slightly damaged items. Strong marketing encouraging consumers to exist in a cycle of buying and replacing comes at a price to retailers and manufacturers. If these expenses were redirected towards making better, durable products without planned obsolescence, consumers might lose the desire to constantly have new items, and would be able to hold onto the same products for a longer period of time. There would be less waste. Companies and their shareholders would find they have more loyal, life-long customers. Customers would shop with a focus on the differentiation in quality rather than with their tunnel-vision focused solely on price. Companies that build their products to last would succeed while those focused on the short-term would fail.

Could Repair Cafés be an answer to the consumer culture of disposable products? Would the availability of free repairs in the United States change the way consumers buy goods, and thus force companies to build products that are made to last rather than go obsolete? Is the trend towards disposability reversible at all?

Photo: phozographer
New York Times

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Today on the Consumerism Commentary Podcast, Bryan J Busch talks to Andrea Woroch, consumer savings expert.

They discuss when and why it can be smarter to shop for certain items during the winter.

Consumerism Commentary Podcast
Best Things to Buy During Winter: S06E17 / 170

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Table of contents

Consumerism Commentary Podcast[00:00] Introduction from Bryan J Busch
[00:33] Interview with Andrea Woroch
[00:51] Big appliances
[02:42] Christmas wrapping, decorations and lights
[03:18] Using and selling gift cards
[05:06] Linens and bedding
[05:45] Motorcycles
[06:28] Suits, prom dresses and spring formal dresses
[08:28] Video games and TVs, and consider ditching cable for a Roku player
[12:55] Winter coats and winter sport essentials
[13:50] Jewelry
[14:58] Furniture
[15:45] Don’t shop for the current season at the beginning of the season
[16:36] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

Theme music by Mindcube.

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One of the most important metrics for tracking financial progress is net worth. I write about my net worth, or a modified form of it, every month when I report my balances. I’ve been in the practice of publishing my net worth updates for eight years. By watching my net worth change over time — usually increasing from month to month but occasionally decreasing — I can get a fairly decent picture of my financial health.

What is net worth?

Net worth is the financial value of all your assets, everything you own, subtracted by the financial value of all your liabilities, everything you owe. Finance gurus are familiar with this formula:

Net Worth = Assets – Liabilities

The equation works as well for individuals as it does for businesses. There should be no question of what is included in the net worth calculation. It starts out simple. Your bank accounts are assets and your credit card accounts are liabilities. These are easy to include in your net worth calculation because the values of these accounts are expressed in dollars and cents at any moment. You could at any point check your accounts online to get an up-to-the-minute balance.

Investments are assets as well. Generally, investments are held in shares, so a calculation may be necessary to convert your shares to a dollar amount that you can include in your net worth calculation, based on the value of those shares. If your investment is a stock traded frequently, you can generally place a value easily. If your investment is something more complicated like a business partnership, then there might be some wiggle room when coming up with a value for your net worth calculation.

Your house is an asset. Its anticipated sale value, even if you don’t plan on selling, should be included as an asset on your balance sheet, while the value of your mortgage if you have one should be included as a liability. Your net worth includes all assets and all liabilities, so if you own a home, you must include your house and its mortgage to get a complete picture of your financial condition.

Here’s how to calculate your net worth, with more discussion about the specifics of the calculation.

How is net worth useful?

CalculatorYou might find that a true net worth calculation doesn’t provide you with useful information all of the time. For example, a net worth calculation in its truest form includes the value of everything you own. That includes your television, furniture, car, coin collection, and light bulbs. Since I use my net worth to track my financial progress over time, I’m not concerned about the value of most of the things I own. Including the liquidation value of my electronic equipment would skew my net worth slightly and in such a way that it would reduce the practical usefulness of my net worth.

I include the value of my car in my net worth, not because I plan on selling it but because it was once associated with a loan. The value of the loan is considered a liability, and it was important to me to reduce that liability as quickly as possible. By including the loan in my net worth, I could track my progress as I eliminated that debt and the effect of the remaining balance on my total financial picture. To include the automobile loan, it made sense for me to include the value of the car (which I check once in a while using the private sale price listed on edmunds.com). After paying off the loan, I left the car in my net worth calculation for the sake of continuity.

It’s this personal continuity that is important. As long as you maintain the same formula from month to month and year to year, it doesn’t matter what you include in your net worth calculation as long as it makes sense to you.

Net worth is an internal metric

Net worth is best used as a tool to compare your progress over time, particularly if you insure it is calculated the same way every month. While some aspects of your net worth you may view as beyond your control, like the performance of the stock market, there is enough information in the numbers to give you a good picture of the results of your everyday financial decisions. There is something interesting about the idea of being able to compare your net worth with those of other people, but there are a few reasons why it’s best to keep your net worth an internal metric.

A quick online search can provide broader statistics so you can compare your net worth with a large population of people in your income range or age range. These comparisons are meaningless, however. Age groups can include a variety of education levels, particularly at the lower end of the spectrum. At the other end, you may be grouping retirees in with CEOs. If you’re comparing your net worth with people with similar incomes, you don’t know whether this income is a full year’s salary, pension, or dividends from investments.

Different people are faced with different situations. If you’re 22, making $40,000 in your first year as a teacher, dealing with student loans, single, and living at home with your parents, what benefit is there in comparing your net worth with another 22-year-old, making $40,000 in his fourth year in a factory, married with one child, owning a home and dealing with a mortgage?

That’s why technologies like NetworthIQ are popular. You can compare yourself with a sample using variables that place you in a category with similar people. This way, you can see where you stand among your peers. NetworthIQ does a good job of encouraging people to calculate net worth in a similar manner and groups members among different dimensions to ensure meaningful comparisons. This gets you closer to being able to compare your net worth with others, but there is still no guarantee that people are providing true information.

As I was one of the first people to blog about my personal net worth and track my finances online in blog form, I think it’s great that tools like NetworthIQ exist now.

I prefer not to worry myself about other people and focus on my own progress. My goal is to keep my finances moving forward, which usually means showing an increase in net worth each month, and other people’s finances have absolutely no bearing on my progress. By publishing my financial reports each month, I keep myself accountable to the public, and this inspires me to make decent financial decisions. Depending on your psychological tendencies, comparing yourself with others could provide you with motivation to improve your financial condition or it could leave you frustrated with your own situation.

This motivation can be helpful, but don’t look for too much meaning in person-to-person or person-to-average comparisons.

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Imagine this: You, accompanied by the sheriff’s deputies, walk into your local Bank of America branch. You tell the sheriff to remove cash from the tellers’ drawers and seize the branch’s furniture and computers. It’s like a dream come true, especially for someone who has been on the receiving end of a bank’s foreclosure.

Now imagine this: You and your wife pay cash to buy your house, never taking out a mortgage. Bank of America, however, believes you do have a mortgage and that you haven’t made any payments. This is not like the issue where a bank can’t prove it is the true owner of a mortgage due to securitization, a situation where someone with a mortgage might be able to get out of paying an obligation because the mortgage can’t be traced to a real creditor. This is a case where a mortgage never existed, but somehow, Bank of America believed the house was owned by the bank. The bank initiates the foreclosure process, forcing you to hire an attorney despite the bank not having any legal standing. Although the court ordered Bank of America to cover your thousands of dollars in attorney fee expenses, the bank doesn’t pay. For months.

A good course of action is to initiate foreclosing proceedings on the bank, and that’s what a couple in this position did. $2,500 may be enough for a bank to repeatedly ignore, but that amount is worthwhile to a household. The sheriff invasion resulted in a check from the bank within an hour, and the check covered the attorney’s fees plus another $3,000.

It is difficult to stand up to banks, even if you know you’re in the right. Large financial institutions have what seems like endless money to throw at problems they want to go away, and another bottomless trough for money to help them maintain a good reputation in the media. While not all consumers need to battle with the financial industry, some do, and those who do are facing long odds.

TIME Moneyland

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5 Legitimate Work-From-Home Options

by Michael

This is a guest article by Michael, chief editor of DoughRoller.net. DoughRoller.net helps consumers figure out the best Netflix plans for their home movie experiences. There is a lot of bad information online about working from home, with scammy and spammy websites offering ideas about quick ways to make money without doing much work — ... Continue reading this article…

8 comments Read the full article →

Life After Salary: Structure and Motivation

by Flexo
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Time management has never been my strength. I like working at my own pace, and the certain working structures, like deadlines, tend to annoy me rather than motivate me. It’s no wonder I’m excited about leaving a job with a typical standardized nine-to-five schedule. I allow myself distractions and breaks and often procrastinate. Despite this, ... Continue reading this article…

30 comments Read the full article →

Your Opinion: Is Debt Slavery?

by Flexo
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I’ve written several times on Consumerism Commentary, and other people have written and said many times as well, that debt is slavery. In fact, there is a popular book on the topic aptly titled, Debt is Slavery. It’s a convenient metaphor; if slavery is working without the benefit of enjoying the fruits of your labor, ... Continue reading this article…

41 comments Read the full article →

Rationalizing an Expense By Changing Your Words

by Flexo

As any marketer knows, words have a power beyond their literal meaning. No one knows this more than political marketers, who create campaigns that usurp specific words and ensure their meaning is replaced with some sort of thought the’d like to embed in the public consciousness. This effect isn’t only thrust upon us by marketers; ... Continue reading this article…

13 comments Read the full article →
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