saving

Finding the Best Saving Opportunities in Changing Circumstances

March 4, 2008 By Shannon Christman 1 Comment

One thing saving has in common with the rest of life is that opportunities are always changing. Economic conditions, companies’ offers and policies, tax laws, and personal financial situations are not static. As a result, the best ways to save today might not be the best ways to save tomorrow. The best savers don’t say, “I always shopped at this discount store and put my money in this savings account, so I’ll keep doing it that way.” That discount store may now have higher prices than its competitors and the savings account may have lower interest rates.

Changing financial circumstances force savers to keep on their toes. Just when you think you have found the best ways to save money, times change and you have to start shopping around again if you want to keep saving money. So, as you continue to search for new saving opportunities, how do you know when you have found a good deal? It requires some strong analytical thinking skills.

First, and perhaps most obviously, you have to do some math. For product purchases, calculate what the per-unit cost is or how much extra you are paying for additional features on higher-tier models of appliances and electronics. Consider how long you expect a purchase to last and figure out how much it will cost you per hour, day, week, or year compared to how much a similar product would cost. Alternatively, think about how many hours you would have to work to buy the item you are considering. Once you do the math, ask “Is it worth it?”

Beyond basic math, every purchase or saving opportunity offers additional factors to consider. To know if you really have a good deal, you have to think through all the factors and how they apply to your own circumstances. If, for example, you have some money to invest and are trying to choose between a CD and a mutual fund, you have to compare the features of both. With a CD, you can know for sure how much interest you will make, but the interest might be less than what you would make on the mutual fund. With a mutual fund, you would be able to take out the money any time you wanted it, but you might wind up taking a loss.

Do you expect to need the money before the CD matures? The answer to that question will probably change depending on what is going on in your life, so a CD might be the best choice one time and a mutual fund the next. You have to consider your choices each time you are ready to invest. Then, once you decide on one type of investment over the other, you still have to evaluate which mutual fund or which CD is best. Just as it isn’t always the same for your entire life, the “best deal” isn’t always the same for one person as it is for another, so you have to think it through yourself instead of depending completely on the advice of others.

You also have consequences, opportunity costs, and “what ifs” to consider. Imagine spotting a great, short-time rebate offer on a product you wanted to buy in a year or so, when you expect to have more money available to spend — say a sewing machine. If you buy the machine on rebate, you will spend less than you would have spent when you planned to buy it next year. However, if the machine isn’t yet in your budget, you might have to give up the opportunity to buy something else now — say a month’s worth of weekly date nights with your spouse. Is it worth the future savings to adjust your budget now?

Add potential consequences to your consideration — you would have to spend more than the cost of the machine to buy sewing supplies and fabric, and your marriage may suffer from lack of time away from the kids. In this case, some consequences would be beneficial, too — if you had a sewing machine, you could save money by making and mending your own clothes, or could even make money by sewing something to sell. But then, what if you don’t get the rebate back? What if a better rebate offer is available next year? What if you discover you hate to sew?

Okay, so I’m getting a little carried away, and you would never obsess so much over the purchase of a sewing machine, but my point is you need to take into consideration multiple factors beyond simple price when you are figuring out whether you are getting a good deal. You even have to consider the time and money you will spend in comparing deals. (Is it worthwhile to spend money on gas to do your grocery shopping at several stores in order to buy the specials at each one? Even that answer may change from time to time and from person to person.)

Of course, the basic dollar amount involved often is the biggest factor. Look at the bottom line: how much will this purchase cost me or how much will this action save me? If something is worth more to you than the money you would have to pay for it, or savings worth more than the time and work you must expend, you probably have found a good deal — maybe not the best deal, but a good one. Take advantage of the opportunity and enjoy the savings until circumstances change and you learn that you can save more by doing something a different way.

Image courtesy of Bob.Fornal

Sometimes, It Doesn’t Pay to Save

February 27, 2008 By Shannon Christman 12 Comments

“Act now, and you may be able to pay less than you owe!” proclaims an ad for debt consolidation services. I’m all for paying off debts, but I was offended. Why should some people be allowed to pay less than they owe when others (like me) are habitually denying themselves things they want in order to stay out of debt? The ad might as well have said, “Be rewarded for your financial irresponsibility!”

Situations like these — where savers are penalized — are rare, but they are irksome to those of us who work hard to keep our accounts from going negative. Any type of amnesty from debt or taxes can serve as a reward for those who did not plan ahead and a penalty to those who did. So can several other cultural practices and business policies. In some cases, the act of saving itself can cause a real loss of buying power.

For example, I am grateful to my parents for saving for my college tuition, but their savings put me at a disadvantage when it came time to apply for scholarships. My grades and extra-curriculars would have qualified me for financial rewards, had my parents not socked away money for my education. The applications asked not only about their income, but also about how much they had in savings. I still remember the words of my teetotaling father: “If I had spent all my money on alcohol instead of putting it away for college, you would be able to get these scholarships.” In other words, it hadn’t paid to save so much.

Had my parents chosen to stuff the money in a mattress instead of a trackable savings account, I might have gotten a scholarship, but they still would have faced other penalties for saving that way. Saving alone is not enough; you have to save in an interest-bearing account to be significantly better off than someone who spends it all. Yes, stashing money around your house will ensure an emergency fund (so long as the emergency doesn’t involve your house burning down), but thanks to inflation, the money you saved will be worth less when you spend it than it would have been had you spent it earlier. Each year, your savings will buy about 2-3% less than the same amount could have bought the year before. At times, even the interest earned on savings accounts and other investments aren’t enough to keep up with cost of living increases. Paying your mechanic before your car breaks down sometimes makes more sense than saving without interest.

Then again, if the interest is just enough to bump you into the next tax bracket but not enough to cover the additional taxes, you might have been better off saving some of your money in a piggy bank.

Even death comes with penalties for savings. Assuming you have been diligent in saving throughout your life and have accumulated at least $1,000,000, the U.S. government currently claims a right to tax the money you leave for your heirs — that same money on which you have already paid income or capital gains taxes. (The IRS website calls the Estate Tax “a tax on your right to transfer property at your death.”) Granted, you can avoid this tax by putting assets in a trust fund, but you still have to pay to set up the trust, so either way, you — or rather, your heirs — are penalized for your saving habit.

So, saving doesn’t always pay. You might miss out on forgiven debts and college scholarships, see your money lose its value, or find yourself paying more taxes. Nevertheless, it’s more likely that you will lose out on much more if you don’t save: Debts could overwhelm you and lead to bankruptcy. Your children could wind up with a pile of student loans and no job to cover them. The things you buy before inflation usually lose their value more quickly than saved cash does. Spending makes you lose out on interest and capital gains that are usually worth more than the taxes you would have to pay on them. No, savings doesn’t always pay, but all in all, it pays far better than not saving.

Funding The Holidays: Twelve Funds of Christmas

February 3, 2008 By Ann Hartter Leave a Comment

Christmas cheer kicked in when I returned from my vacation and decorated my house. I emptied my Post Office box into a bag, then onto my table. Christmas cards (I scribble on a notebook some addresses before the envelopes disappear), bills (none unexpected), a couple of coupons, and junk mail galore. While booting my budget machine I re-muttered my mission to save forest upon forest by outlawing junk mail. My budget for December, as I read through, included Christmas Expenses. Really? Every month there is a birthday or another gift-giving party-throwing holiday, yet I still include extra cash for the end of the year. I challenge myself to a 12-step reduction program, or as I so dorkily dubbed it: The Twelve Funds of Christmas.

I carefully divided my expenses for the holiday. Since I was trying to keep all my costs low, it works out best to see what exactly was costing me money. My list includes specific categories for postage, a phone bill, and a gift for my husband, but yours might have Christmas Eve dinner, Lights and Electricity, or Travel to see relatives. Once everything has been categorized, I can start to figure out ways to disperse the cost into other months or absorb the impact in other ways. For each of my Twelve Funds, I include a rating and a solution. Here’s how I did:

For my gifts, I knit a 2 hour project 26 times, and in combination with my husband’s work, gifts are done. (Okay, it took all 27 days, but they did get done.) I used yarn bought as a souvenir on vacation (spun from Navajo wool), so about $40.
Rating: At less than $2 a gift (on my end) I think this is a screamingly good deal. Plus, I got immediate gratification from my special wool.
Solution: I think I did this one right. Design and early purchase is my way to go.

For cards, after a light bulb pinged in my memory, I rummaged my crafts, wrapping, and a box of hand-me-downs for sufficient blank cards I already owned. Cost: $0.
Rating: Obviously Perfect 10
Solution: Unfortunately, I can’t do this again next year; I’m out of cards! I will try to freecycle for some, and will check some second-hand stores. Finally, if all else fails, I’ll print some up.

My letters — well — I have a tendency to ramble, so I decided a photo chronology of my kids and some of my husband’s photography with a brief hundred word summary would do. It did, but the photo letter became, after hours of browsing, editing, and arranging, a five page affair. The ink to print was $40, it took 6 hours to perfect and print, and I only printed half of what I thought I needed. I forgave the rest and packaged the 16 I had done. Total cost:$60.
Rating: doesn’t even rate.
Solution: I have a 4×6 printer, and I’ll choose and print 4 per sheet every two months or so, thus my photo chronology printed in chronology. The cost will be deferred over twelve months, and the ink for this printer is cheaper.

Postage and shipping got its own fund because most of my family lives far away and I made gifts for them, remember? Even after using free boxes and recycled wrapping paper, this total still came to $138.
Rating: Six of ten.
Solution: Smaller boxes, air pillows (I get a lot of these), and maybe I’ll split cost sending to some recipients with family in my town who send to the same people.

Santa! I love being Santa and to tell you the truth, I didn’t even pay attention to the totals. It helped all my daughter wanted was a whistle, some bubble gum, and a school quiz game. The boy? Large trucks, a clock and a pen. Santa did better than that in the long run, but with the gifts from Santa and the gifts from Mom and Dad the total was still only around $150.
Rating: Nine of ten. (Free is perfect.)
Solution: I think I do a pretty good job keeping my kids in the realistic range of things to expect as gifts. Will this change in a year? We will see.

A gift for my husband. After a brief season of brainstorming, his total is still undetermined. Last year, his gift came after we bought a new house and had room for it, but before you scowl at me, know that we don’t do a lot of gift-giving to each other. If something is wanted or needed, we work out a way to get it. Thus: $TBA
Rating: About an eight.
Solution: No money now, so the money is saved from the holiday budget. It’s spreading the impact of the holiday cost perfectly.

Phone bill. If I lived in the same state as most of the family I’d like to call on a holiday, this wouldn’t even apply. But instead, I rang up a few dollars on long distance. Bill: $10
Rating: Not bad.
Solution: I’ll look into a good long-distance package for the cell phone (or maybe I’ll invite them here!).

After Christmas Sales. Really, I couldn’t help myself this year. With holiday reduction and inventory reduction, and even a closing sale, I had to fill in a few gaps where necessity lay, or fun. New jeans, Amazon bargains on TV DVDs, and a couple of candy desserts and we’re putting on credit $350.
Rating: About a four, unless…
Solution:…I consider these “spreading the cost” of other budgeted events. We needed new jeans. I purchased for the kids’ ornament craft for next year. We buy TV DVD every month, so we’ll skip a few months to catch up.

Thank you cards were a snap this year. I grabbed some 4×6 index cards and printed a black and white photo of a touching moment I had just taken of my kids in the snow. Do this once per giver, post with a postcard stamp, and I came in under $5.
Rating: Nine.
Solution: If this cost can be cut, I’ll find a way. I’ll package the cards with the gifts I send out and hand-deliver the in-town ones.

So while all this End of the Holiday stuff is happening, New Year sneaks up. Heck, it’s only a week after Christmas, and I really wanted to go out. Hair, clothes, a babysitter, some good music in a decent bar…that I couldn’t find in town…so we stayed home, making this expense -$200.
Rating: Ten
Solution: As a parent who doesn’t get out much, I’d love to feel guilty about this expense. I’ll throw my own party if I have to.

There’s a birthday in the family on New Year’s. The girl got a slew of character lip gloss, some fun stationery, and a magazine subscription for a whopping: $30.
Rating: Eight
Solution: Take advantage of After-Christmas sales could help more, but the magazine subscription is great for making a gift last all year.

Not-so-coincidentally, my 12th fund is for my son’s birthday which falls on the 12th day of Christmas. A Saturday at the kiddie arcade and pizza joint at the mall was out of the question, so I held a quiet dinner while my son played with his cousins loudly in the next room. Total cost of train set shipped overnight because the toy store is phasing it out: $85.
Rating: Eight
Solution: Did I say take advantage of After-Christmas sales? Shopping way before his birthday will make shipping nil since we use Amazon Prime. Plus, picket for more toy stores. Competition is healthy.

So, when all is tallied, I came in under my budget by a measly $32. Looking back at how to beat the budget next time around is an efficient tool for some of the most expensive times in our lives. I learned from this careful tabulation of my holiday mess that Christmas is worth starting in the summertime. Trying to save money “right now” is a challenging prospect, and with the stress that comes with these times of great expense, saving frequently gets swept under the rug. List in hand, I’ll sketch on my free, city-issued calendars some deadlines, pop some to-do lists into my email box from my virtual calendar, and make sure I have the appropriate supplies to make everything run smoothly well in advance of the Holiday Rush.

What will my list show next year? Will your list help you for next year? Only time will tell.

Wal-Mart Has a New Coupon Policy

February 2, 2008 By Jennifer Derrick 38 Comments

In recent weeks I’ve seen reports flying around the Internet that some Wal-Mart stores are accepting only ten coupons or less per transaction. For a heavy coupon user like me, this is bad news. I had hoped that perhaps it was just one or two stores that were doing this but, unfortunately, this policy has finally come to my Wal-Mart and may be coming to a Wal-Mart near you very soon.

I asked the local manager why the policy changed and he didn’t have any real idea. He said he hadn’t gotten an explanation from the corporate office and didn’t know if it was a nationwide policy, or just for certain stores. I’ve thought about this new policy to try to find a reason, and it still makes no sense to me. I don’t think it’s money. Retailers are reimbursed for the face value of the coupons they submit back to the manufacturer and, in most cases, are given a few cents extra per coupon as “commission.” Since Wal-Mart doesn’t double coupons beyond face value, they aren’t losing money on Walmart Coupons. They ought to be making money.

I understand there have been problems with coupon fraud in recent years, but that has mostly occurred with coupons printed off the Internet. My Wal-Mart (and many other stores) haven’t taken that sort of coupon for a couple of years and I am okay with that. I understand. But the ones you cut from the paper or the back of a package are much harder to duplicate and alter, and so fraud hasn’t been as prevalent with these types of coupons. The cash register knows if you bought the product for which the coupon is being redeemed. If it doesn’t sense that the product, quantity, and/or size is correct, or that the coupon has expired, it beeps and signals the cashier that there is a problem. He or she can then manually check the items and override the register, if necessary.

Which brings me to what I think is the real reason for this policy change. I think Wal-Mart is looking for ways to speed up their notoriously slow checkout process without having to actually hire more cashiers. They probably figure that if fewer coupons are being used, lines will move faster. I doubt it. First of all, a lot of things at the cash register take time. If someone is using WIC or food stamps, that takes time. Is Wal-Mart going to limit the use of these products, too? Second, writing checks takes time. Not many people do it, but those who do slow things down. Is Wal-Mart going to stop taking checks? Third, what about the person who gets to the register after all of their stuff is rung up and then and only then looks for the credit card, the checkbook or the cash? Is Wal-Mart going to institute a policy that you must have your payment method ready before the cashier begins ringing you up? Price matching, using multiple payment methods (such as a gift card combined with cash), chatty cashiers or customers, or cashiers-in-training all add time to the checkout process. In other words, if you aren’t prepared to wait in line, grocery shopping isn’t for you. I can’t imagine that coupons are so horrible in comparison.

I’ve always shopped at Wal-Mart because where I live I don’t have a lot of choices and using my coupons at Wal-Mart is the most cost effective option. Few of the grocery stores here double coupons and those that do have prices that are more than twice that of Wal-Marts’ regular prices. The stores here don’t have great sales, so I can’t try to save by hitting the loss leaders at each store. Besides, with gas as high as it is, I would eat up my savings by driving all over town. I may not agree with everything Wal-Mart does as a corporation, but they have always allowed me to stretch my food budget further than any other store. Coupons have added to those savings. With the economy heading south and grocery prices rising every day, I really hate that they’ve done this.

Will I still shop at Wal-Mart with this new policy in place? I guess so, but reluctantly and only because I have no other cost effective options. What I will do, however, is make multiple trips through the line and split up my coupons over two or three orders. If Wal-Mart is looking to save time, they won’t accomplish it with me because I’ll be in that line for quite a while. If another store opens up around here that will compete price-wise, I’ll vote with my wallet and shop there.

I complained to the local manager, although there’s nothing he can do. I have also complained to Wal-Mart’s corporate office, although I don’t expect to hear back from them. If this policy comes to your Wal-Mart and it bothers you, I urge you to complain, as well. Maybe if enough people complain they’ll change this policy. If you have other cost effective grocery options where you live, vote with your wallet and shop there. And if you know the real reason for this policy change or have another theory, please post it in the comment trail. I’d really like to understand.

Image courtesy of Dystopos

Sheet Music – 10 Free or Nearly Free Ways to Get It

February 1, 2008 By Ann Hartter Leave a Comment

I became intrigued with collecting sheet music for various instruments, most of which I play, ever since my mom came home from an auction with a box full of sheet music in pristine condition, dated in a range of the past 100 years. She was really pleased with the score, no pun intended; it is the most appropriate slang from that time period of my youth. I helped her use some to decorate our music room. It was an experience similar to working in the back room of a used book store. It was amazing. Music! Something I could take off the wall and read and play, and recreate the sounds jotted on paper from 100 years ago. Needless to say, I was hooked.

So now I’m older and I have my own collection to accumulate. Inheritance would be the easiest way, but I’m impatient. I’ve spent less time finding sources for sheet music than I have for books, but I have found at least 10 reasonably cheap or free ways to build my collection.

Auction: I haven’t had much luck at auctions, but my mom did, so I’ll always have high hopes for this method. If you knew my mom, you’d know she got a screaming deal.

Online sheet music sites: I’ve become addicted to VirtualSheetMusic.com, but you can try musicnotes.com, the Sheet Music Consortium, 8notes.com, or a number of others. This is as cheap as your printing costs, unless you want to install a monitor on top of your piano.

Become a Band Librarian: The Booster Clubs in many places include a librarian to sort, file, and transcribe missing copy for arrangements. Sometimes, the piece is too old and too many parts are missing, or it’s being tossed to thin or update the library. Volunteering as a band librarian is music to my ears, or, you could become a pro.

Write or transpose your own copy: For personal use only, I have files of staff paper covered in my interpretations of songs I hear, have heard, or have invented, as well as songs I needed in the key of my instrument. If you have skill in reading it, you probably have the skills to get good at writing it. Nothing more cost-efficient than doing it yourself.

Former Students: Band and orchestra students, unfortunately, frequently abandon their instrument as the rest of their lives becomes a reality. If you know any, or have a director or instructor friend who know of former students, they may have a folder full of sentimental but unused music that you could rescue and revive.

The Public Library: Music and Songbooks are in the 780s of the Dewey Decimal System. Play your heart out, for the gentle cost of overdue book fines.

Join a Sheet Music Club: You know, like a book club. There might be one or you could start one in your neighborhood, or you could join a Yahoo! group with members from over the world.

eBay: Like on-site auctions, Internet auctions are hit-and-miss when it comes to quality, quantity, and value, but it’s there and all you have to do is look.

Sheet Music Magazine is less than $25 a year, and it comes with a variety of music selections. It’s much more reasonably priced than purchasing each piece separately at a retail, and it comes with readings I’ve always found intriguing, after, of course, I’ve played through the selections.

Join the band: One way you can very simply find sheet music is to join the community symphony or band. If just the possession of good music to play isn’t enough, put it to good use. Work hard, play well, and the exhilaration of the ensemble is unparalleled.

Whether you’re looking for a specific piece, or just have the urge for the collection, this list should give you plenty of ideas to start tickling the keys. Whether you’re looking for Vivaldi’s The Four Seasons or Seasons of Love from the musical Rent, the search for the right composer, artist, or melody is never-ending because the mood of the moment changes as quickly as the weather.

Image courtesy of Lili Vieira de Carvalho

Sometimes, All You Have to Do is Ask to Save Money

January 30, 2008 By Jeffrey Strain 3 Comments

By Jennifer Derrick

I recently returned from two weeks of traveling for both business and pleasure. As I was setting up the components of the trip (hotels, rental cars, etc.) I was disappointed to discover that there were virtually no deals to be had. This surprised me because there’s usually some sort of deal available and I’m very good at sniffing them out. (See my earlier article on how I take frequent trips on a limited budget) Normally I will balk and simply refuse to travel or pick a different destination if I have to pay full price but, since the trip was partly business, I had to go. I thought it was good that at least part of the trip would be tax deductible since I wasn’t saving much anywhere else.

As I was getting ready to leave, I decided to try a little experiment. Since there were no deals to be found I decided that, whenever I had the opportunity, I would ask for a discount. I know this idea will offend some people, but let me be clear: I wasn’t demanding a discount or asking for anything for free. I wasn’t rude or threatening. I simply inquired politely if a better price could be had for the purchase I was making. If not, I smiled, thanked the person for their time and went ahead with the transaction at the going price. It helps that I enjoy talking to strangers and I’m very comfortable negotiating and asking for what I want. Shyer folk may not be as comfortable as I was.

I was pleasantly surprised to discover that my efforts paid off more that I expected, although looking back I see that I had more success with smaller, local operations than big, national chains. I learned that sometimes to save money, all you have to do is ask. Here’s a summary of my attempts, and my failures and successes:

1. Car Rental: I arrived at my destination and needed to rent a car. I was holding a reservation at one of the big rental chains for $200. When I got to the counter, I presented my information and then asked the customer service representative if that was the best price I could get for the size car I needed. The lady tapped some keys on the keyboard, opened and closed some drawers under the counter and came up with a coupon code that saved me $50. I was surprised and grateful. I thanked her profusely and promised to write to her manager to thank her for her helpfulness (which I did). I think the key to my success here was that, although this was a national chain, it was an off-airport, neighborhood location where the rep. had more time to work with me. Had it been a busy airport location with a line three miles long behind me, I doubt she would have been as accommodating.

2. Hotels: My results in this area were definitely mixed. I stayed in four hotels over the course of two weeks. At the first, a local bed and breakfast, I arrived to check in and asked if the price I was holding was the best available. As it turned out, when I made my reservation the only room available was one of the larger rooms that sold for a higher price per night. When I arrived and asked, it turned out that someone had cancelled, freeing up a smaller, less expensive room. Since I didn’t need the extra space, I took the smaller room for a savings of $30/night, or $120 for the four nights I was there. This wasn’t a discount per se, but if I hadn’t asked they would have put me in the room I had reserved.

Two big national chain hotels followed where I was unable to get a better price than that on my reservation, although one did give me an upgraded view. It didn’t save me money, but it was nice to look at trees rather than the parking lot. The last three nights I stayed in a national chain hotel that was pretty much the only hotel in the whole town. I didn’t expect anything, knowing the monopoly they had on the market, but when I asked if my reserved price was the best available, the clerk knocked an extra $10/night of my price for a savings of $30. I think they were almost empty as I didn’t see many people around, so I guess the clerk figured I might leave if he didn’t give me a discount and any money was better than none.

3. Tickets: In some of the places I went, I wanted to visit some attractions and museums. I would arrive at the gate of the attraction and ask if there were any discounts on tickets. Most of the time I was told no, although there were some successes. At two museums I was offered $5 off a ticket. Neither clerk said why, just, “We can offer you $5 off.” Savings $10. I took a colleague to a small aquarium, gave my usual spiel at the gate and we were offered 2-for-1 admission. Savings: $7.50. I think in all of these cases it helped that it was the off season for these areas and business was slow.

4. Food: I was unsuccessful at saving much money in this area, although in one restaurant they did grant me the same discount as the senior citizen discount (10%) for a savings of about $2.00. I didn’t ask for the senior discount, but when I inquired about any discounts the waiter said I could have the senior rate. I don’t look like a senior, so I think he was being nice. Either that or I look far older than I think I do.

5. Fuel: Forget it. In a few places I asked about discounts for paying with cash, but quickly stopped asking. Never ask for a discount on fuel unless you are prepared to be treated very rudely.

So for just engaging in some small talk and making some polite inquiries, I saved about $219.50. Not a huge amount of money, but enough to render my experiment a success. Ask politely, don’t whine, nag or demand and your chances of success are greater. If you do get offered a discount, thank the person and be grateful. Also, you’ll probably succeed more often if it’s the off season at your destination and you’re dealing with smaller businesses. I learned that it never hurts to ask. The worst they can say is no and in the best scenario you’ll save some money.