Tuesday, January 22, 2008

Ten Things You Can Do to Save Money this Year: Seven

7. Clear your clutter. Clearing your clutter has myriad money-saving advantages.
  1. If you donate items to non-profits, you can deduct the donation on your taxes. This is really only helpful if you take more than the standard deduction, but still...
  2. You can improve the feng shui in your home. It can help you have more energy, be less depressed, manifest greater prosperity, better health and well-being. For an excellent resource on how to clear your clutter with feng shui, read Clear Your Clutter with Feng Shui" by Karen Kingston ($10.95 new; about $6 used.)
  3. You can make some money getting rid of unused things. Sell them online via eBay, Half.com, Craigslist, or some other reputable outlet. Last year I made hundreds of dollars selling CDs, books, and consumer electronics that I no longer needed or wanted.
  4. Clearing clutter helps to create order, which helps to create both a sense of well-being and a better perspective on what we own and why we own it. Clearing clutter can help you purchase fewer things, because once you've cleaned everything up, you may not want to mess it all up again. It can also help you to identify poor spending habits. Are you buying clothes in the wrong sizes in the hope that you'll get smaller (or larger)? Do you find that you have more shoes than you can ever wear, or a closet full of craft supplies you never use? Clear your clutter lovingly, consciously, and intentionally and you will reap thrift many rewards.

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Wednesday, January 9, 2008

Free Stuff: Hillary for Pres. Bumper Sticker

If you're supporting Senator Clinton in this year's Presidential race, you can get a free bumper sticker here. Go, Hillary!

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Sunday, January 6, 2008

Ten Things You Can Do to Save Money This Year: Eight

8. Try Before You Buy. I've saved a ton of money by trying things out before I bought them. Often, I'll hear about a book or product, or I'll hear a song and want to get it right away. But I've gotten in the habit of resisting these impulse buys, even though I'm really good at convincing myself that I should get it, get it, get it!

My best resource for trying before buying is my local library. Even though I live in a small town, I'm fortunate that we have a big library--made even bigger by the CWMARS feature, which allows residents of any MA town to borrow books and other resources from any other MA library for free. If I hear about a book, for instance, I can almost always get a copy from my local library. I simply go online, log in to my account, search the catalog, and order the book. A copy is delivered to my local branch, I get an e-mail, and I go pick it up. Nine times out of ten, the book I want is available. And, nine times out of ten, I decide I don't need to buy it after all.

Other resources are friends, who will often loan a book or CD or movie to me. I'm always careful to keep track of what I have, who I got it from, and to return it promptly.

Rhapsody (an online music subscription service) has a massive database of songs and will let you listen to every song they offer three times for free. If you hear of an artist or a song, you can listen before you buy.

In the case of shoes, exercise equipment, accessories, clothing, etc., I will often seek out a local source where I can try on, touch, or try out the item. If the local price is anything close to what I can find online, I buy local. But, sometimes, the price differential is so substantial that I shop locally, but buy online.

Recently, I wanted a Lexie Barnes bag. I did extensive research online and nearly bought a bag, which was originally $85 on sale for $40, with free shipping and a free gift (a smaller matching bag regularly $18)--the best deal online. However, I just couldn't quite tell if I'd like the pattern or the size of the bag. So, I found a local retailer where I could try the bag on for size. In the end, I loved it--and the salesgirl!--so much that I bought it there. I didn't get the free bag, which I'm still kind of bummed about, and I paid $4 more than I would have online. But, I got instant gratification and I supported a local business. Two things worth feeling good about.

And, for those Thrifters who are aghast at the expensive bag, I'll say that I expect to have this bag forever. As a woman who kept her first pretty bra for twenty years and owns four comforters with an average age of fifteen years, I can assure you that once I buy something I like, I buy it to last. This bag meets my Thrifting biggest rule of thumb: it was a conscious consumption. I thought long and hard about it. I researched my options. I tried before I bought. and this interesting, durable, waterproof, practical, gorgeous, (okay, trendy) bag makes me happy every time I use it--which is every day!

For years, I'd been using tote bags that I'd gotten for free and embellished with buttons, vintage fabric scraps, etc. But as much as I loved them, I also felt sort of dowdy and dumpy whenever I slung them over my shoulder. Now, I feel sporty and special and ready-for-anything. In my version of Thrift, this is what it's all about.

If you're looking for a good deal on a Lexie Barnes bag, by the way, the Lexie Barnes site's sale section has good deals on discontinued patterns. And ebags.com also has good deals and promotions.

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Ten Things You Can Do to Save Money this Year: Nine

9. Pay your bills online. If your bank doesn't offer free online bill pay, you can generally set it up directly through the company to whom you owe money (such as your phone or cable company).

The savings will vary, but include the cost of checks and the cost of stamps (roughly $25/year if you pay five bills per month through the mail). (Can you think of anything you'd rather do with $25 than buy stamps?)

Additional savings include late fees associated with lost checks, lost or misplaced bills, and late payments.

Automatic online bill pay features can also be advantageous if you are trying to pay down debts, such as credit cards, mortgages, or car loans. If you set a certain amount (above what's due) to go every month, it will definitely happen--and on time--versus the old-fashioned check-writing method, which is more fallible. Some months you may feel you can't afford the extra cash toward a credit card or mortgage if you are the one taking the time to physically write the check, but, if your checking account just does it automatically, you only have to make the decision once.
The one caveat here: if you are a person without a regular income, without direct deposit, with a shared checking account and a flawed system for managing it, etc., don't set up auto bill pay features. Remember, in order for auto bill pay to be beneficial, you have to have the money in your account. If an auto bill pay feature causes overdraft fees, you'll only be causing yourself additional stress, strain, and expense, so skip the tempting convenience and keep writing checks or using manual online bill pay.

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Ten Things You Can Do To Save Money This Year: Number Ten

10. Stop watching (commercial) television.
If you are a TV-lover like me, this might seem shocking and impossible-slash-obnoxiously-liberal-intellectual, but hear me out. Commercial television's primary purpose is to create desire in you. Unnecessary desire. To be different than you are, have more and different things; the primary purpose of commercial television, in short, is to get you to buy stuff.

According to Tom Bell, Staff Writer for the Portland Press Herald business section, "Consumer debt is at record levels, and the personal savings rate has fallen into negative territory at minus 0.5 percent. The savings rate has only been negative for a full year twice before, in 1932 and 1933, when Americans were struggling through the Great Depression."

I believe this lack of savings is due in large part to our near constant contact with television and other forms of advertising. It's everywhere! Football stadiums, magazines, tee-shirts, even in some schools. We'll get to those other things later, but for now, if you want to save a substantial sum of money this year, stop watching commercial television. Here's how:
  1. Invest in TiVo or another DVR technology and fast-forward through commercials. Become a conscious consumer of television. Choose your shows, make a schedule, watch the things you know you want to watch and skip all the commercials. You'll be amazed at how light you eventually feel! Without watching all the ads in between the segments of your shows, you are left only with the desire you create yourself (plus the desire created by the things in the show itself and the other ads you consume, but still, it's an improvement!). It feels really good to want only what you really want, not what someone is trying to sell you. On your own would you want an iPhone, or is it just the ads that make them seem irresistible? On your own, would you sit on the couch and feel that you needed a new Toyota/a Thighmaster/a freezer full of Lean Cuisine/a pair of jeans from Old Navy? Odds are, that no, you wouldn't generate that desire on your own. Spending on things that aren't coming from your authentic desire is a huge waste. Investing in a TiVo or DVR is a case where spending money can ultimately save you money.
  2. Stop watching altogether. Cancel your cable and listen to the radio, read the paper, and watch shows and movies on DVD or online. Netflix has an excellent selection and presents a good bang-for-your-buck. Choose this method and you can save money (by not spending on cable) and save even more by cutting out *even more* unnecessary desire than with the TiVo/fast forward solution. Yay! My friend Maria is doing this this winter and so far, it's been a great success for her.
  3. Go old school. I still tape all of my shows using VCRs. I have three VCRs. Two built-in to TVs and one separate. I have a complex system of taping and reviewing and I manage to tape and watch all of my shows without viewing hardly any commercials. This method is more affordable than the DVR version, but also takes more commitment.
  4. Cut back on your cable package. Are you paying for channels you don't really watch? In Massachusetts, most Red Sox games are on NESN, a network you have to pay extra for. But there's no rule that says you have to pay for that channel all year long. If you added a channel for a certain benefit--to watch Dexter, The Sopranos, the Red Sox, etc.--cancel it once that benefit is over. I don't need to pay for NESN during the winter. I don't need to pay for HBO or Showtime when none of the shows I like are airing new episodes. If you don't want or need any premium channels at all, you can call your cable company and ask for "reception" cable. It's the most basic of the basic, and they often won't tell you they offer it, but they are required by law to do so. The price should be about $5 per month, and it should give you all the major networks (ABC, NBC, PBS, CBS, FOX) plus some others. I've used this version of cable in Massachusetts and California and received as few as 13 channels and as many as 57. No matter what your cable operator tells you, they are required to give this to you, so if they give you a hard time, keep at it until they acquiesce.

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Dealing with Deadbeats

As most of you know by now, my one most passionate dream is to own a home of my own. Having spent much of my childhood homeless or on the verge of it--and being a Cancer, of course--I crave a nice, safe, clean, wonderful home of my own with an unparalleled constancy. This urge has driven my every move since my last intense craving--a college education--and is with me every waking moment, and often in my sleep as well.

Several things have stood in the way. Student loans, illness, an unsteady and frequently very low income, six years spent renting in one of the most expensive cities in America, and an inability to figure out exactly where I want to settle down top the list of obstacles to my home ownership.

Last March (2007), I publicly declared my desire to own my own home and I set about trying to bring that dream to fruition. The first step was to leave the overpriced apartment I was renting in a (terrible) co-housing community in Northampton. I was paying $825 plus utilities for a tiny, basement 2BR apartment. In order to cut my overhead, I relocated to Easthampton, the smaller, more working class neighbor to Northampton, and rented a 3BR duplex for $900. My intention was to rent one of the bedrooms and split utilities with someone, while still having rooms in which to sleep and work. The apartment was perfect for this, but the plan has not worked as I hoped.

I moved in on May 1st, covered the nearly $3,000 in move-in costs, and then looked for a roommate for June 1st. Only one person showed up for his scheduled interview, but he brought me iced coffee, seemed very easy-going and personable, and said that he had made more than $100,000 the year before. I liked him, so even though he said his credit was bad, didn't have a checking account, and couldn't pay the move-in costs all at once, I took him.

I have regretted this decision ever since. While he is a very good guy in many ways, he is not a good roommate. In all the months he's lived here (nearly eight) he has never paid his rent or any of his bills on time. For the first four months, I paid our rent with my credit card. I had my portion (which is nearly 2/3 of the rent), but not his. Since the lease is in my name, it was my obligation to pay the rent on time, even when he didn't.

Every month, he had a story. Once he said he set himself on fire. Twice he was in the hospital with kidney stones. Once he fell 14 feet off a building. Three times someone died. Twice his employer didn't pay him for a total of one month's wages. The last time, he just didn't come home on the day rent was due. He showed up the next day in tears and said he'd almost killed himself because he felt so bad about not having rent. I had promised myself the month before that if he didn't pay his rent on time one more time, I'd kick him out, but when faced with a sobbing 26-year old ironworker, I could only offer him hugs...and candy.

I think he's probably not a bad guy. Twice I've gone out of town and he took good care of my kitty. He has helped me move heavy things. If I ask him to do something--like turn the TV down or use the bathmat--he does it. But the entire point of having him here was to get myself into a better, more relaxing financial position, and instead, I have been frustrated, stressed out, and angry.

Part two of my home ownership plan was to increase my income, which I have done successfully. On October 1st, I took a full-time work-from-home editing job for which I am well-compensated. It takes away much of the stress associated with rent, because I can now afford to pay both mine and my roommate's without resorting to credit cards, but it does not take away the anger, resentment, and frustration.

I have talked with him about the toll this takes on me. He seems sincerely sorry. He pledges to do better. I have told him, month after month, that this can't continue. He says it won't. But then it does.

Two months ago, my concession was to agree to a weekly payment plan. He would pay me $100 per week, rather than trying to come up with his $385 in rent all at once on the 1st of the month. He never came through with any payments, though.

In December, he paid his rent ten days late. As of today, January 6th, he owes me $276 for November, December, and part of January's utilities.

The good news is that I finally kicked him out. Just before Christmas, I talked it over with him, and he agreed that he could leave by February 1st. Since my boyfriend is here now, hopefully the finances will balance out again. But since Peter just moved here, he hasn't found work yet, so for the time being, it's all on me.

Even though my roommate didn't have to pay rent this month (because he paid his last month up front)--and has no student loans, credit card bills, car payments, or other debts that I'm aware of--he still hasn't paid the utilities. His security deposit is only $230, so even if I changed the locks today, I would lose money. I would lose part of what he owes me for utilities. I would lose the money for the locksmith. And I would lose the cost of hiring someone to clean his filthy, stinking room.

From a Thrift standpoint, where did I go wrong?

  • The plan was a solid one, but I think I overestimated the appeal of living in Easthampton. There were almost no takers for my roommate listing, where I thought I would have a good selection. So, I would up taking someone unsavory.
  • I should have seen his inability to pay the first, last, and security up front as a sign of his financial instability and reconsidered him at that point.
  • I should not have reduced the security deposit from $385 (the maximum allowable by Massachusetts law in this case) to $230. I knew this was unwise, but I caved and I regret it now.
  • I should have drawn up a sublease and had him sign it, but I didn't. Again, this was very uncharacteristic of me. With all other roommates, I have had a legally binding document that spelled out the terms of the arrangement and the penalties for non-payment of rent, etc. But, in this case, he convinced me this wasn't necessary.
  • I should have put him on notice after the first late rent, and removed him after the second. However, in my defense, I suffered a terrible injury at the end of his first month here, and was unable to walk, drive, or take care of myself. I was in no position to switch roommates, and couldn't handle the payments--or living alone--if he left, so it was an extenuating circumstance.
At this point, I have, at least, asked him to leave. So, that's step one. I am taking a harder line with him this month about the overdue utilities, but I don't know if it will create results. I've told him he can't do his laundry here until he pays the gas and electric bills. If he doesn't pay today, then I will take away his parking privileges. I can insist that he be out no later than January 31st, whereas before, I had told him he could pay week-to-week if he needed to stay longer.

What kills me about this situation is that he showed me a check for $2700 that he'd gotten just last weekend for selling his Pats/Giants tickets. So, I know he has the money. And yet, he hasn't paid me.

Having Peter here helps because I think my roommate may be less likely to make up stories or behave badly...but still. It's a lot like the frustration of freelancing. I would complete a job on time, but then a client would take weeks or months to pay me. The work is done, but the payment doesn't come. In this case, I pay Seth's bills, but he drags his heels for days or weeks before paying me back. In his defense, he doesn't spend much time here, but that doesn't excuse him from his obligation to pay the rent and his half of the utilities.

It seemed like such a good idea to get a bigger place and get a roommate. I should have saved more than $400 a month, but that's not what's happened. Even though he always has gotten around to paying me eventually, the lag in payment has caused stress, budgeting crises, and incurred interest payments on my end. Even though the money has always come eventually, there is a feeling of always being behind and never knowing if or when he would pay his bills.

I'm so glad it's ending and I just can't wait for him to be gone. I want to tell him to just get out tomorrow. I could keep his security deposit and suck up the loss (the difference between what he owes and the deposit, plus any costs associated with cleaning up after him or changing the locks, etc.) Sigh.

But, for now, I'm going to continue to ask him to pay his bills and hope that he goes peacefully on time.

Once Seth is gone and Peter is working, the path to home ownership will, hopefully, me more clear and swiftly traveled.

In addition to sorting out this roommate revenue stream issue and getting a better job, I am also paying down my credit card debt in order to increase my credit score and improve my solvency, so as to be in a better position to shop for mortgages, possibly as soon as the end of the year.

3% of my pre-tax income goes into my 401(k), to be matched by my employer. I've set up an auto-transfer of a certain amount every week from my checking into my savings. And I've created a comprehensive budget that will get me out of credit card debt by the end of 2009--sooner if I'm lucky and aggressive.

More on this is future posts, but for now, wish me luck in my dealings with Seth. He's promised to give me the $276 tomorrow. But, I've heard that before. I've told him not to come home until he's paid me, but I don't know if he'll take heed.

Good luck to all of you thrifters out there. I hope 2008 is prosperous for you all!

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