Smart Spending

Snail-mail bargain: Time to buy forever stamps

Karen Datko — Fri, 09 May 2008 03:32:27 GMT

The cost of a first-class stamp is going up yet again on May 12, by one penny to be exact. The smart shopper will lock in the soon-to-be-departed 41-cent rate for a standard letter by stocking up on the forever stamp.

The U.S. Postal Service introduced the stamp about a year ago so people can avoid having to buy those annoying 1- or 2-cent stamps every time the rates go up. The forever stamps you buy now for 41 cents will cover the postage for a letter weighing no more than an ounce no matter how high the first-class rate climbs. Love may not be forever, but this stamp is.

According to the post office, forever stamps have really caught on, with more than 6 billion sold. We like the convenience, plus the thought of avoiding future rate hikes.

But not all bloggers enthusiastically embrace them.

"Mighty Bargain Hunter" said that by locking in today's price for a stamp, he'll miss buying cool stamps like those with the comic book superheroes. We agree, MBH. The forever stamp is bland in comparison. Those superhero stamps are our favorites, too.

And please, don't consider forever stamps an investment. The math isn't there. As The Penny Saved observed: "The postage rates are increased yearly based on inflation -- and this just in: Pacing inflation is not a good investment."

Also, stocking up makes sense only if you use snail mail.

Writes Andrea Dickson at our partner blog Wise Bread, "I try to do all of my bill paying online, since the last time I paid my mortgage with an actual paper check, the bank had no idea what to do with it, and called me, asking why I hadn't paid my mortgage like I always did."

The best advice is to accept forever stamps as a frugal purchase but not a gargantuan savings. Getting a supply good for a year or five sounds reasonable. Writes "BeThisWay" at Are You Going To Be This Way The Rest Of The Time I Know You?: "So, my frugal friends, go buy as many forever stamps as your budget can handle, but please don't take out a second mortgage. And please walk, because the price of gas will undo your frugal coup before you pull out of the driveway."

"Now," says Xin Lu of Wise Bread, "if the government introduces a forever gas stamp that guarantees a gallon of gas for today's price, then I would definitely stock up $8,000 of that stamp."

Saying no when people want to borrow money

Karen Datko — Fri, 09 May 2008 00:21:50 GMT

This post comes from Xin Lu at partner blog Wise Bread.

I think most of us have been asked to lend money to someone we know. No matter how close you are with the potential borrower, there are certain situations when you just have to say no.

Here are some of the times I think you should absolutely keep your money for the sake of your relationship with the other person and the well-being of both parties.

The money is enabling an addiction. If you know full well that someone has a drug habit or gambling problem, you should not give that person money. The best thing you can do is to get them real help like rehab; otherwise the money will be spent on the habit. If you become an enabler by giving them money, they may hurt themselves even further.

Your boss is asking you for money. I wrote about this in an article about crazy bosses. A manager should not use his or her authority to secure a loan. It is highly unethical, and you should not be afraid to report such behavior to the higher-ups or even the authorities. If a manager targets you in a threatening manner because you refused to lend money, that should be reported.

Good money is going toward irreconcilably bad debt. I read a story about a very responsible man whose extremely irresponsible in-laws took out multiple cash loans on their mortgage and ended up near foreclosure. They asked their son-in-law for help to cover their mortgage, which was now twice their income. When you know that the borrower cannot manage the money you give them, you should not let them squander what you earned and saved. Teach them to manage money responsibly; otherwise, continually paying off a chronic debtor's debt is no different from enabling a drug habit.

The asker is a repeat borrower or leech. In some families there's a person who has a track record of hitting up everyone for cash. If that person is able to work and generate income and chooses not to, you should refuse to be taken advantage of. Once again, what would really help these people is to teach them to become financially savvy, and that can be done with coaching and perhaps employment opportunities.

In all of these cases, you should think of alternatives to money to help those you care about. Ask them what the situation is, and look for ways to improve their lives without giving away a bundle of cash. In most of the stories I have heard, relationships actually get worse if money exchanges hands, because more often than not the borrower does not pay the lender back.

If someone is worth helping, you should dig deep to find the root of the problem and help eliminate it. If someone is just an opportunistic jerk, perhaps it is best to sever that relationship and improve your life.

Either way, you must be strong and say no when you're asked for money, even if that person promises to pay you back.

Other articles of interest at Wise Bread:

"How big of a house do you really need?"

"Should you stockpile the forever stamp?"

"The ethics of hoarding"

Wrench sets, emergency kits, watches, shoes, keyboards

Karen Datko — Thu, 08 May 2008 23:50:03 GMT

Here are today's hot deals from partner blog dealnews.com:

Bob Vila eight-piece Quick Glide wrench set in SAE for $3. With $4.95 for shipping, that's a buck under our February mention of the same set in metric and the lowest total price we could find for such a kit.

Halberd 31-piece roadside emergency kit for $10 with free shipping. That's $3 under our mention from a month ago and the lowest total price we've seen for such a kit.

Invicta men's Russian Diver Collection Blue Watch for $125. With free shipping, that ties last month's mention as the lowest total price we've seen by $120.

Sandro Moscoloni men's Canton shoes for $29.70. Coupon code NEW5459 cuts it to $26.73. With $5 for shipping, it's the lowest total price we could find for this style.

Logitech cordless desktop MX3200 keyboard and laser mouse combo for $59.99. A $30 mail-in rebate drops it to $29.99. With free shipping, that's a buck under our mention last month and the lowest total price we've ever seen.

Frugal or just downright cheap: Take the test

Karen Datko — Thu, 08 May 2008 23:40:26 GMT

Pinyo's wife thinks he's cheap. In his mind, he's frugal. Who's right?

He scored a 20 on the cheap vs. frugal test he devised and posted at Moolanomy. That score indicates that he's neither, but that he "appears to be reasonable" with his spending.

Take the test. It's fun. For example, here's Question No. 6.

You have some old clothes. Do you ...?

What are you talking about? I don't have old clothes.
I donate them when they get a little older.
I turn them into rags.
I am still wearing them.

We scored a 26, which means we squeaked into "You're frugal. Good job!" We also took the test for our partner blogger Donna Freedman. Her TV-free status earned her a few more "cheap" points, but she still finished with a respectable 31, well within the frugal range.

Here are two more sample questions. (To see the entire quiz, click here):

When you receive gifts, do you ...?

I take them back to the store to trade up.
I keep all my gifts.
I may return or regift some.
I sell them on eBay for cash.

What kind of TV do you have?

1080 HDTV, of course!
A flat-screen TV, but not the latest and greatest.
I still have the one I bought 10 years ago.
I don't have a TV.

Avoid left turns: Save money by driving like the pros

Karen Datko — Thu, 08 May 2008 23:21:56 GMT

Who has the best tips for saving money on gasoline and diesel? Trucking companies, that's who.

So we decided to check out how those companies are adjusting operations to reduce the financial blow of rising fuel prices. A very good article in USA Today notes that "every efficiency is a brake on rapidly rising fuel costs, up 22% for gasoline since last year and up 46% for diesel," and shares some professionals tips that you can easily incorporate into your own driving habits.

In fact, some of these tips are among proposals made today by the American Trucking Associations, whose members include FedEx Corp., UPS Inc. and Con-way Inc. The group says its combined suggestions -- including a national speed limit of 68 mph, reduced idling, increased fuel efficiency, and national fuel-economy standards -- "will reduce fuel consumption by 86 billion gallons and carbon dioxide emissions -- the main culprit of climate change -- by 900 million tons for all vehicles over the next 10 years," an Associated Press story says.

Here's what the pros are doing:

Minimizing left turns. The USA Today article by Julie Schmit says "waiting for lights or for traffic to pass can consume more fuel than driving alternate routes."

Reducing idling. Big trucks eat up a gallon of fuel an hour while idling. Heck, we were near McDonald's the other day and noticed about 10 cars in idling mode in a slow-moving drive-through lane. How about parking and walking inside? Bonus: You'll probably get your food faster.

Reducing speed. Companies are telling their truck drivers to slow down, and are employing technology to limit their trucks' top speed. State troopers in North Dakota, a vast state with sparse population, have noticed the trend, says another Associated Press article.

Combining errands and reducing the number of trips. Delivery companies use software to design more efficient routes. You can do this yourself with a little common sense.

Checking tire pressure. USA Today says trucking companies are now checking tire pressure several times a day, rather than several times a week.

Using alternative transportation, like ships and trains. (Trucks have been hauling 70% of freight in the U.S., says AP.) You can switch, when possible, to riding a bike or walking.

Improving aerodynamics. "Drag matters," says George Wilkins at Trucker Talk.

Control portions, and you're controlling cost

Karen Datko — Wed, 07 May 2008 21:04:59 GMT

Little is wasted in the home of reader "smartlane," and much money is saved. Why? Because she controls portions of everything from snacks to condiments to shampoo. She writes:

I plan meals ahead, leave out snacks in portioned amounts for the kids, and fix plates for everyone to balance portions, and discourage overeating. I leave ketchup, parmesan cheese, salt, and pepper off table, and butter rolls and potatoes ahead of serving. I put out small bowls of condiments for individual family members. I also put measuring cups in cereal containers to discourage half-eaten bowls from being thrown out. (Smaller bowls have helped here too).

She also controls the amount of liquid soap and shampoo her family uses by filling smaller bottles with half product and half water, and also showing the kids how much is enough to get the job done.

Use credit cards -- and make money

Karen Datko — Wed, 07 May 2008 19:07:27 GMT

This tip from reader "kara17" is a good one, but only if you have unwavering discipline:

We put absolutely everything on credit cards with cashback rewards. (Warning: This obviously doesn't work if you don't pay your full balance every month. If you're paying 15% interest, a 5% cashback reward isn't doing much good.) We both have cards (from different companies -- one from Discover and one from Citi) with 5% cash back on gas, 3% cash back on groceries, and 1% cash back on all other purchases. There is a limit on how much you can get 5% cash back on (I think ours is $2,000 a year), so once we hit that limit, we switch to using the other card we have. These percentages may not seem high, but if you put everything on the cards, the cashback savings really add up.

She and her fiance just got a check for $360 from one card, and have $600 of rewards accumulated on another.

In a related tip, they also get cash back on purchases by using Ebates.

And yet another bonus tip from this smart shopper (one we're about to try because our satellite TV bill has gone up again): "If you must have certain services (i.e., cable, Internet, cell phones, etc.), call your provider and try to get a better deal. It's always cheaper for a company to keep a current customer than try to attract a new customer. ... Research current deals for new customers, then call the company and try to get that deal."

Make it a game with instant mpg

Karen Datko — Wed, 07 May 2008 18:17:00 GMT

It's a lot easier to stay interested in a game when you know the score. Poster sgtrock17 suggests looking for a car that has an instant readout of mileage.

"My last two GM vehicles have an instantaneous gas mileage feature. I use this as a scorekeeper. Me vs.them (Big Oil, speculators, foreign oil, etc.). This has changed my drivng style."

These mileage readouts appear in most makes of cars, sometimes as part of a navigation system but more often as a standard gadget controlled by the same gear that resets trip odometers. Typically they will track gas mileage since the last time the trip odometer was reset, but many have an even more effective feature that shows the instant effect of pressing the gas pedal.

Even a gas miser such as a Honda Civic can return single digits accelerating hard away from traffic lights. The time-honored advice of driving as if you had an egg (a raw one!) beneath the gas pedal pays off.

Get 50 mpg -- in your own car

Consumer Reports' gas-saving tips

Treat debt like a bill

Donna Freedman — Wed, 07 May 2008 18:02:00 GMT

"Dividend" has been using the snowball approach to debt reduction. To do so, the reader treats debt reduction payments as a monthly bill, "as necessary and unavoidable as paying rent."

Dividend started by creating a minimalist yet realistic budget to live on. This includes predictable expenses such as car insurance, gift-giving and "a little bit of play money." Everything left over is officially invisible. "I treat that money like it doesn't exist until the end of the month. Then, out of that, I pay minimums on everything first, and then the remainder gets paid to the next item in the snowball."

We think it's particularly smart to make a budget that includes "play money" -- if you deny yourself too much, you're likely to fail. Dividend is a lot more likely to reach the stated goal of being debt-free by April 2008 if there's room for the occasional treat. The results thus far are impressive: currently, the reader is throwing 46 percent of each paycheck at debts.

Make every drop of gas work for you

Donna Freedman — Wed, 07 May 2008 17:59:00 GMT

If only there were a magic pill that would give us 100 miles per gallon. Well, there isn't. "Frustrated Monk" uses a mix of strategies to get the most bang for the four bucks.

He drives 60 mph even if the speed limit is higher. The reader says that doing this earns him an extra three or four miles per gallon in his three different vehicles. Monk also keeps the car tuned up, checks the tire inflation, uses cruise control (except in hilly areas) and has removed any the junk from the trunk.

Although he's proposing working from home more often, on days when he does drive in he avoids the rush hour. "This alone improves my gas mileage by about 10%." It was because of the commute that he bought his third vehicle, a Honda Fit. The gas savings, he says, amount to about half the monthly car payment.

Not everyone has the option of adding a fuel-efficient vehicle to the family stable. But if you're thinking of replacing a car, or buying your first one, remember that mileage is a big issue. You'll want to buy yourself a tire gauge, too.