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Garage-sale season opens

It’s starting to be the season for one of the region’s great economic “sports” — garage sales.

A lot of people pursue the sales with a passion that easily matches that of the weekend golfer: gathering the ads, mapping a route, and hitting sale after sale for the best buys. Now that the weather’s starting to warm up, so will the sales.

Of course, the recession gives the practice a little boost too, for both buyers and sellers. People might look to buy more used items at a discount these days — or they might be looking to sell off more old stuff to raise a little extra cash. If you’re in the latter camp, here’s a link to a page that rounds up a lot of advice for the garage seller:

Garage sales are work - a lot of hard work, but the returns more than justify the effort. Whether it’s advertised as Patio, Carport, Yard, Porch, or Garage-a-Rama, people will come and buy. Clean out your closets and ANYTHING that is useless to you or you don’t want - put it in the sale. Don’t throw anything away. People will buy just about anything. You’d be surprised. What is one person’s trash is another’s GOLDMINE!

Who you gonna trust?

Good morning, Netizens…

Yeah, tell me about it!

It sounded so nice, so respectable, so dependable when they signed us up for our 401k’s, didn’t it? However, now that we have wandered down David Horsey’s Carnival Midway where the real wheeling and dealing takes place, the money we invested isn’t worth a fraction of its original value, now is it? The only thing we can be certain of is that our financial worth and savings took a big hit while some faceless, nameless guys who own the Midway, such as the rabid bats at AIG, and thus actually control the how the show runs, made a killing doing so.

In several James Bond movies, there are several references made to crooked roulette wheels, where the Bad Guys are capable of manipulating the outcome of each roll of the wheel. In several other movies there are crooked dice, which because they have their edges altered in various ways, can be made to fall in more predictable ways. Of course, since the beginning of time there have always been crooked cards, altered to where they could be read by those-in-the-know in high-stakes poker games.

If the truth is known about our current economic and financial woes, it seems to me as if we all were gambling with our investments when we signed up for various fiduciary products, including our 401k plans; it is just that they told us our savings were all so secure. They told us we were being wise and cautious investors, which we should be.

They just didn’t tell us the equipment was all rigged in the favor of Fat Cats could manipulate the outcome in their favor anytime they wanted to do so with insufferable ease. Apparently they did that.

Short of the Ouija board, a shaman or a soothsayer, who can you trust in these days?

Oh, before you answer that loaded question, since you’re going back out into the Carnival Midway, please grab me a box of popcorn, would you please?


The fad of frugality

I’m starting to think we’re kidding ourselves a little bit, when it comes to coffee.

Is any daily habit more subject to the whims and attentions of our suddenly rediscovered frugality? Is any item more likely to be suggested as a way to save than giving up the “$4 latte”?

When I saw the news that more Americans were making their coffee at home — just as I’ve started doing — it made me wonder if for some of us it isn’t just a bit of tourism in the frugal lifestyle — an act that’s more symbolic and transient than a true change of direction. A little thing that we’re using to bluff ourselves into thinking we’re changing more than we are.

One writer at Wise Bread argues true frugality involves more than simply seeking good deals and small savings. But first, here’s a clip from the Reuters story about the coffee survey: 

Of the people who said they had drunk coffee the previous day, 83 percent said they had made it at home — up 5 points compared with year-ago figures.

“The coffee industry as a whole doesn’t seem to be suffering at all, seems to be recession resilient,” said Mark DiDomenico, director of Customer and Consumer Insights for Sara Lee Foodservice.

“Gourmet coffee is where we saw some of the decline,” said DiDomenico, who presented the survey results on the convention’s final day.

Daily consumption of gourmet coffee, which includes espresso-based drinks, fell to 14 percent, back to levels seen in 2007, he said. In 2008, this category was at 17 percent.

401(k)s: A reason to believe?

Lots of people have stopped investment in their retirement accounts lately — or at least shifted their accounts dramatically toward the slow and safe bets.

And we’ve all heard the gloomy estimates about how long it took the market to recover from the Great Depression — until 1954. But a column in today’s Wall Street Journal should give a little hope to those of us who haven’t stopped putting money into stocks through a 401(k) or some other system of “dollar-cost averaging” — investing the same amount each month, no matter what. That means when the market is down, you buy more shares, and when it’s up you get fewer.

Brett Arends argues that investors who used dollar-cost averaging during the Great Depression bounced back within a couple years — a great comfort to those of us who have stuck with the retirement strategy we had before the downturn.

When the market turned, those who stuck quietly to their plan got repaid quickly. Forget that stuff about 1954. According to Ibbotson data, someone who dollar cost averaged was back on level terms by 1933. And by 1936 he had doubled his money (though the crash of 1938 then knocked him back to evens for a while).

Fill up that freezer

If you buy a lot of food in bulk, you’ll naturally need to freeze some of it.

But a lot of us are uncertain about freezing certain foods, like dairy products and vegetables. Erin Hufstetler, at Frugal Living, has a post today outlining the variety of sometimes surprising items — such as milk, eggs and tomatoes — that can be frozen.

Here’s her suggestion for freezing eggs:

Whole eggs: Mix the yolks and egg whites together. Then, pour the egg mixture into an ice cube tray, and freeze. Two cubes is the equivalent of one whole egg.

Egg Yolks: To prevent thickening, stir in half a teaspoon of salt (or one and a half tablespoons of sugar, if the eggs will be used in desserts) for every one cup of yolks. Then, pour into an ice cube tray and freeze.  One cube is the equivalent of two egg yolks.

Not so fast

When the national economy zigs, Spokane’s sometimes zags. Or at least lags — showing less intense highs and lows than elsewhere during the recent housing bubble and subsequent recession.

It’s been true with foreclosures and bankruptcies, which have been going up here, but not to the degree seen nationally. Now, though, as foreclosures are dipping nationally, they’re showing a jump in Spokane.

RealtyTrac, a national firm that tracks foreclosures, reports today that foreclosures are down 10 percent nationally from December to January. Here’s an article at SmartMoney that cautions us not to get too excited about that.

Month-to-month comparisons can … be misleading, says Andres Carbacho-Burgos, an economist at Moody’s Economy.com. Short-term fluctuations can be too volatile for long-term conclusions to be drawn. “A three-month moving average might tell you a bit more about the underlying trends in foreclosures,” Carbacho-Burgos explains. (Moody’s Economy.com uses quarterly statistics from the Mortgage Bankers Association in its housing reports.)

In fact, compared with January 2008, foreclosure activity in January was up 18%, making it the 37th consecutive month with year-over-year increases, according to RealtyTrac.

Eat well, save money

It’s become a cliche of recession journalism: the how-to list for saving money on food.

But it’s understandable. Food is one of our biggest expenses, and you can approach it in so many different ways. Today at WiseBread, there’s a post offering suggestions for how to save money and eat healthfully. One thing the piece insists on is that you don’t have to eat lousy food to save money — which is good, since some of us would probably go into debt to eat good food.

If you’re on a budget, you can still eat well–all it takes is imagination and a sense of adventure. Invest in spices to liven up your meals. Experiment with sauces. Prepare them in large quantities, and freeze or preserve them. Make your own stock and freeze it in containers that will be ready when you want soup or stew. Curries, stews, and stir-fries are great ways to stretch meat or use leftovers.

Try macaroni and cheese with real cheese and whole-wheat or vegetable pasta. Even something as simple as a peanut-butter sandwich can be healthier with whole-wheat bread and real, old-fashioned peanut-butter. Yes, that’s right; comfort food can be healthy!

You might as well ask

If there’s one money-saving suggestion that comes up again and again, in a huge range of circumstances, it’s this: You can negotiate prices on much more than you might imagine.

Most recently, I was surprised at how many consumer advocates and others say it’s a good idea to try to bargain even with your doctor — which sounds a bit extreme on the face of it, but which surveys show works the majority of the time.

In a post at Wise Bread, Nora Dunn writes about using negotiation tactics to get her cell phone bill and credit card rates lowers. As she puts it:

Truly – you can negotiate just about anything. Just because a website advertises specific rate packages does not mean that you cannot bend the rules. I recently signed up for internet access with a new supplier; in so doing I researched the packages available online, and then called to ask if they had any promotions available. Between the two people I talked to, I saved over $400 in posted connection fees, received 50% off the posted monthly rates, and got a $10 monthly reduction in my telephone bill too. None of these discounts were posted online, and I don’t believe they would have become available to me if I had not asked.

Take the retirement quiz

Kiplinger.com often posts quizzes as a way to provide information about a range of financial subjects. It’s an engaging and interactive way to pick up information about topics from investing to tax deductions.

Today there’s a quiz up about retirement, which opens with this question:

Your 401(k) balance took a big hit in 2008’s market meltdown, but you’re more than ten years away from retirement. You should:

A - Stop contributing to your retirement plan

B - Transfer all  your money to cash

C - Defer investment decisions until the market rebounds

D - None of the above

Becoming an active patient

How often would you say you make an actual decision about your health care?

I mean an active decision — as opposed to simply following what your doctor or pharmacist or health-care pro suggests at the moment? As health-care costs rise and employers cut benefits, individual consumers are being handed an ever-greater share of the responsibility of paying for care. Consumer advocates suggest they ought to take a greater role in decision-making, as well — questioning fees, seeking alternatives and challenging decisions. Here’s the way an article in the AARP magazine puts it:

This harsh reality is starting to translate into a kind of revolutionary fervor among some Americans. “Our health care system clearly isn’t working,” says William Schwied, M.D., M.P.H., an 85-year-old retired physician who has organized hundreds of California retirees in a grass-roots effort to fight for a better health care system. “The only way we’ll see change is for people to take to the streets,” he says.

A thinner box of mints

We’ve all noticed the shrinking packages at the grocery store.

Everything from ice cream cartons, peanut butter jars, cereal boxes and jugs of juice have gotten smaller, as manufacturers look for roundabout ways of raising prices without appearing to raise prices.

Now the Girl Scouts are getting in on the act, according to a story in the Dallas Morning News. 

Fewer cookies were packaged into Thin Mints, Do-si-dos and Tagalongs boxes this year, and the Lemon Chalet Crème cookies were resized to compensate for the rising cost of baking staples. … Alternatives to the changes were to raise cookie prices or use cheaper ingredients – two options that were rejected, said Natalie Martin, marketing director for the Girl Scouts of Northeast Texas.

Advanced cost-cutting

Sometimes, trying to save money gets more complicated than string theory.

At least that’s the case with the “Catalina.” Broken down in a post today at Wise Bread, the Catalina is a special kind of grocery offer that apparently allows shoppers to combine sale prices and coupons to save big. Here’s an excerpt from the piece, written by Carrie Kirby:

I consider them graduate-level grocery cost-cutting — there is math involved to get the best deals, but it’s worth it.

You might have noticed these deals in the grocery flyers: “Spend $20 on selected products, get $10 off your next purchase.” Right off the bat, these deals promise better prices than you would normally find, because the products involved are almost always on sale for the duration of the special offer. Normally, you are either offered a sale price or a “buy-one-get-one” offer, which is essentially half price. But with the above Catalina example, you are being offered half off the sale price – assuming you are able to use the coupons you earn for things you would have bought anyway on your next visit.

Expensive, but frugal

Sometimes, you’ve got to spend money to save money. It’s a truth you learn over time — that a well-made, long-lasting item is worth more than a poorly made inexpensive ones.

Erin Hufstetler at her Frugal Living blog called out a few of her favorite items that are more than worth their higher price tags, because they’ll save you money in the long run:

Energy-efficient appliances; top-quality building materials; well-made furniture (solid wood, instead of particle board; down stuffing instead of foam, etc.); Indestructible kitchen supplies (cast iron cookware, KitchenAid gadgets, etc.); healthy foods (organics, free-range meats and eggs, high-cocao chocolate, fresh fruits and veggies over canned, etc.)

Snowblowers blow past recession

This isn’t a huge surprise to those of us who lived through the past month of winter around here, but the Wall Street Journal is reporting that snowblower sales are resisting the recession.

Across the country, manufacturers and retailers report robust sales — and in some cases shortages — of the do-it-yourself machines, many of which aren’t inexpensive, running from a few hundred dollars to upward of $2,000. At Home Depot Inc., sales of the machines are up “high double digits” over last year, particularly among the heavier-duty big-ticket models. December storms were widespread and powerful enough that Lowe’s Cos. for the first time shipped truckloads of snowblowers to the state of Washington the same day it sent them to Michigan and Maine.

Snowblower sales in Spokane and North Idaho — along with those for snow shovels, ice melt, car chains, etc. — boomed during the storm, when it was difficult to find any of those products.

It’s a case study in supply and demand — the need for a snowblower comes urgently, and feels unquestionable. But how does the investment of hundreds or thousands of dollars pencil out over a longer time? How do you decide whether it’s worth it to buy the big snowthrower versus spending some quality time with the shovel?


Coupons pay off — royally

When did “coupon” become a verb? Is this an outgrowth of the new frugality, or just something I’ve never noticed before?

A post at Frugal Living today is titled “How to Coupon Effectively.” It’s got a lot of practical advice for making the most of coupons and driving down your grocery bill. It’s part of a package on how to become a “coupon queen.” (What about coupon kings?) Erin Hufstettler writes:

Coupon queens – they’re the women that can go into a grocery store with a big pile of coupons, come out with a big cart of groceries and only lose a few pennies in the process. How do they do it?

The answer is lots of preparation and lots of coupons.

401(k)’s: When you advise yourself

If you’ve been spooked by the big negatives on your 401(k) statements, you’ve got plenty of company.

The widespread dent in the retirement savings accounts now has some experts questioning whether the whole program is fundamentally flawed, since it puts untrained, unskilled people in charge of their own investments. The Wall Street Journal has a deep report on this issue today.

After watching her account drop 44% last year, Kristine Gardner, a 35-year-old information-technology project manager in Longview, Wash., feels no sense of security. “There’s just no guarantee that when you’re ready to retire you’re going to have the money,” she says. “You either put it in a money market which pays 1%, which isn’t enough to retire, or you expose yourself to huge market risk and you can lose half your retirement in one year.”

Many retirement experts have come to a similar conclusion: The 401(k) system, which has turned countless amateurs like Ms. Gardner into their own pension-fund managers, has serious shortcomings.

“This is the biggest test that the 401(k) plan has seen to date, and it has failed,” says Robyn Credico, head of defined-contribution consulting at Watson Wyatt Worldwide, noting that many baby boomers are ready to retire. “We’ve put people close to retirement in a very challenging position.”

Feed the pig

Sometimes the simplest strategies are the best.

Writing at Wise Bread, Thursday Bram reveals how she’s used the most elementary of savings tools — the piggy bank — as a way to sharpen and improve her financial life.

When I was a sophomore in college, my dad gave me a piggy bank for Hanukkah. I couldn’t figure it out at first — had my dad forgotten that I was all grown up and didn’t need a piggy bank for my pennies anymore? It was an adorable little pig, though and I put it on my desk as a decoration. Pretty soon, the pig was full. I wasn’t sure how it happened, really, but who was I to turn down the $20 I had in pennies, nickels, dimes and quarters? I took it with me to the bank and deposited my change — I wasn’t about to roll all that change myself.

Turn packaging into toys

If you’ve got two items that are plentiful about now — packing peanuts and plenty of time indoors — here’s a suggestion for something fun for the kids.

Erin Huffstetler at Frugal Living says the shipping nuts, plus a little water, can be turned into a source for creativity, on long snowed-in days. Read about it here.

Do you have anything you turn from trash to toys?




Bats in the Belfry

Daily Tip #348 There are an estimated 46 million under-insulated American homes. Cold drafts are a coming and insulating your attic is probably the most effective step you can take to reduce you home energy use. Give it a shot. Research the project, learn what’s best for your house - consider such issues as type and thickness, proper moisture barrier and ventilation methods. Visit the DOE website for useful information to get started.