Thursday, October 30, 2008
And now for the rules:
1. To link the tagger and provide the rules on your blog.
2. Share 7 facts about yourself.
3. Tag 7 people at the end of your post by leaving names as well as links to their blogs.
4. Let them know they've been tagged by leaving a comment on their blogs.
Hmm, 7 facts about moi? Here goes:
1.) I'm obsessed with the '70s (and mid to late 60s). I love classic rock, disco, Swingtown, and am fascinated with the societal shift in America's consciousness surrounding events during this period (Vietnam War, Civil Rights movement, etc.). Someday I want to rent a souped up '68 VW bus (like this one) and go on a long Doors-esque road trip across the desert a la Easy Rider. While I'm a hippy at heart, I'm also obsessed with '50s style and culture, which would explain my penchant for Mad Men. Have you seen Down with Love? Yeah, that's my dream life.
2.) I am a walking encyclopedia of pop culture trivia, useless or otherwise. Many people say this about themselves, but it's embarrassingly true in my case. Music, movies, books, infamous commercials, classic TV moments -- you name it, and I'll not only remember it in excessive detail, but I'll be able to spout off random facts about it. This is especially the case with classic film trivia. I could teach whole classes on classic film (1930 - 1970) and I'd be set with fodder for months.
3.) I love to design clothes, from sketching, to picking out fabric, to perfecting every stitch and hem. It makes me happy to wear clothes I design from scratch.
4.) I was and will always be an English lit major at heart. I love reading fiction. LOVE it. Can't stress that enough. I plan to write fiction in the next few years when I don't have to depend on a steady biweekly paycheck. I don't think there's anything better -- well, almost anything -- than losing yourself in a great novel. Blanket and cup of coffee required.
5.) I knew I wanted to be a journalist my senior year of high school, when I was an editor for the school newspaper. When I was in college my friend and I started a monthly arts and entertainment magazine in Santa Barbara. Got into lots of great shows (for free), met a lot of fun people and got to do what I love (publishing). Very fun times. It was like Almost Famous, minus the Rolling Stone gig, cross-country bus ride and excessive drug use.
6.) Every night before I go to bed, I have a long, "drawn out" (or so my husband says) regiment of moisturizing my face and hands. Eccentric? Maybe. But I do it because I know that the No. 1 way wrinkles surface is from dry, dehydrated skin. Overly moisturizing every single night satiates my neurotic need to look young forever. So Sunset Boulevard.
7.) I have a younger brother and sister who are 23 and 21, respectively. Yes, that would make me the "older sister." And yes, I possess all those obnoxious traits that make up a true "older sibling": I am bossy, protective, nosy, probably too caring and fiercely loyal. Plus I'm an Aries, so those qualities are magnified even more with my loud, over-dramatic personality. I often tell my husband he was crazy to marry me. Once in a while he'll agree .... but only after laughing at me. ;)
And my 7 blog picks (in no particular order) are:
Kate at MoneyMate Kate
Abby at I Pick Up Pennies
Emilita at She's Little and Lovely
Elessa at Pursebuzz
Budget Mama at Mom's Budget Files
J. Money at Budgets are Sexy
The girls at Frugal Fashionista
Wednesday, October 29, 2008
- Assess your job situation. In a recession, no one is immune from layoffs. Today, anyone in housing, real estate or finance is especially vulnerable. And your job doesn't directly have to be "real estate agent" or "hedge fund manager" to feel the burn. Anyone in home furnishings, retail, construction and interior decorating, among other related fields, is subject to being laid off.
- Pay off credit cards. It's sad to say, but many people "use their credit cards as a rainy day fund," Golden Gate University professor Kit Yarrow tells the SF Chronicle. If you pay off your balance now, when you can, you will be able to borrow more if times get tough (assuming your credit score doesn't deteriorate). Paying down debt will help improve your credit score.
- Don't dismiss retirement. Continue contributing enough to your retirement plan to get the full employer match, but consider putting any extra savings in your emergency fund until it is sufficient.
- Consider a home equity line of credit. If you have enough equity in your home, think about opening a line of credit while you still have a job. As long as you don't borrow against it, you won't incur interest charges and there's usually no fee. If you do lose your job, you can use it for emergency funds. You generally can't open a line of credit when you don't have a job. These lines can be dangerous, however. "The problem is, every six months my bank sends me checks and reminds me I can write a check up to X, Y or Z," money manager Jeff Lancaster tells the SF Chronicle. "You need to be very disciplined" and resist the temptation to use it for nonessentials.
- If you are laid off, file immediately for unemployment benefits. In California, you must file by phone or online and you can't begin collecting benefits until one week after you apply. To be eligible, you must have lost your job through no fault of your own, be able to work and be looking for employment. Weekly unemployment benefits range from $40 to $450 depending on your earnings.
- Investigate health care options. If you lose your job, you usually can remain in your former employer's group health care plan for 18 to 36 months, but you generally pay the full cost plus an administrative fee. There may be cheaper options, such as adding yourself to a spouse or domestic partner's plan.
- If you must raid your retirement plan, know the rules. You can withdraw money from an individual retirement account for any reason. If it's a traditional IRA, you will owe income tax on the withdrawal plus (if you are younger than 59 1/2) a 10% penalty. (Different rules apply to Roth IRAs and nondeductible IRAs.) Many 401(k) plans allow withdrawals if you can prove a financial hardship, but you will still owe income tax on the withdrawal plus (if you are younger than 59 1/2) a 10% penalty.
If you leave your job and roll your 401(k) plan in to an IRA, you will have to wait until you turn 59 1/2 to take a penalty-free withdrawal. [SFGate.com]
- Just Say No to Credit Cards. Credit cards, my friend, are a drug to some of us. The thrill of charging a new plasma television may indeed exceed the thrill that some experience when taking illegal drugs. Because of that, we have to learn to say no.
Even if your credit card habits aren't that bad, you could probably use a bit of "reigning in" and learn to avoid making unnecessary purchases. Even if you pay cash for your "splurges" save the cash and put it toward paying down your debt. With the economy hit so hard, you want to have as little debt as possible weighing your finances down.
- Fall In Love with Coupons. If you haven't yet discovered the wonder of coupons, it's time you get acquainted with the little bits of paper that can save you hundreds (or even thousands) of dollars each year. For the little bit of time you spend clipping coupons and planing to shop the best sales, you'll have a much fatter bank account to show for it.
- For those of you who are homeowners, now may be the time to refinance. If you have an ARM (if you don't know what that is, read my breakdown of mortgages here), now may be the time to refinance into a fixed-rate mortgage. Mortgage rates are lower than they've been in a long time. Adjustable rates can go up and you may find yourself in a bind if you can't make your rising mortgage payments. With a fixed rate, you won't face that dilemma.
- Save for an emergency fund, as you're paying down debt, of course. [Consumertipreport.org]
Monday, October 27, 2008
But I refuse to give up my skirts and dresses just yet. That's what winter is for anyway, right? And sadly the winters are long and hard here in Washington DC -- okay, maybe not that bad, but for a beachbum born and raised, I may as well be living in Siberia. So I've put a few key pieces together that are fabulous for indoor, non-Eastern Block temps, yet can all be covered and belted with the perfect trench for cooler outdoor weather.
I bought tickets for Love and I to see a ballet at the Kennedy Center in late November, and I think this outfit I put together (above) would be perfect. Ballet or not, it would also "razzle dazzle them" when worn out for a nice dinner, drinks with friends or just to kick your night up a notch.
- Purple Crystal Rose ring, Butler & Wilson, $35
- Satin Bow A-Line skirt, Forever 21, $19.80
- Dressy halter, Forever 21, $17.80
- Multi-chain necklace, Forever 21, $6.80
- Santi Blaire fabric clutch, Amazon.com, $95 (pricey, but very easy to make from scratch. Already bought the fabric, which only cost about $4!)
- Wing Tip pumps, Charlotte Russe, $24.99
Trekking out to Old Navy anytime soon? Then be sure to try all these tres chic finds (above) on when you're ready to hit the fitting rooms! All together they cost a grand total of $104 -- a perfect price for four different, polished looks. Hurry though, sizes (as always at Old Navy) are running out fast!:
- Black Stretch Ponte-Cap Sleeved Dress, Old Navy, $29.50
- Baby Blue Belted Cowl Neck Dress, Old Navy, on sale for $20!!! (Hideous shoes they paired with the garment, but I love the dress nonetheless.
- White Turtleneck Sweater Dresses, Old Navy, $34.50
- Pink Wrap-Front Knit Dress, Old Navy, $20
Ah to feel Parisian all year-round! The above outfit I conjured up is fun, flirty and feminine. Stand out in bold colors when everyone else around you is bundled up in grays and blacks!
- Bonjour Eiffel Tower Brooch, KristenGrace.com, $24
- Pink Neck Scoop Cardigan, MissSelfridge.com, on sale for $18.50
- A-Line Floral Skirt, Forever 21, $24.50
- Green clutch, Forever 21, $12.90
- Black Scarf, BonPrixSecure.com, $12
- Pearl necklace, Forever 21, $6.90
- Pink heels, www.Heels.com, $49.50
Everyone needs a good pair of boots, either high heeled or otherwise. I had all high heeled boots until recently when I became obsessed with finding perfect riding boots and found a pair of Nine Wests on sale. I don't know why I'm on such a riding-boot kick lately ... maybe it's all the horse-back riding Betty Draper's been doing in her fabulous black boots on Mad Men. Regardless, above are three adorable boot ideas that I would buy if I didn't already own so much footwear. Oh who am I kidding, I just ordered those Charlotte Russe wing tip pumps. While I work on my willpower, here are the prices:
- Black riding boots, Kohls.com, on sale for $46.99
- Tan Type Z Ashley heeled boots, Zappos.com, $149
- Brown Naturalizer riding boots, Zappos.com, $109 (I like my Nine Wests a little better, but these are cute too.)
And lastly, to keep you toasty and fashionable this fall say hello two of the cheapest yet quality trenches on the Web (above), both on sale right now at the Gap. I want both!! Must....not.....succumb.......
take a million bucks to look like a million bucks.
In fact, I don't think being on a budget ever looked this fashionable! ;)
Sunday, October 26, 2008
Love was there, along with Lola, who was walking along on her hind legs next to us like a two-year old. I remember I looked like a brunette Olivia Newton John circa Xanadu, wearing a delicate white dress that lazily danced with the indoor, yes indoor, breeze, and I remember being happy. No, it wasn't because I was the lead character in Xanadu (I'm obsessed with musicals, no matter how cheesy), nor was it because at one point I got to chat with ex-Mexican president Vincente Fox in the freezer section and Aretha Franklin in the produce aisle.
I remember being happy because I got to throw whatever I wanted into our cart without even glancing twice at the price. And that includes fancy wines and exotic cheeses, two of my favorite things. I woke up mid-float, as I was placing a giant wheel of Jarlsberg Swiss in our cart, to the sound of what I thought was Lola eating our cat Money Penny (false alarm! they were just fighting.)
After I broke up the scuffle, I got back into bed with a bevy of questions. Why did buying any food I wanted -- non-generic at that! -- light the fires of my satisfaction? Why were Vincente and Aretha in my dream? And most important, why was I a floating character from Xanadu? It dawned on me as I nodded back off to dreamland that I might never know the answers to the latter two questions, but the former was obvious.
As humans we have basic needs -- air, water, shelter, clothing (optional, kidding!) and food. Now I can and do skimp on lots of things in my life in the interest of saving money. I don't care about owning some no-name music player over an expensive one, or buying generic aspirin to get rid of a headache. But even though I'm guilty of being a miser, I hate skimping on good, quality food just to save a pittance. I like my wheels of cheese from Switzerland and not Wisconsin,thankyouverymuch.
I could easily go to Whole Foods right now and buy whatever I wanted in cash, but that nagging saver in me always coaxes me into a cheaper alternative, usually Trader Joe's. No offense to Trader Joe's, I love their seasonal pumpkin butter (among other things), but the overpriced pumpkin pie at Whole Food's is simply divine.
But we're budgeters, and budgeters shop accordingly, with or without the Queen of Soul. The more I dwell on it, the more I see no reason why us savers can't also feast like kings at the table of name-brand excess, so I've devised some ways to spend less on groceries as a whole and (hopefully) get better food to boot:
Spice up your life. Whenever I prepare a meal, the key ingredients I use are spices and seasonings -- I like a palatable kick to my food. The best way to inject a little chutzpah in your chow is with herbs and spices, but if you've ever stood in front of the spice rack at Safeway and surveyed your options by price, they quickly dwindle down to the cheapest: salt and pepper. Yawn. If you're like me and like sprinkling some excitement in your life -- er, food -- then why not check out a local ethnic food store? Asian, Indian and Persian grocery stores all carry loads of different spices that I've found are actually more pungent and tasty than what's carrier at their American counterparts. And some spices, such as saffron, aren't even carried at regular supermarkets. Tack on the fact that many foods cost significantly less when they come sans spices and sauces, and you'll quickly find that adding your own zest can't be financially beat.
A study by Columbia University found (in dollars/ounce) the following price disparities between McCormick's spices and ethnic food brands (respectively):
- Nutmeg. $3.54 versus $0.50.
- Cumin. $2.79 versus $0.25.
- Cardamom. $5.99 versus $1.
- Cinnamon. $2.13 versus $0.25.
- Chili Powder. $1.75 versus $0.31
Develop meals around sale items. Okay, so maybe you want your McCormick's and refuse to compromise. That's fine, then only buy McCormick's when it goes on sale or is discounted with some sort of club card. The same goes with everything else you end up shoveling down your gullet. Browse online at the grocery store's website and look for the best food deals. (Don't forget to browse the paper ads, too. You know, those junk mail inserts you throw away as soon as you take them out of your mailbox?) Map out what meals you are going to eat by planning ahead and buying the products on sale that week. The best thing about this method is that you don't have toforgo brand-name foods because they, like their generic little sisters, also go on sale quite frequently. You just need to be on the lookout for when they do.
Once you've written down about a week's worth of meals made up of fabulously discounted, quality food, you'll be armed and dangerous with a realistic grocery list to use once you're traipsing around with your cart. Sticking to your conscious, thought-out list will dissuade you from all the extraneous purchases you might have dumped in your basket otherwise. The end result? You'll have quality "meal food" (real food, aka not all snacks), which you won't have to fret over price-wise because of your pre-shopping research. A glut of impulse buys are never fun once you get up to the register and wonder why your total is so high. Hey, if we can spend hours looking for the best deal on a trench coat, then by God we can apply that same zeal to a can of tomato sauce!
Coupons. Before you click "back" on your browser at the site of this word, hear me out. To many of us the word "coupon" has a negative stigma associated with it ... usually it conjures up an image of an elderly woman on a balmy Sunday afternoon, clipping coupons on her lanai in Dade County, Florida. Scratch that. If speed dating, reality TV and Crocs can be dubbed "cool" by the populace, than so, too, can coupons. If you're spending the time even perusing websites (like moi's ) for tips on how to save money, than you have the time to clip/print coupons. Combine them with the aforementioned deals you find online when you craft your cuisine list and head to market. This can save you between 20% to 50% on your next shopping trip!
Nix the bottled water. When I was a grad student in Boston I did not own a car. A true California girl through and through, the prospect of having to lug groceries home on the subway versus my car (which was at my parent's house) was heartbreaking, but I learned to deal. What I never learned to deal with was carrying gallon jugs of water -- two at a time -- up the slick and snowy street like some medieval punishment for being thirsty. I like to think I'm not high maintenance, so yes, I had tried my apartment's tap water multiple times before this hilarity on ice ensued, but it always tasted coppery -- like someone had plunked a few pennies in my glass. Gross, and probably not healthy. In my metal-tasting-induced haze I failed to see the long-term cost benefits of filtering my water, and instead took the easy way out and hit the bottle.
Think about it: A basic PuR faucet-mountable filter costs $37 and filters 100 gallons of water. Filters cost about $26 to replace (cheaper in bulk). Twenty-six dollars sounds expensive, till you realize you that in the long run you'd only be paying $0.26 per gallon with this PuR method, versus $1.25+ per gallon of Crystal Geyser and other brands. Bring on the filtered water!
Buy in bulk. "Duh," you say. But I'm not just talking Costco here, people. You can get marvelous deals on organic goodies such as chocolate chips, nuts, raisins, oatmeal and trail mix by foraging for them in bulk bins versus packages. I read an example recently that said a Safeway canister of Sun-Maid seedless raisins with a net weight of 24 ounces is $4.99 (equal to $3.33 per pound). You can actually get raisins cheaper at Whole Foods, where raisins -- organic, to boot -- are $2.99 per pound in the bulk-bin section. Remember to look past the price tag when shopping for food, and instead focus on the unit prices (i.e., the price per ounce, price per pound, etc.). This will give you a more accurate view of how much items actually cost.
Farm it yourself, kind of. Farmer's markets are excellent places to cheaply snag many staples of a well-rounded diet, such as fish, fruits, vegetables and breads. (Sadly, those vital Oreos will have to be bought elsewhere). Farmer's markets are cheap because the produce comes direct from the farmer, so there are no middle-man transportation costs, including store-clerk salaries, long-distance trucking costs, refrigeration costs and big-store utility bills. The cost of all those extra measures is built into an item's final price in a grocery store, where freshness is also usually lacking. Farmer's markets ensure cheaper, higher-quality fruits and veggies.
If farmer's markets aren't your bag, you could always sign up with CSA, or community-supported agriculture, which is becoming quite the hip thing to do these days. What happens is you subscribe to a farm on a weekly or monthly basis, and they give you a full box of fresh produce once a week (usually $25 per box). Although most don't deliver, there are general pick-up sites you can visit. This process not only gives you the freshest, highest-quality food direct from the farm (so it's cheaper), but it also saves you time that you'd otherwise spend thumping melons at Safeway and standing in line to be rung up. For more information and to find a CSA near you, visit LocalHarvest.org. Meat can also be pretty pricey, but not when you're buying through CSA! For a list of organic, grass-fed meat ranchers, visit EatWild.com.
Thursday, October 23, 2008
Part of the reason I was so hesitant to sign up was because my addictive personality usually gets the best of me in more ways than one. Yes, watching marathons of The Hills for days at a time, spending sleepless nights looking for the best fashion deals online and studying my facial pores longer than the average person all fall under the "obsessive" category. Now I guess I can add "Twitterer" to the mix!
I think it's the perfect up-to-the-minute way to keep all you chickadees informed of the latest financial news, deals and tips. Plus, I just found out that "blogging is so 2004." God, I'm old.
Anyway, here's my channel: http://twitter.com/BrunetteOnABudg. I also put a feed in the right-hand column of my blog. (Yay for technology.)
I'd love to follow all you guys -- let me know if you have a Twitter channel!
Wednesday, October 22, 2008
When Crystal asked me if I would “guest-blog” on her website about my wonderful fate of being laid off, I almost spilled my expensive Starbucks Pumpkin Spice latte all over my lap. And that’s not a cheap drink, people, especially when you’re currently unemployed and living off of nothing. Well, not nothing, exactly. There are those paltry unemployment checks that are just beginning to trickle in. Yes, I am very grateful for those.
You see, the past month has been no picnic for me. I, like tens of thousands of other hard-working Americans, have been laid off. I’m about to share with you my frustrations and hardships of unemployment, the inevitable self-worth plunge and recovery, the different experiences (good and bad) that I’ve had while trying to get a new job, and how to prepare for a layoff.
For starters, I’d like to mention that once you hear the words “elimination” and “layoff,” your self-esteem and self-worth hits rock bottom … initially. Personally, I take my career success pretty seriously and the fact that my position was being “eliminated” brought forth feelings from junior high when I got cut or “eliminated” from the basketball team. After all, those feelings from the developmental stage NEVER leave you, EVER. But hey, my tennis uniform ended up being a lot hotter than the basketball team uniforms anyway.
So after the initial shock and tears of being jobless just 10 months into starting a job, reality begins to sink in. I have to find another job when the market is in the worst condition since the Great Depression and thousands of other people are being put out of work as well. This has to be someone’s idea of a sick joke. But it’s no joke, it’s harsh reality. Reality sucks, but with a great support system of family and friends, you realize that you can deal with this deck of cards, even if it’s the worst deck you’ve had in awhile.
The Big Job Hunt
I started the job hunt by posting my resume on Monster, Washington Post, the whole works. I searched/search Craig’s List and other various outlets multiple times a day. I spend my days staring at my computer screen with a cheap glass of wine, silently cursing the situation and developing carpal tunnel syndrome while plugging away at millions of emails to companies.
To take the job search to the next level, I started working the streets of DC. No it’s not what you think. I didn’t change my career path from marketing to prostitution. Instead, I dressed up as though I was going on a job interview, prepared envelopes with my resume, writing samples and references, and dropped off the envelopes to prospective employers. I figured that this would be a great way to stand apart from the crowd since most resumes are just emailed to HR departments.
So after I attempted seven resume drop-offs, I only got to meet one person who would be involved in the hiring process. All the other envelopes for job openings had to be left with the receptionists of companies. And I would like to add that the one person that I actually got to meet with for a few minutes was the biggest jerk I’ve ever met (well, one of the biggest).
First, he questioned if I had a political background (which would be reasonable if I wanted to work for a political organization, but this was not the case or requirement). Then he asked me what my political affiliation was. That was the icing on the cake. I suppose your company is not EOE, is it sir?
And then there was the brief stint with the staffing agency. These places are a huge mystery to me. They call you excited about your resume and potential job opportunities, invite you in, then say that the interview went really well and that there should be callbacks really soon … and then you hear nothing for weeks. The feelings of rejection resurface, again. Really? The bad experience with some of these places is that I would talk to a few different people, and none of them had the same story or knowledge of what the status was of the companies you were interviewing for. Awesome. Glad to know we’re working together here.
The Silver Lining
But it is what it is. Unemployment during bad economic conditions is a trying time on anyone, and it really just requires a lot of persistence, dedication and keeping a positive and knowing attitude that something will come up and work out. It just might not happen as fast as you think it should.
Which brings me to the “silver lining in the cloud.” Basically anyone that I have talked to that has been laid off, ALWAYS says that it worked out better for them in the long run. In other words, their layoff turned out to be a “blessing in disguise” and they found something even better for themselves at their next job.
I, too, believe in this. In fact, I honor the whole situation as a blessing in disguise. Sure, it’s quite the disguise, but things will get better. This, too, shall pass.
There are some very valuable lessons to be learned from losing your job. One of the top lessons is to MAKE SURE YOU HAVE EMERGENCY FUNDS SET ASIDE. I cannot stress how important this is. Especially during this market right now, it is so important to be prepared for a layoff, or maybe an unexpected baby. The options are endless. And seriously any amount helps. Whether its $200, $1,000 or more. You will need this money.
I thank my lucky stars that I had started to save for a rainy day (literally) a month or so before I was laid off. And thank goodness I never bought that $400 Coach bag that I had my eye on. Because let me tell you, those unemployment checks DO NOT even come close to what you were making while you had a job. Even with my emergency funds, I still have had to set aside my pride and receive some help financially. With my unemployment checks, I am bringing in about $900 LESS a month. This is of course better than nothing, but still doesn’t compare to the bacon that I was used to bringing home.
Nine hundred dollars is a LOT less money a month when you need to pay for rent, student loans, car, insurance, prescriptions, phone, and the whole nine yards.
Talk about a “brunette living on a budget” during a layoff! I think my Pumpkin Spice latte and lip gloss were the most excessive purchases that I had had in weeks. It sure does knock you off your feet. There was a night when I had to order water from the bar because I was without my man, and didn’t want to miss a friend’s birthday. It’s cool, though, I ended up looking very responsible anyway.
Well tomorrow’s another day and I’ll be working hard searching for jobs and preparing for an interview this week. Bring it on!
Monday, October 20, 2008
Is it seeking out those who are in similar financial predicaments as you? Is it a voyeuristic curiosity that drives you to see how your fellow financiers are holding up with debt? Or do you just want to quick tips on how to save money on everything, from makeup and clothes to groceries and debt (preferably sans coupons)?
My mantra here is "mastering the art of saving now to live lavishly later," so aside from general news and news analysis, some of my favorite blog posts on others' sites are ones that point out creative, original ways to save money -- especially on beauty and fashion (two areas where you all know I spend the most money).
Enter Good Housekeeping's new book "Good Deals & Smart Steals: How to $ave Money on Everything," ($9.95) which I was lucky enough to snag last week! Imagine all the budgeting tips you've ever harvested from your favorite blogs, packaged into one chic, colorful reference guide that's small enough to tote around in your purse. Talk about finally mastering savings zen!
The book just debuted on October 1 and is perfect for girls (and guys) on the go, who want to be able to quickly reference savings tips by category. The book is broken down into two parts:
- Part 1: How to be a Smart Shopper. This section covers tips on coupons, rebates, stacking, negotiating, rewards programs, online shopping, wholesale clubs, dollar stores, store deals, yard sales, flea markets and auctions.
- Part 2: Get a Good Deal. The second half of the book provides savings tips for in and around the house, big-ticket items, food, fashion and beauty, services, entertainment, travel and cars.
For example, does your heating bill skyrocket when the temperature outside plummets? I don't blame you, there's nothing like being toasty warm indoors when it's freezing outside! My husband may laugh at my pink toe socks, but something's gotta keep these tootsies warm -- preferably something economical.
Whether or not you have toe socks of your own (worn only around the house, of course), "Good Deals & Smart Steals" highlights 10 tips to save on heating bills this winter:
- Be a water heater cheater. Many water heater manufacturers set the temperature to 140 degrees. Instead, set it to 120 degrees -- still hot enough for a steamy shower. Reducing the temperature by only about 10 degrees cuts your energy costs by 3% to 5%.
- Dodge the drafts. Seal draft leaks from windows, doors and gaps with weather stripping and a caulk gun. Replace old, cracked or missing weather stripping around exterior doors. Add "sweeps" to interior doors, which screw to the door bottoms and keep cold out. Seal indoor draft leaks, which are often found behind electrical outlets and light switches.
- Heat smart. Buy a programmable thermostat, which lets you drop the temperature when you're out. By setting it 10% to 15%, lower while you're asleep and at work, you can save as much as $100 a year.
- Give yourself space. If you spend most of your time in one room of the house, use a space heater there and set the house thermostat at 62 degrees. Approximate savings: $200 annually.
- Dial down. Lower the thermostat two degrees to save up to $40 on your heating bill.
- Insulate! Wrap your water heater in an insulation blanket to lower your operating cost by 9%. Insulate all pipes running to unheated areas of the house with pre-split closed-cell foam tubes (they slide on easily). If you add insulation every time you renovate, you'll recoup your costs in heating bills over time.
- Draw the drapes. Leaky windows can cost up to 25% of the energy used to heat your home. So lower your curtains and shade to keep heat in and cold out.
- Plant trees. Plant deciduous trees to the south and west sides of the house. The leaves will help cool the house in the summer and the sun will warm your house in the winter after the leaves have fallen. You can save up to $250 a year if you plant three trees in the right spots.
- Go green. When replacing a worn furnace or hot water heater, buy one with an Energy Star label -- that can save up to 20% on your energy bill. If you're in the market for a new water heater, try a tankless water heater which warms water up quickly when needed without wasting energy. Approximate savings: 25% to 45% of your water-heating costs.
- Ask for an audit. Many electric and gas companies offer free energy audits that let you know where to make changes to save on utility bills.
Ed. Note: I received a review copy of this book from Hearst Books. I'm not obligated to review any books I receive from publishers, but this one caught my eye and I felt it merited a mention. Check back in the next few weeks for more tips I deem post-worthy from the book!
Loose money. Monopoly games start swimming in money, which is briefly mopped up as the players buy everything in sight. But then money starts to flood the system again, courtesy of the mysterious Banker who hands out cash to everyone who passes “Go”. The game is one big property boom, funded by an overly generous central banker – a diagnosis many economists would also apply to the sub-prime crisis. Alan Greenspan, the Fed chairman who presided over the boom, was nine when Monopoly was widely published. It is not known whether he played the game as a child, but he seems to have taken inspiration from it somehow.
Vague and constantly-changing rules. Most enterprising kids treat Monopoly the way enterprising investment bankers treat the financial system, quickly making up their own rules and striking side-deals insuring each other against catastrophe. These side-deals now add up to a nerve-wracking $596 trillion, more than forty times the size of the US economy.Monopoly’s rules on buying unwanted assets at auction are disturbingly vague – the Banker is simply empowered to run the auction. Perhaps Treasury Secretary Hank Paulson, who now has $700bn to spend in a similarly vague set of auctions, is also a Monopoly fan.
The endgame. For all Monopoly’s merits, fans complain about the way it tends to end in a slow capitulation, one player after another dropping out as ever greater sums of money slosh around unpredictably between an ever smaller group of people. Remind you of anything?
…and three reasons why a game like Monopoly -- just like our "real" system -- led us all astray:
Instant mortgages. Any Monopoly property can be instantly re-mortgaged to raise cash. The bank never refuses, and never frets about illiquidity or negative equity. The world of 2006 looked much like the world of Monopoly in that respect, but it is no longer quite so easy to persuade banks to hand out mortgages.
Indestructible banker. Monopoly’s rules note that the Banker cannot go bankrupt; they grant him the power to issue as much money as necessary “in the form of IOUs written on ordinary paper”. Sometimes the banks behaved as though that rule applied to them. It didn’t.
Unknown unknowns. Monopoly is a game of risk-taking, but a game in which the risks can be precisely calculated. Monopoly’s dice rolls are known unknowns, and skilled Monopoly players know the risks of landing on any square and take them into account when crafting their strategies (hint: buy the Orange properties). The wizards of Wall Street have to deal in unknown unknowns. As they crafted their credit derivatives, they thought that they understood the risk of a loss in the same way that a Monopoly player knows the risk of throwing three doubles in a row. They didn’t. They never will. [Washington Post]
Sunday, October 19, 2008
You may not be a whiz at economics or even like the subject very much (I'm the first to admit, the two econ classes I took in college were -- and still may be -- the bane of my existence), but forget any premonitions you have of the subject being too complicated! I know -- it's taught as such a boring, dull and downright tedious thing, but it's actually quite exciting and fabulous once you understand it! Not only that, it's so simple to understand that everyone -- especially us girls -- should have a basic understanding of the broader terms and concepts. Believe me, it doesn't take a finance degree to get any of this!
So what is stagflation, exactly? Simple! When a country experiences high unemployment and slowed economic growth, it's called "stagnation." Growth and jobs essentially become stagnant ... get it? Now toss into that mix a rise in prices (or what many call "inflation"), and you've got a potent cocktail of factors that ultimately create stagflation. I prefer shaken, not stirred.
If you're like me and can't remember what day it is, much less some economic theory, just think of it this way:
But before you cast off the term as one of those monotonous historical things coined a zillion years ago, the word actually hasn't been around forever. In fact, it's a relatively new term, first made up by economists in the 1970s (yes, disco balls, platform shoes and all) to describe the "unprecedented combination of slow economic growth, high unemployment and rising prices" that was occurring at that time, according to Barron's Finance & Investment Handbook.
For some quick background: The 1970s was the last time in U.S. history when a high dose of stagflation was swallowed by the American public. Back then, oil took center stage when the price of it rose globally, which caused extreme inflation in many developed countries, including the United States.
In the 70s, "people began to expect continuous increases in the price of goods, so they bought more. This increased demand, pushed up prices and led to demands for higher wages, which pushed prices higher still in a continuing upward spiral," according to a report by the U.S. Department of State. Then, when unemployment began to occur in higher numbers than usual, the upward spiral descended into what was a terrible recession.
As you're well aware of, consumers (meaning all of you and moi) bear the brunt of the stagflation storm. The price of food, gas and clothing (among other things) goes up, while raises, bonuses and maybe even jobs (for some of us) get harder to come by. Wondering why that burrito bowl at Chipotle is 50 cents more than usual, or why those shoes cost thatmuch more these days? Yup, stagflation is the culprit. On top of the current credit crisis, getting loans in a stagflationary environment is harder because banks may begin to restrict credit to fight the feared "s" word, which is extremely hard to correct due to its contradictory nature.
So now you know exactly what stagflation is and what causes it. No stuffy finance degree required! (Thank God.) For an excellent and very easy-to-read article about potential solutions to stagflation, read Fortune Magazine's piece published in May of this year.
Friday, October 17, 2008
If a bow is the perfect punctuation, then a ribbon necklace is the parentheses to my retail-laden life, which I was reminded of the other day while reading an article online. A Barney's New York ad caught my eye to the right of the page, with an HD picture of Lanvin's ribbon necklace beckoning me forth click on it and view more. I know, what the heck was this brunette on a budget thinking even looking at a Barney's New York ad, much less clicking on one, but it was luring me in, I swear! My gaze kept straying from the article I was reading, rubbernecking on the Lanvin necklace ad to the right like a driver holding up traffic by slowing down past an accident scene. But this was Lanvin, I reasoned and it was a ribbon necklace to boot. They are so in they'll never be out. I clicked on it.
The supple satin bow looked delicious enough to eat! But right away I let out a frustrated sigh. $860?! Why was I even surprised? It's a classic Lanvin pearl and ribbon necklace, after all. (For those of you up-and-coming fashionistas, Lanvin is a French power house that's been around for about a hundred years, offering "featherweight sophistication for the modern bourgeoisie.") Someday, I muttered to myself, someday...
But for now my fashion survival instincts kicked into high gear and I did what I know how to do best -- looked for the best knock offs! Here's what I found:
This ribbon wrapped faux pearl necklace (above) is only $16.99 at Target, and is the closest I could find to the Lanvin original. Loves it -- I must go buy one this weekend!
(On the left): Glass-pearl necklace with organza ribbon, A.V. Max, $98;
www.avmaxaccessories.com or 212-216-0600. (On the right): Jet rhinestone ribbon necklace, White House Black Market, $58.
(Above): Ribbon necklace with red iridescent beads, Target, $11.99.
(On the left): Pearl necklace with satin ribbon, Express, $24.50. (On the right): Faceted stone crescent ribbon necklace, Express, $29.50. (Pssst: Right now Express is having a "Buy 1, get 1 50% off sale!" Even more reason to buy both!) The pictures here don't do these necklaces justice.
(Above): Silver tone glossy black ribbon necklace, CostumeJewelryWholesale.com, $10.
Wednesday, October 15, 2008
The next phase we're entering in this economic downturn is the one of the slumping paycheck. If businesses cannot secure lines of credit easily, they begin laying people off. Less employees means less production. Less production means less revenues for businesses which -- wait for it -- means less and smaller raises, with the possiblity of nil bonuses. Oh yes, and this is while the price of goods like groceries, gas, apparel, etc. is rising. Pay down, prices up. Got it?
Pressing forward, this pay slump is supposed to be the worst since the Great Depression. (Ugh, I hate using the "GD" term -- it sounds so theatrically menacing.) Even though it won't be as bad as the slump experienced during the good ole GD, it will be (and probably already is, for many of you) like nothing else you've ever financially experienced.
Talk about stagflation: Median household income ("the middle" of the income distribution) is forecasted to be lower in 2010 than it was a decade ago. Yes, folks, it seems we aren't progressing, but rather regressing, like an eerie plot line in a Ray Bradbury novel. This regression hasn't happened since the 1930s, where the indebted were faced with the lone option of setting up shop in a shanty town and living off canned beans. Already, median pay today is slightly lower than it was in 2000, and by 2010, could end up more than 5% lower than its old peak.
Falling pay will weigh on economic growth, living standards and consumer spending for most -- except of course, for the cast of The Hills, who collectively buy designer loot with the same ease as I do grazing in the Dollar Days section at Target. (Curse you, Heidi Montag! I deserve that Hermes bag more than you do!)
And if you think we've seen the worst of it -- a "bottom," if you will -- you ain't seen nothing yet!
“The biggest hit will be in 2009,” Nariman Behravesh, the chief economist of Global Insight, a research and forecasting firm, told The New York Times, “and it probably won’t be until 2011 until we see any kind of pay gains.”
I guess the good news is that prediction buys us a bit of more time to save up, right?
I was recently asked what "this whole subprime thing" is all about. It dawned on me as I was telling a truncated version of the debacle that if more people knew just a bit more about mortgages before buying their now-foreclosed homes, this whole credit meltdown might have been avoided. (Blame also goes to the banks, for okaying people who were unqualified to take on such large loans, but that's beside the point.)
And so, before I delve into the mysterious world of mortgages, here's a brief history of the subprime mess, in 30 seconds or less:
It all began in the heyday of the early 2000s, when RAZR flip phones were the latest high tech gadgets, Britney was beginning her descent into the maelstrom and 9/11 reminded many that safety was an illusion. During this time, swarms of Americans took advantage of broker-approved "easy" mortgages that lacked the stringent requirements of mortgages of yore. People banked on the hope that future job raises would occur to cushion monthly mortgage payments and U.S. employment rates would continue to prosper.
But as we all know, when it comes to matters of money, banking on faith and hope alone is never enough! You know how credit card companies try to rope you in with deals screaming "0% APR for 6 months!*" and after closer inspection of the asterisk, you see after six months that your APR balloons up to 19% per month? Well the same kind of thing happened with many mortgages. Lower initial interest rates began to soar while unemployment began to unexpectedly rise. People began to default on their loans, either by losing their jobs or lacking sufficient income, and banks began to repossess homes, which resulted in mass foreclosures across the country.
Say you're paying $1,200 per month on your mortgage, and spending instead of (ahem!) saving on new cars or giant HD flat-screen TVs -- hey, you own a home, you need to buy stuff to go with it, right? Life is good till you realize that you are among a bunch of people who are going to be laid off at work. Now add to that a ballooning mortgage interest rate that you were planning to pay off with some fantasy future raise, and credit cards that you maxed out from overspending. Oh, and guess what? By 2005, house values are in a nosedive and your home is worth drastically less than you bought it for.
This is where a resounding "Crap!" was heard across America. With no savings built up, you've dug yourself into a hole so deep not even Beatrix Kiddo (a la Kill Bill) could climb out of. The debt dominoes fell, leaving a trail of woe across the country, and there you have it -- the 30-second history of the subprime mess. Phew!
Now that you're a subprime guru, your first lesson in Investing 101, or what I like to call "I want to buy a home but I know nothing about the process," is mortgages, or the heart of darkness within the bizarre world of investment banks, credit ratings and foreclosures.
A mortgage is type of loan that is specifically used to buy property (aka a house!). The house you buy with said mortgage is used as a collateral, or guarantee, for the amount you've borrowed against it. Don't have a dime to your name but still have $150,000 left on your mortgage? Then your house will be taken from you to repay off the existing debt on it.
There are a myriad of mortgages out there, but the most common are:
- Fixed-rate mortgages -- Or loans where the interest rate is fixed for the entire term of the mortgage (usually 15 or 30 years). This is my favorite type of loan, it's steady and less risk-adverse then its brethren.
- Balloon mortgages -- Loans where the interest rate is set for a given amount of time and then the entire payment of the loan is due at the end of that time.
- Adjustable-rate mortgages (ARMs) - Loans where the interest rate can change and fluctuate as the prime or standard rate (set by the Federal Reserve) changes. (This is very risky since you can't be 100% sure which way a rate will go.)
- Interest-only mortgages -- Loans where the interest only (hence the name) has to be paid off in the beginning, resulting in a very low initial monthly payment that hinges on the hope that property values will keep rising. Still with me? By using this loan, many people could buy larger homes they wouldn't have been able to afford otherwise. When home values tanked, they defaulted because their houses were worth much less than their loan price. Home owners couldn't grow equity over the time they invested in the house.
Just by looking at these four common mortgage choices, you can quickly see which ones -- balloon mortgages, ARMs and interest-only -- might have fabulous initial perks, but are the riskiest and were the culprits in "this whole subprime thing." It's marvelously simple, isn't it? And you don't even need a suit and a finance degree to understand it!
You generally get a mortgage by divvying up a down payment, which is usually between 5% to 20% of the loan total. See how this whole "saving" phenomenon I keep raving about comes in handy? Remember, chickadees, the larger the down payment, the more you win because of the decreased amount of interest you have to pay overall. It's just like paying off a credit card bill with much more than just the minimum payments, so you don't get stuck in the endless cycle of paying off interest on the money you borrowed. And the cherry on this ice cream sundae of down payments? If you put down 20% or more on the loan, you're given a "get out of jail free" card of sorts to not have to carry mortgage insurance, which saves you tons of money. (I knew those long games of Monopoly came in handy for something!)
So you see, now, why saving is so very important. When the debt collectors come a-knockin' and you've just gotten notice you're "not needed anymore" at work come Monday ("the company thanks you for your loyal service over the last decade," though), you'll be happy you were insightful enough to sock away savings and plan for all of life's little catastrophes, subprime or not!
Tuesday, October 14, 2008
Okay, so we were a smidge irrational with our loot back in the heyday of 2006, but is it irrational to believe that we're rational enough (say that 5 times fast) to trust those at the top to bail us out?
"One of the things I think that is most irrational is to assume that we’re rational,” says MIT behavioral economist Dan Ariely, author of Predictably Irrational: The Hidden Forces That Shape Our Decisions. Today, he thinks that the same groupthink mechanisms that caused our financial catastrophe are keeping us from getting out of it.
He argues that it’s all a case of peer pressure: banks and public policy made it easy—even socially necessary—for people to borrow more than they should, which inflated housing prices. Then banks felt compelled to buy the mortgage-backed securities everyone else was buying. That didn’t turn out too well.
The idea that the crowd is wise, Ariely told NY Mag, only works when everyone in the crowd is making an independent assessment, not when they are copying each other. He says the one thing the crowd is overwhelmingingly feeling is the need for vengance. Ah, that explains why the public roasting of the AIG and Lehman Bros. execs a couple weeks ago seems like aptly staged political theater.
Ariely say that in trust experiments, people are willing to expend their own assets to exact revenge on those who cheated them—even if they will just end up losing more money.
Would you pay to have a the Lehman Bros. ex-CEO hauled out so he could be pelted publicly with rotten tomatoes? That was essentially what happened with the Congressional hearings lambasting these top executives because of their decisions that led to the financial meltdown. And it was this kind of thinking -- the "off with their heads!" mentality -- that made the bailout of Wall Street fatcats proved so politically unsatisfying.
“When you think of $700 billion, the millions they made are not quite a drop in the bucket,” Ariely told the magazine. “But we’re willing to lose money to get these bastards.”
And that’s why the bailout hasn’t worked. “It didn’t answer the basic need of revenge. It could include future revenge—from now on, we’ll treat white-collar crime differently. Without that, I don’t see how trust is coming back.” [New York Magazine]
What do you think of the bailout, and does it buttress any faith you have in the economy, or encourage you to invest in the market?
Well, many people who read my article weren't fond of my designer-bag-as-investment assessment and thought I was trite and fickle to believe "excessive" purchases such as my $350 giraffe-print leather Dooney (which I love, but isn't even that high-end in the first place) merited the term "investment."
Many, like New York Times columnist Cintra Wilson, agree ... sometimes.
"I've never really been able to relate to the idea of vastly expensive clothes, no matter how 'classic' they are, as an 'investment.' I figured this was the language absurdly rich women used to justify obscene purchases they should be punished for," she writes in a recent fashion column.
And yet for all her denial of sumptuous higher-end couture, she still has a "terrible love" for Alexander McQueen's designs, although she avoids the store at every cost because it "crowbars the knees of [her] financial intelligence."
"I was in the shop once, several years ago. In a fit of design intoxication, I plonked down $500 for a perfect black pencil skirt, a reckless expenditure that launched me into nose bleeding panic for months afterward," she writes. "Since then, I have worn that skirt so relentlessly that even with the most conservative math, it cost me about five bucks a session to wear it. It still looks new; I figure that if it doesn’t rot off my body, it will, in a couple of years, officially work its way to being free."
Since her pencil skirt incident, Wilson treads carefully when passing by the house of fashion ... that is, until she visited the Alexander McQueen store in search of something "bangingsome" to wear to an upcoming literary festival in San Francisco and laid her eyes on a $1,235 "Sofia-Loren-Goes-to-Wellesley" dress.
"Never in my life had I crossed the $1,000 barrier for a dress I didn’t get married in. I consider it fiscal suicide ... But this wasn’t a dress: It was the fulfillment of my deepest desires, in wool. For a literary performance, it was the perfect fusion of tweedy respectability and autobahn curves. Elves had tailored it on me while I slept."
Wilson's witty, smart commentary on her latest foray into McQueen land is a fabulous read, if not for the fashionphiles out there, than for the frugalists (or wherever the twain shall meet).
The key with Wilson's article is that she understands that even for the the most haute couture, the purchases are "hard enough to justify in an economy that doesn’t look like an avalanche of scratched lotto tickets; now such purchases are indefensible."
And yet wouldn't you, like her, also succumb to that devil of consumerism on your shoulder, purring into your ear that those $795 black stretch gabardine pants are "a sound investment, inarguably classic. You will wear them for at least 150 years." The same for that wool $1,235 dream?
Even though her "credit cards were banging steel cups against the bars of [her] wallet, and black smoke began pouring out of [her] handbag," she did end up buying the dress -- of course "after much weeping and rending of sensibility."
Why? Because Wilson reasons, "There is no investment more worthwhile than an investment in your own transformation into a better future-self."
Although after that (what some may call) irrationalization unearthed from the consumer abyss, Wilson did tote a karmic punishment all the way out to San Francisco with her when she realized the security tag was left on said dress ... but it's a small inconvenience dealt by the fashion gods when you have McQueen hanging in your closet! [NY Times]
Monday, October 13, 2008
And yet it still doesn't negate my intense, dare I say Shakespearean love for that spatter of countries across the pond, and so I'm forever cursed to be saddled with a love/hate relationship, like one who foots the bill on dates with someone who has much-too-expensive tastes. You just know each tete-a-tete will be one you probably can't afford, but the outings are so fun that you can't say no. Oh Europe, if loving you is wrong, I don't want to be right.
Even during these recession-riddled days, where the euro far outweighs the dollar in terms of value, there are still deals to be had and ways to make a trip to Europe happen on the cheap. All it takes is time, careful planning, and a patient determination to stick to your financial travel goals once your sipping espresso in some back-alley cafe in Venice. (Believe me, once you start shopping and partakething in food and drink, your "budget plan" you made states-side will dissipate faster than a roll of quarters in a trucker's backpocket in a Vegas casino.)
In July I blogged about "how to be a jetsetter on a budget," where I touched on a number of important factors to watch for to score the cheapest airfare (i.e., what's the best day of the week to buy tickets, best time of day, etc.) For more tips, the New York Times compiled a fabulous list of "10 Ways to Keep Europe Within Reach:"
Find the airfare bargains. Check the low-cost airlines, including Zoom, Flyglobespan and Eurofly, that now fly between the United States and Europe. Zoom Airlines, for example, recently started daily flights from Kennedy Airport to London Gatwick for as low as $199 each way. On major airlines, look for new flights with low introductory fares. (When Air France started a new morning flight from New York to Paris in 2007, for instance, one-way fares started at $199.) And sign up for fare alerts, which offer a heads-up when airfares drop. Expedia and Orbitz have automated versions. If you’re more concerned with price than what city you fly in to, sign up for e-mail alerts from Travelzoo.com or Airfarewatchdog.com that tell you about all sorts of deals from your home city. A recent Airfare Watchdog alert for travelers flying out of Newark in August included round-trip fares of $593 to Amsterdam, $636 to Oslo and $623 to Stockholm.
Think twice about hotels. Eurocheapo.com offers no-nonsense reviews of budget hotels in dozens of cities; in Rome, it recommends the Suore di S. Elisabetta, a convent on a hill just south of the Piazza Santa Maria Maggiore, for anyone who doesn’t mind an 11 p.m. curfew or a religious environment. Doubles start at 64 euros, $90, at $1.41 to the euro. Eurocheapo’s new CheapoSearch, which shows availability for budget hotels in central neighborhoods, recently turned up 187 hotels in central Paris with rooms for less than $150 a night for Aug. 2 to 4. And you may do even better by renting a villa or an apartment. Two-bedroom villas can be reserved for as little as $1,200 a week near Florence. HomeAway.com and Rentalo.com connect travelers directly to property owners and managers.
Try Europe’s budget airlines. No-frills carriers fly Europeans cheaply from city to city. Ryanair ran a large summer sale last month, for example, with fares as low as 10 euros to Brussels, Pisa and Dublin from London. Pack light to keep costs down; these airlines may charge for checked luggage or bags weighing above specified limits. Be aware that these airlines often fly out of smaller, somewhat more inconvenient airports, and you should add in the extra travel time to get to them.
Avoid airport cabs. If you pack light, you’ll find it manageable to get to and from the airport on commuter trains and subways. From the two Underground stations at Heathrow Airport near London, for example, the trip into central London takes about an hour and costs about £4, $8.20, at $2.10 to the pound, compared to £15.50 for the faster (15-minute) Heathrow Express, and roughly £60 for a cab ride into town. The cheapest way to get to Paris from Charles de Gaulle Airport is via the Paris regional commuter train, or RER, which has several stops in central Paris. It also connects with the Métro system. Cost: 8.20 euros against roughly 50 euros by taxi, depending on traffic. At Venice Marco Polo Airport, go to the Alilaguna ticket booth and purchase a boat ticket for 12 euros to the Piazza San Marco. Europeforvisitors.com offers helpful tips on airport transportation.
Ride cheaply in town. Off-peak Day Travelcards that cost £5.10 can be used after 9:30 a.m. for unlimited travel that day on either the Tube or the Dockland Light Railway in central London. A one-day ticket for unlimited travel on Berlin’s public transportation system, the BVG, costs 6.10 euros for travel in Zones A and B, where most tourist attractions lie. Taxi fares in Berlin start at 2.50 euros and 1.53 per sixth-tenths of a mile, according to the Berlin Tourism Board Web site, www.berlin.de. But if you hail a taxi from the street, rides of up to a mile and a quarter can be had for a flat rate of 3 euros. Just say “Kurzstrecke” when you enter the cab. Copenhagen has 1,300 free bicycles for getting around between May and December. Look for City Bike Parking places in the city center, deposit 20 kroner (about $3.50) and ride off. Return the bike to any rack to get your change back.
Splurge at lunch; save at dinner. Meals at the popular Paris restaurant Taillevent average 120 to 140 euros, but its prix-fixe lunch costs 70 euros a person. Arbutus, a restaurant in London’s Soho neighborhood that has a Michelin star, offers a three-course pretheater meal for £17.50 with dishes like plum tomato gazpacho, roast rabbit leg and English strawberries with sorbet. By contrast, just the gazpacho and the strawberry dessert cost £11.45 à la carte. In Rome, head to the many trattorias in the Testaccio neighborhood for cheap, authentic cuisine. And you can usually pull a nice picnic together with staples from any local market or grocery store.
Save on telephone charges. If you have access to broadband or Wi-Fi and a computer, use Skype or another Internet telephone service, which usually costs about 2 or 3 cents a minute for international calls. If you have a cellphone that operates on GSM networks, used by most countries in Europe, use a local SIM card, a removable chip that determines the phone’s network and number. It makes local calls inexpensive, and incoming calls are typically free. Telestial offers a $49 Passport SIM card that includes $10 of air time; after that, rates to call the United States start at 49 cents a minute.
Watch the bank fees. Before you leave, check with your bank and credit card issuers to find out what fees they charge for purchases and A.T.M. withdrawals made abroad. Most credit cards charge from 1% to 3% of a purchase after conversion to dollars. Bankrate.com posts a list of what some of the major banks and credit cards charge (search “currency conversion costs” and sort by relevance to find it).
Pick the low-hanging fruit. Free cultural summer opportunities in Europe include Wednesday concerts at St. Petrikirche in Hamburg, Germany, and free midweek tours and Sunday organ recitals at Notre Dame in Paris. Entry is free to all national museums and galleries in Britain, including the Tate Modern and the British Museum in London. In Berlin, you can enter many state museums free for the last four hours on Thursday evenings. And in Dublin, there’s the summer-long Diversion Festival; all events are free, but some require tickets. For information go to www.templebar.ie.
If you’re making a big purchase, ask if the shop participates in a tax refund program. European value-added taxes can add up to 25% to the purchase price, but if you follow the rules you can often get much of this money back at the airport when you head for home. [NYT.com]
I actually found out about this news nugget from Love, who forwarded me the news from Litigation Daily, a legal blog he frequents. I thought it was important to pass along, either because you may own stock in the company, or you/someone you know may be using Ortho Evra:
Bloomberg reported on Friday that J&J has paid $68.7 million to settle hundreds of lawsuits related to its Ortho Evra birth-control patch -- yet never felt the need to disclose those payments to investors. A J&J spokesperson declined to comment to Bloomberg on the decision not to disclose the payments. [The Litigation Daily] wonders what J&J shareholders (and the securities class action bar) will have to say.
According to Bloomberg, more than 4,000 complaints have been filed in federal and state courts by plaintiffs claiming they've suffered blood clots, heart attacks, and strokes as a result of the high levels of estrogen released by the birth-control patch. All settlements so far are confidential, but Bloomberg was able to estimate their amount based on the size of the common benefit fund in a 1,300-case Ortho Evra MDL before Toledo federal district court judge David Katz. Three percent of participants' settlements go into the fund, which offers financial assistance to lawyers pursuing cases against J&J. According to a filing by Burg Simpson Eldredge Hersh & Jardine partner Janet Abaray, who is a lead plaintiffs counsel in the MDL, the fund had $2.06 million at the end of March.
Brian Baxter at the Am Law Daily did a little digging to find out who's defending J&J in the Ortho Evra litigation. In the Ohio MDL, it's Drinker Biddle & Reath and Tucker Ellis & West. In individual cases, J&J has also tapped lawyers at Bryan Cave, Dechert, Sidley Austin, and Patterson Belknap Webb & Tyler. [Bloomberg]
Sunday, October 12, 2008
But the question on everyone's minds (besides "How am I going to afford these groceries?") is "Where should I put my money?" And if you're not asking yourself this question, you probably should be. Even in these fearful times, there is money to be made -- or at least fabulous opportunities to position yourself in to profit when things get better economically.
Why? Even the most "recession-proof" stocks -- such as Johnson & Johnson, McDonald's and Procter & Gamble -- are gravely discounted right now, but not necessarily because their business is crippled or they're two steps away from bankruptcy. Usually the bruise of bad earnings or a limping stock price in a company like Wal-Mart is merely a residual effect of the downtrodden market, and not representative (in this market, at least) of the company's operations. Which means that if you can buy into a company that you know will weather the current storm (say General Electric or Amazon.com) while it's down near it's low price, that is the equivalent of finding $850 Manolo Blahniks on clearance for $50 at The Nordstrom Rack. Well, it's even better than that equivalent, actually, because your Manolos will never make you loads of extra cash, but buying up good companies at discount prices will.
Unfortunately I know that most of us don't have ancillary funds that aren't being used to pay off debt and/or create some sort of emergency fund, but for those of you who have the means, I highly suggest getting in when the theoretical gettin's good.
That being said, the Motley Fool spoke with a handful of "all-knowing" analysts on Friday about what they think you should do with your money. The tips include:
- The only reason to cut your losses and sell stock right now is if you have money in the market that you planned to live on in the next five years.
- What goes to (1) is your emergency fund. Make sure you have it in a FDIC-insured savings account that you can get at when you need it. For (2) or (3), get a better yield, but still protect the principal, by buying a CD or TIPS. For (4), that's money you should be averaging into the stock market at today's low prices.
- He says that you'll want to make sure you're saving your pennies as we go into a period of true economic uncertainty. That's not to say you need to turn into Ebenezer Scrooge, but do keep in mind how much you're earning and spending. That way, you can judiciously put some of this money to work in high-quality, cheap stocks, and we're starting to see some serious values out there. Berkshire Hathaway, one of the most stable companies around, is down almost 20% since the beginning of the month. That's incredible, he remarks. (Granted, Berkshire Hathaway is at a current $3,700/share, but its slight flicker into the negative is a testament to its solid footing, especially compared with many other companies. My kingdom for $3,700 to buy in!)
- Money that you'll need to spend in the next year or two for a house, car, in case of losing a job, and so on, that shouldn't have been in the market, shouldn't be in there now. Nothing about that has changed in recent days.
- Money that you're setting aside for retirement, if that retirement is 10 years or more away, I believe, should be fine. If you're closer than 10 years to retirement, and aren't diversified into bonds, Treasury bills, etc., start doing so -- regardless of whether you think the market is going to trade at a higher or lower price next week, next month or next year. If you're properly diversified, you'll be sleeping fine.
But now, more than ever, investors need to consider their risk tolerance, wealth and time horizon when investing. Beaten-down banks may be a great investment for someone OK with risk, but someone who wants to play it safer should look at utilities or a maker of cheap consumables, such as Procter & Gamble, Coca-Cola, or PepsiCo.
In the tech bubble, risk and return was expensive: Investors had to pay for the privilege of investing in risky companies. Now, it's practically being given away. This means that folks selling out of stocks to buy safer investments will pay dearly. They're getting a terrible deal. Those who absolutely need the money soon may need to do that, but for the rest of us, the long-term chart says that we probably want to be in stocks now, not out of them.
Saturday, October 11, 2008
Public schools. Feeling the pinch, the upper-middle class is moving their children from private schools to public schools. This influx of achieving-class families, reporters will find, may improve schools from the inside (better students overall) and the outside (the result of pesky, well-connected parents hounding administrators and teachers).
Climate change. According to a government study, carbon dioxide emissions fall whenever energy consumption declines. Our freezing will be the planet's salvation.
Foreign policy. In the good old days, the United States got in lots of trouble by invading first and asking questions later. Now we couldn't afford to invade Grenada if we had to.
Economic equality. Financial sector employees received the greatest income gains in recent years. Now, the broker your broker gets, the more equal we all become.
Homegrown. Food. Music. Crafts. Education. Solar panels. Suture-yourself kits sold at pharmacies.
Children. The moral fiber of the nation's children went to rot because we gave them everything they asked for. Now that we've got nothing, they get nothing, and they've never been richer.
Churches and community organizations. Trendspotters will detect a massive return to faith and the commonweal.
Air flight. The average Joe won't be able to afford to fly much any more, but when he does, the terminals will be less crowded, the service better, and lost luggage a thing of the past.
Local business. You know, the little mom-and-pop banks that never went subprime and that know you and your family. The return of the neighborhood hardware store, the neighborhood drug store, the neighborhood bakery, the neighborhood fix-it shop, and so on.
The trade deficit. We buy almost nothing from foreigners, we sell almost nothing to them. Finally, we reach a perfect balance.
Cell phone haters. As the cell phone becomes unaffordable, people ditch them. Road rage declines as drivers learn to stay in their own lane and maintain speed because they're no longer texting. Public spaces become more pleasant as the background chatter ceases.
People for the Ethical Treatment of Vegetables. Having won the meat-is-murder debate because beef and chicken are now too expensive to market, animal rights activists move on to protect lima beans, celery, and turnips.
Staycations. More fun than August in France!
Used cars. Cheaper for one thing, and gosh, Detroit stopped making new ones!
"Cheap chic." Washington Monthly founder Charles Peters once imagined that a societal shift from high-status goods, clothing, restaurants jobs, schools, cars, and vacations to the utilitarian, flavorless, gimcrack, and rag-tag of "cheap chic" would remove anxiety and competition from modern life. That the cutthroat competition for status would only resurface in a battle for government power and result in the reinvention of gulag never occurred to Peters. Even so, journalists will fill newspapers with stories about people who regard their new poverty as ennobling. [Slate.com]