Sunday, 26 March 2017

Breathing Room Money


I've heard this called something else involving a common expletive but you know what I mean.   Some people also think of it as a financial cushion or an emergency fund but it is more than that.    It's for the more major hiccups on the road of life that for some people end up being a chasm  from which it takes years to claw their way back up to the road.   I read an article a while back in (I think) The New Yorker about people who went from parking ticket to destitution and jail in relatively short order.   I think the article was more about the country's justice system and the delegation to private collection agencies and their unreasonable power.  For people living on the margins financially and earning $7 an hour a $200 parking ticket is an impossibility.     When tickets are farmed out to a private service with few scruples it becomes nightmare.   Every month without full payment adds a $35 service charge plus interest.   Other made-up charges accrue and before long the amount owing is in the thousands.   A couple of months in jail for failure to pay means eviction from your home and your children in foster care.    You develop a chronic illness in the jails and your children pick up criminal habits while in care.  Was the $200 parking ticket worth it to the state?

Usually 3 to 6 months is suggested as a financial cushion.    Back in the days when money was worth more I had the goal of accumulating $10,000 as the amount that I figured could support my family for a year of frugal living.   Attaining this goal was a tremendous relief.    I couldn't imagine a calamity that I would not be able to solve in a year's time.   For me it was similar to what some people feel with an insurance policy but for me, I knew for sure the money was mine and would be there for me should the need arise.

Sunday, 19 March 2017

Twenty-five percent gratuity


Tips (or gratuities) can be a controversial topic.   Some parts of the world, like Australia, don't subscribe to this custom which is viewed as something Americans dreamed up.   Others, like France, include an automatic service charge of around 20%.   Watch out that you don't add an additional tip if you are visiting.    Some travel guides recommend that in addition to the included service charge you round up the bill so that if it is 18.20 Euros (probably not much of a meal in France) you leave a 20 Euro note.

In Scandinavian countries tips were called drikkepenge or drinking money.   It was often the coin change from a bill and the idea was that the server would accumulate enough over the course of an evening to have a few drinks himself after work.  Wikipedia has a country by country guide which can be useful for world travellers.

Some jurisdictions justify a lower minimum wage for servers under the theory that they will end up with more than that by including tips.    Generally, servers in mid-range eateries expect to double their wage with tips; higher end restaurants and bars and expect exponential returns.   Most only declare a portion of the tips received - 10% is standard.   The tips received are distributed by an internally decided formula so that bussers, hostesses, cooks and dishwashers share in the largesse.  Some establishments have servers tip out on their gross sales which can be unfair if a large table doesn't tip at all.   The tip portion for the rest of the staff comes out of her other tips.   In a less than friendly restaurant there's room for abuse and revenge.  

Cruise ships add standard amounts to each passengers bill--something like $14. per person per day.   On a two week cruise a couple would pay almost $400 in gratuities.   An additional 18% is charged on bar purchases.   Most people appreciate the service provided by staff but there can be some resentment at feeling that customers are making up for low wages paid by ships flying flags of low wage nations.

I've read that in New York City, twenty-five percent is the standard gratuity in restaurants.

One objection that is raised concerns the many low wage occupations that do not receive tips.  What is the solution?

Friday, 10 March 2017

Spending Fast

Some people choose January as the month to go on a spending fast or buy nothing month, but any month would work.  You can't avoid paying your rent or mortgage and other key expenses but  all non-essentials are eliminated.   Of course, deciding what is essential can be difficult.    You have to be honest with yourself.   Would your life be seriously impacted if you didn't buy x?   Can you borrow it?   Can you buy it used?  Those are all preferable to retail price plus sales tax.

We all have our particular weaknesses and it is best to acknowledge them.   I have no particular interest in tools or cars but a shiny new catalog from LL Bean can definitely tweak my interest.  My intention was just to look but before long I found something--actually a few somethings--that would definitely enhance my wardrobe.   Fill gaps.    Go with something that was lacking something to go with.  

The Current U.S/CAD exchange rate is one thing that definitely gives me pause but LL Bean does make good quality long lasting clothes.   I would be getting my money's worth.    Pause . . . pause.
Trying to decide what to do I was reminded of the time an aunt sent me home with a good three quarters of an enormous Black Forest cake that was left from a social occasion she was hosting.   How many calories did that contain?   How many snacks and desserts and little side pieces would I end up eating from it?     In a burst of inspiration I picked it up, ran out to the garbage bin (in my slippers) and tossed the cake in.    It was an enormous relief.    I decided to recycle the catalog, but quickly.

A fast of any kind is meant to be short-lived.   A trial run in case you were ever in serious trouble.   Valuable information  is provided to see just how low you can go.  But you're in charge and get to decide what you missed the most and don't want to do without.

Friday, 3 March 2017

Charity begins at home



Charity begins at home.  Here's one definition:

A proverb that expresses the overriding demands of taking care of one's family, before caring for others.

That begs the question:    To what extent does one take care of one's family before stating the job's done.   There are always improvements that can be made in accommodation, education,  food and amenities.    You child might be graduating with a doctorate at age 30 before you consider you have finished.    Does that mean all other worthy causes and endeavours are postponed until then?

But, let's be reasonable, you say.   No need to provide the also proverbial silver spoon.  Moderation in all things even though nowadays that can be expensive.   Standards have gone up from the crust of bread days.    Modern families do not view their children as prospective workers on the family farm.

Raising children takes  money and time.   It is an important job albeit society doesn't provide a reward for a job well done.   No, parents of grown children who  have become productive and happy citizens can pat themselves on the back but there is no government cheque forthcoming.   No attached note of thanks for the money that has been saved by the state in resources not required.   Your non-delinquent children have not used police or juvenile court services, social workers or probation officers.    The healthy diet of home cooked meals, regular sleep and outdoor exercise have kept medical costs to a minimum.   And now your offspring are securely ensconced in the tax paying middle class.

Our society needs these types of people, at least the way it is set up at present.    Are their numbers increasing?   Should this be considered a charitable contribution to the country/world that dwarfs the need for any other?

Friday, 24 February 2017

Sale / Not Sale


Do you chase sales?   By that I mean do you peruse flyers, make lists from them, go around to different stores to pick up certain items that happens to be on sale?    Do you find it works for you?

Following this method of saving money takes time and gas.   I've found it works well in the planning but not so well in the execution so for the most part I have abandoned chasing the sales.

Some of the problems I have encountered may be familiar to you.   

       -- The stock of the item has run out.   I've been dubious when this happens, particularly when it happens regularly  in the same store.   There was never that much stock in the first place I suspect.   Some stores will then tell you that you can have a Rain check and come back another time.     Others have the audacity to say that there are no Rain Checks on specials.    I suspect I've been made a sucker of in those cases.   It was a trick to get me in the store.   A few times I have gone back to redeem the Rain check but inevitably it becomes lost in the detritus of my purse.

      --  The sale won't commence for three days.   I will freely admit this is my fault for not checking the date.   The flyer comes with the neighbourhood newspaper.   I start a list and head off to the store the next day.   I spend a half hour tracking around the store picking up the items.   Maybe I realize halfway through that the items are listed at regular price;   did someone forget to change them?   At some point--hopefully before I've gone through the checkout--it is pointed out to me/I enquire and am told that the sale starts the next day or the day after that.   The small print at the bottom of the flyer with the dates of the sale is pointed out to me.   I  feel foolish and perversely annoyed.   Inevitably, I recycle that store's flyer immediately the next time.   Call me petty.   It's too much to keep track of and I don't want flyers cluttering up my home for days.

     --  The produce is just a day before it will be chucked.   The blueberries are wrinkled, the cucumber, once you get it home, turns out to be softening.   

That's for grocery or drug store shopping.   For clothing or household goods usually specific items aren't mentioned just a general 40% off selected items.   The selected items are those you wouldn't have selected and neither would most others.   That's why they are trying to get rid of them.   The clothes that don't look good on most people, the off white sofa for people who only have furniture for display purposes, no pets or small children.

Is there an easy solution?     Some people find a few stores that generally have good prices and good quality and they accept that while they may lose out on a few sale prices, overall they will come out ahead.   Costco shoppers fall in this category.    Some people develop a price book or at least a good working memory of what a good price is and stock up at those times, enough to last until the next time the item is on  sale which is usually every two to three months.   Still others adjust their menu plans to reflect what is on sale.   Then there are those who prefer a little of what you fancy and would rather skip the cheaper goods for  a small amount of what makes them feel good.   Think of expensive cheese or  one well tailored clothing item of quality fabrics.   What works for you?


Saturday, 18 February 2017

Beat the airlines at their own game

It sounds like a battle is being waged and all you are trying to do is take is take a vacation.   Airlines are facing the same problems as cruise ships in terms of pricing.  Many people travel regularly now, compared to a generation ago, and they want to keep  travelling.   They just want to pay the same as they did twenty years ago.

I took the same cruise last summer that I had taken twenty-five years earlier.   Same cruise line, same standard of cabin;   Vancouver to Alaska , return.   The 'catch'?    The price was the same:   $1250. CAD.    Competition is rampant in the cruise ship industry as many, many ships have been built or refitted over the past years.   Keeping the base price appealing means nickel and diming (not that a nickel or dime buys much these days) has become rampant.   I'll write more on this topic on a future post.

Airlines first brought in the charge for checking your luggage.   Quite a few people retaliating by travelling carry-on only, as I do.   Some carry-on size bags are quite large and if you've ever watched flight attendants trying to squeeze the large and numerous bags into the overhead bins on the aircraft you'll have figured out that the situation wouldn't be allowed to continue.   But it's not just the price, I and not a small number of others, have had checked baggage either lost, re-routed in error, or damaged.   Carry-on avoids that as well.   Win - win you might say.

United Airlines is first out of the gate in deciding to charge passengers for carry-on bags.  Now you can only bring on, for free, a bag that can fit under your seat.   Not much more than purse size.

This used to be economy

As a longstanding  carry-on traveller I have researched various ideas and methods that could be used to avoid checking your suitcase.   Some are amusing, some border on ridiculous and some seem downright clever.    Families can box up and send their vacation clothing to their tropical destination via UPS or some other carrier.  Or maybe you can send them General Delivery to the main post office at your first destination.   If you are staying at the same resort for one or two weeks or more this can save you money.   Four or five family members, each checking a suitcase would amount to $250 to $500.  ($25 - $50 each way x 5).   It seems it is cheaper to ship a box or boxes back and forth as long as you don't need to travel beyond your shipping destination.
Remember to put 'used clothes' as the content to avoid paying duty.

Then there's the suggestion of travelling with a carry-on bag (probably packed with your underwear) and upon arrival heading immediately to the nearest thrift store or charity shop.   For considerably less than the check luggage fee you and your children can purchase enough clothing to last a couple of weeks.   This reminds me of the character in Lee Child's book, whose title name escapes me, who bought a set of clothing, wore them for several days and then discarded them.  His busy life, tracking down notorious criminals, did not allow for time at the laundromat.

Tim Ferriss' blog (of 4 hour Work Week fame) which you can look at here   is pleased to provide a unique idea for avoiding ever checking luggage again:  Leave caches of clothing and even food at hotels you frequent. Seems to me it might require a large tip.

What about wearing all your clothes?    Check out this website, Jaktogo, for tips on how to wear all your clothes on your body when you fly.   Better hope the air-conditioning is working.  A more conservative version of this involves reversible clothing.   I suppose even the pants that zip off to become shorts and jackets that have sleeves that zip off to reveal a vest, reduce the amount of clothing required.

Will the day come when we pay our airfare by our body weight?  Wait, passengers from Samoa already enjoy that dubious pleasure.

Sunday, 12 February 2017

Disruptive Innovation

What do you think of disruptive innovation?    I suppose it depends if you are a consumer or established producer.   Wikipedia defines it thus:

disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances. The term was defined and phenomenon analyzed by Clayton M. Christensen beginning in 1995.

The innovation can be considerable such as when automobiles replaced horse and carriage.   That was definitely disruptive for the makers of buggy wheels and other assorted accoutrements.   

Someone finds a way to do things better and at less cost and consumers flock to them.  It may not be exactly the same but it's close enough.    Other times, an industry creates a need or desire in many consumers  to spend a lot more.   The wedding industry comes to mind here.

One industry that seems to be overdue for disruption  is the floral industry.   Floral arrangements are very expensive and they don't last long.    There's the artistic element;  not everyone has the ability to arrange flowers in a pleasing way although Youtube videos go a long way to remedy that.   Spending a hundred dollars to send someone flowers seems to be the norm  in the medium price range from my recent perusal of the situation.

I thought of sending a modest floral arrangement to an elderly  relative who lives at at a modest distance.    I set a budget of fifty dollars and searched the websites of florists within a few kilometres of her home.   Amazon will delivery a vast array of products to my home (with free shipping)  if I spend $50.   A local on-line organic grocer, SPUD, will deliver various grocery and produce items  to my door (with free delivery) if I spend $40.    Florists haven't caught onto this trend it seems.   After considerable searching I found one business that promised free delivery but after spending too long inputting information and composing an on-line card when I got to the part about paying I found a $30 service charge was added to the cost.   Seriously?   Maybe they hope that I have by now invested enough time to feel committed to proceed.   Sorry, no.

I abandoned that version of my idea.   I'm going to purchase and mail a book.  I just finished one that I feel my relative will also enjoy.   Fortunately, there's a week to go which is another example of the benefits of foresight and planning in advance.   I estimate this will cost me around $25.   

It's also an example of Think outside the box, of definite benefit to frugal and sensible people.