By mid-October, the rains have usually come to Oregon. Not this year. It’s been bright and clear and sunny. The days are amazing. As a result, we’re getting unusually beautiful fall color in the trees, and for once I understand what it must be like to live someplace where this is a regular occurrence. It won’t last long, though. There’s rain in the forecast for the weekend!
Meanwhile, here are some great personal-finance articles from around the web. (Three of which are from Big Media publications. Yikes!)
First, Fortune is reporting that Americans have finally started saving again. “As dark as the next three or four quarters could be, the U.S. economy appears to be undergoing a more lasting, and ultimately uplifting, shift. Americans who for decades have spent an increasing share of their incomes and taken on more and more debt are now, for the first time in years, saving instead.” It’s about time!
At Consumerism Commentary, Flexo has some thoughts about emotions and money, and when to keep them separated. “Human beings do not make logical decisions when it comes to their personal finances,” he writes, and he’s right. As I always say, money is more about mind than it is about math. The more we take control of our bad habits and behaviors, the better our bank accounts look.
Popular Mechanics (!?!) has a list of 19 ways to slash your utility bill. Many of these are familiar (use compact fluorescent bulbs, switch to a programmable thermostat, stop the drafts), these sorts of checklists are always great to have as winter approaches.
Finally, The New York Times reports that the yard-sale economy is on the rise. With more people trying to increase their income (and/or save money!), garage sales are increasing in popularity, becoming accepted by more and more people. But not by some local governments, which view them as a nuisance.
P.S. Oh yeah, I forgot! I took my own advice today and spent a little money on something I wanted. I paid $125 for an old door (and related hardware) to hang in the den. I’ve been wanting to renovate this room for a while, but have balked at the cost. But I want it and I can afford it, so I’m going to make it happen. (Frugally, when possible. Mostly I’m going to use salvaged materials.)
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I think now’s the time to take advantage of yard sales. I bet if I look around town this next weekend I could find some great deals, especially for household items that my fiancee and I may need when we get married and move in together soon.
J.D, Oregon in the fall is beautiful! I’ve been to OU and OSU for away football games (when I was at Cal), and the bus ride was always spectacular. Good times =)
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You know, it’s still okay to spend just a little bit every now and again, especially if it improves the quality of your life. So don’t worry about it and enjoy the fact that your new door didn’t come at too much of a cost
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I’ve come to appreciate home improvement more and more. I’m getting my house ready for the market and just dropped some bucks for new carpet. I’m kicking myself for not doing it sooner so I could enjoy it longer (since I’ll be moving in 2 months). I think money spent that is well appreciated has more intrinsic value than hoarding it and not spending it. Improving your home really does make your surroundings more pleasant.
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Yeah, I don’t know why I’ve been putting this project off. Make no mistake — it’s going to be expensive, especially when we arrive at the furniture. But this isn’t the same as buying comic books or going out to dinner. This is a lasting improvement to our home, and it’s one we can afford. And it’s one I’ve wanted for a long time. See? I can loosen up a little!
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I thought the Popular Mechanics article was interesting and there are some things on there that we’ll try. However, I haven’t seen anything about how to save on energy costs for renters. I would love to do some of the things – like a programmable thermostat – but don’t particularly feel like investing my money in someone else’s property, especially when we only plan on living here for 2 years.
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If everyone starts saving too much, it’ll end up being bad for everyone. By saving, and living with less, you’re forcing everyone else to live with less, as well. This doesn’t make a difference on a small scale, but if *everyone* does it, then it effects everyone. Here’s how it works. Suppose you’re a cabinet maker. You can make, say, 10 cabinets a month and fill all your orders. For this, say, you’re paid a total of $5000. Now suppose all your customers, or the people who would have been your customers, start increasing the amount of money they’re saving. Now that they have more in savings, they have less to spend, and some of them, due to their increased savings, are putting off buying cabinets. Now, instead of making ten cabinets a month for $5000, you’re only making 8 a month for $4000. You were thinking of buying a new hot tub, but now you can’t maintain your savings rate and still afford the hot tub, so you decide to put it off.
Meanwhile, the guy who makes hot tubs wanted to buy a new television, but with the decrease in hot tub purchasing, he can’t afford to…. etc.
People rarely talk about it, but the economy really isn’t based on money. It’s based on the exchange of goods and services. If people stop wanting goods and services, then people will stop making them, and no one will have any. Money is just an abstract idea that makes this exchange more convenient, but the fact is that you can’t survive solely with savings. Savings allows people to shift around the time periods in which they redeem their goods and services for the goods and services they themselves produced (maybe decades later), but the fact of the matter is that we’re dependent on goods being manufactured.
Presume for a moment that everyone in the US had substantial savings. It sounds great, doesn’t it? It’s not inherently bad, but think of the situation in which everyone just decides to retire and live off their savings. It’s impossible – everyone would starve to death, because no one would be doing any farming. Then they’d all freeze to death, because no one was producing any heating oil or electricity.
Certainly, this is a contrived extreme example, and would never actually happen in real life, but it’s just to illustrate that slowing down production on a large scale by refusing to purchase things and instead saving money isn’t necessarily a good thing.
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Compact fluorescent light bulbs look cool and slash utility bill but they produce harmful high levels of radio frequency(RF) radiation known as “dirty electricity” (GS) and high frequency electromagnetic radiation. In Canada, inefficient incandescent light bulbs are slowly being eliminated and will be phased out by 2012. Scientists believe that the use of compact fluorescent light bulbs (CFLs) is not a safe in many cases. I don’t mind saving energy but getting exposed to harmful chemicals and dying of cancer are lot less important than saving energy.
Cheers,
A Dawn Journal
http://www.adawnjournal.com
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Great links and congrats on your door ^_~ I’ve been visiting a bunch of yard sales to find the perfect chairs to go with this old vintage table I bought at a flea market for $30, but no luck yet
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Tyler,
Will it really be bad for everyone or will it just be bad for a bit? Hopefully (like JD) those people who have been saving will end up spending money on the things they want, they will just pay with cash rather than taking on debt for it. And maybe since less money is going towards paying interest on debt, people will be more apt to buy the things they’d like. But I’m no economist (nor did I sleep at a Holiday Inn Express last night) so I’d be curious to know your thoughts.
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Tyler,
What you are saying is right, of course, but when you have an inflated economy, and people who have overspent and overspent, there must be time for some adjustment. It hurts, of course–esp. for the person who didn’t save anything for the hard times.
But never fear, Tyler, most people “out there” will not have the self discipline to save. I live in a former communist country where people tell me they used to have money. Now they have no money. Why did they used to have money? Because there was nothing to buy in the stores. Buying a major appliance meant being on a waiting list for sometimes up to years! Now things, and credit are readily available. People often have no money….but plenty of things. They look back on the days when they had “money” but can’t seem to remember WHY they had money.
It does take a lot of self discipline to see the “stuff” available and walk past it, even as it beckons you to touch it, buy it, and take it home with you.
Some people are programmed to be able to take risk, including bankruptcy without even batting an eyelash. Others can’t sleep at night.
For those who care for more peace of mind, use less, spend less, etc. Maybe that mentality won’t make for the “biggest economy” but maybe we’d be more calm and live with less haste and less pressure.
We already know that if “everyone did” things like shop yard sales or goodwill, or used craig’s list, the good things would be impossible to find. However, we know that “everyone won’t”. So, those who care can do it and everyone else can go on with their lives like normal, spending at the mall, buying more things that can end up at their next yard sale.
When I was recently in the US, I considered myself “helping the economy” when I did something that wasn’t necessary, like going out to eat, or buying a pair of slippers that I just wanted but didn’t “need” yet because my others aren’t worn out.
Sounds good, huh?
On the “individual scale” side of things, tho, most people should think more about their own personal finances instead of trying to “help the economy”.
But, IMO, most people won’t willingly “do without” if they don’t have to.
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Note that if you have a heat pump and a programmable thermostat you may be wasting energy. In heat mode if the programmable thermostat automatically raises the temp by more than ~2°F in one jump the heat pump won’t heat the house fast enough before the much more expensive back up heat kicks in. This, of course, doesn’t apply to cooling mode. We don’t have a programmable and simply raise the heat manually by 2°F in steps.
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i think its great you are using salvaged materials to renovate!
so great for the envornment
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For the renter who didn’t want to invest in the programmable thermostat, maybe you could buy one, install it (it’s not difficult) and then when you move just take it with you and re-install the old one. Ours that we are currently using is actually from my adolescence…my parents got a new furnace last year and gave it to us. It took my husband all of 10 minutes to install when we decided to get our own new high-efficiency furnace. In fact, the furnace salesman thought it was new. (!)
Interesting about the heat pump. My coworkers and I were just discussing the merits (or faults) of programmable thermostats. Several of the older ladies with larger houses don’t agree that turning your heat way down at night makes a big difference because of the energy it takes to reheat your home in the morning. I’d like to see some experiments with the different methods of temperature control.
Right now I am trying to keep our house set at a low, consistent temperature, then we supplement with our wood stove when we feel we must. I can say that my body is adjusting because my husband caved in and turned the heat up this morning and I was roasting.
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Perhaps this is a dumb question, but why do local governments consider rummage sales a nuisance? Tax or business reasons? I think you can only have 2 per year (at least in Wisconsin) before you have to declare it or are considered a business…something like that. At least that’s what our tax consultant told us a few years ago. (We do our own now.)
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I just read an article in the paper about how a wood-burning stove or fireplace actually removes heated air from your home, in effect cooling the house more than just leaving the furnace going would. They say if you are using one, close the doors to that room and open a window to try to draw the warmed air back inside.
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Turning your heat down for several hours means several hours where the furnace (electric or otherwise) is not running. Heat is still being transferred from inside your home to outside, as physics dictate, but as the temperature in your house lowers, the less of a transfer there is. There’s a better explanation elsewhere, but the point is, having it turned off when you’re not there will save energy.
Some programmable thermostats avoid the problem of using backup heating by starting the heating a little early, and only running the normal heat to get back to the target temperature in time for you to get home.
I don’t have any research to back it up, but I believe the fireplace design can affect where the air comes from that is burned, and thus whether more warm air is consumed than created.
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Kudos to you for being green! re: buying houses, there are some pretty economical options out there– including ones that repurpose shipping containers. I’m actually lusting after one myself… the architects did a great job.
http://renaissancetrophywife.wordpress.com/2008/10/28/green-nesting/
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Re: Chickybeth
It depends on what type of fireplace you have. Some are created just for appearances which can suck heat out of your house especially if you don’t keep a roaring fire. For the past 3 years we heated our entire house with a wood burning stove. The furnace would only turn on when it got below 0 outside and the stove couldn’t keep up. I liked teasing people out my $50 gas bill (gas stove, dryer, & water heater) when others were paying $200-350. You can get inserts for most fireplaces that even have blowers. This is a great way to save a few bucks if you have a fireplace originally designed only for having a romantic fire on a saturday night.
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re: salvaged materials: are you using the Rebuilding Center? it rules!
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I am happy to see the rise of yardsales and donations of good stuff to Goodwill rather than heaps of stuff going to a landfill. Stuff has value again. Maybe.
I work retail and have pondered Tyler’s #6 comment.Chances are pretty good that I’ll be out of a job in February if there isn’t some spending. I’ve been preparing for that by cutting back gradually.
My guess is that everyone will cut back in some ways, but rarely all in the exact same way and to the same degree. It is almost impossible to spend or use up nothing. We will adapt to what we have available be it jobs, goods or services.
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I’m trying out the 50/30/20 budget for a month starting on the next paycheck. Like you, JD, we’re spending less than 10% on fun, and my husband keeps complaining that we’re not living enough for today. Your last post really made an impact on me, so I pulled out the budget and re-figured a few things. I’m nervous, but there are a few house projects that could use some money and will improve life, so that’s probably what we’ll try first. Maybe we’ll go out for dinner too and I won’t feel so guilt and enjoy it for once!
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Re the savings link: It’s nice people are doing this and I hope they continue (I’m having a lot of trouble… need to bear down), but it would have been better had they begun years ago. I hope this doesn’t wind up being another fad.
Re utilities: Another way to save on them is to avoid renting from landlords who can’t be fussed to update windows and other potential “leak” spots in the building. I spent four years in an apartment where we had to seal the windows every winter, there was so much draft coming in. Of course that in itself was dangerous; we couldn’t air out the apartment from fall to spring, and it would have been hard to get out the window had the building been on fire. Since we’ve moved I’ve had to run a space heater in our bedroom one night so far. It’s awesome.
Re the yard sale economy: Look for more people to complain about eBay soon. It’s getting a lot harder to sell there for the new person just starting out. You’re favored in search results now if you have a certain amount of history with them. Yard sales are still cheaper, but of course if you don’t *have* a yard, you are kind of out of luck and must look at online options. Etsy, however, is a great deal if what you’re trying to sell is crafty in nature–you must have made the item or must be selling supplies or vintage items.
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Oh, and FYI? I think you need to change your time settings. I posted that at 3:45pm on the 28th–aren’t you in the States?
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