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Finance | The Grumpy Pundit | Page 3

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Playing Little Money

Posted by on April 21, 2008 No comments

There’s a style of play in baseball known as ‘little ball’ or ‘small ball.’ What it boils down to is rather than always swinging for the bleachers just doing little things to move runners around the bases. Bunt, steal, sacrifice fly, take any small advantage you can get and move men slowly around the bases to score. Its not as dramatic a style of play as banging out home runs, but it can get the job done.

The same thing applies to your household finances. Clipping coupons may not have the same drama or thumping impact as a big raise at work, or winning the lottery, but the little things are easy to do and they add up.

The simplest thing you can do, if you have the self-control to handle a credit card, is to get a cash back card. There are a variety of different kinds, but they all have certain things in common. They give you 3% cash back on some of your purchases, and 1% on everything else. I have a few different cards, each offering a 3% kickback in different categories, to maximize the return. A 3% kickback on a five-buck meal at Wendy’s doesn’t amount to much, but 3% on a new laptop is something you can notice. And 3% on what we spend keeping two cars gassed up is definitely worthwhile.

Sometimes you can get a combo deal. Our local grocery store sells gas too and gives you a discount of ten cents per gallon for every $100 you spend there on groceries. I do my grocery shopping there, with a card that gives me a 3% kickback on purchases at grocery stores. Then I buy the — discounted — gas with the same card, which also gives 3% back on gas purchases.

It doesn’t take any particular effort at all to do. Just a few minutes to fill out a credit card application, or on the phone with customer service getting an account changed to a different type of card, and then it’s just a matter of pulling the right card out of your wallet. The return on that small investment is several hundred dollars a year.

Of course, if you’re going to try that, you have to pay off your credit card every month, or the interest charges will eat up any savings.

A lot of money can be saved simply by paying attention. People will quite commonly negotiate hard on big purchases, like cars and houses, but not pay much attention to the little things. (Men are notoriously bad about this.) For example, an item you buy every week on your regular grocery store expedition may cost twice as much at store A as it does at Store B. But you buy it at store A because most of the other stuff you buy is as cheap or cheaper there. Now, sometimes that’s just fine. There’s no sense spending two bucks in gas to drive to another store and save a buck on a package of hot dogs.

But something like that should raise a flag, tell you to look more closely at your purchasing patterns. You don’t want to set up some overly complicated plan, with so many different items at different stores that you can’t keep track of it. Keep it simple; compare two stores that carry the same items and which are both convenient to you. Look at the stuff you purchase regularly, and see which are significantly cheaper at which store.

You’ll probably end up with just a handful of items that are much cheaper at one store than the other. Keep doing your regular shopping at your usual store, but don’t buy those items there. (Barring emergencies, of course, or a killer sale.) Instead, every couple of weeks or so, depending on the stuff you’re buying, make a second trip to the other store and stock up on those cheaper items.

This little-money trick might take you ten or fifteen minutes of thought, to determine what stuff is noticeably cheaper at which store, but after that, it doesn’t take much effort at all. Just driving a few blocks every couple weeks.

Example. We do most of our grocery shopping at Kroger’s, the above-mentioned store with the gas kickback, and which also happens to be right around the corner. But a few things (most notably hot dogs — and with a hungry two-year old in the house we go through a lot of hot dogs) are a LOT cheaper at Wal-Mart. (Contrary to expectations, most of Kroger’s prices are very close, and cheaper in many cases.) So every now and then we drive the extra few blocks to Wal-Mart and stock up.

Stocking up on staple items is another good trick. We try to buy groceries that are on sale whenever possible, and buy enough of them to last until the next sale. I’d much rather buy three or four two-liters of Coke one week at $.89 a bottle and not buy any again for a month than buy one two-liter at $.89, then two or three at $1.59. That seventy-cent savings may not sound like much, but multiply by each item you can do it on, and do it for a year, and it adds up. It’s not unusual for us to have our grocery bill discounted by 30-40% by sales. Every week. And all it takes is buying more of the stuff on sale that you know you’re going to use (and which will keep) and sticking it on a shelf.

(Don’t get carried away with this. My grandfather used to buy cans of coffee whenever it was on sale, much to my grandmother’s disgust, even though they had a whole cabinet full of the stuff already. Their supply of coffee, in fact, outlasted both of them. I have no idea what eventually happened to it all.)

Then there are coupons.

Oh, who am I kidding. You’re not going to clip coupons. I don’t clip coupons. My wife, fortunately, does clip coupons. Sometimes she even remembers to use them before they expire.

People who are really dedicated can save huge amounts of money with coupons. For most of us it is, let’s be honest, too much trouble.

Once you start looking for them, and get in the mindset, you should see a lot of ways to save a few buck here and there. Down here in the desolate wasteland of north Texas, for example, keeping your house cool is a much bigger expense (and problem) than heating it. Once of the best investments I have made was a couple of years ago, when I spent a few hundred dollars to put dark solar screens on the south- and west-facing windows upstairs. That not only cut our electric bill by a significant fraction (about 25%), but it keeps the house much cooler and more comfortable when the temperatures outside exceed the melting point of lead.

Take a few minutes to look over your expenses and see if there are any ways you can move a few dollars here and there. It’s not a lot of money, but it’s sitting there waiting for you to find it and pick it up. You’re not just going to leave it there, are you?

The Pillars of Civilization Shaken

Posted by on October 6, 2008 No comments

A terrible crisis has been averted, at least for now.

You’ve probably heard about this so-called ‘Credit-Crunch’ that the United States is going through, but I will summarize very briefly. In the simplest terms, financial institutions and consumers in the US lent and borrowed so poorly, so stupidly, that the the system was in danger of grinding to a halt, with people and businesses only able to lend or borrow with great difficulty.

Obviously, that would be a terrible situation. Home prices in some markets would fall down to the point where middle-class families could afford them. People would have to live within their means, and might even begin to dig out from under a crushing burden of debt. Companies would have to manage their resources sensibly.

Spending, in short, would no longer exceed earnings. Taking out a home equity loan to go on vacation and buy a big screen HD TV would no longer be the order of the day.

Of course, some people would (and may yet) lose a lot of the stuff they bought that they couldn’t pay for, which would make them very upset.

Obviously this would never do. The financial institutions called up their friends in Washington and the government sprang into action with a rapidity hardly ever seen from our ponderous bureaucracy. A Bill was quickly thrown together, promising that the US Taxpayers (that’s you) would give the financial institutions hundreds of billions of dollars, no strings attached. But that Bill wasn’t bad enough, so they went back and put in a bunch of other crap, to make sure everyone got a little bit of the pie the taxpayers were so generously serving up. That passed, of course.

To paraphrase BusinessWeek, Wall Street and the US financial firms in general want the government to stay out of their business; they want no regulation or government oversight at all. But when they get in trouble, they want the government — meaning the taxpayers — to bail them out. This is exactly like a young adult who does not want his parents to have any say in how he (or she) conducts his life, but who wants them to pay his bills for him when they get to be too much. We wouldn’t put up with that from our kids, but we’ll send billions to people we don’t even know, just because they say they’d like to have it, thank you very much.

And, of course, because they threaten us with Financial Armageddon if we don’t give it to them. Government, remember, is all about fear.

Remember; saving is Un-American and will be punished. If you’re not over your head in debt, the government hates you and will take your money in order to help people who are over their head in debt. If you’re not willing to go into debt yourself, the government will do it for you.

Isn’t it nice of your Congressmen to do that for you? The Wall Street executives, running their companies into the ground and then bailing out with hundred-million dollar bonuses, appreciate your patriotic generosity.

History Pop Quiz

Posted by on February 23, 2009 No comments

Extraordinary optimism sustained an orgy of speculation. Books were written to prove that economic crisis was a phase which expanding business organisation and science had at last mastered. [….] In October a sudden and violent tempest swept over Wall Street. The intervention of the most powerful agencies failed to stem the tide of panic sales. A group of lending banks constituted a milliard-dollar pool to maintain and stabilise the market. All was in vain.

The whole wealth so swiftly gathered in the paper values of previous years vanished. The prosperity of millions of American homes had grown on a gigantic structure of inflated credit, now suddenly proved phantom. Apart from the nationwide speculation in shares which even the most famous banks had encouraged by easy loans, a vast system of purchase by installment of houses, furniture, cars, and numberless other kinds of household conveniences and indulgences had grown up. All now fell together.

It should not, however, be supposed that the fair vision of far greater wealth and comfort ever more widely shared, which had entranced the people of the United States, had nothing behind it but delusion and market frenzy. Never before had such immense quantities of goods of all kinds been produced, shared, and exchanged in any society. There is in fact no limit to the benefits which human beings may bestow upon one another by the highest exertion of their diligence and skill. This splendid manifestation had been shattered and cast down by vain imaginative processes and greed of gain which far outstripped the great achievement itself. –Winston Churchill

Winston was talking about events now 80 years gone. But history does not, despite the popular saying, repeat itself. It just gives pop quizzes to see if anyone was paying attention.

Happy Thanksgiving

Posted by on November 26, 2009 No comments

A few weeks ago, I had to make a brief stop at a client’s office on the weekend. Nathaniel and I were going to go on adventures that day, so I brought him along. He likes going to the office he calls ‘the snacky place.’ I took care of what work I needed to do while he had some cookies in the break room, and we were getting ready to go when he asked me, “What’s that?”

‘That’ was a food-bank box, with a few cans rolling around forlornly in it. I considered for a moment how to explain this to a three-year-old, then said, “There are some families out there who don’t have enough food to feed their little boys and girls, so other people give food to help them out.”

Then I thought about what I’d said, while Nathaniel stared at the box and munched on a mini fudge graham, and said, “You know, daddy complains a lot sometimes, but I guess we don’t have it so bad. Whatever else, we always have food in the house and never have to wonder where our next meal is going to come from.”

Then I tousled my little boy’s hair and said, “Let’s go have some adventures, little guy.”

Happy Thanksgiving, everyone. Be thankful for what you have, and not just on one day each year.

New Eyes

Posted by on March 11, 2010 No comments

After a year or so of increasingly being unable to see . . . well, anything, I finally broke down and bought myself some new glasses. Because of the amazing options available to consumers here in the future, I was able to indulge in a luxury that would have been unthinkable to me not many years ago.

I got myself three pairs of glasses.

One pair for general use. A pair of polycarbonate prescription sunglasses. And a pair of close-up glasses for working on the computer and reading. At first, after getting this wealth of eyewear, I was second guessing myself. I could see the computer screen well enough with the regular distance glasses; did I really need the computer glasses?

Then I noticed that if I wore the computer glasses, I didn’t have a headache after spending several hours on the computer. Oh, right!

I have to remember which pair I’m wearing, of course, and change them as appropriate, but that’s a small price to pay for being able to see, and not having to deal with headaches and eyestrain. Plus, there is the added bonus of confusing people when they see me wearing very different pairs of glasses over the course of the day. (I deliberately picked frames that look nothing like each other for the computer and distance glasses, so that I could easily tell them apart.)

The trick that makes all this possible is ordering the glasses online. I was able to get all three pairs for less than what the last pair I bought at the optician’s store cost. They’re not designer frames (though you can get those online too, and still save a significant amount of money), but they’re quite nice. I’m impressed by the look and quality of them.

The sunglasses and computer glasses came from 39DollarGlasses.com and the distance glasses came from EyeBuyDirect.com. (Link and coupon codes–10 and 15% off– courtesy of Glassyeyes) Both are quite good and they were delivered in about two weeks. Comparable to what I’d expect from my local optician.

If you wear glasses, treat yourself to the luxury of multiple pairs, and pay less too.

Ancient Wisdom

Posted by on March 30, 2010 No comments

“The wealth required by nature is limited and is easy to procure; but the wealth required by vain ideals extends to infinity.” – Epicurus

Money and Motivation

Posted by on May 30, 2010 No comments

This is a very interesting illustrated discussion of how people aren’t motivated by what most employers (and even many employees) think that they’re motivated by.


From my own experience, I see a great deal of truth in this. I could make more money in my business if I wanted to, but at this point in my life I begrudge every day not spent with my son. I work enough to meet our financial needs, and that usually leaves some time for more important things, like playing catch with my son. Not as much time as we’d like, and he always gets upset when I leave for work and tries to stop me, but as I tell him, “Daddy has to go work to support you and mommy in your luxurious mommy and little boy lifestyle.” It doesn’t really help.

And on a good week, though, we’ll have a couple of days to go to on Daddy and Nathaniel Adventures, a couple of days that most dads don’t get to spend with their kids because they’re working, chasing one more handful of dollars.

I can always make more money, but a life only holds so much time.

The Leaky Economy

Posted by on July 25, 2010 No comments

It’s a pretty standard course of action these days that when the US economy gets in trouble, the government starts ladling out ‘stimulus’ money. This ‘stimulus’ (whether in the form of direct payments, tax breaks, or low interest rates) is supposed to jump-start the economy and create jobs. The idea is that creating demand for products (either from consumers or other businesses) will encourage companies to hire people to meet that demand. Increase demand, increase production, create jobs. Seems straightforward. Unfortunately, the borders of the US economy are porous.

That was not always the case. Between WWII and 1990, it took about eight months for the jobs lost in a recession to be recovered. Job recovery from the 1990 recession took 23 months. Job recovery from the 2001 recession took 36 months. We’re still waiting on the current recession.

The reason behind these ‘jobless recoveries,’ I think, is that in our globalized economy the demand created by stimulus spending no longer has to be met by workers in the US. The stimulus money basically leaks out of the US and stimulates economies all over the world. Imagine a colander in a sink. You keep pouring water into the colander, but it never gets full. Not until the entire sink is full enough of water to raise the level in the colander.

That is the situation we have when the government tries to ‘stimulate’ the US economy. The money pours out into the global economy as fast as they can pour it in. They’re not really stimulating the US economy; they’re stimulating the entire planet’s economy, which takes a lot longer and a whole lot more money.

And so we get ‘jobless’ recoveries. As the global economy grows, these recoveries are going to take even longer, unless we drastically re-think how we go about managing our financial crises.

There seems to be three different ways the problem could be approached. (Well, four if you count “Don’t do anything,” which is the likeliest course of action.)

The social safety net could be strengthened so that there isn’t as much urgency to stimulate the economy. The downside of this is that increasing unemployment payments, and extending low-cost health care to the unemployed, would be expensive. The upside it that it would probably be less expensive than what we’re doing now.

The stimulus could be made more direct, to focus it on the US economy. That would require more direct government involvement, not just writing checks to consumers and businesses and hoping they do the right thing with the money. The government would have to directly put people to work, require that companies create their new jobs here in the US, that sort of thing. The downside is that government job programs are generally inefficient, and any government involvement in the economy causes some people to begin bleating, “Socialism!” The upside is that it would keep some of the money in the US economy.

Finally, we could make the borders of the US economy less porous. This would involve a small tariff, say about 5%; just enough to impose some friction on the money leaving the country. The downside is that it would annoy many of our foreign trade partners, who are used to having unfettered access to markets in the US, and many US companies which are used to being able to move parts of their operations overseas without restriction. The upside is that it would restore some of the competitive imbalance that US companies currently operate under, and keep many jobs here in the US.

I favor a mixed approach; strengthen the safety net for workers, and impose a small tariff on all imports. The tariff would go a long way towards paying for the safety net.

This would raise the cost of some goods, either directly in the case of imports, or indirectly in the case of companies having to maintain more expensive operations here in the States (as opposed to hiring people in China or Indonesia and importing their products), but with more jobs and money kept in the country people would be better able to afford the more expensive goods. NOT doing it will mean increased taxes to pay for all that stimulus money that is pouring out of our country, to benefit workers all around the world. We simply can’t afford that any longer (though that is exactly what the powers-that-be want to keep doing).

In either case we pay. This plan at least lets us pay each other.

Thinking Point #7: What You Pay For Is What You Get

Posted by on December 19, 2010 No comments

What we, as a society, want from our domestic security apparatus (the TSA, Homeland Security, the armed forces, etc) is for them to keep us safe, to let us feel secure.

The security apparatus, however, is rewarded when we feel unsafe and insecure. When danger is around every corner, they need bigger budgets and more power to keep us safe.

What we, as a society, want from our healthcare system is for it to keep us healthy.

The healthcare providers, however, are rewarded when we are sick. If you are healthy and never have to go to the doctor, your doctor doesn’t make any money.

See the problem? Imagine if firefighters got paid only when buildings caught on fire.

When there is a disconnect between what society at large wants from an organization, and what actually benefits the organization and its members, society is going to be poorly served by that organization.

Thinking Point #8: A Modest Proposal

Posted by on December 11, 2011 No comments

In 2010, US imports totaled just under $2 trillion. A 2% tariff on imports would generate about $40 billion in revenue. That would be sufficient to give each of the 13.3 million unemployed Americans a $1500 worker retraining grant. Make companies pay in a reasonable amount (say $10,000) for every American job they move overseas and even more money becomes available.

If 100% of the tariff were passed on to consumers, that would add ten cents to the cost of a $5 t-shirt, or $500 to the cost of a $25,000 car (about the same as the ‘destination charge’).

The point is not to seriously impede trade, but to add a tiny bit of economic friction at the country’s borders, to the benefit of American companies and workers. Of course, none of the people with the power to make this happen have any interest in such things, so don’t hold your breath.