Weekend Reading: In Cheap We Trust

In Cheap We Trust: The story of a Misunderstood American Virtue by Lauren Weber. Back Bay Books, October 2010.

I've already mentioned this book once, but I could write an entire series dissecting why this is a fantastic analysis of the American character in relation to money. I realize that that sentence doesn't make it sound very appealing, but it's seriously fascinating. Just taking a cursory view of American history, we shifted from Puritain values of thrift to wartime rationing, to the roaring twenties to the great depression. We always seem to know that we're supposed to be saving, but easy credit gets the best of us each time. When it's all written down like this, it's both horrifying a fascinating how we as a nation keep making the same mistakes in a slightly new way. It certainly re-validates my personal desire to be thrifty and remain that way, but even I have only come to this conclusion after falling victim to the same ideas that always bring us down.

Best Takeaways:

A new appreciation for Home Economics class

Actually, I should amend that to an appreciation for Home Economics class, because it was a joke to me before. In my school, Home Ec was for the lazy, for the kids that were scared of the shop teacher and for the kids that knew taking shop meant doing a little bit of math. We did the lessons in cooking and sewing, but we also had a Mary Kay beauty consultant come in twice, which seriously undermined any actual lessons we were supposed to be learning. Prior to reading this book, I had never even really considered the name Home Economics and what it actually means. Basically, the men went off to earn the money, and it fell to the women to run the home as efficiently as possible. This means knowing how to get a good price on food, how to prepare it, how to sew and mend clothes--basically all of the things that I'm trying to reach myself at age 31 and lamenting that I didn't know before.

My Home Ec class has changed its name to Family and Consumer Sciences, but still didn't really tell the students that even if you're not going to be a housewife, you will still run a house someday. There is a huge opportunity to teach high school students practical skills that they will actually need someday, but that message doesn't seem to get through. If anyone else has had a better Home Ec experience, I'd love to hear it, otherwise, I feel like I might end up lobbying my way into local schools to save today's youth from themselves!

The notion of the good life has been pervasive in our history.

We have always had the ideal of The American Dream, but we've always let the haves dictate history more than the have nots. "Despite the flashy 1920s images of Gatsby et al., many Americans still lived in poverty having missed out of the decade's gains. In 1929 The Brookings Institution reported that 60 percent of Americans lived on less than $2000 per year, barely able to provide for basic necessities, yet they were inundated with images of the good life." (148). Sure history is written by the victors, but why do we always celebrate extravagance and waste more than we do hard work and practicality. It's sexier, I suppose, but again, it's this whole cyclical notion of thinking that becomes really apparent when you just focus on our nation's history with money.

The Tightwad-Spendthrift scale.

Carnegie Mellon did a survey of consumer behavior (which you can take, if you like) that indicated that people who fall into the category of tightwad actually have a physical reaction to spending money i.e. it's not always just cheapness, for these people, it's actually difficult to spend. Likewise, the spendthrifts have a hard time not spending money, even if it's money they don't have. Personally, I've gone through phases of both, and it depends on what I'm buying. Sometimes I wake up knowing I need to buy milk, but just not wanting to. Sometimes I wake up knowing that I don't need a new black cardigan, but it's all I can think about. I go back and forth and I think I fall more into the middle area of unconflicted consumer.

I'm sure we've all seen, just in observing human behavior, that all of us spend in different ways, but it's interesting to learn the though process (or automatic attitude) that goes into buying things.

Protege!

Like the financial guru that I long to be, I have taken a friend under my wing for money/budget advice and to act as a financial AA sponsor. She's going to be good enough to keep track of her progress, which I will then anonymize for you, my twelve readers, to read and share tips, tricks and encouragement.

A little background:

Protege has a full-time, benefitted position that she actually enjoys--living the dream! What she also has is student loan debt, credit card debt and an expensive apartment that she's lease-locked into until at least June. So we're working with what we have, and making the best, because that's what grownups do.

Major expenses: Rent, gas, utilities--not much can be done about these, especially this time of year.

Areas that need cutting: Eating out and food in general. Socializing may have to take a hit, and grocery spending could be reigned in.

Major goals: Pay off credit cards and start saving.

It's going to be tricky, but between protege's gung-ho attitude and my incessant nagging, we should do just fine. Thank you, internet, for providing accountability.

Lean times ahead

In my frenzy to adjust to my new work schedule and learn how to do my new job, I completely forgot one major thing: I'm on an academic schedule now. What this means is that with the looming winter intercession, comes a severe dropoff in hours. In fact, between December 21 and at least January 2nd, I have no hours at all. At first I thought yay! I'll finally have some nights off! Then I realized, oh yeah, I can't really be out cavorting if my income is cut in half.

Pair this serious downshift in work with the fact that I'm committed to go to a library conference in January, and I'm forced to admit that I may be a bit of a dumbass.

Like all setbacks, I'm determined to take this one in stride. Afterall, it's only temporary, and it will actually be nice to have a few nights off during the most depressing part of the year to eat some comfort foods and curl up in my reading chair. I do need to keep myself in check, however, spendingwise, as I have gotten a bit freer with the clothes-buying.

I'm lucky in that no one really expects x-mas gifts from me, so I save money there, and knowing I have this expensive (but warm!) trip coming will give me something to focus on. I'll have to dial back the saving (damnit), but if I keep spending like I have been, I should still be able to sock a little away.

Time to give myself some frugal assignments to pass the time productively...

Separate Accounts

I love my bank. That may sound as strange as saying I love going to the dentist (which I used to also), but it's actually true. What made me love my bank even more was moving and opening a new checking account at a local bank, and then realizing what jerks that local bank are (I have since closed my account). So technically, my bricks and mortar bank is 1,300 miles away from me, but with direct deposit and online banking, it rarely makes a difference.

One thing that was handy about having two separate banks was that I had my designated travel fund in my least-used bank, which made it easier to slot away funds and not be tempted to spend them--out if sight, out of mind, and moving money between the two banks involved writing and mailing a check, which I could easily talk myself out of. Then I got a notice that my local bank is instituting a $5 monthly surcharge on checking accounts unless you maintain a balance of something like $2500. I don't remember the exact amount, but it was high enough that I would never keep that kind of money in an account that earns .000000004% interest. So I started shopping for a new bank.

I could have just kept all my money in my beloved bank, but I really like having a separate hidden account, plus, as great as my bank is, my money market savings interest rate has dive-bombed in recent years meaning I might do better shopping around a little bit.

Enter, The Frugal Girl.

This is almost spooky, but the same week that I got that letter about the $5 surcharge and was inwardly grumbling about finding a new bank, Frugal Girl linked back to a post of hers from a while ago talking about her multiple online accounts with ING. I have never met Frugal Girl, but I trust her, and she's never steered me wrong before. Plus, I've had many friends who have used ING, the city I used to work for used ING for retirement accounts--in short, it's a name I know and have heard good things about.

They have free, high(er) interest rate savings accounts, and they allow you to have more than one. It's tied to your regular bank account, so can move money between the two easily, and the interest rate is about double what my MMA is yielding right now. Huzzah!

The point of all this rambling is that having a separate account, for anything (doesn't have to be travel), is really the handiest, easiest way to accrue money. If you're someone who buys a lot of Christmas gifts, set up a free, interest-earning savings account and sock away a little bit all year long. Then when it comes time to buy things, you don't have to freak out wondering where the money is. People love to invoke the notion that if you just skip your weekly coffee, you'll save something like $300/year. How about you just stick a painless $10-$20 a week into your secret savings account. It adds up. Whenever I start shopping for a vacation, I know that a jarring as it is to charge a $300 plane ticket, I just have to move that money from my travel fund and send it off to Amex.

You can keep accounts anywhere, doesn't have to be ING, but I've found in my sleuthing, that online banks like ING have better rates for savings accounts. If the notion of online banking seems scary (and I understand why it would), shop around for a bricks and mortar bank that doesn't hose you with fees. One thing that I liked about my local bank was that there was always a branch in the grocery store I frequent, and my savings account was tied in with my store savings card meaning I got a tiny percentage back on my purchases (gas and groceries). That amount was not going to total the $5 a month they want to charge in fees, however, so that's why I've jettisoned them (jerks).

It's the banking equivalent of hiding cash in your sock drawer.

*Plus, if you open an account and let me refer you, you get $25 and I get $10. If you want in, email me at findmefrugal@gmail.com

Shepherd's Pie

Holy crap is this delicious. I was optimistic, but not prepared for how awesomely delightful this turned out to be, although, honestly, if you put mashed potatoes on a shingle I'd probably be thrilled, so there's my bias. I've never had real (beefy) Shepherd's Pie, but it can't possibly be as good as this delightful vegetarian version I found on Vegetarian Chic and then changed slightly to match my own tastes (of course).

It's a bit labor intensive as it requires you to make mashed potatoes as well as lentils and saute some stuff, so next time, I'm going to double the recipe--plus, there just wasn't enough!

Ingredients:

1/2 cup lentils (green or brown)

2 large russet or three medium red potatoes

1/2 cup spinach (frozen works)

1/4 cup shredded carrot

2 cloves garlic

milk

cream cheese

basil, cumin, parsley, salt to taste

soy sauce

• Place lentils and about 2 cups water in sauce pan, and bring water to a boil. After boiling, let simmer at medium until lentils are tender (this may require periodically adding more water, but don't over add). Once lentils are nearly done, add a few spices and a few splashes of soy sauce. Cook until all liquid is absorbed.
• Transfer lentils to another dish and rinse pot for potatoes.
• Peel and dice 2 large russet or 3 medium red potatoes and place in sauce pan with water enough to cover and float them. Boil until fork tender, then mash with potato masher. Once the potatoes are slightly broken down, add about 1/3 cup of milk, 2 tbsp cream cheese, and a few dashes of salt. Re-mash until potatoes are smooth, and stir with a wooden spoon to mix in all ingredients. Potatoes should be thick consistency, but not too thick to spread.
• In frying pan, add three glugs olive oil and two cloves garlic diced. Saute garlic until slightly golden brown. Add spinach. If using frozen spinach, be prepared for a reaction from the oil. Saute spinach for about five minutes, then add shredded carrot. Saute, then add lentils. Saute all vegetables, add more basil, parsley and cumin to taste, then spread mixture on the bottom of a casserole dish (note, I used a full-sized casserole dish, and had a very thin pie, hence the doubling next time.) Use a smaller one if you don't want to double.
• Spread mixture evenly to all edges. Then plop mashed potatoes on top and spread as neatly as possible to the edges.
• Bake at 325 for 20 minutes!

It gets awkward

One of the big drawbacks to living a frugal life is the near-constant thought of money. I'm getting used to that, it's becoming routine, but tied in with that is the near constant appraisal of other's money--does anyone else do that? I'm not saying that I do it in a malicious or envious way, but when I know approximately how much people make, I find myself wondering how do they afford this?

I don't know if this is something I just started doing on my own, or if it's a reaction to things people have said to me, but it's there. I used to work with a kid who was an avid video gamer. I have nothing against people who play a lot of video games, but it's not something I really choose to do with my time. What bothered me, was when he started making snarky comments about my travels and how lucky I was that my parents paid for all these life experiences for me.

In the interest of full disclosure, yes, my parents did pay my college tuition for four years and that four years included a semester abroad and a grand tour of Europe, but by the time video gamer and I were having this conversation, I was completely cut off from all parental financial support. I was paying all my own bills, taking out loans for grad school and funding all travel adventures myself. When I was in High School, I traveled as much as I could and paid for all of it with money I earned myself. I don't think my parents even gave me spending money. I've been working since age fifteen, buying all my own clothes and extras but I was lucky enough that my parents were willing to pay for college (then I went to grad school twice and took out an obscene amount of loans).

When he made that remark, I looked him square in the eye and said, "You just bought three DVD sets from me for $60 and barely blinked. How much do you spend on DVDs and video games per week?"

He thought for a moment and shrugged, "I don't know, maybe $100? depends on the week."

If he would stop buying video games for six weeks, that would save him more than enough for my most recent trip to Vegas. If he quit buying video games for three months, that's a trip to England.

I've had a lot of people look at the way I live my life, and assume that I'm heavily subsidized by my parents, which is something that I really don't appreciate, but I guess if I'm taking a positive approach to veiled insults, it means that it looks like I'm doing a lot with very little. Of course, if these people knew me better, they would have seen my coupon organizer and heard me rave about the great deal I just got on yogurt, so it's not like I'm masquerading as a fancy person.

I save, and splash out on the things I really enjoy. I'm lucky now that I'm finally making enough money to bolster my savings account more than before, but just because my income has gone up, doesn't mean I'm really doing anything else differently. There will always be something to save for, and there will always be a reason to keep myself in check and not get carried away at Target (which I did a little today, but I got a great deal on socks). The more you own, the more your stuff owns you, and I just don't want that kind of burden. Save your money, and buy independence.

Because it's free, of course

A friend sent me an article the other day, which surprised me at first, but then really makes sense when you think about it. According to a study by OCLC, a nonprofit library co-operative and research organization, Public Libraries circulate more movies than Netflix, Redbox and bricks and mortar video stores.

Since I'm a librarian, and I know that we have an exceptional collection of DVDs that circulate like crazy, I wasn't shocked by this, but I still thought Netflix would be the clear winner. Thinking back to my own video needs though, I have Netflix, which I've dropped down from the 3-at-a-time plan to 2-at-a-time to save $5 a month, but I still borrow heavily from the library. Between the two, my needs are more than met.

It's just so basic, if you can get something for free--legally, why wouldn't you? Frugal Rule #1 Get Thee to the Library!

Getting a bit too caught up

I'm reading a great new book called In Cheap we Trust by Lauren Weber. It's an examination of Americans' love/hate on-again/ off-again relationship with thrift, and the differences between cheap behavior and thrifty behavior. It's incredibly interesting, and I'll be writing a proper review once I'm finished, but there is one idea that is just lodged in my mind that I can't stop thinking about.

A bit of context: The author talks briefly about her upbringing in the introduction, explaining how her father was a man who liked to make his pennies stretch as far as he could. He would keep the house so cold that you could see your breath and wash the dishes in cold water (which she notes was not very effective). He was also a man who was generous when it counted, and sent each of his kids to the college of their choice to study what they wanted to study with no cost to the kids at all. He paid for everything.

As was reading this, I was thinking--yes! that's exactly the kind of thrift I aim to employ in my life (except I will always wash my dishes in hot water). I never want to be cheap. To me, cheap is mean, penny-pinching behavior; cheap is saving for the sake of saving and just admiring your pile of money; thrifty is not buying more than you need, knowing the difference, and having the ability to spend your money on things that are important.

Then the author mentioned the tea bags.

Apparently, as a further cost-cutting measure, her father would re-use his teabags up to twelve times. He would dunk once, "just enough to color the water" then clip the bag on a makeshift clothesline to dry. This is appalling to me, and I have to wonder, why drink tea at all? Why not just drink hot water?

I like a strong cup of tea. I've been known to use two tea bags sometimes, so this kind of behavior steps foot squarely into cheap territory and infringes on your quality of life. Unless your tea is made of the rarest flower that can only be harvested by blind nuns in Tibet, there is no reason to live like this.

Out of curiosity, I decided to examine my own tea consumption and the possibility of saving money. My preferred brand is PG Tips, which I can usually get at The Ocean State Job Lot (weird, discount remaindered store) for $3.45 for 40 teabags-- about $.09 per bag. Not great, but not bad either. My local grocery store sells that brand for $8.99 for 80 teabags--$.11 per bag, so I'm already seeking out a bargain.
But wait, I can also get Tetley tea for sometimes as low as $2.65 for an 80 count box--a mere $.03 per teabag. Tetley's is nice and strong, but I don't like the flavor as much. However, it is $.06 cheaper per bag to go with the Tetley's.

Considering I drink at least one cup of tea per day in the summer, and at least two cups per day in the winter, that could be significant savings. If we average that I drink 650 cups of tea per year, that's $58.50 spent on PG and $19.50 on Tetley's--pretty significant difference, but do I really want to live my life drinking sub-par tea just to save $39? Then again, it is $39, that's walking-around money.

This is possibly the lamest blog I've ever written, but it's a good illustration of how significant savings can be just from switching brands! It has merit! Even though I've devolved into strange nickle-and-diming territory. I've just done a big tea buy, so I'll drink that up, but I have a box of Tetley's waiting in the wings--perhaps I'll grow to appreciate it?

What I used to spend my money on

I read a lot of frugality blogs, many of which are kind of half frugality blog and half "here's a great deal!" blogs, which can be a bit difficult for me at times. I love a good deal--who doesn't, but as I've mentioned before, when I began couponing and reading these blogs, I spent more on food and stuff than I had in years. A lot of it was boredom; a lot of it was a need to feel in control of something while my professional prospects seemed hopeless; and a lot if it was just glee at getting good deals (that weren't even that good, just slightly less than I might have previously paid).

One thing that always surprises me when reading these other blogs, is what people want to spend their money on. In my mind, and this may just be where I'm at in my life right now, but I spend money on necessities and save the rest. I may be saving the rest for travel (I consider that a necessity), but I don't buy things for the home, jewelry, beauty treatments etc.

So many of these blogs are concerned with creating inexpensive centerpieces and finding discounts on scrapbooking materials, which I guess if that's what you like, good for you, but for me it just seems extravagant. I'm glad that I see how other people spend their money, though, because it gives me a bit perspective. I'm certainly not making a Thanksgiving centerpiece using remaindered silk flowers and ribbon ends (just sounds like something to dust to me), but if it makes people happy--good for them!

It did get me thinking about what I used to care about--the things that I used to spend all my money on. I started working at age fifteen, and had two jobs by age sixteen. Since I lived with my parents and didn't have to pay for any necessities, it was all just spending money. I saved plenty, sure, but the rest, I just spent on anything and everything that I felt I needed at the time. I get a little sick thinking about all the crap I frittered away money on, and I understand why it was so hard to adjust to a real world where all of my money goes toward necessities and not tacky room decorations.

Books: The biggest thing I used to spend money on was books. I was an avid library user when I was younger--I was there every day--but we moved to a different town when I was twelve, and I kind of forgot about the library. Plus, this library was in a small town, and just didn't have a lot of the books I wanted, so I bought them instead (and borrowed many from friends). As I'm a fast reader--usually at least one book a day, despite working two jobs and having an active social life--you can see how this got expensive.

CDs: By the time I finally bought an iPod, I had 500+ CDs. I actually had enough that I could sell them all to the CD resale place for $1 each, and have enough money to buy the largest iPod on the market at the time. So, that was kind of cool, but still, a lot of money spent.

Tacky Crap from catalogs: I grew up in a very small town, 1500 people, so we had one store. Around age 13, I discovered catalogs, and that was the beginning of the end. I had to order all those CDs because the nearby Pamida didn't stock much that wasn't country, and Columbia House Music Club (my music delivery system of choice) often sent along a catalog of tacky plastic wall decorations that were decidedly rock and roll. I bought a lot of them.

It's funny, looking back, because the things that I used to spend all my money on, I never buy anymore. I don't want to have books in my house anymore because they take up too much space and get so dusty (though I do have a few that I read over and over again, and some collectible ones), I get all my music and books from the library now. I do still buy stuff from catalogs, but now it's about four times a year rather than weekly, and is usually clothes, not wall decorations.

I guess it's all indicative of growing up and priorities changing, but it's also weird to look back on your own life and think that the things that were most important are now least important. I'm not talking reading (I still do that), but buying books. I used to have a big thing about liking owning books, and now I could really care less. I wonder if I'll ever start caring about centerpieces.

What was your big thing back in the day?

Monthly Goals--November

It seems a bit like cheating to post about monthly goals on a blog that has been sorely neglected for almost all of October, but it is what it is. I'm adjusting better to my new work schedule and working only nights; I'm getting better at using my days productively. Unfortunately, as happens every time the seasons change, I've been buying clothes and blowing my budget (only in that column).

Last month's goals were to pay back savings account to the point where I have 8 months worth of living expenses tucked away; start paying back student loans (only slightly), and be a little less rigid with my money and enjoy life a bit more.

I'm proud to report I've pretty much succeeded in all those. I socked away a whopping $1000 in savings while still throwing $100 at the student loan folks. I'm well on track to my savings goal, and am feeling quite smug for giving money to student loan people. I have no idea why that makes me feel smug, honestly, because I knew I had to pay it back when I borrowed it, and I certainly intend to... How about, instead of smug, we'll say I felt smart.

As to the goal of enjoying myself more. I went out for dinner/drinks with friends a couple nights, and had a lovely time. I've been treating myself to a coffee before work occasionally, which I would have talked myself out of before, and I'm going to take my stylist's advice and get my haircut more than three times a year. Getting a haircut isn't terribly enjoyable, though my stylist is a fascinating and lovely person, but looking good appeals to me much more than looking stringy and bedraggled (as I have been) so there you go.

Goals for November are as follows:

1. I'm stocked up on winter clothes, I re-inventoried my closet the other day to remind myself what I already have, so I need to take a huge step back from all these clothes purchases. I would like a pair of black shoes, so I'm going to keep on the hunt for those, but I don't need scarves, jackets, sweaters or any of the other things I really want to buy.
2. Continue replenishing savings account while paying a bit toward the student loans. I've decided to go to a library conference on January, so I need to start feeding the travel fund as well. I've asked for scholarship money, but I'm certainly not going to get enough to cover all my expenses and money I lose by missing work, so need to save.
3. Try baking bread again. After getting some sage advice from actual bread-bakers, I think I'm better prepared to have another go. Plus, I've got those four packets of yeast--can't waste them.