Freezing in NH

I’d been skeptical about people’s claims that they were going to save their rebate or pay off debt with it.  While that might be true for PF bloggers, I suspect it’s not that true for the general public.  Oh sure, it goes in the savings account or off to the credit card company right away, but in the back of your head you’re thinking “it’s a free 600 dollars, I can treat myself to dinner out just this one time”.  And eventually you’ve spent a good chunk of it.  Everyone who pays down credit cards this month is going to spend them up a bit more next month. 

But mostly this was idle speculation and pessimism.  Until I read a Freakonomics blog post today.  They linked to three studies of the 2001 rebate.  The first said basically what you’d expect.  Some people planned to spend it (1/4 of respondents) and the rest were going to pay down debt or save.  They seem surprised that the richest folks were most likely to spend it, but those are the folks who have their savings and debt all planned out and know they have it to spend. 

But the third had the most interesting information.  Here’s the recap from the Freakonomics blog:

This paper begins with one particularly compelling observation: credit card companies know our social security numbers (and hence who got their rebates when), and they also know a lot about our spending and saving patterns.

And so once the authors were able to get a large credit card company to share with them (anonymized) data, their research project was made.

Recall that paper #1 had found that nearly half of all respondents expected to use the rebate to pay down their debt. It turns out that this was the initial response of many, but then over the ensuing nine months, spending rose by enough to account for around two-fifths of the average rebate. And for those who were liquidity constrained, spending rose even further.

Yup, they paid it down and then spend at least 2/5 of it later.  Actually a lower percentage than I thought, so maybe I’m too pessimistic.

Since I don’t seem to be able to break my reading habit, I’ve had to find a way to cut back.

Library: The obvious answer is the library, and I do go there.  When I first moved I went a lot, but it’s a small library.  I’ve read just about everything in Sci-Fi (they have a really bad habit of buying the middle books of a series and I hate starting in the middle), and much of the mystery and fantasy as well.  Also just about everything in the money/finance section which is pretty small even if you include the books about individual companies like the rise of Coca-Cola or the fall of Enron. 

Used Book Stores: There are two locally, and a third that’s somewhere I go at least once a month.  The hours are bad and the sci-fi sections are small (and the finance way out of date) but I can often find something that makes it worth the trip.  But they are picked over by everyone else in the area, so while they’re great for finding “something” they’re bad for finding a specific book.

Freecycle: This apparently works better in more populated areas.  I’ve gotten a couple things off of freecyle, and given away a bunch more.  It’s a worthwhile group but I don’t see any books around here.

Amazon: This is another obvious answer.  I use Amazon for all sorts of things.  I have the rewards card, and since my heating oil company lets me charge my oil, I get a $25 reward certificate pretty often.   (Don’t do this if you can’t pay in full every month.) I buy books and also groceries/drug store items with my rewards.  But for common used books, the shipping is a killer.

BookMooch: Bookmooch is a great book swapping site.  You post books you want to get rid of and a wishlist of books you want.  When someone “mooches” your book, you pay the shipping to them and you get a credit.  When you find a book you want you spend your credit and the book is shipped to you at no cost.  If you stick to paperbacks, the cost comes to a bit under $2 per book.  This is pretty reasonable, since the local used book stores charge half the cover price (often $3.50) and Amazon charges $3.99 to ship a used book, making that “1 cent book” cost $4. 

PaperBackSwap:  Paperback Swap is another great book swapping site.  It’s similar to BookMooch with two important differences.  The BM wishlist system is free-for-all, in other words you have to be fast to get a popular book but the PBS system is first come first served, so if you wait long enough you will eventually get your wishlisted book.  The second difference is that on BM you get your credit as soon as someone requests a book from you, while on PBS you don’t get it until the recipient marks the book as received.   There are plusses and minuses to both, and I use both frequently.

Swaptree: I’ve just signed up so I really can’t rate it, but it’s a site for swapping books, music, dvds, etc.

My thanks to the Carnival of Everything Finance and Festival of Frugality for including my posts this week!

I use gmail for my personal email.  I have a google alert set up to email me once a day any new links it finds to this blog (gotta see who loves me).  It only emails me if it finds stuff, so I’m not surprised to occasionally miss a day.  But I decided to look at the 800 spam messages from the last couple weeks (that gmail filters out of my inbox) before I deleted them.  And there, in the spam messages, was a google alert.  I thought that was pretty funny. 

My boyfriend and I don’t eat cheaply.  We believe in tasty food and we eat out far too often.  We do cook dinner in about four nights a week but it can cost as much as eating out.  After some discussion, we discovered that the real problem was that we weren’t planning ahead.  Some nights we ate out because we were too tired to decide what to cook.  Or we decided at the last minute and made an extra trip to the grocery store while we were hungry to get a missing ingredient.

There’s something about the grocery store that makes every trip cost at least $30.  Even if you just go in for milk, somehow you come out with bread, cheese, an avocado and three pounds of bacon.  Or if you’re hungry a bag of candy, three bags of chips, a box of frozen appetizers and a roll of refrigerated cookie dough.

But we don’t always know if we’ll be in the mood for a particular meal, so we’ve resisted doing any real meal planning.  So this week we made a list of possible meals but left off the day.  One shopping trip gets all the ingredients so no extra trips or random ingredients that go bad because we don’t get around to them.  And each night we’ll pick from the list which gives us options but not too many options.  Too many options when we’re tired and hungry is how we end up at the local brewpub. 

And with a list of common dinners, I can start to plan ahead and shop sales.  We’ve already been buying frozen boneless skinless chicken breasts in bulk from BJs, but I discovered they go on sale (fresh) at the grocery store for 30-40 cents less per pound.  That’s worth buying some quartsize freezer bags and freezing them myself. 

After a few weeks of this, we should know which types of dinners we enjoy and actually have time to make.  Then I can stock up on common ingredients when they go on sale.  I do stock up on sale items, but it often means I have a cupbord full of jello in the winter (jello is summer food around here). 

According to CNNMoney, it looks like those rebate checks will start coming a week early.  Everything seems to be in the same order, but some people will get moved up a week.  I guess I would do the same thing if I had an important deadline…looks like they’re only going to do 800,000 the first day (out of a total 130 million).

Last weekend I made a batch of waffles.  I’ve been switching some things over to organic and/or whole grain so I had a new box of “baking mix”.  I planned to mix it half and half with Bisquick until we got used to it, so I was merging two recipes (the new kind has less fat so includes more oil in the recipe) to make waffles.  In the process of doing that, I forgot that I usually halve the recipe for the two of us.  Two cups of baking mix makes a lot of waffles…so I decided to cook up the rest of the mix and put them in the freezer. 

I tried them today and I’m happy to report that they work great in the toaster.  They were fairly brown, so next time I won’t cook the waffles as much before I freeze them, but other than that they were great!  I may do the full batch on purpose next time so I’ll have something quick and easy stored up for breakfast.

At the grocery store the other day I saw an interesting machine just inside the door.  It scanned your savings card and printed out a theoretically individualized sheet of coupons.  Several people had left their sheet so I could see that they weren’t really individualized, just pushing whatever the store wanted to sell.  But it’s an interesting concept for the future.  Advertisers could target people who bought brand X with a coupon for brand Y.  Unlike the coupons that print at the checkout, you are sure to have these with you while you’re shopping.

Most of the coupons on my sheet were for things like store brand ice cream.  Not something I buy, but one coupon was special this week for earth day…$2 off of any 2 “full circle organic” products.  Since Full Circle has canned beans for 99c, I picked up two free cans of beans.  Not bad for a quick investigation of a new machine. 

I’ve just subscribed to the “other” local paper to get the Help Wanted ads.  There are a lot of ads, but nothing that interesting.  That’s not too surprising.  It’s expensive to live here, more so recently because of the rising cost of heating oil and gas.  Things are spread out and you have to have a car because the bus runs once an hour 8am-6pm M-F.  So it’s hard to find people who can afford to make only $8 or $10 an hour.

And of course there are ads for delivery drivers for the newspaper itself.  They are paid a flat fee to deliver the papers before a certain cutoff time.  My parents live a few towns over (same paper) and their delivery driver was warning them that he was going to quit soon…he was paid a flat rate of something like $640/week to deliver in his own vehicle, and his gasoline spending on the route was up to $400/week.

Lots of ads for servers/waitresses, part time line cooks, housekeeping, 3rd shift hotel desk, etc.  Things that require a certain amount of self-discipline yet pay very poorly.  There are a few higher paying ads that require a fair amount of education or experience, e.g. machine operators, mechanics, nurses, but not much in the way of professional ads.  Nor is there much for folks that require some supervision.  No grocery baggers, assembly line workers, etc, those jobs are all full.

Most of the professional stuff is either on the website of the specific company or word-of-mouth.  I guess it makes some sort of sense.  The companies want either motivated people who search them out, or people with personal recommendations.  But they might be missing a whole segment of the population. 

A local bank has started advertising a high interest rate checking account.  It all sounds very good on the radio: 4.55% interest, no monthly fee, $50 to open.  But there are a couple of catches…which aren’t listed in the radio ad but are listed in the teeny-tiny print at the bottom of the postcard. 

The rate is only good for balances of 0-49,999 dollars, above that it’s 1%.  And then you have to “qualify” during each statement cycle.  The qualifications?  Get electronic statements, have an automatic deposit, and make at least 12 charges on your debit card.  Miss any one of those?  Interest is 0.10% for that statement.  Ouch.  That’s a lot of loose ends to keep track of, especially on an account that charges you $3 per check after the first three per month. 

If you had 10K to put in this account, you’d make an extra 150 a year above keeping it in HSBC Direct.  But you have to make 12 charges per month, how easy would it be to justify buying one more thing?  If you can keep your charges to your normal purchases, and you normally have a direct deposit and use your debit card a lot, this is a great account.  You could miss the 12 charges a couple times a year and still beat HSBC. 

But how long is the account likely to stay at 4.55%?  The woman in new accounts at the bank couldn’t give any promises (they never do) but did say they intended the interest rate to stay above the interest for the CDs.  I’m still thinking about it.  I use a rewards card for my purchases, so I need to figure out what I’ll lose in rewards (and holding my money an extra month) compared to what I’d gain in interest.   If I used a debit card all the time and had closer to that 50K limit, I’d be more likely to do it.