This will be our last Small Change post, and we are sad to have to leave you to work on other projects. But we’ve really enjoyed coming up with ways for you — and us — to slog through this recession. I hope we have helped — or at least provided some entertaining company along the way! We also appreciated all of your comments. You gave us many great ideas as well.
We’ve covered everything from credit cards to cheap eats together, and our posts will still be archived here in case you want to revisit your favorites. Now we will be waiting, hoping and watching for signs of the recovery.
We hope you will still keep in touch and share your stories of how the economy is affecting your lives. Ylan will continue to write about consumers and retail, and Nancy will keep covering personal finance.
And remember that dime Ylan wrote about a few months back, sitting on her desk as a reminder of the importance of Small Change.
It’s still there.
Nancy and Ylan
Bring the Bar to Your Home
One of my favorite things to do on a summer evening is to sit outside and have cocktails with my friends after work. But hitting a bar a few times a week can be very costly in this town. Our intern Emma L. Carew has come up with some fabulous ideas for enjoying cocktails with your friends without going broke. Here they are:
The weather’s nice and there are tons of great drink specials. So it’s tempting to wander from bar to bar each night. But think about this: When you get home the next day and look at your receipts, you’ll probably wonder how you managed to rack up so many tabs.
One idea? Bring the bar crawl home. Sure, you can snuggle up with a case of cold ones for cheap but where’s the fun in that? Get more creative. Buy some booze, preferably in bulk for the cheapest results, and mix it up.
Invite over a few friends and have a happy-hour progressive. Instead of going house to house, or bar to bar, set up a few locales in your own home. Front porch stoop? Dining room lounge? Basement dive-bar? Whatever works. Make big batches of your favorite drinks for each “locale” and go to town. Either have each friend “sponsor” a drink, or have them chip in for the total cost of the evening. You’ll still end up paying way less than you would at the bar.
I like a big bucket of sangria. Buy whatever fruit is on sale that week (fresh or frozen) and a jug of red wine (I like the Carlo Rossi sangria). Let it marinate a couple of hours or overnight, and for less than $20 you’ve got a party for about eight, possibly more. An added bonus is that the fruit soaked in the wine makes a great snack, so it’s like a 2-for-1. Traditional recipes call for things like grenadine, brandy and a splash of orange juice. If you’ve got them on hand, by all means. But it’ll be cheaper, and just as tasty if you go without.
My colleague, features designer Allie Ghaman, likes the “pink panties” drink. Mix cheap beer, cheap vodka and pink lemonade mix with ice and serve. Here’s her recipe: Take six Miller Lite beers, 10 shots of Crystal Palace vodka, one can of frozen pink lemonade, then add water and ice to taste. Again, if you use cheap ingredients, you can drink for less than $20 and even snag a bag of pretzels or crackers to serve on the side.
Good luck, be safe, and let’s hear your ideas for fun punchbowl drinks at email@example.com.
More Grocery Store Tips
A couple of Saturdays ago, our frugal intern Emma L. Carew wrote about making private-label purchases at the grocery store. A lot of you commented and e-mailed Emma with some suggestions. She'd like to share them with you. Here goes:
Wow, props to the commenters out there. It seems like a lot of you make your own salad dressings. I’ve never had much luck in the past with that (and I actually home cook a ton of things most people probably buy each week! Pasta sauce, chicken stock and cake frosting, to name a few), but I’m willing to give it another try. That’s the beauty of the topic, which was sorting out that each person has his or her own quirks and priorities when grocery shopping on a budget.
Sharon from Gaithersburg had some thoughts about this: The one thing that I will NOT compromise with is my Hershey brand chocolate syrup. One time the store manager at my local Giant convinced me to buy the store brand by saying it was made by Hershey’s. NO WAY. I’ll never do that again.
Anna from Arlington: I hope I’m not the only person to point out the alternative to brand-name paper towels. Rags are a higher-quality product that costs nothing at all. They’re much tougher than paper towels — you can really scrub with them. You get them by ripping worn-out clothes or towels into handy-sized rectangles. Sometimes rags get worn out, or just stained and nasty-looking, but it’s easy to maintain a supply by ripping stuff up as it wears out. We store our rags in a box under the kitchen sink.
(NOTE: I actually used to do this! I had about a dozen wash cloths I bought in college, and kept the clean ones in a cute wooden crate that used to hold clementines. Unfortunately over the years they’ve gotten ruined/lost and I never invested in new ones)
Sue from Reston: I’m a huge fan of store brands, but I must have my Charmin Ultra Soft. Period.
Additionally, I “splurge” on farmers’ market bacon and real cheeses. I find that there’s more meat than fat after the cooking is done, so the net price is almost the same. The additional flavor more than makes up for the small price difference. Add to that knowing that you’re supporting a neighbor — it works for me.
Dorothy from Front Royal, Virginia (a mother of 10): I buy whatever cereal is on sale, at the cheapest price per pound. Sometimes the name brand will be cheaper, with a coupon. I always buy real butter, string cheese and real maple syrup, usually from Costco.
Harise from Silver Spring: For spaghetti, I’ve been using Barilla Plus, a half way gesture towards healthier pasta, as we interpret the suggested serving size of a tennis ball to be a jest, and a bowling ball is more what it turns out to be. I did notice at Harris Teeter recently, a HT version of that pasta and I will try it on my next spaghetti dinner, it’s a big bargain and I have high hopes for it, as the HT brands I’ve tried have been good so far.
So if anyone out there has a great (and I mean great) homemade salad dressing recipe, I’m all ears at firstname.lastname@example.org.
Pack Your Own Lunch
Today, we have another guest post from our frugal intern Emma L. Carew. She's figured out a way to make delicious lunches on an intern's budget. Her lunches put the turkey and cheese sandwiches I often bring to the office to shame. Here's what Emma has to say:
As a college student working for my campus newspaper, I frequently had 12-hour days. After rotating between Chinese takeout, Chipotle and the $5 foot-long at Subway when I “didn’t have time” to pack a lunch, I decided to get smarter about brown-bagging. It’s definitely a commitment — you can’t “not have time” four days a week.
I've learned a few things along the way, which I'd like to share with you.
First, invest in some plastic containers. I’m a plastic container junkie. I usually have three or four lunches worth of food in containers just waiting in my fridge. Second, devote some time on Sunday to make lunch for the week. I like fruit and veggies in my lunch, so I portion those out right away, either into plastic bags or containers. If you're into salads, chop everything for the week, mix it up and throw it in a big plastic bag. The grocery bill may seem steep from loading up on produce, but do the math per serving. It’s still cheaper than your cafeteria salad bar.
I like to make a big batch of something and eat it all week. Soups, stews and curries make for really good leftovers, which means they make for really good bag lunches. One way to cheat a little is buying a pre-cooked whole chicken, using the body for stock (freeze your excess) and the chicken for various lunches throughout the week — salad one day, soup or stew, a sandwich, with a side of rice or quinoa.
One pot meals are great for lunches. Pot roast (buy whatever cut of meat is on sale that week), a big colorful stir fry (throw it over glass noodles or brown rice — white rice will generally get hard and dry), and cold pasta salads with lots of veggies. If you can make the meal for about $10, maybe $15, that means you're only spending $2 or $3 for lunch each day.
Of course, a loaf of bread and a jar of peanut butter is always going to be cheaper — and some people don’t mind eating that every day. I’m also a household of one and can rarely eat through an entire loaf of bread before it molds. (I also don’t like peanut butter)
And, for the days you really, truly “don’t have time,” make a contingency plan. I’m not big into convenience food, but if you are, write your name on a freezer meal and keep it at work, or hide some microwave noodle bowls in your desk. I like Campbell’s Soup-At-Hand (but wait for a sale or find a coupon) and microwave popcorn (again, super cheap per serving if you can get it on sale) as a backup plan.
So, let’s hear your best leftovers-for-lunch recipes, and if you want, I’ll send you mine! email@example.com
Negotiating with Your Creditors
A lot of credit cardholders are finding out that their interest rates or minimum monthly payments are going up or their available credit is going down.
It’s scary and frustrating when that happens. If you’re one of these cardholders, you’re probably wondering what you can do about it. Fortunately, the National Foundation for Credit Counseling, the nation’s largest nonprofit credit counseling organization, has some tips, which I’d like to share with you:
Ask for an explanation. The card issuer may be doing it because of account inactivity, because you’ve become too risky, because you’re no longer profitable. Either way, you deserve to know why the terms of your agreement are being altered.
Try to get your previous terms restored. If you’ve been in good standing, you should call the card company and plead your case. But remember, “in good standing” is the operative phrase here.
Build your case. Arm yourself with information about how long you’ve been a customer, how much you charge each month, how good a payment history you have. Have all the answers to the questions they will ask before you make the call.
Prove that you’re desirable. Get your credit report for free from www.annualcreditreport.com, then review it for accuracy. Find out what your FICO credit score is, which most lenders use to determine how credit-worthy you are. Again, arm yourself with information.
Prove that you can pay. If it’s true, point out that you have a steady job and a steady income.
Be prepared to negotiate. Decide what you’re willing to accept before you call. If, for example, the card company has both raised your rate and lowered your limit, decide if getting a lower rate or a higher limit is more important. If you carry a balance, the lower rate is probably the way to go.
Ask for a supervisor. If the customer representative is not being cooperative, ask to speak to a higher-up until you get what you want or are convinced that the company won’t budge.
Ask about the opt-out clause. If your rate has been increased to an unmanageable level, ask if you can close down the account and pay the balance off under the original rate. This might affect your credit score but it might still be the best option.
Ultimately, you might not get what you want, but it’s worth trying out these tips.
A Credit Card Dilemma
I just came across an interesting credit card dilemma on Consumerist.com. A reader writes to say that she and her husband were trying to negotiate a lower rate on their credit card. Their rate had reached a whopping 28 percent. The card issuer, the reader said, offered them a 6 percent rate under its hardship program if they closed the card. But the reader was worried about how that would affect her credit score.
From covering the credit card industry, I know that your credit utilization ratio affects your credit score. That ratio tells you how much of your available credit you have used. If you have used a high percentage, then your credit score will drop. But the calculation of credit scores is tricky and depends on many factors. So how this particular consumer would be affected by closing down the card is hard to tell definitively. Still, it's an interesting case study.
Have any of you had similar deals proposed by your credit card companies? Please let us know.
Some Tips for Saving
I know it’s hard to think about saving your small change when you are trying to pay off debt, as many of you out there probably are.
But when you can, you should set aside any extra money you have, if anything so you are prepared for an unfortunate event such as a layoff.
I came across some good savings tips from Women & Co., a financial resource program offered by Citi. Obviously, the program focuses on women, but I think many men can benefit from these tips. Here they are:
Examine the current state of your finances. You can’t save for the future unless you know how your finances are in the present.
Set goals. Decide what your short-term (i.e. a home improvement project) and long-term (i.e. retirement) goals are.
Make a so-called savings sacrifice. Track your expenses for a month, study them, and decide what sacrifices you can make. Perhaps you don’t have to get your nails done every week?
Save money monthly. Automatically have a portion of your paycheck, even if it’s a small one, set aside in a separate account.
Establish an emergency fund. Have at least 3 to 6 months worth of living expenses set aside.
Invest in your future. If you have a choice between saving for your retirement and paying for your child’s college education, go with your retirement. There are other ways, such as scholarships and grants, to finance a college education.
Double Whammy: Higher Credit Card Rates, More Credit Card Debt
When President Obama signed legislation that restricts many credit card practices that consumer groups have long complained about, bank executives said it would force them to raise interest rates across the board.
Looks like that might be happening already.
According to IndexCreditCards.com, which tracks the industry, credit card rates hit an 18-month high in July. The Web site’s review of rates offered by issuers such as American Express, Bank of America, Chase and Citi found that the average rate on consumer cards was 14.94 percent, which is more than a full point higher than it was in March.
Both customers with bad credit and those with good credit were seeing higher rates, the researchers found.
“It’s a double whammy for consumers right now,” says Adam Jusko, founder of IndexCreditCards.com. “Card issuers were already raising rates in response to higher defaults in an unstable economic environment. Then the new credit card law was passed. While the law doesn’t fully take effect until February, it’s provided issuers with a second justification for rate hikes.”
The Web site also offered average rates for specific types of cards. For instance, the average rate for consumer cards with rewards programs was 15.32 percent versus 14.04 percent for non-rewards cards. Student credit cards had an average of 15.33 percent.
And in more credit card news, national research and policy firm Demos found that the average credit card debt of low- to middle-income indebted households was $9,827. Credit card debt has quadrupled since 1989, the firm found in its second national survey of households whose incomes fell between 50 and 120 percent of the local median income.
What’s worse, one out of three households reported using credit cards to cover basic living expenses for an average of five out of the last 12 months.
The new credit card law won’t go into effect until February. It’s unclear how these households will reap the benefits of the law.
How To Budget Like An Intern
Our intern Emma Carew is back again! We love to see persistence. And Emma has a lot to write about from personal experience, especially as a summer intern in Washington. She polled her colleagues for their favorite tips on living large for less that anyone can use, even if your intern days are a distant memory. We won't tell.
What are your best intern-worthy tricks? Send them to Emma at carewe[at]washpost.com or post them in the comments.
For the most part, we Washington interns are broke. And while we anxiously wait for pay day we have to get creative. So here are the Washington Post Intern09 tips on living on a budget.
Editorial writer Alexandra Petri:
* If you are at all a Starbucks aficionado, get one of their membership discount cards. It costs $20 but gets you 10 percent off, which definitely pays for itself over time.
Copy editor Morgan Schneider:
* Order an “intern latte” — a double espresso over ice at your favorite coffee shop and add your own milk at the bar.
* Blend softened butter with olive oil and stick in a Tupperware — cheaper butter spread, better for you! Use about two sticks of butter to one-third cup oil to start, add more oil if you like it softer.
* Telling you to eat ramen is too obvious. And gets mildly boring after a while. Try using seasoning packets from ramen to flavor fried rice, chicken or anything else. For 13 cents a pop, it’s a great dose of salty flavoring. But caution: use sparingly.
Metro reporter Martin Ricard:
* Give up TV to cut down on bills. I’ve realized now that since I don’t like most of what’s on cable anyway, I can get all the entertainment satisfaction I need with my laptop, Hulu and a Netflix account.
401(k) Accounts Recovering
When was the last time you checked your 401(k)?
A few months ago, my girlfriend confided that she was scared to look at her balance after opening her statement only to find her account had nearly been wiped out. Many other workers have taken the same shut-eye strategy. It's like riding a roller coaster: If you don't watch, maybe it won't be as bad.
But you may want to pry your eyelids open again. The recent stock market rally that has lifted the Dow to above 9,000, erasing its year-to-date losses, has also given retirement accounts a boost. Encouraged, I peeked at my own 401(k) balance and found that it has increased in the past three months, finally recouping my 2008 losses and then some.
According to the Employee Benefits Research Institute, workers in every age group and tenure have seen improvements in their retirement accounts since the stock markets hit bottom on March 9, 2009. The gains ranged from nearly 15 percent growth among workers ages 25 to 34 with one to four years of experience to about 3 percent for workers 55 to 64 with 20 to 29 years of experience.
The group's analysis also shows that younger, inexperienced workers have rebounded much more readily from the stock markets' mood swings. Their retirement accounts are up about 67 percent compared to Jan. 1, 2008, though one imagines they weren't very high to begin with. Older workers' accounts are still 13 percent off from that date.
There is much debate over how to best handle your 401(k) in a volatile economy, and the strategy that will best for you will clearly depend on your stage in your career, your age, your needs in retirement and your appetite for risk. (Kiplinger's has this guide, and Motley Fool serves up these tips.)
But at least it seems that this roller coaster ride is almost over. It's safe to open your eyes again.