Do small steps save enough or should you look for big cuts?
If I had $4 for every day I hadn’t had a latte, I’d have a nice nest egg. Because, let’s see, that would be 365 days times 30 years of adult life… Wow, $43,800 plus the power of compounding …
Except I don’t drink lattes. And giving up a latte every day for a year wouldn’t pay even half my property taxes. I’d better look elsewhere for savings.
The “latte factor,” popularized by David Bach, author of “The Automatic Millionaire” and other personal finance books, has become a synonym for the small money leaks that could be draining away our cash without us noticing. And it’s certainly important to find and plug those small leaks.
But, in some cases, plugging the small leaks and giving up lattes (or soda or bottled water or candy bars) doesn’t really make much difference.
Some are annoying, others are downright unappetizing.
We know the tactics restaurants employ to get all you longtime and newbie frugalists to splurge on eating out these days: two entrées plus one appetizer for 20 bucks at the casual chain or great deals like the $1 Junior Whopper.
But what sneaky changes have restaurants made to improve the bottom line?
We're not on the playground, but others are browbeating us.
When I was in seventh grade, a bunch of 12th-graders grabbed me one day. They tossed me in a trash can, popped a lid on it, and then rolled the can (with me and some trash inside) out into the middle of the school’s parking lot. They then administered some kicks to the can and left me there.
I crawled out as they were laughing and high-fiving each other, grinned, shrugged it off, and went about my business. It was the right attitude to take.
A few other seventh-graders provided an enormous reaction to the situation -- telling the principal, throwing fits, challenging the much older kids to fights. Those reactionary kids were subjected to ever-escalating forms of bullying and hazing, while the ones who just shrugged it off were at worst ignored and at best given occasional positive recognition from the much older kids.
Now that we’re all adults, we might think that such bullying has been left behind. This is playground fodder, after all. The nonsense and torments of high school are in the past for most of us, right?
The truth is that even as adults, we’re subjected to bullying in various, more subtle ways -- and our reactions to that bullying often determine our futures.
Don’t believe me? Take these ideas into account.
Customers would prefer that banks deny debit card purchases.
Banks and credit unions collected nearly $24 billion in overdraft fees last year, an increase of 35% from just two years earlier, according to a new study by the Center for Responsible Lending.
The explosion in overdraft charges has drained the wallets of as many as 51 million Americans whose accounts become overdrawn each year. It is particularly harmful to financially vulnerable families already hit hard by the recession.
"Banks and credit unions have become so sophisticated in driving up overdrafts that Americans now pay more in overdraft fees every year than they do for books, cereal, or fresh vegetables," said CRL senior researcher Leslie Parrish. "These billions of dollars drained from consumers each year represent lost opportunities for families to save for a rainy day or buy necessary goods and services that could help spark the economy."
Even Neiman Marcus is touting cheaper gifts.
If we didn’t already know it’s going to be a lean holiday season, we do now. Not only is the National Retail Federal predicting less spending by consumers, even the Neiman Marcus fantasy catalog is touting more frugal choices this year -- if you consider $75 plaid stockings a bargain.
A survey commissioned by ING DIRECT found that 54 percent of American adults plan to spend $300 or more on holiday gifts, a 10% decrease from what Americans last year said they typically spend.
With shoppers looking to spend less, retailers are pushing less expensive toys for the 2009 holidays. Toys R Us lists the Zhu Zhu Pets Hamster, at $9.99, as one of the top toys of this year, though we would reject it immediately because it makes noise. Wal-Mart is expanding last year’s successful “10 for $10” program and offering more than 100 $10 toy items. We like the LEGO Bionicle Legends set. Kmart announced its Fab 15 toy list last week, too, with 15 items selling from $10.99 to $99.99. The company says those items represent the “best long-term play value.”
Service also lets friends bail you out 'from the comfort of home.'
Debit cards are increasingly popular, so why shouldn’t jail inmates have them. How about a get-out-of-jail prepaid debit card when they’re set free?
They can. (Does this strike anyone else as kind of strange/funny?)
Here’s what’s offered:
- Pay your bail with your own credit or debit card or cash at the self-serve kiosk. Or if it’s more than you can handle, your friends and relatives can post bail at the kiosk or via a handy Web site "from the comfort of their own home," the company says. No more early morning trips down to the hoosegow to bail a misbehaving family member out.
Savers took a hit in 2008 but the 5-year average looks good.
If you’ve stashed money in your 401k regularly over the last several years, a MarketWatch story can help you feel good about yourself.
A study of the performance of 401ks owned by 6 million consistent savers from 2003 through 2008 showed that:
… average account balances for these workers rose about 7% annually, even including the stock market crash in 2008 -- thanks in part to market gains in the years preceding the crash, but also thanks to workers' and employers' ongoing account contributions.
Now, let’s examine that more closely.
We get very little vacation time and we still don't take it.
Here is a frightening (or enlightening, depending on how you look at it) passage from Wanderlust and Lipstick about the American approach to vacations:
A 2009 survey from Expedia found that 1/3 of employees don’t take all of their vacation time. While this speaks (to a certain degree) to how individuals make personal choices, there might be something else underlying our reluctance to hit the road.
The Center for Economic and Policy Research calls the U.S. the "no-vacation nation." In a 2007 study, they determined that the U.S. is the only advanced economy in the world that doesn’t guarantee paid vacation for employees. That means you can take a job, work your 40 (or more) hours a week, and it’s considered a bonus to be given paid vacation time.
But when we are blessed with vacation time, what keeps us from taking the time off we earn and deserve? According to the Expedia survey, people who don’t take their vacation time do so for several reasons. They hope to receive compensation for unused time, they have a hard time planning ahead or their partner can’t travel during the same time period. What’s worse? One in five respondents admitted to canceling a vacation because of work.
No wonder we have so much trouble balancing work and life.
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