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Are You Saving Enough?

February 20th, 2010 at 05:36 pm

Next week, February 21-28, 2010, is http://www.americasavesweek.org

With a persistently low personal savings rate, inadequate retirement savings and a frequent shortfall in emergency savings, Americans clearly need to "build wealth, not debt."

Although America Saves Week is intended to encourage institutions like employers, banks, credit unions and lenders to promote saving, it also seeks to encourage individuals to take charge of their finances.

When visiting the website, individuals can:

* See the humor in saving by viewing a variety of videos.

* Read or subscribe to monthly e-Wealth messages on a range of timely topics like Retirement Savings in a Bad Economy, Developing a Debt-Free Game Plan and Saving Your Tax Refund.

* Read the inspiring personal stories of ordinary individuals who have overcome a specific financial challenge. You can also submit your own story.

* Test your savings knowledge.

* Assess how you're doing.

America Saves Week is jointly sponsored by America Saves, which is managed by the Consumer Federation of America, and the American Savings Education Council (ASEC), which is managed by the Employee Benefits Research Institute (EBRI).

If you had to submit a story about your greatest savings challenge, past or present, what would it be about?

Free Advice from a Financial Advisor for 2 Days in January

January 4th, 2010 at 04:48 am

Ever wish you could sit down and chat with a personal financial advisor and receive personalized financial advice, but didn't want to pay $150 to $300 an hour? Do you think you're pretty much on track toward reaching your financial goals, but still wish a financial advisor could confirm that?

Well, now's your chance.

For two days in January, the National Association of Personal Financial Advisors (NAPFA) and Kiplinger's Magazine will open their phone lines from 9 a.m. to 6 p.m., Eastern Standard Time, to dispense financial advice, absolutely free. NAPFA considers this a public service. For the ninth year, NAPFA is making this opportunity available to anyone, not just Kiplinger's subscribers. All you need do is make sure you have your financial paperwork at the ready, should the advisor require further details to answer your question.

So mark your calendars for Friday, January 22 and Tuesday, January 26. Just call 888-919-2345 to speak to a NAPFA advisor. If you like, you can also participate in an online discussion with a NAPFA advisor at http://www.Kiplinger.com/links/jumpstart on those two dates.

If you could ask a financial advisor a single question, what would it be?

One New Englander's Heating Oil Diary

December 16th, 2009 at 09:28 am

When your income is erratic (or even if it isn't), every household expense is subject to scrutiny, most particularly those recurring expenses that are too easily left on auto-pilot but really add up over time. Energy prices have been especially volatile during the past two heating seasons and for the majority of homeowners living in the Northeast, heating oil ranks among the top five expenses.

There's a great deal you can do to minimize your heating oil bill, from bulking up on insulation, winterizing around doors and windows and adapting to a cooler indoor environment.

Still, unless you're Paul Bunyan and rely solely on a fireplace or stove for heat, you're going to have to bite the bullet at some point to schedule a home oil delivery.

But before you dial 1-800-OIL-NOWW, there are still ways to economize. You can save a few bucks simply by shopping around each time you order fuel. Over the years, I've narrowed possible suppliers down to the three I know consistently offer the lowest prices. (If you've signed onto a contract that locks you into a set price for the entire winter season, that's another way to go, but it's also speculative and can backfire like it did last year when customers who signed fixed rate contracts last summer of over $4.50 a gallon got burned when prices began to slide in the fall. I stopped purchasing fuel in advance after the oil company I paid for an entire winter's worth of oil went out of business, but that's another story.)

When you shop around, be sure to ask the supplier if they offer a discount for paying in cash. (In my area, you can shave off another .06 per gallon by doing this.) I also make a point to fill up my tank in the peak of summer, when prices tend to be lower. This doesn't always guarantee a lower price, but with the exception of the 2008-2009 heating season, it usually works. And finally, when I have no choice but to order oil in the dead of winter, I try to wait for a relatively mild day to do so. The delivery man who came to my home today confirmed that doing so made sense and that prices do indeed dip with even a modest rise in temperatures. Most suppliers will honor the price they quoted you, even if prices are higher on the day when delivery takes place

During the past five winter seasons, I've tracked oil prices and usage in my own home. I've certainly noticed the ups and downs in prices. Looking at the five-year period from 2005-2006 to 2009-2010, my cheapest price paid for oil was in 2006-2007, when I averaged $2.14 a gallon. That must've been a relatively mild winter as well, because I used less fuel that year, 315 gallons, than any other year since then.

Average price paid: $2.19 a gallon
Total gallons used: 391

Average price paid: $2.14 a gallon
Total gallons used: 315

Average price paid: $2.74 a gallon
Total gallons used: 339

Average price paid: $2.78 a gallon
Total gallons used: 506

Average price paid so far: $2.36 a gallon
Total gallons purchased: 116 as of 12/16/09

The last two heating seasons took the biggest chunk out of my wallet. I paid an average of $2.74 and $2.78 per gallon, respectively. Last week's national average residential heating oil price was $2.76 per gallon, according to the U.S. Energy Information Administration.

And while my total usage remained relatively constant in every other year, when I consumed in the 300-400 gallon range, I burned 506 gallons last winter. I can't remember, but it must've been a cold one. (The Residential Energy Consumption Survey reported in 1997 that households consumed an average of 730 gallons of heating oil each season. Hopefully, we have closed that gap since then, thanks to improved home energy efficiency.)

Averages, of course, don't tell the whole story. Checking back on a post I wrote last spring, I see that the lowest oil prices I paid in the past five years was $1.99 a gallon April 2008 (ah, those were the days) and the highest was $4.24 a gallon in June of 2008. Who would have guessed there'd be such a dramatic spike in just three months?

All things considered, I didn't feel too bad paying $2.36 a gallon today.

How do your heat bills compare?

What Gets People Talking? Most Popular Posts of the Last 3 Years

December 9th, 2009 at 04:57 am

It's been nearly three years since I started this blog. The approach of year's end has put me in the mood to reassess, evaluate and quantify. Today, 102 entries and 668 comments later, I can gauge which posts were most popular with readers, based on the number of comments.

Interestingly, my most popular posts included the launch of the annual No Heat Challenge and multiple updates and entreaties to throw on a sweater. All told, the 15+ posts on this topic averaged 11 comments each, while all other posts averaged just 5 comments.

Aside from the No Heat Challenge, could you guess which posts generated the most interest? No, they didn't address some aspect of personal finance, which is, after all, the predominant theme of this blog. Surprisingly, the most talked about posts, after the No Heat Challenge, had to do with my cats. My request for help in naming Luther (2/16/09) and later, Waldo (4/17/09), each elicited 20 comments each.

What can I deduce from these findings? First, that "Theo" and "Boris" are last on the list of preferred cat names in the minds of many. But more seriously, that matters of money management are perhaps more palatable, and a heck of a lot more fun to read about, when you can participate in personal challenges, quizzes or cat-naming contests to break up the stream of more weighty reading.

So that's what I'd like to strive for in 2010: the creation of more personal challenges that we can all participate in, and in the process of doing so, motivate ourselves and others to improve their financial picture in some way, big or small.

What kinds of challenges would you be up for joining? In my challenges I'd like to emphasize strategies to reduce spending, since the ongoing $20 Challenge already addresses saving money.

I'd love to track home energy efficiency, but with multiple variables (regional differences in energy prices and weather patterns, different types of energy used and varying home square footage ), it would seem a difficult thing to measure in a national challenge.

Any ideas?

Hunger in America is Growing

December 7th, 2009 at 03:30 pm

Shortly after Thanksgiving, the New York Times reported on the rapid rise of food stamp use across the country. Shockingly, there are 239 U.S. counties, from the Bronx to Appalachia, where at least a quarter of the population receives food stamps. In the cities of St. Louis, Memphis and New Orleans, the Times reported, fully half of all children receive food stamps. And it is in some of the nation's richest counties, like Forsyth County, Georgia and Orange County, California, where the use of food stamps is growing most quickly.

The spike in food stamp rolls has often followed industry busts, from the collapse of the recreational vehicle business in Elkhart County, Indiana to the slowdown in car parts manufacturing in northwest Ohio. In southwest Florida, food stamp use rose sharply along with high foreclosure rates.

One food bank volunteer quoted in the Times story was surprised to find that people seeking aid were "knowledgeable, normal, well-spoken, well-dressed. These are people I could be having lunch with."

The USDA's 2008 report on Household Food Security in the United States stated that 14.6% of American households were "food insecure" for at least part of the year, meaning that the diet of one or more family members was reduced or disrupted due to lack of money to buy food. This represents the highest rate of food insecurity since 1995, when such data was first collected.

In my home state of Connecticut, the Connecticut Food Bank notes that soup kitchens and food pantries it serves have reported an average 30% increase in demand for their services this year.

In my hometown, an affluent suburb in Fairfield County, Connecticut (population 26,000), there are not one, but two, food pantries which permit those in need to pick up groceries once a month. One of them is run by the Connecticut Food Bank, which expects to serve more than 300,000 residents this year. There is no income verification, unlike the federal food stamp program, where eligibility hinges on both income and savings. (I approached one of the food pantries, where I had volunteered several years prior, about volunteering once again when I lost my job last fall, but I was told they had all the volunteers they could use. The need for donations, of course, remains constant.)

Has hunger in your part of the world increased, decreased or remained about the same this past year? Have you ever participated in food stamp or food pantry programs and, if so, how much of an impact did it have on your family budget?

Are You Better Off Now Than You Were This Time Last Year?

December 5th, 2009 at 06:20 am

Are you better off now, financially speaking, than you were this time last year?

I pondered that question while I was answering a survey from the investment management firm that oversees a good chunk of my investable assets. It caused me to stop and think a while, because the answer was not clear-cut.


Speaking strictly in terms of investments, the rising stock market has buoyed my portfolio by 27% in just a year's time. (But what the stock market giveth, the stock market can easily take away.)

Earning Power

It's hard to overlook, however, the obvious elephant in the room; my present state of joblessness means I am most certainly worse off than I was this time last year.


Here's one more angle to look at: the balance on my only debt (my mortgage) has shrunk by about $9,000 in a year's time, helped along by sizable prepayments of principal until my layoff in September.

How do you measure your financial progress and where do you think you stand?

Heating Oil Prices

April 1st, 2009 at 04:43 pm

I got heating oil delivered yesterday. I thought prices might go even lower now that heating season is nearly over, but actually, prices rose a little from their low of $1.76 a gallon. (This is heating oil, like diesel, not the same as gas for the car.) I got about 140 gallons at $1.99 a gallon, still a huge savings compared to last winter and even a very decent price compared to all my winters here.

Because I'm a manic keep-track-of-everything-you-never-know-when-it'll-come-in-handy kind of girl, i can tell you the lowest oil prices i paid in the past 4 years was, in fact, $1.99 a gallon yesterday (!) and the highest was $4.24 a gallon in June of 2008. I don't think prices will stay that low, so that's why I topped off the tank, though I still had a third of a tank left.

It's times like this that i keep telling myself i should have a second oil tank installed in my garage next to the other one, and I could fill them both up when prices are low and know I'm covered for all of the next season. As it stands now, this one full tank will probably get me through mid-January.

Talking About Car Tires

November 8th, 2008 at 05:49 am

Another big bill looms ahead.

There's still tread on my car tires, but just barely enough to touch the head on a Lincoln penny.

Car tires weren't really on my radar, but I've experienced some skidding this past week coming home from work. The road was wet and i skidded easily on a level surface, without even applying the brake that hard. I was on a busy interstate highway doing about 50 in heavy commuter traffic.

So my next stop will be at the library to check Consumer Reports recommendations. I'd rather not take any chances.

I have a set of four snow tires that have a little less wear, so I may just defer the new tire purchase until spring.

In past years, I put the snows on in fall and took them off in spring. I do get noticeably better traction with four snow tires. More recently, someone told me that frequently putting tires on and off the rims and can possibly weaken the tire. I haven't had any luck looking for an extra set of rims at a junkyard.

I see from my records that the last time I purchased tires, I bought Dunlop SP Sport A2 tires, which were ranked #1 among all-season tires by Consumer Reports in their Nov. 02 issue. The four tires cost just $240.

The tires were warrantied for 50,000 miles, but mileage was one thing I didn't make note of when I purchased the tires. By checking the mileage noted on a few receipts I saved for oil changes and rough annual estimates, I calculate these Dunlops had 40,000 miles at most. It doesn't appear I could have benefited from that warranty because I didn't have a Dunlop authorized dealer do my tire rotations all these years.

I may wind up at Town Fair Tire when I'm ready to purchase. They'll do those rotations, and fix any flats, for free.

When I bought my Dunlops last year, I wound up purchasing them from Tire Rack online. When I priced tires at Town Fair Tire, their prices were significantly higher.

But using four snow tires meant that twice a year, I shelled out $40 a pop to have the snows put on, then taken off in spring, adding $80 annually to my car expenses. So that extra traction the snows afforded me actually cost me an extra $480 over the six years I used them.

Cable's Best Kept Secret?

October 25th, 2008 at 10:31 am

I was browsing personal finance blogs yesterday and came upon a post that really got me excited. The author was talking about the upcoming February 2009 conversion of analog TV to digital TV.

I heard before that if you already have cable TV, you won't lose your reception, but if you don't, and you have an older TV, you won't be able to get a picture without getting a digital converter box.

But what got me excited is that the author was saying you could get a picture with the digital converter box and WITHOUT cable. In other words, by getting one of those $40 coupons they're offering online for free and then spending $10 out-of-pocket for the converter box, that could give you a picture if you're willing to settle for the basic network channels. Hey, that's what I'm getting now, but I'm spending $15 a month for the privilege.

It would be great to do away with that monthly expense if I could, since I don't watch much TV.

The author of the post also noted that they got a better set of rabbit ear antennas for their TV and said they didn't have an outdoor antenna on their roof.

Still no heat:
Boomeyer - Missouri
monkeymama - Northern California
debtfreeme - Northern California
Ima Saver - Georgia
scfr - Texas
snoopycool - Florida
sevenofseven - Northern California
princessperky - Charlotte, North Carolina
toyguy1963 - Ohio
Analise - northern California
Little gopher - Minnesota
canoineag - Denver
Buckeye - Ohio
Koppur - Massachusetts

Those who already turned on the heat:
Househopeful - Delaware Oct. 23
dmontngrey - Massachusetts Oct. 22
Fern - Oct. 19 Connecticut
mbkonef - SE Pennyslvania - Oct 17
Creditcardfree - Oct. 15
Nancy - Oct. ??
MilehighGirl - Oct. 11
wyozozo - Wyoming - Oct. 10
Mech - Oct. 3 Massachusetts
ME2 - Oct. 3
myenglishcastle - October 1 - Wisconsin
homebody - October 1

Fuel Efficiency Has Stalled in the Past 10 Years

October 12th, 2008 at 02:26 pm

I've been tracking my fuel economy for the last 10 tank fill-ups. I'm getting an average, since this past mid-July when I started taking note, of 38.4 miles per gallon with a high of 42.6 miles per gallon and a low of 34.9 miles per gallon.

I really can't complain, but what will I replace my 10-year-old car with when the time comes some day? Only a hybrid will beat my Honda Civic's gas mileage.

How important is fuel efficiency to you when you're considering a new car purchase?

Do You Have a Bucket List?

October 11th, 2008 at 01:22 pm

You probably know what a "bucket list" is, even if you didn't see the movie by that name. I didn't see it, but after a friend started talking about it, I began musing about what would be on my list.

I thought it would be fun to come up with a Bucket List made up of learning experiences.

1. Travel to every national park in the country. I love visiting national parks. Aside from unique and fantastic scenery, our national parks are an incredibly affordable vacation destination. And with park ranger-led talks and walks, it's a learning experience as well.

I get my Parks Passport book stamped each time I visit a national park. It's a nice memento of your travels. It would be fun to plan a week's vacation around a string of parks in close proximity to each other that you could hit all in one trip.

2. Read a biography of every American president, starting with George Washington and ending with President Obama. (Just making sure you're reading this.) I'm more interested in recent history that i've lived through, but I'm sure there are interesting things to learn about our earliest presidents. I'm getting more and more interested in history, and this would be a good way to go about it.

If I were really ambitious, I might add this goal: Read three books of my choice from the New York Times best-seller list each year.

In other news...
I filled up my oil tank last June, which is usually a time when prices are depressed. But when I scheduled my furnace cleaning, I asked what the going rate was now, and they told me $3.09 a gallon. That's cheap(!) compared to the $4.24 i paid in June x 192 gallons = an overpayment of $220 with just that one fill-up, but who knew?

However, the Energy Information Administration has forecast an average per gallon oil price of $3.90 this winter, so my advice to you would be, if you haven't filled up, do so now! Especially since OPEC is concerned that the dip in oil prices to around $87 per barrel is getting a little too low; they like to maintain oil prices at between $80 and $100. So they're meeting in November and will likely cut production.

Today's high was about 69 or 70 here, so I threw open all the windows at about 1:30 pm when I saw it had reached 68 outside and my indoor temp was still 60! Despite doing that, and then closing all those windows around 3:45 pm, I managed to increase the indoor temp to only 61.

This house seems to retain the cooler temps, a nice thing in summer but not so nice now. Still, with mild temps forecast through at least Wednesday of next week, I'm thrilled to continue deferring use of my heating oil. Each day I avoid turning it on now means an extra day's worth of heat I'll get in the dead of winter, when I really can't avoid using it.

Dismal News on Rising Homeowner Costs

October 9th, 2008 at 02:05 pm

In case you were in any kind of denial, here's an excerpt from a story on http://www.marketwatch.com

"All major categories of homeowner expenses increased faster than incomes between 1996 and 2006, the center reported in "Stretched Thin: The Impact of Rising Housing Expenses on America's Owners and Renters."

"While mortgage payments increased 46% during those 10 years, utilities increased 43%, property taxes increased 66% and property insurance increased 83%, according to the study. But homeowner incomes increased just about 36%.

Here's the full http://www.marketwatch.com/News/Story/Story.aspx?guid=433532...

Kudos to all those who remain in the no-heat contest. No one else has written to tell me they turned on the heat, so we're all still in this together.

Fortunately for us in the Northeast, we're expecting mild temps in the low 70s for the rest of the week. And with all the terrible economic news (the Dow dropped again today like a lead weight), I'm looking at this no-heat challenge as more and more a necessity, not just entertainment.

On top of that, http://www.accuweather.comis forecasting the coldest winter in the Northeast in five years. So hang onto your mittens!

Will Fake Chocolate Flood Store Shelves?

September 19th, 2008 at 05:10 am

You may have caught on this morning's news how Hershey, trying to control costs and retain profits, has replaced the cocoa butter in many of its chocolate candy products with vegetable oil. The FDA says it's not real milk chocolate without the cocoa butter, which gives it its rich, creamy taste. So Hershey's has changed its labeling and wrappers. Will most consumers take the time to read the new labels that say "chocolately taste"?

Yesterday, I saw another interesting way that retailers are trying to save costs, and this idea, at least, wouldn't seem to hurt consumers or give them less product for their money.

I had a free-after-rebate offer (courtesy of this website) to try Arm & Hammer's Essentials Multi-Surface Cleaner. When I found it on the shelf, I was surprised because the plastic spray bottle was completely empty. Attached to it was a much smaller vial which contained a powder that is designed to be mixed with water in the container. You can then buy the small vial refills as needed, and continue to reuse that same plastic spray bottle.

Now this was a good idea. Just think how much Arm & Hammer is saving on shipping costs if their bottles are, well, filled with air rather than liquid. And consumers are actually helping the environment by avoiding the need to buy additional full-sized, plastic spray bottles. (Of course, one could help the environment even more by using a home-made vinegar mixture in your own reusable spray bottle.)

Have you come across other ways you've seen retailers trying to save some money?

The Real Cost of Owning a Car

September 6th, 2008 at 10:04 am

Ever wonder what your car really costs you? Not just the purchase price, but the gas, repairs and maintenance, insurance, license, registration and, if you're lucky like me, car taxes?

I figured it out this morning, just for fun. I had finished reading an article in Kiplinger's about whether hybrids are worth the price, and they mentioned that the Prius and the Honda Civic Hybrid are tied for lowest total ownership costs over five years, at $39,780.

So I decided to see how much my '99 Honda Civic HX has cost me since I purchased it. I track all my expenses anyway, so it was easy to do.

Here's the breakdown.

Purchase Price: January 1999: $14,500

Year Tax/Reg Gas Repairs Ins
1999 1175 639 200 813
2000 365 409 235 718
2001 507 516 507 874
2002 325 370 739 894
2003 302 520 466 719
2004 149 393 945 796
2005 214 377 614 655
2006 130 496 1020 393
2007 206 514 1029 388
2008 YTD 89 888 980 378

Totals 3462 5122 6735 6628
10% 15% 20% 20%

Total costs: $36,447
Minus sale of old car: 2,850
Balance: $33,597 divided by 10 years of ownership = $3,360 per year to operate.

Just think how much you'd save if you used your legs, bicycle or public transit to get to work.

A few interesting items to note:

1. Total costs for state taxes and registration, etc. fees was a substantial (10%) part of overall ownership costs.

2. Gas and repairs each accounted for 15% of total costs while insurance counted for 20%.

3. The cost of the car purchase itself represented 35% of overall costs over the 10-year period.

4. Gas, interestingly, didn't show a unilateral upward projectory leading to 2008. In the year I bought it, I spent $639 for gas, which is more than I spent in 2007. 2008 is already the year showing the most spent on gas for the whole time I've owned the car.

5. The cost of repairs has steadily risen each year. Guess that's to be expected.

6. Insurance, happily, has fallen, especially from 2006 on, which is when I dropped the collision/comprehensive on the car, in year 8.

So I spent less money to operate my car for 10 years than the new Prius and Honda hybrids will cost over 5 years. While gas costs for these hybrids will be lower than my costs, I don't think that alone makes up for equally high expenses for registration, insurance and repairs, not to mention the purchase price. Unless, of course, you really need a new car. But otherwise it's clear that coaxing an old car along is a great deal cheaper than buying a new one.

So while I grumbled a bit last week to pay over $650 for repairs to my car's emissions system, it's still a small price to pay compared to new car ownership costs. But you knew that already, didn't you?