Sushi Money

That’s pantry fellas, okay?  You know, that closet or cupboard where you keep your food and canned goods?  I looked around ours recently and discovered we’ve got a lot more food on hand than we realized.  Maybe not fresh foods like milk and eggs, but if push came to shove we could probably go a month without a major shopping trip.  That’s not even counting what’s in the freezer.   With thoughts like these it’s no wonder we’re reading about consumer spending taking a huge dive last month:

“The Commerce Department reported Friday that retail sales fell by 2.8 percent last month, the biggest drop on record, surpassing the old mark of a 2.65 percent plunge in November 2001 that occurred after the terrorist attacks. The October sales decline was led by a huge fall in auto purchases, but sales of all types of products suffered as consumers, worried about their jobs and the market turbulence, cut back sharply on spending.”

“The dismal report on retail sales was worse than the 2 percent decline that analysts expected. It marked the fourth straight decrease, the longest stretch of weakness on record. Retailers are braced for what could be the worst holiday shopping season in decades with economists forecasting a recession that could turn out to be the steepest since the 1981-82 downturn.”

“A survey of the nation’s big chain retail stores found that retailers suffered through the weakest October in at least 39 years even though they tried to gin up more sales by a frenzied round of price cutting.”

Of course there’s a bright side to a retail downturn…  discounts and sales everywhere.   Now retail doesn’t usually include grocery stores, but I know folks are cutting back there too.  The stores are quieter and emptier.  Except for Wal-Mart.  I made the mistake of going to Wal-Mart on a Friday a week ago- holy cow!

Having grown up through the ‘81-’82 downturn, I’m not sure I learned anything of significance either, especially because I was young and single, and didn’t have a family or home to support.  But we scrambled with multiple jobs and did what we had to do… worked, saved and pinched pennies.  I do remember running out of gas a few times… that was embarassing, but more a reflection of my lack of foresight than anything else.   You know what else was lack of foresight?  Not investing on a disciplined basis each year at the time- I probably gave up a decade or more of investment returns over the length of the 1980’s bull market.   But that’s another story.

As I ponder the current state of affairs it strikes me that most of us have a lot more resources at hand than we may realize.  And that’s also because most of us plan ahead a little bit, and try to stay prepared for whatever might come.  If I look in the pantry, the garage and a few other places, I realize we have a lot of stuff.  Some of it is even useful.  If things get really tough, we’ll be fine for a while.  We’ve already cut back, and we have room to cut back more if we need to.  Admittedly lots of other folks may not, and we’ll need to help them where we can. 

All across America starting this weekend the Boy Scouts and Cub Scouts have their annual food drive to gather donations and help people.  So many of the local food pantry and shelters really need the donations.  Looking at our household pantry I know we have a lot of cans we can give to help another family with Thanskgiving this month.

But if you’ve read Sushi Money at all before, you know I’m not one who believes we’re falling into another Great Depression.  Heck they haven’t even called it a recession formally yet.  But when they do (oh, they most assuredly will!), the recession will probably have started around the middle of 2008. 

We don’t know when this recession will end.  We don’t know how deep it will be, or what will help trigger the turnaround.  But to get the nation moving and growing again means we’ve got to foster business and public works.  And James Stewart’s approach to How Obama Can Fix the Economy makes as much sense as anything I’ve heard from Congress or the Treasury Secretary.  The new President will have a full plate, and a lot of motivation for changing the economic course we’re on right now.   I don’t envy his job, but is there a better time to be a new President than with the economy on the ropes?  Looks like opportunity to me.  

If it’s not apparent to many people by now, the frugal living style is becoming the “in thing” these days.  No surprise considering the challenges Americans face with a tigtening economy and job market.   While consumers have cut back on spending more than any time in the last 28 years, the Fed has lowered interest rates to levels not seen since the days of Eisenhower.  It’s no wonder we’re spending like we lived in the days of Eisenhower over fifty years ago.

Of course the government is doing all it can to stimulate the economy, but consumers have awakened to the reality that money only goes so far.  And taking on more debt to support lifestyle needs is just not a good idea for long term financial security. 

But what is surprising is that being “frugal” is becoming fashionable throughout all levels of the socio-economic spectrum. Even the more affluent families are now looking for ways to cut back, and busy executives are wearing bargain shirts.  It just makes sense.  Why does “dressing for success” have to mean $1200 suits and $80 shirts? 

I believe we’ve entered a new period of practicality and frugal living.  Even if it’s simply a response to challenging financial times, people are becoming aware that spending money they don’t have just digs a deeper hole of indebtedness.  Living a simpler lifestyle is healthier, more stress-free and saves a lot of money over time.

So will families and children growing up these days have a new perspective on frugality and financial awareness?  Is this a new paradigm that has changed how society may interact with money?  Possibly, but you’ve got to wonder if some people are simply like that all the time anyway, or if it’s just due to the financial crisis.  A good comparison is the Nature versus Nurture debate, examined by the Wall Street Journal in The Making of a Miser.

“…people who lived through the Great Depression were often thrifty their entire lives. Since the 1930s, each successive generation has gotten to be more free-spending.”

“The current financial crisis could change that. “Right now, there are probably a lot of children who are going to be tightwads,” says Mr. Rick.”

“But our childhood isn’t the only factor. George Loewenstein, a professor of economics and psychology at Carnegie Mellon University, says people have innate tendencies. “It’s almost like people are born tightwads or cheapskates,” says Dr. Loewenstein…”

I’m not sure about being born to be thrifty.  Personally I think it has more to do with our experience, and the nurture aspect of childhood development is very important.  Yet being a tightwad is far different from simply being frugal.  And being a cheapskate, or someone who stresses out about every penny may not be all it’s cracked up to be:

“…According to Messrs. Rick and Loewenstein, being a tightwad isn’t the happiest state of being. Many cheapskates experience something akin to physical pain when they spend, and are constantly anxious about money.”

“Spendthrifts aren’t necessarily any happier. Their free-spending often causes stress in their lives and marriages. Indeed, Messrs. Rick and Loewenstein say the happiest people are frugal, which they define as people who are able to spend without suffering but take pleasure in saving.”

But what about the little things we love to buy, or gadgets like cell phones?  Are we thinking twice about those purchases as well?

One of the more expensive items I purchased this year is something most of us don’t need, but we really like.  A GPS navigation gadget, or personal navigation device (PND).   I’ve been waiting to buy one of these for a few years, and finally justified it by taking a two-week trip this summer (with sky-high gas prices to boot!).   Taking the trip was not a frugal decision by a long shot.  But it was a chance to spend time with my son, and something we will long remember.

To help with the trip I found a Garmin Nuvi 770 at a great price on Amazon, and had to have it.  And how did it perform?  Flawlessly.  In fact, the trip would not have been the same without it, and I’ll never be without it again.  This thing took us places I couldn’t have imagined, and kept us safe and sound and always aware of our location.  We did a round-robin trip in the midwest, through Michigan and the Upper Peninsula, and back down through Wisconsin, circling Lake Michigan.   Not only did the Garmin take help us find dozens of “points of interest” (POI’s) that we might otherwise not have seen, but it also found gas, shopping and dining facilities in a heartbeat. 

Crossing the Mackinac Bridge into Michigan’s Upper Peninsula

You can even see Mackinac Island in the picture’s background to the right over the water, and also on the Garmin’s screen.   This thing was just awesome to use, and really simple.  Personally I view it as a safety or security issue now- we know where we are, and how to get where we want to go.  It’s peace of mind and a whole lot more.  I even added a custom POI database that listed campgrounds, parks and other recreation facilities.  The coolest part is while driving down the highway in late afternoon, I could look up campgrounds nearby and the Garmin finds several I never heard of or even knew existed.  So we end up camping at some terrific places, without a reservation, simply by using the Garmin to find them as we travel along.

So can a Garmin be considered a frugal purchase?  Probably not, but one could make a case for saving gas by not getting lost!  It probably comes out even though, because the Garmin shows you so many new things you never knew existed, that you like driving there too. 

But a couple of months later, do I still use the Garmin very much?  Not everyday, but whenever we visit the city, go to garage sales, need directions to some new place, etc., it’s very handy to have.   I suppose of you’re a sales rep or a realtor, you can’t live without it.   But in terms of frugality it’s not an easy argument to make.  This thing is a cool gadget that makes life and travel better…but most of us don’t need one. 

I would like to think I’m usually in the frugal category, or at least working a lot harder at joining the ranks of the future frugal. I think we have entered a new age of frugality, and many people will more carefully consider how and where they spend money and the lifestyle choices it brings. 

Personally I enjoy spending money, yet I relish saving money on things and finding a good buy.  In reality however, I also don’t hesitate when I think I need something, and I usually pay for quality when given a choice.  But I often wonder if frugality and the enjoyment of shopping can go together?  I think the answer is yes, but it depends on the lifestyle we choose, and how much that debt is part of our lives.  It’s much easier to whip out that credit card and charge something rather than pay cash.  When we use our own hard-earned cash, I think we’re a little more careful about what we buy.

All I know is I choose not to stress out about financial choices (or debt!), and the more I provide for a secure financial future, the better my life is.   And that’s what it’s all about.

We’ve heard a lot about frugality in recent years.  No wonder of course that people are looking for more efficient ways to live and save money in challenging economic times.  And there’s all kinds of blogs and categories devoted to the topic of being frugal.  But what is frugality exactly?  Is it a virtue?  A character trait?  A lifestyle choice?  Frugality and being frugal means many things to many people.   

But I’m starting to wonder if frugality is all it’s cracked up to be. In some ways it’s like approaching the building of a house with cutting back on a few bricks here and there.  You may build the house, but will it stand the test of time?  Of course some might say it’s more about finding less costly bricks or other more efficient material, and building a house for less so you can do more with what you’ve saved.  But if one’s focus is always about saving or not using up resources, or using less of something or even of finding ways to get more from less, then what does that say about seeing value or abundance in the world around us?  How can we direct our energies more towards growth and creativity instead of focusing on not wanting certain things?  What if we just knew that there was enough to go around, or that we could have what we needed?  Would that free up our creative focus or energy in new ways so we could better our lives or the lives of others around us?

In some ways frugality has evolved almost as a discipline for some, even a spiritual journey incorporated within a lifestyle of simple living.  In South Korea there are Frugality Masters who help teach others how to live a more frugal lifestyle.   Of course with the economic challenges we face today many people are being forced toward a more frugal lifestyle by sheer necessity.  How many of us have cut back our driving and spending at the grocery store?  We find ourselves looking for more efficient use of our money and how to cut corners to get an alternative benefit for the same amount.

Some bloggers have even explored what might happen if everyone chose a more frugal lifestyle.   I may differ with many of the assumptions, but it’s interesting to consider. Certainly our ancestors may have lived more frugally but I have no desire to return to the life of my ancestors!  Realistically, most of us do prefer more choice and opportunity in life.  And I think that economic diversity is, on the whole, beneficial to society.   There will always be degrees of economic advantage and those who leverage human capital versus those who do not.

I do agree that society won’t make a “frugal leap” anytime soon barring a complete economic breakdown, and then it would only be in response to crisis for a time.  Although watching energy and food price inflation get out of hand feels like enormous challenge to many of us, those living in the U.S. in fact live in the most prosperous nation on the planet with the highest quality of economic life and opportunity for the greatest number of citizens.  It’s so good in fact that most of us take it for granted.

Of course that could depend upon your view of economic quality!  But opportunity abounds, and we are creative and enterprising individuals.  Although I wouldn’t describe it as frugality, I do think most developed societies will continue to evolve towards conservation and efficiency with resource use. 

For some people however, the thought of being frugal does not represent a positive value or benefit in their lives, but rather something that means being cheap or miserly, and not having enough money to make choices in life.  I don’t agree with that viewpoint, but I understand it. Yet whether one is rich or poor, the act or choice of being frugal is still available.  In fact, some of the most frugal people I’ve known were quite wealthy. 

Frugality then can be independent of wealth or economic status.

I also think that a lifestyle choice of simple living is different than frugality, or maybe a separate but related approach to how one chooses to live.  Many of us are on a journey to live a more simple, economical life but we’re not always frugal.  So for me, being frugal has specific meaning at times, but is not an approach or central theme I see with all of my life.   

And as I mentioned above, something about being frugal bothers me.  Too often I see frugality wrapped up in a focus of lack, absence, need, wastefulness, etc.   It seems like many people are focusing on frugality from a perspective of losing something instead of appreciating what they do have, or making positive choices and finding opportunity for growth, financial or otherwise. 

And there’s something else that I’m not quite sure that I’ve reconciled personally in terms of being frugal.  That has to do with an abundance mindset. 

I view an abundance mindset as one in which we see that everything we need is available to us in life in one form or another. It also says that we can positively, intentionally, choose a path for ourselves that brings joy and abundance to our life.  People who embrace an abundance mindset do not focus on the lack of things, or the worry that money or something will run out.  An abundance mindset knows that there will be enough money or food or whatever to supply our needs if we live intentionally to create the life we desire.

Steve Pavlina has written of the abundance mindset and shows how it’s often our perceptions that limit our ability to have whatever we want in our lives.  The opposite of the abundance mindset is the scarcity mindset, in which we limit ourselves because of our thoughts, actions or beliefs.

“At an average level of income in the USA, there™s not much difference between a dime and a penny, right?  It™s a small amount either way and not particularly significant.  Would you fret over a price difference of 9 cents?  Hopefully not.  But for some people on this planet, 9 cents is a fair amount, and to pay a dime instead of a penny for something would be regarded as extravagant and wasteful.”

“Similarly, at higher levels of income (and value creation), $10K is nothing.  It™s just a penny.  It™s insignificant.  It™s pocket change.  There™s virtually no difference between a $10K hotel room and a $100 hotel room ” the price difference is meaningless, so why not pay that extra œ9 cents for a nicer setup?”

“If you think any amount of money is œa lot or œtoo much or œextravagant, you™re resonating with scarcity, not abundance, and you™re preventing yourself from becoming the kind of person who can generate that level of value.  Why do this to yourself?  Why hold back if you™re capable of contributing so much more?”

Those are great questions.  Admittedly, sometimes it’s hard to see the abundance mindset in action, especially when you see so many poor families and children living in poverty.  It’s quite amazing too how society throws money at so many problems and yet those problems endure through the ages.  On one side of the street you may see abundance, and on the other you only find need.  Some argue that it is because of poor lifestyle choices, lack of education or unplanned challenges that need or poverty exists. And yet we find that in nearly every country and society throughout the world there are those always living at the bottom rung of the economic ladder. 

I think there will always be a need for people to help other people, no matter what you call it.  And maybe there is so much disparity simply because we are human.  We are all on a growing path, and many have simply not learned to embrace the opportunities available.

And with that we find many views of financial abundance.  Steve Pavlina also examines how achieving financial abundance can even complicate our lives.  But more importantly he shows how it’s related to the value within and around our lives:

“The pursuit of financial abundance is the means to shine a light on your need for growth in these areas.  To attract more abundance, you must create more value for others, which requires that you recognize, accept, and embrace your own value.”

Instead of frugality, I think a mindset of abundance offers greater benefits to the context of our lives.  Frugality may create short-term value, and it does perhaps show what we value in certain areas of life.  But does frugality help create long-term growth and the life that we want?  Maybe it does.  Maybe we save enough money in our IRA or retirement fund because we were frugal in other areas.  But maybe we just don’t know any better.

Maybe with an abundance mindset we would create more. Personally, I strive to live intentionally and set a postive, constructive course of growth as the years go on.  I believe we can create the life we desire through small steps of growth, big leaps of faith and embracing the opportunities that challenge us. 

Certainly I find myself balancing the realities of economic choice with being frugal.  But I’m working towards not seeing things in life from the perspective of lack, or to live in fear that gas or money or whatever will run out.   No question that as we spend more money at the gas pump we are faced with the reality and choice of driving a car that uses gas.  Or not.  We are presented with the opportunity to make decisions that change the status quo: keep putting that gas in the car, don’t drive it, get a smaller car, etc.  Most of us just drive on, and gripe about gas prices while filling the car.  But we don’t have to!

Our nation is challanged by that very problem as many grapple with wasting so much money on a daily commute.  We are now looking for frugal alternatives whether that be with higher mileage vehicles, or abandoning the car altogether and riding a bicycle.  But many people are angry because of the sheer economic weight of spending so much money on something that doesn’t return any excess value for the money.  At that point it doesn’t really matter what you call it, even though some people have become so frugal that it’s affecting how they drive- they’re running out of gas!

But what does frugality mean to you?  I ask the question because there are so many perceptions of the word frugal based on the context of our life and experience.  I browsed several dictionaries and the words frugal or frugality have many meanings:

Frugality:

• Avoiding wastefulness
• Resourceful use of money or economic goods
• Careful management of anything valuable
• Practicing, or marked by economy
• Applies what is used to a profitable purpose
• Opposed to extravagance
• Careful use of material resources
• Sparing use of things
• Reduction of waste
• Seeking efficiencies
• Economy, thrift, parsimony

Does that cover most themes for being frugal ?   In some ways, I think frugality is a lifestyle choice.  But I have to wonder that if someone’s lifestyle gets to the point where frugality reigns over everything, then isn’t it taken to the extreme?  Doesn’t it then border on obsessive behavior in the same manner as compulsive shopping or spending money all the time?

Perhaps most people who value frugality seek a happy medium.  I like the idea of being frugal, saving money and using our resources wisely.  It’s quite rewarding to use the materials or goods we have at hand to satisfy needs in our lives, and not having to spend money constantly.  Growing a garden in some ways represents a wonderful balance between maximizing resources at hand in order to live more economically, and being frugal by saving money we would spend otherwise. 

More importantly however, the garden creates value in our lives!  We create something with our own hands, and it provides a healthful benefit in return.  Few things taste as good as fresh vegetables you have grown and cooked from your own garden.

But frugality can become a negative influence.  I’ve seen people call themselves frugal that to me are simply cheap and miserly with the money they do have.  It’s their choice and their money obviously, but I don’t see that it provides added value to their lives.  Instead it appears to create obsessive behavior and more stress in their lives. 

So can we find an ideal balance for managing the money and resources we have and still be frugal?   And how do we live abundantly while appreciating the life and choices that we have?  How do we let go of the scarcity mindset?  Frugality and abundance are surely not mutually exclusive, and may even complement each other.

Yet while balancing frugality and abundance, I still believe in working slowly towards living a simpler and more efficient life.  And while we make that journey I don’t want frugality to be such a focus that it involves lack or a mindset based on fear.  Rather I hope to redirect our focus at times, and find new or more creative approaches to living happily in a practical and efficient manner; to see the value that our lives represent and to leverage that value in new directions.   And I have to wonder,  isn’t life too short to make frugality a defining theme?  

Spring sure feels good after a long winter, and now getting ready for summer. I find myself heading outside more often to enjoy the fresh air, clean up the landscaping and garage and ponder the various barbecue dinners for those warm summer evenings. I don’t know why, but then I start tinkering around with and trying to improve a lot of things both inside and outside the home.  That’s not so bad in itself, but then I start making a list of things we need from the store that will help fix or improve those things. 

Too many of us go shopping for a host of reasons other than finding something we really need.  We crave adventure and excitement, and it’s fun to buy things.  But after looking around the house and closets, we’re just buying junk that doesn’t help our family’s economic well-being.  If we’re not careful, we end up caught in viscious cycle that I call The Spending Loop.   

So there I am, wandering the aisles of the nearby big-box store filling up the cart with all kinds of stuff.  It’s a self-fulfilling spending loop that I’ve created from both a real and a perceived need to buy “things we need.”  Nothing wrong with that if spending is balanced against needs versus wants.  But too many of us don’t consider the difference.  When I head to the store to buy something, I’m half excited to be getting things that I think will help spruce up the house and keep it looking good.  

Yet sometimes, for all the good intentions we may have, a lot of that newly purchased stuff just ends up sitting on a shelf, and we don’t get around to finishing the projects we were really motivated about a few weeks earlier.   And if we’re not careful, that shopping and “sprucing up the house” can take on a life of its own, until it becomes a habit that takes real money out of the bank account over time, and we’re caught in that spending loop, piling on enormous debt over time. Honestly when I look in the garage and all the closets, I wonder if we really ever need anything else again!  Even the food pantry is too well stocked, but somehow I feel more secure with that. 

While acknowledging my impulse to head to the landscaping store to find just the right tool or hardware item, I’ve made an effort over the last few months to avoid shopping for the sake of shopping and really think about if we need something or not.  The shopping aspect has never really been a problem, but I just realize that I’ll buy things that I don’t really need sometimes.  So while I still make lists and think of things we need to buy to help finish this project or that, I’m now trying not to rush right out and buy what I think we need right away.   After a few days, some of those items don’t seem so important anymore, and the impluse to go shopping is not as strong.

Maybe it’s part of modern society and our conditioning.  When we shop or buy something at the store we feel like we’ve “done” something and that simple act of buying something will help our situation.  Too often all that we’ve done is decreased the cash in the bank or gone deeper in debt on the credit card. 

If you recognize that smiley face above, it seems to imply a certain level of satisfaction or happiness.  Combine that with a shopping environment, and it’s no wonder why the smiley face was chosen to be associated with price comparisons.  Many of us crave adventure, excitement and something “new.”   And whether we admit it or not, we try to fulfill many of those cravings by going shopping, getting a good deal, or finding something “special.”  Let’s face it, sometimes it really is fun and exciting, especially if you’re buying something you really want. 

But it’s short-lived satisfaction for the most part.  The experience and the excitement is momentary.  Far better to seek adventure and excitement in healthy, practical ways such as working outdoors, gardening, hiking or playing sports.

So while I’m in the midst of a host of spring cleaning chores, I’m working on getting all those other things accomplished that don’t cost much extra money to undertake.  If I really think about it, sometimes my desire to go shopping for “stuff we need” is a disguised effort to procrastinate or improve something else so I don’t have to deal with the stuff I don’t want to finish right now.

I’m no psychologist, but I’m sure there’s a host of other dysfunctional reasons that we go shopping, spend money and buy stuff we don’t need.   Sometimes it’s just plain fun.  But it’s too darn easy to go through money like crazy, much to the delight of the retail store business.    I’m still looking at the shopping issue, and trying to educate a child as well.  Even with kids, their eyes light up when they have a chance to buy something.  So we need to find balance and a healthy approach to spending money when we need to, and avoid the cycle of spending money for no reason at all.

Are there other strategies we can use to structure our shopping needs?  Credit and debit cards are really too easy to use.  Is something like the household budget really an effective tool to prevent binge shopping, or buying stuff we don’t need?   Not for me, at least a lot of the time.   Do you see a better way?    It’s a continuing issue for so many of us, and without really looking at the issue within the family, a lot of people are going to struggle financially while remaining stuck within the spending loop.  But it’s time to break free, to be a little more honest with ourselves, and to begin restructuring our goals toward positive, long term financial outcomes.

Okay, the rebate check is in the bank and we’re going through the budget again.  I was shaking my head at the price of groceries and gas today, but it’s hard to see much of an economic slowdown by the amount of traffic out on the roads.  People must be cutting back though because everything has gone up in price recently. I’ve even heard some of the restaurants are struggling. 

We’re learning like never before how fuel prices really impact consumers and the needs of the family.  Simple things such as a trip to a nearby town are put off until really necessary, and I find myself driving a lot slower than I used to.  Some enterprising automaker should come up with a really efficient vehicle they call the Frugal.   I’d call it our Family Frugal and drive it proudly around.  Not a very sexy name perhaps, but heck I’m all about practical efficiency these days.  Actually it sounds kind of like a Volkswagon… Das Familie Frugal.

Ah but we use fuel for more than our vehicles.  We use propane fuel for some of our winter heating needs, and I usually fill the tank in late spring each year.  But with oil prices out of control, propane prices are crazy high too.  Do I fill the tank now, or wait until next fall or winter?  I’m inclined to wait and see if somebody… anybody, will do something about the rampant speculation in the oil markets out there.  At some point these high prices are bound to blow off.  It’s bad enough with gasoline, but the debate even involves diesel fuel supplies which are tighter and more expensive.  It’s a problem we need to solve because it affects everything- driving cars, trucking and transportation for goods, grocery prices, heating, etc, etc.

Members of the House Transportation and Infrastructure Committee’s Highways and Transit Subcommittee generally agreed that diesel prices have risen faster than gasoline prices, and that increases are reflected in higher food and merchandise costs. But they broke along party lines in suggesting ways to address the problem.”The conventional wisdom is that speculation provides liquidity to the market. But when you have a huge entry of people who have no intention of taking delivery of a commodity but are merely interested in making money by bidding prices higher, that’s a different matter,” Rep. Peter A. DeFazio (D-Ore.), the subcommittee’s chairman, said in his opening statement.

But Tyson Slocum, energy program director at the consumer advocacy group Public Citizen, agreed with DeFazio that speculators are exerting an unhealthy influence on energy commodity markets. “A certain amount of speculation or hedging is essential. But we have a financial bubble resulting from too much speculation. About 95% of the trades today do not involve taking delivery,” he said.

DeFazio still was interested in the possible impact of speculators on oil prices. “What would it hurt to have trades no longer opaque and off the books?”

I’m a pro-business, free market kind of guy, but when you have a critical commodity that drives every aspect of the national economic engine, how can we allow speculators and commodity investors to leverage investments in oil contracts that will never be delivered?  And if oil prices just keep going up, can the U.S. economy and consumers even survive in that environment?

Here’s one for you:  Just yesterday I was talking with the local propane company manager about fuel prices and my propane bill, and he spoke of a close friend who was a truck driver.  This guy regularly drove from the midwest roundtrip to the south and southwest, but his normal routine was to fill up his truck’s fuel tanks in Mexico!   “Why does he do that?” I asked, and the answer was that truckers can buy a cheap $20 pass to cross the border to buy fuel and they pay half the price for gas and diesel that we pay in the U.S.!   

Why does gasoline or diesel fuel cost half as much right across the border in Mexico than it does in the U.S.?

I don’t know how accurate that is, but the propane company manager I spoke with said it was true.  Perhaps Mexico has more reserves for oil, more drilling, more refineries… oh, maybe that’s why it costs less?   Even so, should petroleum products be half-price just across the border?  If it is, then we’re doing something wrong here in the U.S.  Hey, maybe we can tie in some of the immigation issues with cross-border agreements for oil or fuel?

But with the economy still teetering on the edge of a recession, at least Alan Greenspan thinks that ”the worst of the credit crisis is behind us.”   But what about inflationary costs to consumers for fuel and grocery prices?  I’m really not sure what Congress is doing beyond posturing and looking at raising taxes.  Is raising taxes on fuel and energy companies going to save consumers money?  I don’t think so.

I’m still calling for a U.S. Energy Summit however.  We’re not going to get anywhere if people don’t stop pointing fingers.  They need to sit down and map out the issues- start taking proactive measures and move forward with a plan for the nation. 

But in other news at the homefront, we’re busy planting a garden this year.  A different kind of fuel for the family perhaps, and another way to live a little more frugally.  With a little bit of space, how hard is it really to grow a few vegetables?  Especially tomatoes, but this year we’re even planting corn.  It’s much cheaper to grow your own, but admittedly it does take some effort to get started.  But if we’re successful and have enough veggies, it will cut down on the grocery bill.  And we hope to freeze and put up some of the extra to last into winter.  Now if I could figure out how to grow our own fuel for the cars we’d really be doing well. 

Okay, let’s be honest. How many of us have little quirks or habits that we use to save money? I was thinking about this the other day while doing a cost-benefit analysis in my head over some purchase. Then I realized I do this everyday almost unconsciously. So I began to wonder- how “normal” is it to think of saving money in various ways as a routine habit or way of life? After all, many of our friends and acquaintances enjoy spending money and living like there’s no tomorrow.

For those of us interested in personal finance and growing our wealth, does frugality just naturally go along with our goals? Or is something we pursue and challenge ourselves about? Somehow I believe we develop our own financial knowledge and strategies because it meets the values that are important to us. And how many of us wish we learned these values, or lessons, at a far earlier time in our lives?

But do you know any people who don’t even seem to care about saving money? I’m not sure I could go that far, it’s more likely that some people are just not aware of why it’s so important, or that they are spending much more of their income than they should.

So after I thought about it a while, I realized I do a lot of things to try and save money. I say “try” because I may not always be saving money, but just believe I am. And I have various habits or quirks that to try and find ways to become more efficient financially. Maybe it’s a disease… the same one that had me running around changing lightbulbs the other day after realizing I didn’t finish all the bulbs in the house last year. By my accounting, it saves us $5-$10 a month on our electricity bill.

So here’s my short list of strategies for saving money at home. These are things I do, or we focus on as a family:

1. Installed and use programmable thermostats for the house… but I still fiddle with the thermostats everyday to optimize the settings if we don’t need the heat or cooling. I even shut doors/vents to rooms that we don’t use, and are colder in winter, and circulate the fans where possible in living spaces.
2. Installed 40 compact flourescent lightbulbs instead of using the traditional incandescent bulbs throughout the house.
3. When putting gas in the car I hold the pump hose up to drain as much gas out of the line as possible… if it’s possible!?
4. Try not to drive excessively fast, but try and maintain constant speeds (a little higher than Grandpa..), and I coast as much as possible, especially going downhill and between stoplights. Also saves on brake wear.
5. Try not to shop for groceries when we’re hungry. I’ve proven that I’ll buy all kinds of useless junk if I’m hungry! We use coupons if it fits our lifestyle, but don’t clip that many. We minimize junk foods, and pre-packaged processed meals.
6. Pay bills online for free instead of using stamps and checks if possible.
7. If we go out for fast food, I’ll order from the value or dollar menu, and often order water instead of soda. But in general we eat out a lot less these days. We splurge on dining out once or twice a month at a decent restaurant.
8. We buy groceries and dry goods in bulk where possible, especially if the item is on sale.
9. Make our own coffee in the morning; having coffee out is a rare treat.
10. Prepare brown bag lunches for work/school, instead of eating out.
11. Eat and stay healthy… avoid the doctor and look for alternative health ideas for common ailments.
12. Use the library for books and videos. Find free recreation and activities for the kids.
13. Use the least expensive cell phone, land-line telephone and internet service plans as possible. But we do have broadband internet- it makes life so much more pleasant. We also keep land-line telephone service because we live in a semi-rural area and it works during electricity outages, or else we’d ditch that too.
14. Avoid bank and credit card fees in all ways possible. Find another bank if the current one charges too many fees.
15. Cut the kids hair at home. Pets are also bathed and groomed at home. Not that kids and pets are the same mind you…
16. Carefully research larger purchases (greater than $50-$100). When ready to buy, we purchase quality items that will last. Often we’ll shop online after finding a lower price, and save on taxes as well.
17. Pay off credit cards each month unless financing a temporary item at very low rates, or 0%. Don’t carry a balance.
18. Do most of our cleaning, landscaping and auto maintenance needs at home when possible.
19. Grow a garden to eat our own vegetables.
20. Don’t shop for more clothing and shoes than absolutely necessary, and purchase items on sale.

Oh… one more I just realized. Use the same old computer until I can’t stand it anymore! I’m typing on my second laptop- the first lasted almost three years. This one has just passed two years and still going strong, but I would really like to get a bigger desktop… some day.

So what things do you do to save money? I’m sure there’s a lot more… does this seem normal to you, or do you live carefree and not worry about it? I’m not sure I’ll ever be able to do that…

Awoke to a cold spring morning today with blue skies and sunshine. It would be nice if it were all blue skies for the economy and markets, but there’s still a lot of uncertainty out there. Does it seem like we’re reading more and more about recession paranoia in the media these days? Maybe recession-speak is now fashionable, but perhaps also because of the election cycle. As some economists observe, one way to create a recession is to just keep talking about it. Hmmm, interesting observation about sex there…

Many American consumers are feeling pinched these days. The Fed has aggressively cut rates in the face of many economic challenges, yet some investors are worried about the Fed causing more inflation. The inflation argument may be valid down the road, but it doesn’t sit well when we’re trying to tackle the other economic problems first. Seems like you slay the dragon in front of you before worrying about the one coming next.

All I know is I can bring more certainty to our own life through doing more things that improve financial stability, and doing less things that reduce it. Stuff like increased savings, reduced spending and debt, and becoming more knowledgeable about financial matters. Honestly I can control very little except the conduct of my own life, and even that is arguable at times.

Yet because most of us care about the nature of our life situation in the future, we do something about it. We modify behavior in the present in order to cause change for the future. Or at least we try to do that. Sometimes we fool ourselves for quite a few years, going through the motions, but not really being serious about it.

And then it hits. Some event, realization or dynamic in our lives that induces enough reflection to become aware of our mortality. For many of us it’s hitting the age of 40. Maybe like that keystone analogy and the poll results that shows how people take retirement planning the most seriously around the ages of 40-49.

It’s the realization that says,

“Half my life might be over, and I have very little to show for it!”

If you haven’t yet been hit with that realization, it will come. It’s kind of like presbyopia. “Presby what?!” Well, let’s just say “old people’s eyes.” Somewhere between 40-45 years old, most people are going to have a tough time reading things up close. And you’ll need reading glasses. Just a fact of life. And it’s a humbling experience that I’ve just gone through the past few years. I think reading glasses should come with a financial “how-to” book that helps people understand retirement planning. Because that’s about the same timeframe that most people start really planning for retirement.

I think it helps to remember what’s important, even in the face of a recession and that,

“If it takes change to make our lives better, then we better change!”

There are tons of resources out there of course. Learning from the experience of others can be a valuable source of new knowledge. In the blogosphere an excellent source of insight is the Carnival of Personal Finance hosted this week by Million Dollar Journey.

With an eclectic mix of personal financial advice and interesting stories, there’s something there for everyone. PennyMine talks about Teaching Kids the Importance of a Dollar. Dividends4Life finds Dividend Gold in a Down Market. The Honest Dollar shows us 11 Ways to Trigger an IRS Audit. And The Financial Engineer writes with the economy tanking it’s no time to increase foreign aid by $845 billion dollars. Not really time to increase taxes either…

There we have it. A place to find a beginning, and make a start or new commitment in our own lives. This week I’m committed to finishing our taxes. Now where did I put those reading glasses…

It’s often been said that experience is the best teacher, and that’s a very appropriate axiom when it comes to managing money. Jonathan Hoenig from SmartMoney.com might agree in his article Trading, Not TV, Offers Best Investing Lessons. He makes an excellent point in terms of investing in the market and how learning to trade stocks can provide an understanding that we won’t get anywhere else. It’s a good read with some valuable insight, but it’s not for everybody. There are plenty of investors out there who have never set foot in the world of brokerage accounts, and don’t intend to. Many investors have a 401(k), Roth IRA, and a host of taxable mutual funds. Do they need a brokerage account? Not unless they want to trade stocks on their own.

Sometimes I think many of the Wall Street gurus think that trading in the stock market is a necessary practice for achieving wealth. Perhaps surprisingly it’s not- many people enjoy building a business and working at a career that provides long-term growth and opportunity. Many other people invest patiently without trading. Some folks think the market is just too complicated, and don’t want to risk any money trading. I can empathize with that, but at one point in my life I felt a strong desire to learn what trading is all about. My story is pretty much like Mr. Hoenig’s, except perhaps that I didn’t make as much money and don’t trade for a living now.

The conclusions I came to were born on the winding road of countless gains and losses, and the realization that, for me, trading stocks is no way to make a living! Naturally, if you are a professional or have a passion for trading, then more power to you. But to be quite honest, I realized that unless I was going to focus on trading full-time, or become a professional in the investment and trading world, I really had no business being there. It takes a lot of time and focus to get it right, and you can’t be very successful on a part-time schedule. Maybe there are exceptions- I’d love to hear about them. Trading just doesn’t get me there… but saving and investing does!

I would offer that most of us need to be a little more patient and disciplined over time, and instead of trading- focus on investing. Once I accepted that I wasn’t going to spend a lot of time trading stocks, I became a long-term investor, and focused on companies, stocks and mutual funds that would help grow my portfolio. Much of that means dividend paying stocks that return something for the risk I take when holding them over time. I also became someone who looked for opportunities to save money in every facet of life. Little costs add up to big dollars over the years. Something that David Bach calls “The Latte Factor” or how People Magazine says “A Latte spurned is a fortune earned!” Don’t see it? Let’s say you give up three latte’s per week at $3.50 each. That’s $10.50 per week, or $42 per month. Or if you cut back somewhere else and save $20 per week, or $80 per month? Take a look at a comparison:

That’s just from some extra savings each week, with monthly compounded interest. Maybe it looks like a paltry sum of money to some people, but it’s just a minor example. Imagine what we can achieve by saving more! It also shows how a little more interest can go a long way. And it presents an opportunity for us to look for saving money in everything we do over time. At home, at the grocery store, at the bank, when using credit cards, etc, etc. There are countless ways to become more frugal, efficient, thrifty… whatever you want to call it. Just doing it is the hard part, but once you get started- it becomes kind of fun.

Overall I think we can achieve a balance between needs and wants… taking care of ourselves and our families, treating ourself to good things now and then, and being proud of our savings and investing habits over the years. We can end up with a lot more than we ever dreamed of, if we just do our part each week. And by the way, that axiom about getting experience? Well, experience is pretty darn important, no question about it. But it’s not the only place we can learn. Learning from the mistakes and wisdom of others is often more important. There’s a quote I like from Benjamin Franklin, someone who long recognized the value of money throughout his life:

“Experience keeps a dear school, but fools will learn in no other.”

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     Welcome to the 18th edition of the Carnival of Money Stories! We had 28 submissions this week, half of which had stories or a personal twist to provide interest for the Carnival. There were some great submissions! Alas, if the article didn’t share some type of story or dialogue, even remotely… then we couldn’t include it here. On a negative note, we also couldn’t include articles that were the work of others…  some people actually submitted stuff that was reprinted verbatim from other sites, without attribution.  Nothing ruins credibility in blogging and publishing faster than plagiarism, so here’s a call for making sure we respect the work of others and provide proper attribution.  Some sites are like spammers… but they’re really stealing the work of others, and personally it really frustrates me.  So if you’re hosting, I recommend taking a hard look at submissions from sites with no author information, etc.  

Thanks to Andy from Money Walks for asking me to host… I really enjoyed reading the submissions, and thank you all for making the personal finance blogosphere such a vibrant community. Enjoy the Carnival of Money Stories #18!

“The people who get on in this world are the people who get up and look for the circumstances they want, and, if they can’t find them… make them.” George Bernard Shaw

Stephanie at Stop the Ride! talks about those kinds of people with Resourceful West Virginians.

A hearty Congratulations to Lazy Man and his Bride (I’m not calling her lazy!) on their recent wedding… I wish them well with a favorite quote from Sir Winston Churchill:

“There is no doubt that it is around the family and the home that all the greatest virtues, the most dominating virtues of human society, are created, strengthened, and maintained.”

Lazy Man shares how the money adds up… brace yourself for The Cost of My Wedding.

Andrew Tobias once said, “You want 21% risk free? Pay off your credit cards.”

Good advice, but what happens when someone else is using them?!

Tate of Trading Stocks at Self Investors is wrestling with that issue (keep us posted!) in Beware of Credit Card Fraud.

Steve of Debt Free outlines some great preventive ideas in - How to Avoid Credit Card Fraud.

Aristotle once said “We are what we repeatedly do. Excellence then is not an act, but a habit.”

I think Frank from The Happy Rock would agree in It™s Hard Without Habits – July Cash Experiment Update .

Edith also shows us how good financial habits can improve our lives by using the 7 Habits of Highly Effective Money Managers.

“How I Made My Fortune? It was really quite simple. I bought an apple for 5 cents, spent the evening polishing it, and sold it the next day for 10 cents. With this I bought two apples, spent the evening polishing them, and sold them for 20 cents. And so it went until I had amassed a dollar and sixty cents. It was then that my wife’s father died and left us a million dollars.”

Not very likely for most of us! But Millionaire Mommy Next Door talks about how she achieved financial security and happiness in Reader asks, “How exactly did you become a millionaire so young?” .

Silicon Valley Blogger at The Digerati Life makes the Carnival rounds with an excellent view of her 10 Steps To Becoming A Millionaire.

“Before borrowing money from a friend, decide which you need more.“    A. H. Hallock

But what if you’re borrowing money from yourself?

Paul at ExtremePerspective is asking for opinions with a question, Why Not Borrow Against 401k?.

“Develop an attitude of gratitude… knowing that every step forward is a step toward achieving something bigger and better than your current situation.” Brian Tracy

Betsy of Money Changes Things helps us remember that a little perspective (and money) goes a long way in Gratitude and the Garage Door Opener. (I’m glad I have one of those little red handle thingies as a back up!)

œQuality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality. Peter F. Drucker

David of MoneyNing discusses his views of customer service practices with Coca Cola vs TD Ameritrade – Company Efficiencies.

“Nothing is to be more highly prized than the value of each day.” Goethe

Mr. Credit Card has a great attitude in testing that premise with

Missed My Airline Flight and Threw Away Money!

“If every fool wore a crown, we should all be kings.” Welsh Proverb

We’ve all been there in one way or another, and Moorea of Queercents shares her past with some insight on How to Undo a Wedding.

Ralph Waldo Emerson said it simply when he wrote, “The first wealth is health.”

Who could disagree with that wisdom? Certainly not FitBuff as he ponders the legislative efforts in the UK for a proposed “fat tax” in How Much Are You Willing to Pay for Twinkies? .

That’s it for this week’s edition of the Carnival of Money Stories. Thanks to all the contributors! I didn’t have a story today, but I will share one of my favorite quotes by Authur Gordon:

“Love life. Be grateful for it always. And show your gratitude by not shying away from its challenges. Try always to live a little bit beyond your capacities. You’ll find that you never succeed.”

The next edition of Money Stories will be hosted Monday, July 23rd at Investor Trip  Dough Roller. You can submit your money stories to the Carnival here.