Category — Buying Stuff

Christmas? What? Didn’t that just pass a few days ago? Why should I worry about Christmas day now, especially a Christmas that’s almost a full year away?

I’m glad you asked. If you’re like a lot of people, you probably wanted to spend more money on Christmas gifts than what you actually had saved. If you’re like a lot of people you probably went ahead and paid for your gifts on a credit card with the intention of paying it off “soon.” Hopefully soon is next paycheck. Hopefully you don’t intend to keep paying for Christmas gifts over the next few months.

Whatever you plan to do with your credit card, next year we’re going to do Christmas different. Next year we are going to have enough money to pay for all of the gifts we buy for everyone. The key is to start saving now.

First things first - you are going to need a place to keep that money until next year. Preferably that someplace safe earns a decent interest rate, and is someplace you don’t look often, like your normal bank account.

An ING savings account is an ideal place to put that money. I don’t have any affiliation with ING, I just happen to use their savings and checking accounts and I have been very happy with their products and service so far. If you need help getting started with ING, I previously wrote about using ING sub-accounts.

Once you have your account opened and named ‘Christmas Account’ (for good measure, this isn’t really necessary), we can get started with the savings. You will need to figure out how much you spent this year on gifts. Make sure you factor in everything you spent, including wrapping materials, bags, and Christmas cards. Don’t forget about any gifts you bought for coworkers or other people who may slip out of your spending memory. We want to make sure we have an accurate number for next year.

Now divide that number by 24, and you will have the amount of money you need to save every paycheck for next year’s gift giving. This assumes you get paid twice a month. If you were paid every other week you would divide by 26.

Here’s an example. If you spent $500 this year on gifts, you would divide $500 by 24, which gives you about $21 a paycheck. Not too bad, right? And over the course of a year, you might earn a little bit of interest on the side, instead of paying interest on a credit card.

Every time you get paid, put the necessary amount of money into that account first thing. Don’t touch it for anything. Better yet, set up an automatic savings plan that will pull that money out of your account automatically so you don’t have to worry about it. Think of that payment as a bill that you need to pay. When December rolls around and you have enough money to buy everyone gifts without resorting to the credit card, you’ll be glad you did.

One More Idea

If you got stuff this year that was nice, but maybe isn’t stuff you want to keep, consider re-gifting it next year. Get a sticky note out, write down who gave you the gift in question, and put it away until next year.

When the time comes, pull it out, look at the sticky so you don’t give the gift back to the same person, and give it to someone you think will enjoy the gift. You’ve saved yourself from having more things around that you don’t need, you saved a small space in a landfill, and you are saving yourself some money.

Last week I made a very non-frugal purchase. In case you didn’t guess, I bought the wonderful camera pictured here, the Canon Digital Rebel XSi. I have been wanting to buy a digital SLR for well over a year now, and have waited due to our debt situation. But now all of our debt is paid down except for a small student loan and a 0% credit card. I get paid every two weeks, which means I get paid three times in October. So instead of doing something responsible like pay off more debt or build up our emergency fund, I bought a camera.

My wife and I have a trip down to Big Sur coming up in a few weeks, which is why I decided to buy it a little earlier than I should have. This is the first time in a few years that I can take advantage of the 30 day grace period on one of my credit cards since it’s now at a $0 balance (well it was for a few days anyways).

Was it the smartest choice? Probably not. But with the amount of hiking we do, and with the holidays coming up I should be able to get a lot of enjoyment using it. And hopefully I can get some better pictures coming through on this blog. And honestly, I’m pretty darn excited to get it. The only thing I slightly bothers me about making the purchase is that I am now lusting after a few high-priced lenses.

So there it is. I will be a slave to money and to my job for a little while longer. But at least I will be taking some rad pictures while waiting for that time to come.

This weekend my wife and I finally made it out to our local farmer’s market. It was fun to walk around and check out the stands, although there wasn’t much to see. A few observations I made.

First, the prices were not as cheap as I thought they would be, and in some cases the prices were higher than at the local Whole Foods. I brought along a small notebook to record the prices we paid for everything. I am going to compare what’s cheap and what’s not so we can focus on buying the cheaper stuff there.

Second, the quality of the fruits and vegetables was very high. This is probably due to the fact that everything was grown locally, so it was fresh and in season. The quality of the food partly makes up for the prices paid, although if something is in season it is likely to be cheap at the grocery store as well.

Last, and something that will make it worth going back every week, was coupons for Whole Foods. Someone was handing out $5 off $25 and gave us two. This is 20% off a $50 purchase, not too shabby. Coupled with finding things on sale, we managed to get a lot of food for a pretty good price.

Overall it was a fun trip for the morning, and definitely something we will try to do every weekend going forward.

So it turns out DRM (Digital Rights Management) is just as bad as everyone predicted. Ars technica has an article up about the recent closure of the Yahoo music store, which allows customers to download music legally, but with restrictions on the number of computers that are authorized to play the music. (I realize I pretty much copied their title, but it summed up the situation so well)

Take from it what you will about finding music and other media on torrent sites, but you should realize that anytime you have to pay for something that has restrictions like DRM attached you are getting a bad deal. Media companies want people to pay for their music, but every time a company pulls something like this it can only increase the number of people who wonder why they’re paying for something they can’t keep using.

The alternatives for music lovers include iTunes, which has some DRM-free selections, and Amazon’s download service. Another alternative is to buy the actual CD and rip it to your computer, something I covered previously.

If you are interested in attempting to use BitTorrent, Lifehacker has a good guide for getting you started. If you are into video games, I highly recommend checking out OC Remix. They have a ton of music that you can download legally and for free using their tracker page. Make sure you have a lot of hard drive space, as there are over a thousand songs that will take up a few Gigabyes of memory.

So there it is. Stay away from DRM. Happy downloading!

I wanted to point out a slightly ridiculous article I read today courtesy of Smart Money. Apparently they think it’s a good idea to go ahead and buy a new high-definition television now instead of waiting.

I am by no means one to talk about not buying new toys and gadgets. On the contrary I own quite a few cool gadgets (which is probably part of the reason I’m in so much debt). If you are in the market to buy a new TV and if you have the money to do it, then do it.

Stop rationalizing about spending money! If you have some extra money, no debt, and are saving for the future I see absolutely no reason why you shouldn’t spend money to make your time now a little more enjoyable. I mean why make money if you can’t spend it, right?

Here is my thoughts on each of the reasons why it’s ‘best’ to buy a high-def TV now, and why it might be a good idea to wait:

1. Prices may go up.

Yeah, right. I can’t recall ever seeing the price of consumer electronics go up. Every year processing power gets cheaper and cheaper thanks to Moore’s law. And as company’s try to push out the next best thing to get your buck the price of the current generation is almost always guaranteed to go down.

2. Bigger Selection.

Sorry, can’t say I really care about this. There will always be a few top brands selling the top products. Nothing else matters. If you are going to drop $2,000 on a television you better get the best, not some cheap, crappy off-brand just to say you have a high-def. There is more to a good screen than resolution.

3. No new technology worth holding out for.

This is slightly true, although I would argue that 1080p sets are still rare versus their 720p counterparts. As time goes on they will become more common and cheaper.

If you have plans to upgrade your DVD player to Blu-ray it’s probably worth holding out for the extra resolution if you can’t afford a 1080p set now. Blu-ray players, the Playstation 3, and the XBOX 360 all support 1080p. And if you plan on getting a media center PC or an Apple TV you will want the highest resolution available.

4. Sales on last-year’s models.

Wow! Really! Guess what? The same thing will happen next year (see #1) And then year after that (see #1). So if you can’t afford the television you really want now, save up for the one you want and buy it later. It’s not going anywhere, and more than likely something better will come along at the same price.

I really can’t believe a magazine called ‘Smart Money’ would put out crap like this. I wonder if there’s any connection between this article and the stimulus checks being sent out.

If you want a TV, just buy it. Articles like this do a disservice to personal finance.

By far the most difficult part of getting out of debt is not incurring more debt. A while back I started an extra savings account to save for new gadgets, namely a new dSLR camera. But every time I save a decent amount of money in the account I decide that I would rather put that money onto my credit card to pay it down further. It has been great for paying off debt, but not so great for me actually getting a camera. So far I have been patient, but it’s getting tougher to resist the siren call of spending.

Flexo at Consumerism Commentary has a post about frugal lifestyles and whether we are missing out on some of the fun things in life. I completely agree with the analysis, and feel that it’s important to strike a balance between planning and saving for the future and enjoying your money now.

The followup article was also interesting, noting that actually having money provides a lot of freedom that “stuff” will never provide, particularly freedom and time. When you have enough assets to cover your living expenses, you no longer have to worry about a job and you are free to do whatever you want with your time.

How does this fit in with me wanting a new camera? Right now I still owe a lot of money on my credit card, and I feel that no matter what paying that off is priority #1. Although I would rather spend my money on fun stuff like gadgets and vacations, my debt is not going to go away on its own. My debt was incurred buying “fun stuff” when I couldn’t actually afford them, and now I am paying for it (with interest no less). But once that debt is paid off I shouldn’t feel so guilty about spending money, as long as the spending is kept within reason. On the bright side, I still have a lot of cool stuff sitting around to keep me occupied until then!

I just hope that I can keep up this mentality for another year while I continue to payoff debt and then build an emergency fund. Patience will be key.

Anyone care to comment on when they think it’s okay to spend money versus saving it for the future (especially if young ones are in the picture)? Cheapo, I know you’re out there somewhere! Let’s hear your thoughts!

I am currently working on a post regarding so-called “green” living, and I came across the name of photographer Chris Jordan. He has an interesting series entitled “Intolerable Beauty: Portraits of American Mass Consumption“

Quoted from his website regarding the series:

Exploring around our country’s shipping ports and industrial yards, where the accumulated detritus of our consumption is exposed to view like eroded layers in the Grand Canyon, I find evidence of a slow-motion apocalypse in progress. I am appalled by these scenes, and yet also drawn into them with awe and fascination. The immense scale of our consumption can appear desolate, macabre, oddly comical and ironic, and even darkly beautiful; for me its consistent feature is a staggering complexity.

The pervasiveness of our consumerism holds a seductive kind of mob mentality. Collectively we are committing a vast and unsustainable act of taking, but we each are anonymous and no one is in charge or accountable for the consequences. I fear that in this process we are doing irreparable harm to our planet and to our individual spirits.

As an American consumer myself, I am in no position to finger wag; but I do know that when we reflect on a difficult question in the absence of an answer, our attention can turn inward, and in that space may exist the possibility of some evolution of thought or action. So my hope is that these photographs can serve as portals to a kind of cultural self-inquiry. It may not be the most comfortable terrain, but I have heard it said that in risking self-awareness, at least we know that we are awake.

Some of the photos in the series, such as the one below, are simply amazing to look at. To think about the amount of waste that is produced every year is something most people, including myself, never think about.

Our society is built on consumption and throwaway goods. I am not going to point fingers, since I enjoying buying new gadgets as much as most people do. But I want everyone to consider cost versus value when making purchases. Instead of buying cheap clothing that will wear out quickly, spend the money on high quality items that will last years. Instead of buying cheap electronics with the intention to buy something better later on, save up for what you really want and buy that instead. That way you only pay once, which saves you money, you get the cool stuff that you really want, and you consume less materials in the end. Consider upgrade cycles and whether you really need to give in to buying the latest and greatest. Cell phones are a good example. Every time you take a free upgrade to another crappy cell phone (why do you think they’re free?) you are contributing to waste. And you lock yourself into another contract with your cellphone company.

I know I am slowly changing my views on what I buy and how I value those things. This is another example that buying less is good for both your wallet and the environment. I hope to follow up with more posts like this, but until then take a look at Chris Jordan’s website to see the rest of the photos. He has a few other really cool galleries to check out in addition to the one mentioned. Enjoy!