MAKING BREAD BUDGETEER

Tips and tricks to help you trim the excess—and plan for success

 By Gail Harlow

 ATM DOESN’T MEAN  ‘AT THEIR MERCY’! 

     Doesn’t it always seem like there’s an ATM within reach whenever you’re thinking about spending money? There’s no doubt that the ubiquitous nature of these money machines has made it harder for us to stick to our budgets. But ATM doesn’t stand for ‘At Their Mercy’!

    When the automated teller machine most convenient for me to use during the workweek upped it’s transaction fee from $1.50 to $1.75 (I’ve heard that some charge as much as $2.50), I said, “That’s it!” Now I make it my policy to walk the extra block to one that charges no fee. I know someone else who always asks for cash back when she uses her debit card at the supermarket so that she doesn’t find herself at the mercy of an exorbitant fee-charging ATM later in the week.     

     And, remember, just because you have money in your pocketbook, that doesn’t mean you have to spend it!

 HOW TO JUMP START YOUR CREDIT

    The father of a friend counseled her cousin, who was fresh out of college and complaining about how difficult it was to get a credit rating: “Go to a bank and borrow $500 dollars. Then pay it back immediately.” Presto! You have instant credit-worthiness. Pay it back before the interest comes due, and it costs you nothing.

ADVICE FROM A CATALOGUE JUNKIE

     In one recent week, I received 20 catalogues trying to sell me, among other things,  “a course of reckless abandon” (golf vacations—and I don’t even play), garden furniture, luxury bedding, high-end high-tech toys, jewelry, videotapes, lampshades, pool equipment, imported knick knacks, and of course, clothes, clothes and more clothes.

     I get them because I am a catalogue junkie. I have spent a small fortune on impulse purchases, reaching for the phone while browsing through these consumerist bibles—print versions of the Garden of Eden, with me always succumbing to the temptations that lay within their pages. One evening, tired and frazzled from the day’s pressures, as I faced yet another pile of catalogues that I felt I simply had to go through (in the mail with them were the credit card bills that ‘catalogued’ my previous shopping activity), I had an “a ha” moment. I realized they are NOT mandatory reading.

     Now I throw them away as soon as I get them. This isn’t easy—especially if, like me, you are addicted to that feeling of vicarious wealth that you get while paging through them. But it does get easier with time. And you’ll save a bundle—and feel truly rich—as a result.

 VERRRY INTERESTING

     Look for a bank that offers an interest-bearing checking account that doesn’t require a minimum daily balance. Some Internet banks and smaller community banks do this.

 EXTRA! EXTRA!

     Check your phone bill for unnecessary add-on expenses. For instance, are you being billed for an “Optional Inside Wire Maintenance Plan”? That $3.45 per month may not seem like a lot, but wouldn’t you rather have it earning interest in your bank account than in Ma Bell’s—particularly when nine times out of 10 the problem is with an outside line?

 DRESS FOR SUCCESS

    Office-dress-code permitting (and these days, almost anything goes almost anywhere), switching from a wardrobe of designer suits to casual wear could easily save you a cool couple of thousand dollars a year—so skip Christian Dior and buy Banana Republic or Gap, instead.

 IT’S MUTUAL, I’M SURE . . .

     Look for “penny mutual funds” on the Internet. Your low contributions—as little as $25 a month—will be invested by experienced money managers, and, more importantly, you’ll get into the habit of investing in your future. For more information, check out “The Thrifty Investor: Penny-Wise Strategies for Investors on a Budget,” by Craig Israelsen (September 2000).

 MIND OVER MATTER

     If four-wheeled, turbo-charged, chrome status symbols are your thing but you can’t afford the car of your dreams, the next time you climb behind the wheel of your pedestrian Ford Taurus or Nissan Sentra, pretend it’s a BMW, Mercedes or Jaguar… Go ahead; let your imagination drive away with you.  Trust me, it works! You’ll feel like a million bucks—and think what you’ll save in car insurance and tune-ups!

 ZEN WISDOM

     Nature is free . . . you don’t have to own a 20-acre estate, or even a postage-stamp-sized lawn, to enjoy it. You don’t even have to live in the country. Just take a walk in the nearest park—and don’t forget to stop and smell the roses. For a more hands-on approach, volunteer at a wildlife rescue, or plant flowers in front of the town library.

SAFE SAVINGS HAVENS

           According to the Federal Deposit Insurance Corporation (FDIC), Americans keep $355 billion more in savings accounts than they do in higher yielding Certificates of Deposit—and those savers are losing as much as 2 to 4 percent in interest in their savings.

     One reason may be that many consumers overestimate the returns they are earning on their savings and underestimate the range of choices available. For example, according to research conducted by ING DIRECT, consumers in the metropolitan New York area estimated their rate on savings accounts of $1000 to be in the range of 4.5%, when the average is actually closer to 2.17%. Consumers in the Philadelphia area estimated their rate on savings account of $1000 to be in the range of 3.0%, when the average is actually 2.03%.

     Moral: Find out how much your money is earning. Take the time to shop around for the best place to stash your spare cash.

WIRELESS LESSONS

     Looking for ways to cut your phone bills?  Try coordinating the rate plans that you have with your land line and wireless carriers so that there’s always a time of day when calls are discounted or free. Then, think before you dial. Remember which phone to use when.

WORDS WORTH MONEY

     Amazon.com’s used-book offerings are a boon two ways: why pay full price when you can often order a pre-owned copy of just the book you’re looking for from the same source online?  While you’re at it, why not go through the books you’ve been collecting over the years and post the ones you don’t want to keep online for others to buy? 

    Be sure to check whether you have any hidden treasures among them, though. Look for first editions and debut novels by now-famous writers. They could be worth a bundle. The asking price for a first-edition hardcover copy of John Grisham’s first novel, “A Time to Kill,” for instance, is  $160. If you’re in doubt about the value of any of your books, look them up on www.abebooks.com  —a useful resource for checking prices and finding rare books online.

SHOP TALK FOR SHOPAHOLICS

     The next time you’re confronted with an object of overwhelming desire, before you reach for your wallet, take a deep breath and ask yourself: “Will I still enjoy this when the credit card bill comes?”

    Unless you pay off your credit-card balances immediately, that $100 bucks is likely to stick to your credit card’s interest-collecting bottom line like the effects of an ice cream binge stick to your hips. (If you still can’t resist making that purchase, read “Secrets of a (Married) Shopper” in our Funny Business Department. You’ll find some “creative accounting tips” there.

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Gail Harlow is the Founding Editor of MAKING BREAD magazine.    

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