Colleges Learn to be Frugal

The New York Times recently published an interesting article: For Colleges, Small Cuts Add up to Big Savings. In one college, students in dorms competed to save electricity -- getting 25% of the savings for a party -- and in another, the university hired students to do groundskeeping in return for minimum wage and a $1,000 scholarship. What is surprising is that colleges haven't done these kinds of things before (I know I would have mowed grass for a $1,000 scholarship!). Another aspect of this that the article did not discuss is the impact on the students; today's college students, or Millennials, are frequently displayed as feeling overly entitled and spoiled. What a wonderful chance to show students how to be frugal! If only the college could save money by providing financial education to its students.

College life may look different in the not-so-distant future: Students squinting out dirtier windows, faculty offices with full wastebaskets and no phones, sporting events in which opponents never meet, and paper course catalogs existing only as artifacts of the wasteful old days.

* * *
After years of boom times that led to competition among colleges to provide more luxurious dorm rooms and student centers, some perks of campus life have gone by the wayside. Dickinson, for example, is saving $150,000 by cutting back on free laundry service for students and an additional $75,000 by eliminating free ESPN and HBO in student rooms.

This is unbelievable -- almost a quarter of a million dollars every year for laundry services, ESPN and HBO? That is quite a cable bill. This may be one of those hardships that are really better for the students than the luxury accommodations. After all, in the real world, not only is there no free lunch -- there's no free laundry, either.

Ten things to save money on...or not!

Kiplinger has a great quiz on some common beliefs about money-saving items. I got an 80% -- how about you?

Where'd TInT Go?

My apologies to my readership that I suddenly stopped posting here, but what happened is that graduate school started up again and I am swamped with homework. I do plan to report on my spending for the summer (not good!) and I also need to vent about soccer uniforms, karate instructors and the cost of veterinary care. Regardless, I plan to be back, writing again about personal finance very soon, and I also plan to do a painful assessment of how badly we did over the summer.

How was your summer? Did you save or spend?

Principles, Ideals and Relationships: Why PF and Hollywood don't mix (to recap)

I love to read J.D.'s fantastic blog, Get Rich Slowly. Not only does he have fantastic, well-written articles that come so fast it's almost too much to keep up, but he has a great readership, and looking through comments often gives me a lot of inspiration for my own, much less read blog.

After responding to a comment on his blog, I came to mine to write about it and realized that, yet again, I've left my blog for too long. I also realized that my last post might be confusing; I argue that giving an expensive gift is better than giving an IRA. I just want to say that if, hypothetically, I was a person who had $7500 to give, I would want to give someone a gift they would want, not a gift to "teach them a lesson." Let me expand on that:

First off, I've spent far too much of my life with people who give me things to teach me a lesson, whether it is political (my in-laws gave me a subscription to the ultra-conservative World magazine for Christmas one year) or religious (I have many, many Bibles from my mother). I get the principle thing, but I'd really just like, oh, I don't know, a candle? Some flowers? Or even an IRA, because that's what I'm into, and I would really appreciate it. My point is: give the gift the other person would want.

Secondly, I wanted to emphasize that the ultra-rich world of Sex and the City is not the real world. Let's not take our personal finance ideas from Hollywood! This is a pretend world that doesn't exist for most people, and we should always keep that in mind. Hollywood is not our teacher, not for relationships (who really has sex with new strangers every week?), not for ideals (like letting the guy buy the apartment), and certainly not for finance (in make-believe, you can make as much or as little money as you choose). Even the writers of the show knew they were stretching.

Last, I think it is important to find balance in life. Sometimes gifts are required in order to keep your social capital, and that social capital can be more valuable than dollars.

I am constantly in the search for balance in life and in finances, and while I am still learning, here's one thing I know: Hollywood ain't got it. And now I've done enough posting about Hollywood (there's too much in this world about Hollywood as it is) so let's get on with some posts about real finances, because that's what Tired in Tucson is about!

Sex and The City -- Fun, or bad Finance?

I went to see the new movie Sex and the City a couple weeks ago. I thought it was lighthearted and fun, just like the HBO version. It also tied up more loose ends and had a pretty decent storyline. I came home missing the East Coast and great times with my female friends.

I didn't really think about the show in personal finance terms -- I mean, that episode, where she can't buy her apartment because she spent $40K in shoes? That one did it for me. Ten years ago when I lived in Japan, I saw a lot of articles about women there who would run up $40,000, $50,000 and even $70,000 in credit card debt to buy labels, and I knew that wasn't for me. One woman even used the oven in her kitchen to store extra handbags and coats. Watching the HBO series Sex and the City after I returned home was always somewhat shocking, but it was fascinating too; I remember well Carrie saying she would go without food in order to buy her copy of Vogue magazine. Let's just say I'm a lot more food driven than that.

Nevertheless, I did think about the financial aspect of their lives. I have always thought about "how" it can be humanly possible for a newspaper columnist to make the kind of money Carrie needed to support her lifestyle (I saw a piece about the making of the series that said the writers put the $40,000 shoes episode in to show how an author could manage to buy that many shoes and still live). Of course, her apartment was rent-controlled, but I remember her maxing her credit cards on one show and thinking, gosh, what's the limit on those?

I think that Sex in the City is fun and interesting, in a voyeuristic, what-if-I-blew-money-on-fashion sort of way. As far as personal finances go, Carrie and her group aren't pillars of frugality -- nor does Hollywood paint a fair picture. Ever.

Nonetheless, some articles about finances have erupted from the pure materialism shown in the movie. The money and business section of US News had a very nice piece about making major financial decisions as a single woman -- Sex and the City meets Personal Finance, which I thought was timely, and a way to use the movie as a segue into more sophisticated information about finances. I wish I had thought more about my finances as a young, single woman (who doesn't?)

Then there are the negative reactions. That Rude Girl calls the movie a two-hour-long advertisement, but then goes on to admit she recognized every name brand there -- including the sheets! Wow. I am soooo not aware of labels, at least not to that degree. I had to look up what a Manolo Blahnik was after I first watched the series (I watched them on DVD, as I've never been one to pay for HBO).

BostonGal goes on to say that Sex and the City just isn't her kind of fairytale, and says a SEP IRA contribution would have been a better gift than the Louis Vuitton bag Carrie gave her assistant. I love BostonGals blog, and I read it nearly every day, but the more I thought about this comment, the more it fell into my "why young people ignore personal finance" bag. To give someone a gift like that is immensely practical, but for a woman in her twenties who loves fashion it would be like wrapping up a pair of practical wool socks as a gift -- nice, but not endearing. Nor would the gift of an IRA contribution teach the most essential skill -- contributing to the IRA oneself.

It's easy to look back and say, I shouldn't have done it this way. I spent $12,000 I didn't have in order to go abroad in college when I was 21 years old. Do I regret this? Yes, in a "I wish I didn't have to pay that money back" kind of way. But that trip sent ripples through my future that I simply can't regret -- it sent me to Japan, where I met my husband, changed my career path, and changed my life. You can't put a price on that.

In the quest for financial liberty, it's easy to lose balance. Sometimes a grand gesture is worth the money. Sometimes you have to take a vacation, or visit a sick friend or spend the money to attend a special occasion. Sometimes you really need to buy something you don't need, if you get my drift. That's all a part of being balanced. If we don't occasionally use our money for things that bring us pleasure, such as a gift or a thing of beauty, then why have it? It's easy to go too far to one side or the other; Scrooge was, after all, a bad guy for a good reason. I'm becoming more and more interested in the social and behavioral aspects of good money sense.

So much guilt, and love, and need is wrapped up in our money and what we do with it. A friend of mine whom I consider the paragon of austerity told me she owned a $750 Louis Vuitton bag that her British mother-in-law bought for her on Bond Street. Maybe this gesture was one of those grand gestures -- after all, my friend and her daughter nearly died working with refugees in dire conditions overseas -- and maybe it was her mother-in-law's way of saying, "I'm glad you're alive." Whatever the intent, my friend treasures her bag, and I don't think she wishes she'd gotten an IRA instead.

Who knows? Maybe in 20 years, she'll wish she had gotten that IRA after all. Having already escaped death once at age 30, however, I can understand my friend, and I can understand young women all over who focus on the now rather than the later. Life is short, and precious, and sometimes it seems best to enjoy the bag in hand.

"Yesterday is history. Tomorrow is a mystery. And today? Today is a gift. That's why we call it the present." ~Babatunde Olatunji

~And~

"Let the credit card companies market as they will, the only thing that's priceless is Now." ~Caleb Baylor Hive, 2005


Photos by Tolate2sk8 and Princess Poochie, respectively. Photos used with permission. For shoes, shoes, and more shoes, Princess Poochie's website can be found here.

Credit Card Companies -- They always, always win

We've been launched into summer (it's over 100 degrees in Tucson already) and our credit card debt is down to $6900. It is not the $5000 I had hoped for, but it is considerably less than the $24,000 I started at last summer. $17,100 less, to be exact.

Still, the interest we're paying on that $6900 in credit card debt is $50 a month. That's $15 for a cash withdrawal (huh? I don't even remember a cash withdrawal, but it must have been an overdraft from months and months ago) and $35 for regular interest. That's $50 we could spend on two nice items of clothing a month...or a gym membership...or we could put it aside in an IRA and have an extra $600 a year towards retirement. Oh, how the credit cards siphon money from people! From ME.

Here's an interesting article about credit card rewards:

About 85 percent of U.S. households participate in at least one rewards program, according to a study released Monday by Consumer Reports.

And though rewards do spur consumers to spend more, the study found that confusing rules and restrictions make most reward cards more trouble than they're worth.

...

And while cash back, gas and grocery rewards credit cards can offer some relief for costly essential items, they often carry higher annual percentage rates than traditional credit cards, Consumer Reports said. Looking at some of the more generous credit card rewards programs, the study found that rates varied from 9.74% to as much as 19.99%.

We've gotten caught in the "points" game before, and have learned a hard lesson from it. I racked up nearly $7000 on my American Express card trying to get cash back; the cash back I got from last year (one single purchase was over $5500 -- I just read on my own blog that I used the card to get cash back from it) equaled $118.00. $118.00? Yes, that means I put over $10,000 on my card in order to get 1% cash back, paying who knows how much in interest (my monthly interest on credit card debt used to be almost $200). Credit card companies charge daily compounding interest, but that 1% cash back is a one-time annual bonus. It's like a $30 Christmas ham for the employee who makes $20,000 a year; it's a pat on the back, not real money or real help.

Here's a tip for beating the credit card companies -- don't use your card at all. Keep it for emergencies, and when you need to use it, pay it off immediately. They've always got an ace up their sleeve, and you just can't beat them at their own game.

The only way to truly get credit card rewards is by keeping your balance at zero.

How to keep saving money when life gets in the way

I've been reading some personal finance books lately (I'll review some of them here later on). There is no shortage of books on how to save, how to budget, invest, spend your money wisely, etc. What the books seem to lack, as a whole, is advice on difficult personal decisions.

This spring my marriage started to come apart. I was taken completely by surprise; my husband asked me for a divorce, and it was like a bolt out of the blue. I haven't written about it on this blog, because this blog isn't really to chronicle my personal troubles outside of financial decisions.

The problem is, divorce is a financial decision.

We talked, we went to counseling, but what really seemed to get my husband's attention was current divorce and personal property laws. I know my marriage isn't based on money, but the knowledge that we would have to sell our house in a down market, that up to 50% of his salary could go to child support, and that a divorce would bankrupt both of us was very sobering. I faced the fact that I would have to take a full-time job again and put my youngest child in daycare, and I started applying for jobs around the country.

More importantly, I made plans for my husband and I to separate. I would have left a few months ago, but I've been babysitting for a graduate student here and my leaving could have caused her to postpone graduating and getting her Ph.D. I couldn't let my emotional state cause her and her family financial hardship, so, I gritted my teeth and decided to stay until June.

Time eases all things. My husband and I have worked to solve some of our problems, and he no longer wants to get a divorce. Some things have remained, however, and one is my plan to leave in June. I no longer plan to leave for good, but I do plan to spend at least a month away. Part of that time I will stay with my parents, the other part with friends. It is an essential break that I think is necessary for me to continue my marriage. It is also a chance for me to network as I prepare to finish my master's degree next year.

All of this has been very hard to deal with, even as we have continued to pay off our debt.

I am incredibly proud of myself and my spouse, that we've stuck to our financial choices even as our personal lives have gotten more and more difficult. We had initially agreed to postpone travel for this year in order to save money, but which is better? Postpone travel and have an expensive divorce? Or pay the credit cards off a little more slowly while doing what is necessary to stay together?

Clearly, we've chosen the latter.

In addition to my travels north, my husband decided to ask his work to send him to Boston for a conference while we were gone. I know he is unhappy that I am leaving with the children for a month, so although I was initially irritated by his request to spend a week in Boston (after all, I'll be sleeping on the floor in my parents' house, not visiting fabulous historical spots in the beautiful Back Bay of Boston) I'm glad he's going.

This is at the crux of why it is so hard to eliminate debt and save money; life quite simply gets in the way.

Sometimes spouses need distance, and I know that right now I need my family and childhood friends to help me get through this. That doesn't mean I can't try to offset the costs of our travels; I hope to spend as little as possible and have some left over for the omnipresent credit cards when I return. I also hope that this time apart will continue to help my relationship with my husband because, after all, my marriage should last longer than my credit card debt.

Anyway, here's a few things we're doing to cut the costs of traveling:

• Shorter trips. I'm only planning my trip in 300-mile legs or less. This means I can drive more slowly, getting the best gas mileage possible.
• Camping, rather than staying in hotels. I'm camping in two national parks (possibly more) on the way up. I plan to buy the $80 annual National Park Pass; this gets me into the parks for free (usually $25 per park) and gives me a 50% discount on park campgrounds.
  
• Hostels to keep us showered. I initially planned camp all four days, but that is difficult to do in low desert and urban areas. In searching for campgrounds, I stumbled across Bootsnall.com which featured a couple of hostels in Salt Lake City, Utah. Once I'm sure of my dates, I can book a private room there for $47.00/night plus tax. That is a room with a private bath and it includes breakfast -- hard to beat! It also comes after two nights of camping, and I'm sure we'll be ready for a real bed and a hot shower by then.
• Freeze-dried food. I know this isn't the norm, but we had a failed 3-day backcountry hike a few years ago, and still have a ton of freeze-dried meals to show for it, along with a tiny camp stove and many cylinders of fuel. I plan to take this, along with a cooler of food, to help offset the cost of food on my slow trip north.
• Craigslist. My husband, rather than staying in a business hotel in Boston, has contacted a local resident who rents out a room in his house by the week; the total is less than half the cost of a hotel. We aren't sure whether this will actually work out, but we're keeping our fingers crossed. It means that he can use the rest of the money alotted to him by his work for some nice dinners and maybe a little sightseeing when he isn't working, without any out-of-pocket costs.

So, even by taking the extra days, I will still pay less than $80 for lodging each way -- about what I would pay for a single night in a hotel. I do have that initial outlay for the park pass, but I'm chalking that up to education expenses, as it will be a chance for my 6-year-old to explore geology, botany, and other educational opportunities available at national parks.

The picture I posted at the beginning of this article is one I took myself in 2004, when I took my son (then two years old) on a month-long trip to Canada. I'm sorry to say that we stayed in hotels every night, and ate primarily at restaurants, and I spent upwards of $5,000 for that trip. I have $1800 saved for my trip right now, and I think I can make it on less than $1000, but even if I don't, I certainly have learned a thing or two about cutting costs these past four years.

As my trip progresses, I'll post what works and what doesn't. Hopefully I'll get another great shot of the Grand Canyon at sunset again, for one-fifth the cost.