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What you need to know for 09/24/2017

$aving some green

$aving some green

Stephen J. Schmidt says people can save money. “It’s not impossible, but it’s not easy,” said Schmid
$aving some green
One way that Shawn Dell saves money is to borrow DVD movies at the Schenectady County Library in Schenectady.
Photographer: Marc Schultz

Stephen J. Schmidt says people can save money.

“It’s not impossible, but it’s not easy,” said Schmidt, chairman of the economics department at Union College.

Not as easy as it used to be. Americans are spending dozens of dollars at gas stations, dozens more at supermarkets. Cash saved one week can be handed over the next, especially with gasoline around $4.20 a gallon and rising.

Schmidt and others know ways to conserve and stretch funds. In some cases, saving money means changing habits. It means brewing your own coffee, clipping manufacturers coupons from the Sunday newspapers and hanging laundry outside to dry.

Supermarket cashiers are getting more and more of the consumer’s money. For some items, like produce, higher gas prices mean higher transport prices, and the shopper has to pay his share. A bag of potatoes that cost $2.99 over the winter is $4.99 during the summer.

At the supermarket, Schmidt said, generic brands can replace more expensive national brand products. Consumption of other products can be reduced.

“If you are in the habit of eating a lot of meat, you will find there are other foods you can eat that are cheaper,” Schmidt said, “but it involves making a substitution in your diet, which you might or might not want to do.”

Healthier, cheaper

Eating less meat can be beneficial to both wallet and well-being. “You can simultaneously eat healthier and cheaper, if that’s what you choose to do,” Schmidt said.

In Alex A. Lluch’s recent book “Personal Finance Made Easy,” he said shoppers should avoid impulse purchases while shopping for food.

“The key is good planning,” he said. “If you plan what you’re going to cook over the next few days and then make a list of the items you need to buy, you’re less likely to buy unnecessary items that will either spoil before you can use them or sit in the pantry.”

Lluch also said some sales are not such great bargains.

“Supermarkets frequently offer 2-for-1 sales, or offer a reduced price on a second, identical item,” he said. “Many grocery stores charge $4 for a gallon of milk, but charge $6 for two gallons. But those savings disappear if the second gallon spoils before you can use it.”

When purchasing canned and dry goods, the opposite is true.

“When items you regularly use come on sale,” Lluch said, “there’s nothing wrong with stocking up. Items like dried pasta will last for months, if they’re properly stored, and canned soups and vegetables will keep for years.”

Winning price war

Some ideas are almost common sense:

- Borrow books, compact discs and movie DVDs from the library instead of buying them.

- Use coupons. Clipping $1 coupons from the newspaper for products you use is like clipping a $1 bill.

- Take your lunch to work instead of eating out or ordering in.

- Observe speed limits, which will save gasoline.

- Shop at outlet stores.

- Drink ice water with lemon or other citrus flavors to avoid pricey — and calorie-heavy — soda.

- Go to movie matinee instead of an evening show and save $2 or $3.

- Grow your own vegetables.

Christopher Lowell has other ideas. The interior decorator, television host and author has made saving money a fourth career.

He suggests people use zero-interest credit cards that require balances paid in full at the end of each month.

“I try to use it for everything while hardly ever using my personal checkbook,” he said.

“The credit card gives me a detailed itemized statement that helps me track my spending, prevents me from overspending and creates an accurate financial history for taxes.”

National consumer finance expert Ethan Ewing prefers cash for his transactions.

“Start handing over old-fashioned bills for your routine expenditures,” said Ewing, of San Mateo, Calif.

“People who do not use debit or credit cards are less likely to throw that extra item into the shopping cart. You’ll be pleasantly surprised at the end of the month.”

Lowell said people can also spend less at restaurants.

“Learn to cook and take pleasure in it like a hobby,” he said. “Today, there’s a huge gourmet culture in this country enjoyed by both sexes. When you learn to cook and freeze without buying pre-packaged food, you can save a lot of money while gaining confidence to entertain at home. This drastically cuts down on restaurant bills and the gas consumed to get there. It will also boost your social life in the process.”

Schmidt said some lessons can be learned from the past. During World War II, he said, people were coping with the same problems that exist in 2008 — just in a different form.

“Gas was being rationed and food was being rationed,” he said. “Those things were in short supply not because they were expensive but because they were being controlled.

“But they came down to the same basic problem. How do you manage to find a way to live your life with less gasoline? How do you find a way to live your life with less of the foods you’re used to? What do you substitute? In World War II, you grew the victory garden; you can do that now.”

Ewing said people can save a fistful of dollars by bypassing coffee cafes. For a few dollars more, they can brew their own cups.

“If you hit Starbucks twice a week, break the habit for a month and save $32,” Ewing said. “To make the habit permanent, spend $10 on a good insulated container to bring your own hot coffee, tea or chai to work or school. Short-term savings are $50 if you spring for the container. Long-term savings — if you bank the money saved and thank compound interest — more than $10,000 in 20 years at just a 3 percent interest rate.

Ewing also says people can take advantage of summer breezes and sunlight — both free of charge — to dry their clothing.

“A new electric dryer can use 4,500 watts per hour, older ones might use even more,” Ewing said. “This is likely the highest energy use of any appliance besides your furnace. Running the dryer for an hour might cost nearly 30 cents. The average family does 8 loads of wash a week. If each load takes one hour in the dryer, hanging all clothes to dry will knock nearly $10 per month off your utility bill.”

Lluch goes after other appliances. He said water heaters and refrigerators can suck up both power and money.

“Your water heater is one of the most energy-hungry appliances around,” Lluch said. “In general, there’s no need to heat water to the point that it’s scalding hot when it comes out of the tap. Heating water to that point is both wasteful and dangerous.”

Here to stay

Schmidt says people should get used to finding ways to save. Gasoline prices, he says, will not be returning to $2 per gallon prices.

“If there’s good news from the Middle East, they might go down a little bit,” he said.

“The problem is not so much the war in the Middle East, it’s the growth in China and India,” he added. “People in those countries, because their economies have been booming for 10 or 20 years, are getting to the point where they can afford a lifestyle that’s more like the Western lifestyle that we’ve had for a long time. It’s great for them, and it’s not really fair of us to say, ‘No you have to live in poverty so we can have our lifestyle.’ But as they grow wealthier and as they adopt a more Western lifestyle, they use a lot more gasoline than they used to.”

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