Tag Archives: saving money

Paradox of thrift: what’s a poor consumer to do?

Paradox: n. a statement that is seemingly contradictory or opposed to common sense and yet is perhaps true

Poor: adj. impoverished, beseiged

Paul Krugman (Nobel prize-winning economist, Princeton professer, and liberal NY Times pundit) spoke to a packed house in Portland the other night as the first in our annual World Affairs Speakers Series.

The theme for this year’s series was supposed to be “The World in 2020” but Krugman rightly assumed that his audience was much more concerned about what was happening in the world in 2009, so he talked about the economic crisis.

He was funny*. And pessimistic. His basic message was that it sucks out there, everywhere – and that we have a right to be worried because we’ve never been in quite this sort of pickle. And furthermore, it’s a global crisis.

We poor consumers who have already lost jobs, health insurance, and homes  aren’t stupid. We tighten our belts, hunker down and dust off grandma’s formerly quaint advice on cooking dry beans and saving string.

But thanks to the “paradox of thrift”, our sudden crave to save is making the economy spiral down faster. If we don’t buy stuff, companies don’t earn enough money to make stuff, so they lay off workers – or they drop their prices to woo buyers, causing their competitors to do so as well which also leads to stuck inventories and laid off workers.

Giving us a tax credit or tax cut may put a few bucks in our pockets, Krugman says, but we use that to pay down debt, which doesn’t help the economy. We should be spending

(Didn’t we just try that?? like for the past couple of decades?)

If he were to advise Obama he’d tell him to make the stimulus package big enough… like about $2 trillion (!) because that’s what’s needed to get people working again so we can return to our spending ways. Unfortunately a ginormous stimulus package is a hard political sell.

Meanwhile, all the money I’ve saved from eating dog kibble the past few weeks just flew into my dentist’s pocket. It appears that kibble chomping can crack a tooth.

* Sample Krugman joke: “Capitalism is a system of exploitation of man by man. Socialism is the reverse.”

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Pogue plugs in to tech savings…

Pogue: n. David Pogue, the tech columnist for the New York Times

Plug in: v. Connect

David Pogue is the puckish tech guy whose column has come to substitute for my attachment to PC Magazine.  I don’t always catch his columns, but whenever I do, they ignite my inner geek’s acquisitive nature.

His most recent column is about “saving” money on your tech devices.  Now I know that even if you buy something at 80% off, you have not saved money; you’ve spent 20% more than nothing. (OK I know my math is incorrect, but you get the idea…).

His first suggestions – I’ll give him credit for this – really are about saving money: by letting go of your cable TV contract (a good one for me, since I watch about an hour a month and can watch many shows and reruns on the computer); letting go of your land line (thinking about that as we speak…); and eliminating your cell phone contract and going on a monthly plan (can’t do that till my contract runs out in July).

If I stop paying Comcast for my land line ($22/mo) and my basic cable service ($13/mo) I’m $35 a month to the good = $420 a year.

$420…. to spend (!) on Pogue’s final suggestion: buying computer gear that’s been refurbished.

Ahhh. I am SO ready for a new laptop. My current one is four years old and sounds like it’s digesting an entire Thanksgiving dinner when I ask it to do certain things.  I’ve been eying the Dell XPS 1530 for a year, and refurbished I can get one for about $700.

DOWN GIRL!!!!   I have to snap myself out of geek lust.  What I really need to do is back up the laptop, reformat the drive and reload just the few programs I use on it.  Only if that doesn’t solve the problem, do I have the right to think about replacing it.

I HATE reloading software.  I just went through this a few months ago with my desktop.

Sigh.

Penny-pinching begins at home.

Penny-pinching: v. to spend little, to be frugal (holding pennies so tight they squeek).

“When you have only two pennies left in the world, buy a loaf of bread with one, and a lily with the other”. – Chinese Proverb

This is why my garden is so precious to me. Every day a I find new “lily.”

———

Penny-pinching to me is less about spending reductions and more about making do with what I already have. Like reading books that have been mouldering on the shelves for years instead of buying fresh ones. Like resuscitating some ancient scarves to garnish some very ordinary sweaters and tops.   Like figuring out how to alter the shoulders on a couple of ’80s jackets to update their fusty look.

And last night I made a great soup tonight based on some canned veggies whose pull dates passed during the Clinton administration.

If I were sealed into my home I could probably keep myself fed, dressed and amused for a long long time, just with the stuff I’ve got on shelves and in cupboards, boxes and closets.

Surely one way to down-size is by simple attrition – just the way they do in the corporate world. After you’ve bought your lily, here are some other penny-pinching ideas to try:

pennypinchingtips