May 21, 2008
Wow. I just saw this over on The Consumerist… As of June 15th, America Airlines will begin charging $15 for your first checked bag. Apparently United’s decision to charge $25 for your second checked bag (but give you the first one for free) just wasn’t enough, so American decided to go a bit further. They’re also going to increase fees for “oversized bags” and “reservation help.”
Lovely. I wonder how long it will be before others airlines follow suit? I also wonder how they’ll handle people who bought their tickets prior to this announcement. Will they try to get them to pony up for the extra fees?
[Source: AP News]
Earlier this year I had an opportunity to visit the World of Coca-Cola, which is essentially a shrine to all things Coke. Having been a child of the 1970s and 1980s, it was pretty interesting to walk back in time through the commercials of my childhood. Of course, the memorabilia housed there reached back far earlier than my childhood, to the very beginning of the Coke dynasty.
While we were there, I ran across the following advertisement from the 1950s, and was so amused that I had to snap a picture and share it with you:
Hang on… The “BIG” sixteen ounce size serves… Three? Wow. Things sure have changed.
Nowadays, 16 oz. is on the small side for an individual drink. Instead, convenience stores are filled with 24 oz. behemoths selling for $1.49 apiece. According to the old math, that should be enough to serve five. But according to the new math, 24 oz. is just right for one Coke-slurping sucker.
Of course, at the other end of the spectrum we have the every-shrinking half gallon of ice cream. I’m not sure if you’ve noticed, but over the past couple of years, “half gallon” ice cream containers have dropped from 2 quarts (an actual half gallon) to 1.75 quarts to (most recently) 1.5 quarts. All without a price decrease.
Why the changes? Simple. Profit. If Coke can convince you to buy (and drink) an ever-increasing “single serving” (at an ever-increasing price point), they can push more product out the door while padding their bottom line. And if ice cream makers can convince you to buy an ever-decreasing amount of ice cream at the same price point, they can likewise pad their bottom lines.
Gotta love marketing.
May 20, 2008
We moved into our current house not quite two years ago. While we love nearly everything about it, including our relatively isolated location. The big downside to all of this is that we get spotty cell phone service. This isn’t a huge deal, as we also have landline phone service, but it can be a pain when we need to make cell phone call.
In the past, we’ve always used our cell phones to make long distances calls for free, but it’s annoying to only be able to talk in certain parts of the house and to deal with periodic dropped calls. While we could always revert to using our landline, perhaps with a cheap calling card from Sam’s Club, I’m looking for a more elegant solution. [more]
I spent some time over the weekend getting caught up in Quicken. While updating our accounts, I discovered something interesting about the way in which Vanguard debits your bank account when processing automatic investments. Instead of making a single withdrawal and then partitioning it up into the various funds that you’re investing in, they make one withdrawal per mutual fund.
In our case, this means that my monthly SEP-IRA contributions result in four debits to our HSBC Direct savings account. This is because the money ultimately goes into four different mutual funds even though they’re all held within the same SEP-IRA.
This probably isn’t a huge deal for most of you, but it’s something to keep in mind. After all, Federal Reserve Board Regulation D limits electronic withdrawals from savings accounts to six per month. Violations of this policy can result in a warning, a service fee, or even being prevented from accessing your funds until the next month.
May 19, 2008
Jim over at the Journal of Healthy Living (yes, that Jim) tagged me for a meme about six word memoirs. While I don’t usually do memes, I’ll make an exception in this case.
Without further ado, here’s my six word memoir:
“Family comes first, everything else second.”
And since I’m an overachiever, I’m going to start by tagging myself over at Credit Addict. (Click here to seem my second six word memoir.)
I’m also tagging Clever Dude, David at My Two Dollars, NCN, and PaidTwice.
The rules for this meme are:
» Write your own six word memoir.
» Post it on your blog and include a visual illustration if you wish.
» Link to the person who tagged you in your post.
» Tag at least five more blogs.
» Leave a comment on the tagged blogs with an invitation to play.
Over the weekend, I ran across an article that talked about the social acceptability of frugality. The primary example used in the article was that of a clothesline and what impact it might have on your neighbors. The underlying concern was that frugal moves such as hanging out your clothes might negatively impact property values and/or your social standing in the neighborhood. [more]
May 17, 2008
May 16, 2008
I just ran across an interesting article that talks about a lawsuit against Wal-Mart over their 401(k) investment selections. The suit claims that Wal-Mart harmed their employees by offering high-cost retail funds instead of the cheaper institutional funds for which they surely qualify, and by only offering actively-managed (and thus costly) fund options rather than choosing a company such as Vanguard that offers low-cost index funds. Overall, the suit claims that if the Wal-Mart 401(k) had been invested in Vanguard funds, it would have been worth an additional $140 million over the six year period under consideration.
This is an interesting case. While I’m not a big fan of lawsuits of this nature, the lack of affordable investment options in many 401(k) plans is a real issue that needs to be dealt with.
After a couple years of stability, we recently decided to tweak our allowance system (again).
For background, our original allowance system involved paying the kids $0.50/week for each year of age, broken down as follows:
30% spending money
30% short term savings (e.g., a video game, pricey toy, etc.)
30% long term savings (e.g., a car, college, retirement, or some such)
10% to the charity of their choice
So, for example, our ten year old would get $5/week with $1.50 into spending, $1.50 into short term savings, $1.50 into long term savings, and $0.50 to charity. After giving this system a bit of time to work, we decided to tweak our allowance system a bit to provide more flexibility (or more lessons about money management). Here’s what we did… [more]
May 15, 2008
Just over a week ago, USA Today ran an interesting piece on where consumers plan on spending their economic stimulus tax rebate. They also compared it to how people actually spent their rebates back in 2001.
For starters, this is how people say they’ll be spending their current rebate:
23.3% - Keep in savings account
21.4% - Apply to credit card bills
6.5% - Car payment
5.1% - Home repair
5.1% - Gas/energy bills
4.2% - Buy things for the house
3.7% - Small daily expenses
2.3% - Buy clothes for kids
1.9% - Buy food/groceries
1.4% - Buy clothes for self/spouse
1.4% - Buy consumer electronics
1.4% - Apply to mortgage payment
From an economic standpoint, that doesn’t sound very stimulating.
But wait… What can history teach us?
Here’s a look at how people actually spent their rebates that last time around. The percentages were expressed in non-standard way, so I’ve just ranked them from greatest to smallest:
1. Movies
2. Computers
3. Drugs/sundries
4. Books
5. Women’s clothing
6. Apparel (presumably not including women’s clothing)
7. Electronics (presumably not including computers)
8. Kitchen appliances
9. Restaurant meals
10. Toys
Hmmm… That’s more like it.
Rampant consumerism, just like the bigwigs in Washington envisioned it.
