"Living Better...For Less"
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In this issue:
Introduction
Christmas on the Cheap!
by Nancy Steinkoenig
Mutual Fund Expenses Explained
by Gary Foreman
Ask Bob: The Automotive Answer Guy?
by Bob DeP
Tips, Quips, Quotes & Questions
NEW ON THE WEBSITE:
Inexpensive Christmas Gifts, Memories and Decorations
http://www.stretcher.com/stories/971210a.htm
Eat Better, Spend Less - Tortilla Surprise
by Julie Davis
http://www.stretcher.com/stories/971210e.htm
Buy a Home with Electric Baseboard Heat?
http://www.stretcher.com/stories/971210b.htm
Unscrupulous Auto Repairs
Reader's Solutions
http://www.stretcher.com/stories/971210c.htm
Laundry Detergent Face Off
Do Cheap Brands Clean As Well?
http://www.stretcher.com/stories/971210d.htm
UPCOMING CHATS
http://www.talkcity.com
in the Finance Center at 8:30 to 9:30 U.S. Eastern Time
12/17 - Calculating Your Expenses
12/24 - After Christmas Sales
Hello to all my Frugal Friends!
No space for an intro this week. Just a quick reminder to slow down enough to enjoy the holidays. Remember the world won't come to an end if every last task isn't completed. We all know that every last gift, decoration and meal can't be perfect. Don't let the 'must do list' kill your joy!
Oh, and don't forget to save enough time to forward a copy of the newsletter to a frugal friend!
All the Best!
Gary
Let me talk to you about printer cartridges, ok? My friend Brian sells some of the best ink cartridge refills you'll find anywhere and his prices are *great*. For a 16 oz / 450ML pint bottle of black ink you'll only pay $21.95 and for color (same size) it's only $23.95. You can even get a special deal on a pint each of black and three colors for only $89. When you call or write, mention Dollar Stretcher to save $5 off the shipping and handling. Visit the site at http://www.oddparts.com/ink/inkjet3.htm or get details by mailto:automate@bellsouth.net 1-888-728-2465 ACSI Bulk Inks
It always helps to have a dollar limit for gifts. I have had a five dollar limit for most of my gifts for years. It inspires creativity. My cousin Penny and I have a contest every year to see who outdoes each other for $5.00. If I'm giving a gift to a family, I multiply my limit by the number of people in the family.
In the never-ending quest for inexpensive easy holiday gifts, here are some of my favorites:
1. Giant Cookies for the Teacher: Make extra-large decorated sugar cookies. If you don't have a large cookie cutter, you can cut a pattern from paper and cut the cookies out with a knife. I have a large Christmas tree cutter (about 8" tall). I bake first, then ice with green icing and add sprinkles for decorations. Ask your butcher for some new styrofoam meat trays. Get some red or green plastic wrap, add a ribbon and you are done. I tried to buy styrofoam meat trays, but because I only asked for 8, the butcher just gave them to me free. Teachers get a lot of small gifts that have sentimental value, but they tend to gather dust. With a cookie, the odds are that it will get eaten!
2. Personalized Refrigerator Magnets: from a favorite snapshot, get extra prints in the size that will fit in a clear plastic frame with a magnet on the back. These come in several sizes and are available at discount stores or drug stores. I took a picture of Big Tex at the Texas State Fair in Dallas that I really like. Big Tex is dressed in cowboy clothes and is as tall as a building. He has a guy that acts as his voice and says things like, "Howdy, folks! I'm Big Tex!" That led me to the idea of creating a cartoon balloon from a self-stick label to say "Howdy, Y'all! from Texas" and sticking it on the picture. You can have the people in your picture say whatever you think appropriate!
3. Holiday Tea: get a mug, a tea strainer teaspoon (great gadget - check the hardware store or kitchen gadget store), and peppermint leaves from the bulk jars at the health food store. Put the peppermint leaves in a small plastic bag and tie with a ribbon. Add 3 or 4 small candy canes to use as stir sticks. If you don't want to bag loose tea, get the peppermint tea bags from the grocery store.
4. Bag o' Nuts: In our neck of the woods, pecans fall off the trees. People pick them up this time of year, even on the highway right-of-ways. Make a drawstring bag from burlap (for the rustic look), fill with nuts in the shell even if you have to buy them from the store. All you need to add is a name tag.
5. Aromatherapy Bath Bags: mix equal amounts of lavender flowers, peppermint leaves, sage, rosemary and thyme. (I buy bulk herbs from the health food store, but you can also get them by mail-order.) Add a couple of drops essential oil (lavender is nice) to give it a little extra punch! Make small muslin bags (2" wide by 4" long). Put a large spoonful of oatmeal in bottom of each bag, then two spoonfuls of herbs. Tie bag closed with string. Knot the ends of the strings so that you can hang it over the faucet as you draw the bath water. You can use the bathbag as a washcloth - the oatmeal softens the skin. (These are only good for one bath - throw away after using.)
6. Sachet bags: using the same herbal mixture above, without the oatmeal, stuff small pillows made from print fabric. Sew edges shut. Attach two sachets together with a length of ribbon. Nice to hang over a hanger, or insert in a pair of shoes. Seal into a ziploc before wrapping to preserve the scent.
7. Create a jelly basket: recycle a small basket. Add a cloth napkin (or a bandanna), add small jar of jelly or two (homemade or store bought), and a muffin mix.
8. Hot chocolate mug: get a mug, packets of hot chocolate mix. Add special chocolate spoons: dip heavy plastic spoons in melted almond bark coating, let cool, wrap each in plastic wrap. This is easy enough to do with your children. The chocolate candy coating can be melted in the microwave. It is not supposed to be super hot, just melted.
9. Fire starters: Gather large pinecones. Melt paraffin wax, add broken candles or crayons to tint. You can buy candle scent at craft stores. Dip pinecones in wax and cool.
10. If you really want to give the epitome of tightwad gifts, make up a basket with a sack of beans and cornbread mix. Isn't that what everyone thinks poor folks eat?
Happy Holidays!
Periodically Nancy shares some wisdom with our readers. You can find her other articles in the author index http://www.stretcher.com/menu/author.htm.
Is your mutual fund management company getting rich while you're not? You know that they make money by managing some of yours. But are they charging you too much? How can you tell? Let's answer some of the most common questions about mutual fund expenses.
What are operating expenses? They'll include the payroll for investment analysts, phone bills, rents for office space and the cost of printing and mailing your statements. Basically, it's the cost of managing your money. One notable exception is the commission that the fund pays to buy and sell securities. That's not included under operating expenses. It's considered a 'transaction expense' in most cases.
How do you calculate expense ratio for a specific fund? The math is pretty simple. Just take the operating expenses and divide them by the average assets. Both figures will be available in the prospectus or quarterly report. For instance, a fund with $10 million in assets and expenses of $100,000 would have an expense ratio of 1.0%.
How much is a 'reasonable' amount to pay for fund expenses? That depends on two things. First, how hard is it to manage the money and, secondly, how aggressive your managers are. Let's take two simple examples. First, consider a fund that buys US Treasury bonds and plans to hold them to maturity. There's not much research required so the expenses should be low. In 1996 the average expense for a government bond fund was 1.02%.
Compare that to managing a long-term growth stock fund. You'll want your analyst to do a good job in finding the next Microsoft. That takes time and effort. And the average cost of managing a growth fund was 1.42% in '96. As you would expect, the cost to manage international funds or find small emerging companies is even greater.
Can higher expenses 'buy' better managers? Sometimes. The most talented managers should make more. What you really want to know is if the extra expense is worth it. The best way to see if a fund really deserved a higher expense ratio is to see how they've performed in direct comparison to other funds and the market. If they've done a better job on a regular basis, the higher expenses shouldn't bother you. Conversely, if they haven't outperformed, find another fund.
How am I charged with the expenses? Is it on my quarterly statement? Unfortunately, you'll have to do a little bit of digging to find out how much of your money the fund spent. It's not found on your statement. You'll need to go to the fund's income statement in the quarterly report to find the answer. Most people toss the report without looking at it.
A number of industry 'watchdogs' are pushing to have fund expenses shown on your fund statement. They argue that if people knew how much they were spending on expenses there would be more pressure to control the cost. Fund managers counter that the increased cost of collecting and reporting that information would only increase the expenses.
How do expenses affect my earnings? They're subtracted before you see your earnings. If a fund earns 10% and the expenses are 1.2%, you'll see a return of 8.8% (10.0 minus 1.2 equals 8.8). That's not so bad when markets are going up, but remember that the expenses go on even if a fund is losing money. A half-percent difference in expenses can seem huge if your fund is only making a couple of percent.
Are 'big funds' less expensive than smaller ones? Yes, but not by as much as you'd think. Obviously, it doesn't cost twice as much to manage a fund that's twice as big. But you need to remember that the mutual fund companies want to make a profit, too. All of the savings of a big fund don't come back to you. Some of that savings goes to the fund company as additional profits.
What should I look for when I consider fund expenses? Look for two things. First, how does the fund's expense ratio compare to other similar funds? If it's higher, check to see if it's justified by performance. Don't forget to make sure that the manager that produced the past performance is still managing the fund.
Second, if the fund is part of a family, take a look at the average family expenses, especially if you're buying a load or 12b-1 fund. You may want to switch to a different fund within the family some day. That could be less attractive if the whole family has higher expense ratios than the average. And there's quite a bit of difference in average family expenses. Some have a ratio of less than 3/4 of a percent and many others are over 1.5%.
One final thought. You do need to keep all this in perspective. In some ways it's the same as deciding to order pizza. How much time and money would it take you to make the pizza? Is it a good value? Unless you're really into tracking and researching stocks, you may be getting a pretty good deal for your one percent or so. That doesn't mean that you shouldn't consider expenses in picking funds; just remember that it's only part of the equation.
If you have a suggestion for a future Dollar Stretcher column please email it to: Gary@stretcher.com. Thanks!
Bob,
I own a 1990 Ford Escort with 56,000 miles. It has recently
developed a thump that I feel in the floorboard, apparently
coming from the front axle. It is especially noticeable when
coasting. My dad (more of a car guy than I am) suggested that
it might be the CV joints. I recently had the brakes replaced
and mentioned it to the mechanic, but he said he wouldn't be
able to tell anything without costly disassembly. Whaddya
think?
Finally (this may win the award for stupid car questions), is
there any fuel economy advantage to shifting into neutral to
take advantage of the natural acceleration of a downward slope?
(It DOES accelerate when not hindered by the gears.) Is there
any structural damage caused by shifting back into DRIVE when
traveling this fast?
Thanks for all you do,
Tim
Tim,
One quick and easy way to tell if the CV joints are bad is when
you do a slow full wheel turn. If you hear any clicking in
either direction, then the CV joints needs to be looked at.
The next thing to look at would be the boots on the ends of the
CV joints. If they are intact and not ripped or torn, then all
should be okay. What you might want to look at would be the
tires themselves. They might be out of balance causing
the thumping that you feel...
As far as the transmission thing, if the car you are talking about has an automatic transmission, then it is not recommended to do this. You see, when you put the car in neutral, the pump stops circulating the fluid. This could lead to premature transmission failure.
Good Luck!
Drive Safely!
Bob
The Auto Answer Guy?
Bob answers your auto questions. If you have a question for Bob just sent it to him at: AskBob@stretcher.com.
A question regarding paying bills through the mail:
Is a bill considered "paid" when:
I was taught in a law course that it is "3". However, I had
a recent dispute with a credit card company that charged me one
month's interest on an amount I paid in full because they
received it after the due date, yet I dropped it into the box
on the date due.
Thanks,
Scott S
My wife and I do a lot of ethnic cooking that involves a lot of
spices. Specifically, we do a lot of Indian cooking. The vent
in our kitchen is not the most powerful and it simply recycles
the air, and as such after every cooking exercise, the whole
house tends to smell for a while. We open all the windows in
the kitchen, even in winter, when cooking, but still have the
same problem. We have tried to burn scented candles while
cooking, with only a lighter wallet to show for it. Do you or
any of your readers have any suggestions that would absorb the
smells while we cook? There is the solution of a more powerful
vent that would pump the air out of the house, but that is
expensive. I hope someone out there has some ideas for a smelly
problem.
Thanks.
Ranji A.
One of my favorite Christmas gifts easily fits into the category of "less money, but lots of value".
About 9 years ago my mother made a photo album for each of her kids (I was about 26, by brother 23) containing pictures of us from babyhood to the present. These were taken from the pictures that my parents had collected over the years, of course, and one of the things I treasure about it is the very fact that I *couldn't* have gone out and bought it. I love having it and showing it to friends both old and new. I also treasure my mother's comments about certain pictures in the album -- especially one that she said was her favorite: I'm about 2 years old and looking intently at a recipe card in my hand, with a bowl on the table beside me; Mom said that I'm "cooking". Another one that gives me a chuckle is of our family on vacation in Florida when I'm 17and my brother is 14. Both of us look like we're only grudgingly putting up with this picture-taking nonsense and we'd much rather be elsewhere. Aren't the teen years fun?!
Mom spent a fair amount of time on it, I'm sure, and that is
something I probably wouldn't have ever gotten around to doing
myself since I am much too good at procrastinating. I also
like the blank pages at the end of the album, which make it easy
for me to add new pictures as I get them.
--Carol
My husband gave me my most treasured Christmas present when we were married for a year or two and it continues to be the best gift even after 21 years.
It is very simple and maybe someone else might not appreciate
it as much as I did, but I thought I would share it with you.
On Christmas morning I opened up a shoe box that when held
appeared to be empty and on the outside was the word "time"
written all over it. What was inside was a typewritten note
that said basically, whenever I needed or wanted to spend time
with him that all I had to do was show him the box and he would
be there for me. I still feel the love and the thought that
was put into that gift. It didn't cost him anything and yet it
cost him everything (his time and his love) and it has meant
the world to me.
Darlene
(We have two Christmas gift, memory and decorations pages available. They're at http://www.stretcher.com/stories/971203b.htm and http://www.stretcher.com/stories/971210b.htm)
June asked (11/24/97) what to do about "unscrupulous car
repairs" and who to contact to "right" them. I'd like to
suggest your local Better Business Bureau. I recently had some
problems with a local carpet business. After calling and
arguing with them on the phone (and getting NOWHERE!) I finally
decided to contact the BBB. I got *immediate* results after
filing my written claim. Even if you live in a small town, you
can find one in your region, I'll bet. You can also contact
the BBB *before* having work done to find out if any claims
have been filed against a particular business.
Leslie in Oklahoma
For June, who had a problem with a car repair shop: Contact
your state's attorney general office (listed under state
government in the phone book). In most states, this is the
office that handles consumer complaints. Another option is
small-claims court. The cost is minimal. Just suggest in her
suit she sue for all costs associated with this fiasco,
including filing and summons fees, any estimates she paid for, and
mileage to and from the shops that fixed the damage. The more
documentation she has, the stronger case she will have with any
of these options. Also, if there is a consumer watch on one of
her local TV news stations, they may be interested in helping.
She may also contact the Better Business Bureau. They won't
take action, but at least they can warn others before they do
business with this same company if it reopens after its
"reorganization."
--Linda S.
(there's more suggestions on how to handle unscrupulous auto repair shops at http://www.stretcher.com/stories/971210c.htm
I was reading the responses to the Harassing Creditor Phone
Calls by NB. I was very concerned when I saw one person advise
NB to record the phone calls. There are state and federal laws
which may be violated in doing so. Some states allow one-party
consent for recording of a conversation. Many states require
both parties' consent to the recording of the call. If that is
the case, you must tell the person they are being recorded. You
may not tape record a conversation if it is "only for your
records" if the law would not allow you to otherwise record it.
The person who wrote that may have been referring to the fact
that it is a separate offense to divulge an illegally recorded
conversation. I would recommend getting good legal advice
before recording the conversations.
--Andy S.
(editor's note: Andy wasn't alone in his concern with unapproved phone recording. I'm not in favor of violating the law. But if faced with an unrelenting, harassing collector the temptation to let him know that I had recorded his abuse could be awfully strong. As long as the tape wasn't played for others, I'm not sure that justice wouldn't be served.)
eating low-fat means no butter or margarine on bread. Try: 1.
equal quantities of carrot and turnip cooked together. Mix with
nut of butter, salt, pepper and a dash of ginger or nutmeg and
process in food processor. It freezes well. Use instead of
butter. 2. Cook one cauliflower and three medium onions in
water. Process in food processor - add salt, pepper, cup of
chopped parsley and one tub sour cream. Lowest percent fat
available. Use instead of butter. Also freezes well.
--Dalia G.
It's Christmas time, and for those who have night lights in
their homes, now is a perfect time to stock up on clear bulbs.
They are usually on sale 10 for $1 in December; a pack of four
night-light bulbs costs about $2. I usually buy 10 of clear,
small size bulbs to last us for the year.
--Scott B.
Laundry detergent doesn't clean the clothes. It breaks down the surface tension in the water so that it can dissolve water- soluble dirt more easily. The actual cleaning is done by the agitator and the clothes rubbing against each other. In fact, the more detergent you use, the faster your clothes wear out and fade.
So regardless of what brand of laundry detergent you use, DON'T follow the manufacturer's recommended detergent amounts. Instead, make sure you are loading your washer correctly (too many clothes hinders agitation, clothes don't get as clean, too few clothes allow the clothes to stay away from each other so they don't get as clean either), and experiment to see how little detergent you can use and still get the level of cleanliness and fresh smell you want.
Also, hot water is not EVER needed to wash clothes. Most clothes (except for heavily soiled ones) can be cleaned very well with cold water. Heavily soiled clothes can be cleaned with warm water.
If you use the above tips, not only will you save money on
detergent, but your washer will last longer, clothes will last
longer and your utility bills will be smaller.
--H.
This is in reply to Tam's question about cheap laundry detergent: I learned the hard way that some of those super- cheap detergents do, in fact, ruin clothing. I washed several items of brightly-colored clothes in some ultra-cheap detergent and in fewer than 3 washings I realized with horror that they had faded to the point of looking almost too old to wear.
My solution now is to use the super-cheap detergents for whites
(especially diapers!) where fading is not an issue. For my
bright colors, I buy Gain with Bleach (very highly rated by
Consumer Reports, and much cheaper than Tide), which does not
fade the clothes.
-TJ
(more laundry discussion at http://www.stretcher.com/stories/971210d.htm)
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