Show of hands.  How many of you actively participate in recycling endeavors in your community?  You schlep around your empty cans, jugs, and bottles.  You pile them up with your used papers, then sort them all into bins so some poor schmoe down at the recycling center doesn’t have to.  All so your city can save a few dimes on an already expensive endeavor.

Let’s think about this honestly for a minute.  Because, I think we’ve got our terms confused.  What, exactly, is recycling?  It’s the taking of something that’s already been used, and putting it back through the manufacturing cycle so that the material can be used again.  That extra cycle is where the term recycling comes from!  But, what is the cost of that extra cycle.  Let’s break it down a bit.  We’ll ignore the first cycle, since it’s going to get used for the first cycle regardless.

Let’s consider a plastic bottle.  It’s been created, and used.  It’s empty, so has no further use in it’s first cycle.  You collect it with similar bottles, then submit it to the local recycling center.  We’ll discount the energy that you use in collecting the bottle, as it really isn’t that much more work than you would use in throwing the bottle away.  But, what about the energy that will be used in picking up or dropping off the bottle.  You’ve got to either have someone pick up the bottle, or you have to drop it off at the recycling center.  Once the bottle has been taken to the recycling center, it then has to be shipped to a factory where it can be broken down in a way that makes it recyclable.  More energy wasted in transportation.  Once it’s there, at the factory, it then has to be broken down.  Depending on the process, that could involve melting the plastic under heat.  It could mean squishing, cutting, and making the plastic into threads.  Even more energy wasted.  Once it’s been broken down, the resulting product must be taken to yet another factory that can then turn it into the “recycled” product.

By the time it’s recycled, it’s been through a manufacturing process three times.  Does the extra cost in energy, pollutants, and work make it worth our while?  I’m not sure that it does.  Want to take a deeper look at some of this?  Take a look at this video.  Now, arguably, the show is called “Bullshit”, and anyone who uses that as the name of their show (or as a title for an article) is out to be a bit sensationalist.  And, certainly, I don’t know that Penn and Teller count as experts.  But, I do think they make some interesting points.  There’s three parts to it, so it’s a bit long, but worth watching, I think. When you’re done, we’ll continue on below. P.S. as you can imagine, a show whose title is “Bullshit” has some NSFW language in it.

I admit, I like sensationalism. And, I’ll make another admission. I’m not entirely against recycling. But, I tend to think that the first two parts of the motto “Reduce, Reuse, Recycle” are far more useful and important than the recycling. By reducing the amount of energy and products that we use, less needs to be made. By reusing the things that we can, we reduce the amount of products that will need to be recycled or thrown into a landfill.  Instead of expecting someone else to ease my conscious, and take away my trash to be converted into something usable, I’d rather reduce the amount of trash I make.  Less paper plates.  Less non-reusable water bottles.  Less stuff.

The one thing that I collect to send off to recycling is soda cans.  Mostly, because I can drop them off at the local Humane Society where they take them to a scrap metal yard and sell them for cash.  It’s an extra way to give to one of my favorite charities.  Here’s some more sensationalism for you.  The Humane Society is, essentially, a pet recycling center.  People take their unwanted and used pets there, so that they can be washed, fed, given their shots, and sent back out to a new family.

I’ve gone on about recycling long enough.  Now, it’s your turn.  Scroll down a few inches on the screen and leave a comment.  Do you agree that recycling might be bullshit?  Do you recycle religiously?  What steps do you take to reduce, reuse, and recycle?  Heck, you can let me have it in the comments too, if you like.  One small caveat in doing so, is that any excessive NSFW language will likely get edited out.

CNN had this post on the Association behind the popular lottery game, Powerball, announcing that, starting January 15, 2012, the price of a ticket to play Powerball would be doubling, to $2 a ticket.  If you read the article, you’ll notice several things.

1. The starting jackpot will also double, from $20 Million to $40 Million
2. The second prize (all the white balls without the red “powerball”) will increase from $200,000 to $1 Million.
3. The Power-Play option, which allows you to pay $1 to double any prize (except the jackpot) will remain at $1

There are a couple other things that you should also notice, but probably won’t.  But, they are likely the more important ones.  First, the number of red “powerball” balls will be decreased from 39 to 35, which will “decrease the odds of winning the jackpot slightly.”  To me, decreasing the odds translates to less chances of winning.  But, that doesn’t make sense.  If there are less choices in the “powerball”, doesn’t that make it more likely to get that match, thereby increasing your odds of winning?  Maybe that’s just a typo.  If it’s not, then I obviously need a new class in statistics and chance.

Second, because the starting jackpot is increasing, and the price is increasing, they estimate that the average jackpot will increase to approximately $255 Million which is a bit more than the average jackpot of $141 Million now.

Finally, the last thing that you should notice is the remark that “We know that most folks play for the big jackpots and this game will have more of those more often.”  I know several people who only play if the jackpot is over a certain value.  Say $100 Million.  The association has obviously noticed that as well.  Heck, it probably didn’t even take a statistics genius to pull the sales numbers and see the spike when you hit a certain amount.  So, rather than find a way to get people to play more often, (North Dakota has a subscription option) they just make it more certain that the jackpot will reach the higher numbers faster, thereby getting those people to play more often.  I wonder if those people who wait until the jackpot is higher in order to save money on lottery ticket costs will realize that they’re buying tickets more often?  A few might, but I bet the majority don’t.

My personal stance on Lottery games is that if you’ve planned for the expense as a “fun” entertainment expense, then, go right ahead and buy those tickets.  But, if you’ve got bills to pay, food to buy, and no budget for the tickets, you really should avoid them at all costs.  I’ve played off and on over the years, and I am one of those people who generally only buy a ticket when the jackpot is really high.  Will I buy tickets more often now that the jackpot is going to be higher, faster?  Probably not.  It just means that the number will have to be adjusted a bit.  Maybe I’ll wait until the jackpot hits $200 Million now…

What about you?  Do you play lottery?  When?  How often?  Will an increased cost per ticket change your habits?

photo credit: Lisa Brewster

If you’re like almost every other American, after you’ve gorged yourself on all the Thanksgiving day feasts, you’ll be headed out to do a little gorging of a consumer variety.  Black Friday is well known as one of the largest shopping days of the year.  Most every retail store has some huge deals for the turkey-drunk shoppers that wander to their doors.  And, like most every other American, you’ll likely spend way more than you had planned on spending.

As your favorite personal finance blogger, I urge you to not do that.  I’m all about buying what we need at a price that is below the normal retail price.  Sales, coupons, and rebates are the way to go when buying things that we need.  But, chances are, the things that will be on sale on Black Friday will not be things that you need.  In fact, they’re likely to be things like big-screen televisions, computers, and the hot toy of the day.  You’re going to be tempted to buy them all, because the marketing department makes it look like such a incredible deal!  Here’s some tips for avoiding that temptation, and coming away from your Black Friday shopping with a happy account balance.

1. Have a budget.  This should be the only tip you need.  But, you’ll get in the store and be tempted.  But, having a defined budget for how much you are planning to spend is still a good thing!  Even if you go over that budget, you’re much more likely to at least stay close to it if you have a budget, than you are if you don’t have one at all.
2. Make a list.  You’re likely shopping for gifts for everyone, hoping to make them all happy while saving some money on what you buy them.  Make a list of the people you’re planning on buying for, compare it to the flyers that will be inundating your vision over the next week, and then make a master list of people, with the things you plan on buying for them, and where you’ll be buying them.  Now, stick to your list!
3. Be aware of prices.  Just because the marketing department put the price in big yellow letters over a big red starburst does not mean that it’s really a good deal.  The stores will be full of items that they are marketing as a big savings, when they really are not.  Be aware of the prices of competitors, sure, but also be aware of what the price for that item was last week and be wary of artificial sale prices that aren’t really sale prices.
4. Don’t fall for the swap.  Many of the places will have a very limited amount of the big sale items on hand.  When they run out, they’ll “swap” the sale item for a similar item that’s more expensive.  You’re there for the big sale item, and you can’t leave without it, so you pay the little bit extra to get the similar item.  Usually, that “swap” item is regular priced, and not on sale at all.
5. Free can be bad.  More than any other day in the year, the stores will be pushing free items.  “Buy a tickle-me-broke, and get a free tin can!”  The free item is usually a low cost item (loss leader) that they can afford to give away, while the item you have to buy is usually not on sale for as much as they’d like you to believe, and is a much higher profit item.

The biggest thing to remember while you’re doing your shopping next friday is to be aware.  Be aware that the store isn’t out to save you money.  They want to make money, so they will do what they can to bring you in the doors with a huge sale and then sell you all the high-profit items that aren’t on that huge sale list. We’ve all seen the videos each year of the people trampling each other trying to get one of the ten of those super cool kitchen gadgets, or video game systems.  Don’t be that person.  Be conscious of what you want to buy, how much it sold for before, and what the price should be the day you’re buying it.  Have a set amount you want to spend and stay close to that amount.  You’ll be happier that you did.

What are your plans for Black Friday?  Gonna be in the crowds at midnight?  Or wait until it cools off later in the day?  Or, are you a Cyber Monday shopper?

photo credit: Matt McGee

It is only September, but I have already seen Christmas trees and holiday presents in Costco.  Most people probably aren’t thinking about holiday gift buying now, but they will be in another month or two.  If you are like most people, you probably have difficulty coming up with gift ideas for several people on your gift giving list; most people often have everything they need, and what they don’t have, they buy themselves.  Or, you may look around your house at “stuff” you are not using that is just taking up space and dread the latest infomercial product Aunt Shirley will buy you for the holidays because she doesn’t know what else to give you.

If you are tired of giving more “stuff” that people don’t need or the generic gift cards that people now resort to, consider giving a different present this year—the gift of experience.

Maybe your best friend, inspired by Dancing with the Stars, has always wanted to take a ballroom dancing class but can’t justify spending the money on that kind of indulgence.  Why not give the gift of a class or two for her so she can try it out?

Perhaps your sister recently had a baby and would like nothing more than a weekend away to reconnect with her husband.  You could offer to babysit for the weekend or to pay for a room at a bed and breakfast for her.

The opportunities are endless for this type of gift.  Chances are that those closest to you often tell you what they would like to do and what is most important to them at this stage in their lives.  By listening closely, you will have endless gift giving possibilities.

People often will not splurge on things they want to try or experience, so they will appreciate your gift all the more.  In addition, they will remember your gift for years to come.  You probably don’t remember that cousin Ricki gave you a $50 gift card to your favorite department store last holiday season, but you will remember that she paid for a three hour cooking class for you to take at the local culinary school.

Another bonus of giving the gift of experience is that there is no remnant of it physically.  Unlike gifts that you don’t want or need that just clutter your house because you feel bad throwing them out or selling them in your next garage sale, the gifts of experience do not take up a physical presence in your home.  They enrich your life and create pleasant memories, and you are able to keep your home free of clutter.

If you are tired of the commercialism of the holidays and would like to connect to your friends and family on a different, more thoughtful level, consider giving the gift of experience this upcoming holiday season.  Chances are they will enjoy the gift and the new experience and will remember it for years to come.

photo credit: Shandi-lee

Our culture seems to be one that is centered around dining out.  When you are younger, you meet friends at a restaurant for a night out and to chat.  As you get older and have a family, you may go out to eat because time is short between working, raising a family, helping with homework, and doing housework, among other things.  Some people are extreme and eat out for every meal because they do not like to cook or have not learned to cook.  This is so commonplace in the American culture, that we don’t often question these expenses.  Instead of just assuming that going out to eat or grabbing take out is a necessity, evaluate the cost of your restaurant purchase.

It has been a stressful day, and you would like nothing more than a night off from the kitchen.  You decide to buy take out for your family of 4 and spend $25.  True, you did buy yourself a night out of the kitchen by avoiding cooking and washing the dishes that you would use.  Yet, ask yourself, would you have paid $25 to hire someone to come to your kitchen for an hour that night, make a meal and do the few dishes that you used?  No?  Well, that is essentially what you did by picking up take out.

I use this way of thinking frequently now to save myself from spending money eating out.  My family ate out by habit until I started evaluating the true cost.  I recently quit my job and have been doing freelance work from home.  Several of my smaller jobs each pay $20 a month.  Recently, I wanted to go out for sushi, which is a weakness not only of mine, but of my husband and kids.  When our family of 5 goes out for sushi, it typically runs us $55 to $60.  I asked myself if one meal of sushi was worth doing 3 additional small jobs to recoup the $60?  Although the jobs do not take much time weekly, I would have to do the three jobs for a month to recoup the money spent on sushi.  Was it worth it?  No.  We did not go out that night.

The idea of evaluating life energy for consumption is not new.  It was the subject of the book, Your Money or Your Life by Joe Dominguez and Vicki Robins.  The overall principal is to look at the amount of time and money it would take to recoup an expense.  I try to use this in my life normally, but I find it especially effective when considering the often inflated price of dining out.  Take the sushi dinner for $60—my family’s weekly grocery budget is $100.  Is that one meal worth half a week’s groceries?  Definitely not.

I am not saying we shouldn’t go out.  My family still enjoys going out, but I am suggesting we should stop thinking of dining out as something routine and to be done daily or several times a week.  Instead, think of dining out as a treat and something to be planned and enjoyed.

photo credit: dslrninja

According to CNNMoney, Wells Fargo will begin testing a program to charge a $3 a month fee for debit cards.

Wells Fargo said Tuesday it will start charging a $3 monthly fee for debit card usage to customers in Georgia, New Mexico, Nevada and Oregon beginning Oct. 14.

“We regularly review our pricing and take into account the needs of our customers, industry trends, the market competition, and our cost of doing business,” a Wells Fargo spokeswoman said. Customers who don’t use their card during the month won’t be charged the fee and the fee will be waived for select accounts, she added.

I’m beginning to wonder if it isn’t lost on the companies that adding new fees like this is a step backwards on usage?  When there was only cash to pay with, the banks were only able to make money by usury.  You gave them your cash to safe-hold.  In exchange, the bank paid you a small interest rate on that money and then loaned it out at a higher rate to other consumers.  They kept the difference.  Simple, no?  With the advent of credit cards, they’ve found any number of new ways to nickel and dime us out of our money.  All in the name of “cost of doing business”.  (Side note: Part of the reason I like being a member of a credit union is  that they usually don’t go looking for profit at every turn.)

Eventually, as the regulation piles up, and it becomes harder and harder for the banks to make any money on credit and debit cards, they’ll find more and more ways to fee us for those services and others.  As the fees increase, more  and more of us will revert to using cash as a medium of exchange.  And the more of us who are using cash, the less of us are using those services which means they’ll have a smaller income on those services and will need to squeeze more fees out of the users.  Do you see where I’m going with this?  Good.

I just don’t see the Wells Fargo fee as good business, or any of these new fees, for that matter.  Some of the regulation should be pared off, but if the banks can’t figure out how to operate without passing the buck on to us, they’ll find themselves with far fewer users than they had before.

What if everyone in the world was as frugal as the most frugal?  Inspired by conversation on the Early Retirement Extreme forums about the ethics of the Early Retirement Extreme lifestyle.  So, the beginning of that linked conversation (if you haven’t read it) is based on the premise that if everyone did as Jacob does and lived the ERE lifestyle, would the world collapse?  And, if so, doesn’t that indicate that the ERE lifestyle is not socially responsible (ethical)? Which, got me to thinking.  What if everyone was as frugal as most of the frugalers we know? What if frugal was normal?

I’m not talking about the people who hand wash their Mercedes, either.  When it really comes down to it, the ERE lifestyle is pretty similar to the frugaler lifestyle.  Each has their extremists.  So, what if everyone was frugal?

Would we all make our own shampoo?  Would we all have a sustainability garden?  Would we all coupon?  Would coupons still exist?

It’s an interesting question.  Many of the things we all see and do each day exist because a much larger section of the population use them far more regularly than we do.  Disneyworld, for instance, probably wouldn’t exist if it’s only customer base were frugalers.  What about those Mercedes cars?  Probably not in the U.S.  But, if you think about it, there wouldn’t be very many used cars available for purchase, since we’d all be busy driving them until the wheels fall off.  What would that do to the auto industry?  If all the people who buy a new car every year, or even every five years, stopped doing so?  You thought they needed a bailout a couple of years ago!  They’d really need one then.

We might see more local farms growing a larger variety of goods because more people are shopping at farmers markets and taking advantage of the Co-Op farms.  We might see less McMansions and more smaller houses with big yards and gardens.  We might see some pretty drastic changes in the pricing of some things.  Without all the willy-nilly spenders out there paying whatever the manufacturer asks for the product, you might see more reasonable pricing to get people to purchase a product.  We would likely see a return to a more craftsman foundation, much like the early retirement extreme lifestyle.  People might be interested in making things themselves if the market dynamic shifted that drastically towards the frugal side of things.

How do you see the world changing if everyone was as frugal as the most frugal?

photo credit: kenteegardin

If you’re reading this blog, chances are you know all the tips and tricks associated with spending less. But everyone needs to spend money sooner or later. So when you know you’ll have to open up the wallet, spending smarter is your last defense against wasting your hard earned cash and maintaining a contribution to your high interest savings account . Smarter spending can save money and get you to feel better about your purchases at the same time. So how do we spend smarter? By reducing or eliminating ‘spending mistakes’.

We’ve all had the experience of buying something we regretted. It probably happens more often than you think. Whether it is clothing you don’t wear, something sitting in the fridge or freezer because no one wants it or some toy or gadget taking up space. How do we define spending mistakes?
I define spending mistakes as anything you buy which you do not get full value out of. Whether this means you only received limited value or no value at all. For those who are already doing what they can to spend frugally, spending smarter may be the last, best way left to save more. The following is my list of 11 tips to help you spend your money in a more effective and efficient way.

All Products / Services

Read Reviews and Compare First
This advice is usually adhered to for major purchases like cars and TV’s, but smart spender gather as much knowledge about the products or services they are about to buy, every time. Whether you check a place out on yelp first (great for knowing what to order), reading reviews online for fashion or checking consumer reports. Do your homework and you will spend smarter.

Know Their Refund and Return Policies
Always ask about refund and return policies and make sure you adhere to their guidelines. I get a real sinking feeling when I did something small or stupid to void a chance to refund or exchange something I only realize later was a mistake to buy in the first place.

Know Why And How You’ll Use The Item
Before you buy a new gadget or anything really, figure out how you will use the item in your day to day life. Also, make sure the item is an improvement over whatever you do now and is worth the cost. Better products come out every day, make sure the upgrade is worth the extra cash. If you’re buying toys for your kids, if they are old enough, ask them how/when they would use the toy. If a kid knows all that stands in their way of a new toy is a good reason why they should have it, they’ll be motivated to give a good answer. Plus, it is a great way to develop their logic and reasoning skills.

Follow Your Basic Shopping Knowledge
Searching for coupons and using a shopping list are no-brainers that no self proclaimed frugal spender can do without. However, no list is complete without mentioning these shopping strategy staples. But it doesn’t hurt to be reminded of these tips for being a savvy spender.

Food and Drinks

Don’t Buy It Until You’ve Tried It
Think that new 6-pack looks good? Only see the family size version of a new product? Want to switch brands? See if others you know have the product for you to try yourself. If that won’t work, try waiting until you can buy a cheaper or smaller quantity of a product before you invest in a more expensive purchase you may need to suffer through till you finish. Or worse, need to throw away and replace completely. Also, try these other ways to save on food costs

Clothing and Accessories

Wait Before You Buy
After you find an article of clothing, try waiting a week before you buy it. If you can go a week without needing an item you were on the verge of buying, chances are, you don’t really need it. This works best however, with bigger clothing purchases, like new shoes, dresses or jackets/coats. If after a week you still feel you NEED that item, you have already cut down drastically on the chance this is a mistake purchase.

Use A Shopping List
Just like groceries, you may be tempted to buy more than you need when you go clothes shopping, particularly during sales. By having a list of what you need, with notes about what colors or styles will fit best, you can cut down on mistake purchases by being able to zone in on what you’re really after. This can also help you save time too.

Know Your Wardrobe Before You Shop
While men seem to suffer with this more so than woman (no shock there), knowing what you have at home can prevent you from buying something you realize later you can’t match with anything.

Don’t Take The Tags Off
Don’t take off the tags until you are putting on that item and are sure you are going to walk out the door with it on. If you are the type to go shopping, come home and cut off all the tags and labels immediately, you could be making a mistake. First of all, leaving the tags on until you are about to wear it will remind you that this item is new and hasn’t been worn, who doesn’t like having that feeling? Second, if somehow the item gets pushed back in your closet and doesn’t get worn, having your tags intact can help you return it more easily or sell it for more money.

Don’t Rush To A Decision
Chances of a mistake purchase are at their highest if you’re not really into the item at first sight. Spend some time looking at the item, coming back to it later after browsing through more options. And definitely try it on. Nothing makes you feel worse than bringing something back you barely liked to find out it doesn’t fit anyway. However, sometimes you can use a second, or third, opinion, which brings us to the last tip.

Go With Other People
Go with someone who you trust to make purchasing decisions. A second, or even third opinion can help ensure you don’t buy something you won’t want to wear out when the time comes.

Pro tip – Designate certain people to help you buy certain attire. Have different “bar friends”, “golf friends”, “dinner and movie friends” and “business friends”? While your exact groups may vary, some of us tend to do certain things with certain people. Not only will going shopping with them help eliminate mistakes, but it can also lead to a nice day with a friend and strengthen your bond.

We want to know what your money saving tips while shopping are and what you think of this list in the comments below. And if you have shopping buddies or feel others can benefit from the advice here, do not forget to share it on Facebook or Tweet about it. Sharing is caring

Author Bio: Daniel Rosenhaus is a frugal spender himself and loves sharing tips on saving money so others can continue their commitments to their high yield online savings accounts.

photo credit: epSos.de

Many people have been adversely affected by the economic recession that hit the United States in the last few years. Termed the “Great Recession”, from December 2007-June 2009, The United States has not fully bounced back. Let’s take a look at the facts.

• Jobs are being cut at an alarming rate, so much so, that the unemployment rate in January 2010 was at 10.6%. As recently as February of this year, that rate has decreased to about 9.5% according to the U.S. Bureau for Labor Statistics.
• For those who are still employed, any news of layoffs that makes the front page of the newspaper leads to a paranoid, nail-biting frenzy over our own job security. Salaries have frozen, benefits have been slashed; and let’s face it, it’s now easier for employers to replace their long-time employees for the sake of cheaper labor.
• Gas prices skyrocketed from a per-gallon average of $1.78 in 2005 to $3.56 to the present date, according to the U.S. Information Administration.
• Home foreclosures are no longer a rarity; in fact, it wouldn’t be unreasonable to say that home ownership has become a luxury. The government’s efforts to fortify the real estate industry with programs such as the First Time Home Buyers Tax Credit or the Making Home Affordable program may be impacting the situation positively: foreclosure rates in February 2011 were at the lowest they’ve been in three years.

The Great Recession is teaching a hard lesson to young adults, who may not be used to a flailing economy. Increasing food prices and every day commodities have driven Americans to be more frugal and save. This is not the first time the United States has held afloat in rocky times.

The Great Depression of 1929, which lasted into the early 1940s, is an iconic memory for Americans. It started on Black Tuesday, October 29, 1929, when the stock market collapsed. Deflation occurred, and people feared to spend money and invest further. A staggering 25% of Americans were unemployed. Black and white pictures of this era depict a desperation beyond belief: soup kitchens to feed the countless people who were unable to afford the simplest of meals; farmers who stood in dusty barren fields during the dust bowl – a devastation of the agricultural world; and the jobless, with make-shift signs to beg for employment.

Though other smaller recessions hit the United States between the 1940s to 1960’s, none were as devastating, and the U.S. continued to prosper. However, from 1973-1979, the Bretton Woods monetary system fell (the system that allowed international recovery and monetary management following WWII). It made the dollar into a flat currency, backed by no monetary value. It instead became a promise of payment with a floating value. This caused the deflation of the dollar. Other effects occurred, such as the Iranian war, which resulted in an Arab oil embargo (creating the gas crisis of 1973). Here, the Organization of Petroleum Exporting Countries (OPEC) raised the price of oil by 70%, to $5.11 a barrel. The economy was described as having underwent “stagflation“- which means a stagnant economy which is incurring inflation.

By 2001, the U.S. hit another pivotal moment: the attacks of 9/11 decreased consumer confidence, the dot.com bubble collapsed, and major corporations (such as Enron) tainted the sentiments of larger corporations and entities. After several years, the economy improved until 2007, when our recent economic woes came into effect.

It is easy to look at today’s times and address the issues with uncertainty and indifference. However, in looking back at the our past, it is clear to see that we will once again find ourselves strengthened. This recession will not last, and instead, we will soon find ourselves amid economic prosperity. We must examine these former failings and learn from them.

Guest contributor Andrea Fisher is an online marketer and content specialist from North Carolina. She is a published journalist with an English degree and political science minor from the University of North Carolina at Greensboro.

photo credit: Dan04

Supply and Demand.  We all learn about this tenet of the capitalist market at a rather early age.  It’s a pretty simple concept really.  When one increases the other decreases.  As supply grows, demand diminishes.  As does the price for that product.  As demand grows, supply diminishes.  And price goes up. It’s a function of our market.  And, I think parts of it are broken.

As a frugal blogger, I’m constantly wracking my brain trying to find new ways to be more frugal, and new ways to present that information to you. Part of that includes keeping an eye on the market.  And as such, I’ve come to the conclusion that the law of supply and demand has become more of a guideline than a law.

How so?

Take airfare for instance.  According to this CNN Money article, airfare prices have been raised twice as many times this year as they were all of last year.  And we’re only in March.  What allows them to do that and get away with it?  You keep paying for the tickets.  Gas goes up, and we still fill up our SUVs.  As long as you continue to pay the prices they are asking, the prices will continue to go up.  And, recently, they’ve gone up anyways.

We all know that some of the things that we are buying are too expensive.  I read several articles a day about how expensive somethings have gotten and ways to save money by making your own, or frugally using what you do buy.  And, to some extent, that does work.  For a select few.  But, there are others who are willingly paying that price and then complain about it afterwards.  Why?  They’ve been conditioned to do that.  When was the last time you heard of a boycott based on the price of a good, rather than something the company did to offend you?  Do you think that if even half of the consumers boycotted flying for a month, that prices wouldn’t drop?  They’d have to or they’d have to go out of business.

Why can I buy a ticket from Fargo, ND to Las Vegas, NV for less than $150, but it costs me 3x that much to fly to San Antonio?  It’s not 3x as far.  Why can I buy a bag of malt-o-meal cereal for $2 that tastes exactly the same as a name brand cereal but I can’t buy that name brand cereal for less than $3.50?  The examples of this are plentiful.

We aren’t just consumers.  We have brains and are capable (in most cases) of thinking with them.  It’s time we used them to demand fair prices for products.  We’ve forgotten that supply and demand goes both ways.  We do have some small modicum of control here, but we’ve grown complacent and forgotten that we have it at all.  Many of you are frugalers.  But, we always say that we’re doing it to save money.  And, that’s true, but maybe it’s time we also say that we’re doing it to protest the high prices that we’re being charged.  Oddly, saving money isn’t always a good enough excuse for some people.  Sometimes they need a moral soapbox to stand on.  And, maybe that’s the way to take back supply and demand, and turn it into a working machine again rather than a pleasant theory in economics textbooks.

What say you? (So Say we All.  If you’d watched BSG, you’d get that.)