August 2007

I intended to publish this earlier, but simply forgot about it (.. yeah, just forgot). So, I am just going to stick with the “midweek” in the title and you can assume that I published this on Wednesday.

• Upgrading My Living Room Entertainment, Part 2: Extended Warranty by Flexo @ Consumerism Commentary. Flexo wonders if he should buy extended warranty (at $63 per year for 3 years) on his newly acquired 42″ $1300 LCD HDTV. Personally, I don’t even think about extended warranties when it comes to electronics - if there is some problem, it’s usually apparent within the first few months and conversely, if there are no problems within the first few months, then it is very less likely that there will be problems in future (according to my perception). This is especially true for stationary (non-portable) items like televisions, desktop computers, or home theater systems - there is hardly anything that can cause malfunctioning at a later stage. Also, most of these relatively expensive items come with original factory warranty (usually for a year) and that’s probably enough time to figure out if you bought a lemon.

• Envelope System Video Tutorial (Step By Step Guide To Using The Envelope System To Manage Your Cash) by NCN @ No Credit Needed. For people who don’t use credit cards, and are not good with managing cash, this will be a very instructive video.

• Here’s A Crazy Idea: How About A Six-Month Prohibition to Cut Debt, Eliminate Alcoholism, and Save Families by Nick @ Punny Money. Nick wonders whether prohibiting alcohol would solve a lot of problems. Hmm… prohibition will probably mean much safer driving on Friday nights. Now, I would give up a few beers for that. Seriously though, with all the TV advertisements against drunken driving, one would expect a drastic reduction in people who drink and drive. However, over the last 5 years, things haven’t changed much in our town. It’s still pretty risky (for sober drivers) to be out driving on late Friday nights.

• How The Frugal Law Student Saves On Shaving by Brett @ Frugal Law Student. This is what I was talking about when I wrote this post: I Don’t Need A Microchip For Shaving. Brett’s post reminds me of old days - it was a norm to use safety razors for shaving (around the place where I lived when I was young).
  

• 10 Ways To Make Saving Money Painless by Brip Blap (as a guest author) @ My Two Dollars. A simple message worth repeating a thousand times: make your savings automatic.

• Additional income: Stoozing, or Credit Card Arbitrage by Plonkee @ Plonkee Money. “Stoozing” seems to be the English word for 0% APR arbitrages. On a related note, I wrote something earlier about whether a credit card arbitrage is worth it if the card companies charge balance transfer fees (although the article talks about transferring balances from one card to another, you can extend the logic to transferring balances from a 0% card to a bank) - check it out if you still want to “stooze” after the fees.

• 5 Myths That Can Hurt Your FICO Score by Melissa @ A Penny Closer. Again, some advice that is worth repeating a thousand times. Every once in a while you will notice a well-established personal finance blog saying something to the contrary.

• Examine Your Motives Series: Buying a Home @ Clever Dude. If every homeowner had done this before jumping to make their purchase, we wouldn’t have had the subprime mess at all.
  

  Don’t just buy a home because your friends are doing it, or you’re afraid of missing something, or because you “want freedom and stability”. Home ownership is not a financial investment. It’s an emotional investment.

  True, it’s an emotional investment, but it cannot (and should not) be made without a thorough financial analysis. If you are signing for a 30 year mortgage… at least think 10 years down the line.

Carnivals of the week

• The 89th Festival of Frugality hosted at FILAM Personal Finance.

• The Carnival of Personal Finance hosted at Free Money Finance.

• The Carnival of Observations on Life hosted at Anja Merret.

Earlier on this blog, I have actively supported the concept of assigning higher priorities to bigger expenses in your life to improve your financial situation. However, every now and then, it helps to look at the smaller things that might be steadily leaking money from your wallet.

Occasional indulgences are perfectly fine, but if you are habitually spending money on certain items, then some financial plumbing might be in order. The point is to either seal the leaks completely, or to keep them in check so that, eventually, they don’t grow into massive drains on your resources.

Some typical popular sources of money leaks are as follows:

• Paying for cable - in spite of the fact that you don’t regularly watch more than a few channels and don’t even have enough time to watch TV.
• *Addiction* to certain foods/drinks.
• The habit of not shutting off electronic equipment after use.
• Making only the minimum payments on credit card balances (other than 0% APR balances).
• Making payments on small low interest loans first, instead of large high interest loans (yes, it may be psychologically satisfying - Dave Ramsey style - but it’s still a money leak).

And so on… you get the idea by now.

Fortunately, because of our lifestyle, serious money leaks like expensive cable and debt do not exist. However, there are other small spending irritants that I am dealing with. Here is a list of some of them (that I have identified as of yet):

1. Books: Yes, we have a massive library available to us on campus, but we still head down to book stores (usually Half Price Books) every once in a while and browse through a lot of books. Most of the times we end up purchasing a few books we like. They are usually cheap enough so that we can afford them (or at least that is our perception), but they are really not *necessary*. Usually, it ends up like this: “Wow, this book is awesome, I want it” - and the thoughts of checking it up in the library, or trying to see if I can get it cheaper online just vanish.

Current fix: Avoid visiting book stores.

2. Diecast vehicles: This issue has been existing since more than 20 years - I think it’s been hard-wired in me by now. I just can’t take my eyes off good quality diecast vehicles. Cars, motorcycles, tractors, aircrafts - you name it and I have bought it. Usually, they are not very expensive, but at times, good ones cost more than a few decent dinners.

Current fix: Avoid stepping into shops that sell diecast vehicles. The other indirect fix I am working on is to get my wife to shorten her shopping time for clothes (too much time in a clothing shop makes my mind wander in the direction of diecast vehicles).

3. Chocolates: These are evil - especially the miniature ones. I devour them like some people eat peanuts. Generally, they never make it to our shopping lists but, in spite of that, I often find myself in front of the chocolate aisle, drooling over the “rich dark” variety of chocolates.

Current fix: Again, avoidance rules. Another great idea that’s working right now is to keep the chocolates out of sight after we buy them. We store them in a drawer at the bottom of our refrigerator. The extra work of opening the refrigerator and then opening and closing the drawer has reduced my consumption rate, so now they last longer - discourages additional purchases.

4. Library fines: Great, I spend on books … and I also spend on library late fees on borrowed books! The real culprit here is procrastination, but I prefer to blame it on the geographical positioning of our school library - it takes me a good 20~30 minutes of walking time to just return a book (I haven’t given a lamer excuse in a long time). Also, our library charges fines by the minute on certain issues and that doesn’t help me much. Here is a screenshot of the late fee schedule:

Current fix: I will try and stop procrastinating… in a few days.. or months.. sometime.

5. DSL + Landline Phone: This is a bit mindless. We need high speed internet access (else, I cannot really work on this blog from home) and the cheapest option is DSL. The problem is we need to carry a useless landline to get DSL connection and that really raises the cost by almost 100%. The only other option is a cable+high-speed-internet connection, but that turns out to be more expensive than DSL+landline (in fact, just the high speed internet itself is expensive when it is offered by a cable company) ~ so we are sticking with the DSL for now, even though that means wasting about $20 every month on landline.

Current fix: Don’t have one yet. Will someone please provide high speed internet for cheap?

So, there… these are the little holes in my pocket. It looks like temptation and procrastination are the roots causes these money leaks (duh!). So far, practicing avoidance has been working very well against temptations, but the procrastination part is a bit tricky to handle. Working on it.

Have you recognized your money leaks? how do you handle them?

… Then you probably have been through more than a dozen panic attacks and at least one major heart attack within the last 10 years.

Here is why. Look at how the S&P 500 index (SPY Exchange Traded Fund) has performed during the last 10 years:

It certainly doesn’t look like a place to be if you get nervous at every minor fall in share prices.

By the way, if you compare the latest market slide - that tiny drop at the rightmost end of the graph - against the major downturns that have occurred earlier, you can see that it’s really not that big of a deal (at least not yet).

So, take heart and this too shall pass.

On a more sobering note, it looks like the S&P 500 has not performed very well when averaged over the last 10 years… and 10 years is a pretty large span of time (or is it just my perception?).

Forget about the rapid ups and downs in the curve - if you invested at random from a period between 1998 ~ 2002, you probably haven’t made much more money than what you would have made in a high interest savings account. If you invested around the year 2000, you may have even *lost* money after taking inflation into consideration. May be these are the people (who invested a lot during 1998 - 2002) who are worrying more about the recent events (?).

Of course, this doesn’t have any bearing on 20-year or 30-year performances, or some other 10-year performances (different time-frames will result in different returns). It’s just that I am just wondering if it’s not a good idea to put most of your money in such an index fund (or probably the stock market as a whole) if you are intending to keep it there for less than 10 years. Especially if you have a weak heart.

After a year long run with 0% APR credit card arbitrages, it looks like it’s time to pull the plug.

The sole reason for ending this free money run is the lack of *good* 0% APR offers to continue transferring the existing balances. Most credit card companies now impose balance transfer fees at about 3% of the amount of the balance transfered with no maximum limit and some have taken the “0% APR” terminology totally off their charts. All in all, the card companies seem to be making sure that people don’t milk them for the money with these offers.

In my case, some additional crap happened which has sort of ticked me off this arbitrage game. Here is how stuff unfolded:

• Currently, I have balances on Citibank and Discover cards. The offers are coming to an end within the next few weeks.

• Balance transfer offers do not allow transfer between two cards of the same kind (you cannot use a balance transfer offer to move your balance on one Citibank card to another Citibank card). So, I tried applying for a third party credit card (HSBC - 0% APR with balance transfer fees) and that got approved with extremely low credit limit and made it totally worthless - the net gain after taking taxes and fees is hardly worth the trouble.

• Then, a few minutes later, I tried applying for a Discover card (Discover More Card) so that I can transfer the balance from the Citibank card. This application got rejected! Interestingly, I was chatting with their service professional through a live-chat service at the time of the application and she got back to me within seconds after I submitted the application informing me that it was declined. From the promptness of the decision, it was pretty obvious that it was rejected through some “automatic” criteria without any human intervention. My current credit score is 742 (which is not bad), so it had to be some other stupid reason on which they based their decision.

• Then, after another few minutes, I tried applying for a Citibank card (AT&T Universal Card) so that I can transfer the balance from the existing Discover card. This card was approved, but again with a very low credit limit. Crap! so even this didn’t work out.

• At the end of all this, I ended up with one rejected application and two useless credit cards and no feasible solution to transfer the existing balances.

It was more crap than I could handle peacefully and I decided to put an end to the misery by just paying off all the balances. Will keep an eye out for good offers in future.

By the way, a few days later, I received a letter explaining why my application for the Discover card was rejected and this it what it listed as the reason:

Credit History Established On Your Account

What’s that supposed to mean? It sounds incomplete to me.

~*~

Anyways, here is some more information on how credit card companies currently deal with 0% APR balance transfer offers. I had to go through all this before applying for new cards. Although, there are a lot of players in this area, I am just including the big ones.

• Discover: Charges a balance transfer fee of 3% with a minimum of $5 and maximum of $75 (in some cases the maximum is $50). With the upper limit still in place, Discover cards with very high credit limits are still attractive - although not as attractive as before (you will still lose a small percent of the free money in fees). 12 month offers are standard.

If you get a $10,000 credit limit and transfer the entire amount and park it in an online savings account at 5.15% APY, your earnings before tax would be $515. After tax (assume 25% bracket) it would be about $386. After accounting for the balance transfer fee, you will have about $311 in your hand. That’s a pretty sizable amount; however, there are a few caveats.

From personal experience, Discover is pretty stingy with their credit limits. Plus, it has another new trick up it’s sleeve. According to their updated terms and conditions:

If more than 90% of your New Balance consists of special rate balance transfers, we may increase your Minimum Payment Due to a maximum of 4% of the New Balance..

Increased minimum payments are going to further erode your earnings.

• Citibank: They have at least one no-fee 0% APR balance transfer offer on charts (AT&T Universal Card - not a referral link) that I know of (perhaps there are one or two more, but there sure aren’t many). So, if you are interested (and lucky enough to get a good credit limit), you may try this one out. Other than this particular offer, Citibank charges a 3% balance transfer fee with $5 minimum and no maximum. 12 months offer period is typical.
  

Cards with no maximum on balance transfer fees are not attractive enough for playing the arbitrage game. I wrote about this earlier when Citibank sent me the change of terms notice.

• American Express: Typically, they charge a balance transfer fee of 3% with $5 minimum and $99 maximum. Plus, currently these guys don’t even have any 0% APR offers; the best they can do is a 4.99% APR on transfered balances till they are paid off.

If you get an AMEX card approved for less than $3300 of credit limit, your effective expense on the balance transfer will be 7.99%. There is no way that can be offset with a high yield online savings account (or any other place where your park cash will have sufficient liquidity and guaranteed returns). With a credit limit as high as $19,800, you are still looking at an expense of 5.49%.

That takes American Express totally out of the arbitrage game.

• Chase: Read offers terms for Chase cards carefully. Their balance transfer offers are of 12 months, 6 months, or 3 months duration depending on how “favorably” they view your credit history. For example, here is a typical clause in their terms:

Elite and Premium Pricing: A 0% fixed APR for the first 6 billing cycles following the opening of your account… Standard Pricing: A 0% fixed APR for the first 3 billing cycles following the opening of your account.

Generally, balance transfer fee is 3% with $75 maximum.

Personally, I am not a fan of short term balance transfer offers - the gains are not much and you will need to look for another credit card pretty soon. Plus, I didn’t apply for Chase card after my experience above because I didn’t want to end up with another useless credit card with extremely low credit limit and 3 months offer period. That will simply put another card on my credit history without doing me any good.

• Bank of America: Charges a 3% balance transfer fee with $10 minimum and no maximum. Unlike for the case of Citibank (where there are a few exceptions to their balance transfer fee policy), Bank of America’s balance transfer fee is applicable to ALL the cards it has to offer. So don’t waste your time looking for credit card offers from these people.

• HSBC: These guys have a few good 0% APR cards still available. If I understand their terms and conditions correctly, they imply that HSBC Bank customers will not have a balance transfer fee on the cards for the initial offers, whereas non-HSBC customers will have a 3% transfer fee with $99 maximum. Make sure you read their terms and conditions very carefully. Offer term may be 6 months or 12 months depending on which card you apply for.

Check out this video of a wooden counting contraption.. it’s really interesting. Watch it till the end.. it’s totally worth it.

~*~

Now, here are some interesting articles published over the week.

Related to market jitters:

• Nervousness and the markets by MBH @ Mighty Bargain Hunter.
• A Stock Market Scenario - Going From Bad to Worse by Super Saver @ My Wealth Builder.
• Market Timing with 401K Contributions by Lazy @ Lazy Man and Money.
• If The Stock Market Sell Off Makes You Nervous, Keep Things In Perspective by SVB @ The Digerati Life.
• More On Why I Sold My Vanguard Target Retirement 2050 by Jim @ Blueprint for Financial Prosperity.
• Where to Park Cash in an Uncertain Market by Sun @ The Sun’s Financial Diary.
• How to Make Money in the Stock Market (Revisited) by Nickel @ Five Cent Nickel.
• How Do You Know When to Invest in a Down Market? by Ben @ Money Smart Life.

Not related to market jitters:

• Getting Over The “Taboo” Of Generics And Store Brands by Trent @ The Simple Dollar.
• Do You Worry About Your Parents’ Readiness For Retirement? by Jonathan @ My Money Blog.
• I Got a Relatively Good Deal on Bedroom Furniture by Flexo @ Consumerism Commentary.
• Save Money by Watching What You Feed by Nick @ Punny Money.
• Add More Tools to Your Arsenal to Help Solve Your Financial Problems by Jeremy @ Generation X Finance.
• The Keys to Getting the Best Reward Credit Card for You by FMF @ Free Money Finance.
• Adapting to Income @ Advanced Personal Finance.
• Reflections from the checkout line I Have Paid for This Twice Already.
• Avoid Late Fees and Stay on Top of it All by Stephanie @ Poorer Than You.
• Lose Weight, Not Money by Mrs. FLS @ Frugal Law Student.

Things have been a little crazy on the work/study front this week as I am trying to come to terms with my schedule for the fall semester. It looks like I might get more obsessed with saving minutes instead of saving dollars for the next few weeks.

Also, with each passing day in grad school, I have a better understanding of why “PhD” stands for “Permanent head Damage.”

Anyways, look what I got from our farmer’s market yesterday:

That’s a long squash in the picture. The tennis ball is just to give you a size reference.

At almost 3 feet, this is probably the longest squash I have ever seen. It weighed about 5 pounds and cost us about $6. The moment I saw it, I named it as “Barry Bonds Squash” because:

• well, it looked like a baseball bat (almost).

• it also looked pretty juiced up.

I was later relieved to find out that this variety of long squash can indeed grow naturally up to three feet. Sorry Barry Bonds, no stimulants involved.

**********

A Novel TV Idea

Here is an excerpt from a small piece of on BBC about the much touted $100 laptop:

“One of the things that has been developed in concert with the laptop is a device that can be used to power it,” said Mr Blizzard.

The OLPC [One Laptop Per Child] is fitted with a ripcord that owners can crank to power up the device.

“What we are hoping is you will be able to get a 10 to one ratio - that is for each minute you pull and crank on the laptop you can get 10 minutes use out of it.”

Here is a fancy idea - someone should apply that technology to TVs (and on the pretext of global warming, make such TVs mandatory). Instead of a ripcord, just design it with some treadmill or a cycling machine. Want to watch TV? .. here, run on that treadmill for about 30 minutes - that will power the TV up for the next hour.

The only worry about this idea is that dedicated couch potatoes will start hiring cheap labor (or perhaps dogs or other suitable animals) to run on treadmills to keep their TV running.

Who knows, may be it will work well for the kids.

**********

Read Letters From Credit Card Companies Carefully

In light of the ongoing mortgage mess, watch out for letters from credit card companies in your mailbox. They may probably be carrying important changes to your interest rates, credit limits, introductory offers, etc. Here is an excerpt from an article on Yahoo Finance that suggests that the subprime fallout may prompt credit card companies to change the terms and conditions on your account:

Credit card issuers, meanwhile, have begun to take steps to protect themselves. Curtis Arnold, CEO of CardRatings.com, has seen evidence of issuers boosting transfer fees and introductory rates, reducing the periods for which lower introductory rates are valid and even lowering credit limits on existing cardholders, including some prime customers.

People who are borrowing large amounts on 0% APR credit cards should be especially careful about this.

According to the results of a study conducted at Ohio State University’s Center for Human Resource Research, super-intelligent people are only as good as (or as bad as) people with average or below-average intelligence, when it comes to better management of finances.

The study concludes that, generally, income increases with IQ; but, the increased income does not necessarily translate into increased wealth (by “wealth” the study means “net worth”). It also says that people with high IQ are not consistently better than people with low IQ at staying away from financial distress - as measured by problems like maxed out credit cards, late bill payments, and bankruptcy.

The way I see it, the report serves as a note of caution for seemingly *intelligent* people with high IQ (who think that just being smart can make them rich) and a word of encouragement for seemingly *less intelligent* people (who may not be confident enough in their approach towards becoming rich).

If you think about it for a while, the findings don’t seem too surprising. Below are some of the essential characteristics of people who are on the path to financial prosperity. I don’t see any reason why a person with low IQ will possess these characteristics to a lesser extent than a person with very high IQ.

• Ambition: somewhere deep in you, there has to be this powerful drive to excel financially. Intelligence alone does not guarantee this drive.

• Energy, willpower, and discipline: you need to put your thoughts (and/or *intelligent* analysis) into action. There is a big difference (usually recognized as “results“) between just *knowing* about things and implementing them. Also, once you find the right direction, you need to keep pushing to make progress along that direction - that requires quite a bit of discipline.

• Emotional stability: from what I have observed, a whole lot of *intelligent* people lack this (by the way, although I don’t consider myself to be intelligent, I do have some issues in this area that need to be addressed). Recently, JD of Get Rich Slowly elaborated on this subject (incidentally, the post was a review of the book titled “Why Smart People Make Big Money Mistakes“).

A couple of other important factors that might keep super-intelligent people from becoming wealthy are: ego and overconfidence. It’s not too difficult to find intelligent people with this written all over their foreheads: “I am intelligent; hence, I must be right. Everyone else must be wrong“.

Of course, there is this other thing called common sense which cannot be judged by IQ tests. And, there is this whole bag of vices like procrastination, impulsive behavior, etc., which can become a burden for anyone - irrespective of his/her IQ. Personally, I still have a lot of things in my bag of vices, and I don’t foresee much financial progress before I empty it. My intelligence (or whatever is left of it) is immaterial in this situation.

Jay Zagorsky (the scientist who conducted the research), summarizes the study very well:

Your IQ has really no relationship to your wealth. And being very smart does not protect you from getting into financial difficulty.

Intelligence is not a factor for explaining wealth. Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage.

That gives me some hope.

Some Totally Tangent Discussion

Interestingly, for the sake of entertaining ourselves, this leads to two contradictory statements:

• It is dumb to be smart but not wealthy.

• It is smart to be dumb but wealthy.

On a cautionary note, attributing *smartness* to just being wealthy is a tricky business. I am sure there are smart people in this world for whom accumulating wealth is not a priority. This may sound absurd to a whole lot of people who are interested in personal finance - but after a few years in grad school, it sounds perfectly normal.

On a more fundamental level, the reason behind the results of the study coming out the way they did, could be our interpretation of the human intelligence as scaled by the conventional IQ tests. As far as my perception goes, such tests are pretty narrow in scope, and probably favor book-smarts over street-smarts, even though people in both categories may be almost equally “intelligent” [sort of .. the difference between Sherlock Holmes and Mycroft Holmes - for those you are familiar with these characters].

Image source: health.allrefer.com (original image has been edited)

I ran across this article on Wisebread (a great read, by the way) titled “Frugal Things My Mom Does“, which talks about this ketchup story:

Our kitchen has drawers stocked with drive-thru napkins, straws, plastic silverware, chopsticks, and all variety of other things. But what I find the strangest is the drawer in the refrigerator filled with ketchup packets. …

.. When our ketchup bottle gets low, mom pulls out a funnel, the scissors, and the infamous ketchup drawer from the refrigerator. She then proceeds to spend an hour or more clipping the tops off 10,000 ketchup packets, and squeeze them into the bottle. When she’s finished, we have a nice, full bottle of ketchup. …

.. How, you ask, do we have a drawer filled with 10,000 ketchup packets? Because anytime Mom goes through the drive-thru, she asks for extra ketchup, of course! (And extra napkins, salt and pepper, straws, plastic silverware, and quite possibly, a roll of toilet paper from the restroom…)

I have to admit that the article was amusing to read, and it was certainly something novel. But, I had a hard time calling that “frugal”.

I really really hope that these *frugal* adventures didn’t go as far as taking toilet paper from the restroom. Even without the toilet paper, it doesn’t sound quite right to me.

Just imagine what will happen if thousands of families decide to go on that *frugal* path. With 10,000 packets each, we are looking at about 10,000,000 packets of extra ketchup stored in kitchen drawers. Now, those millions of packets don’t come for free, someone has to pay for them. Let me guess who pays for them… yeah right! the remaining thousands of families who don’t hoard on stuff just because it’s available without any extra cost.

Of course, one can go into the technicalities of profit margins of fast food chains, and argue that the cost of several packets of ketchup is recovered (several times over) by the amount of profit that is made with each sale. But, that still does not condone hogging on *free* resources. If you have issues with profit margins of fast food chains, just stop eating at those places - instead of trying to get the worth of your junk food expense. Just cooking at home and avoiding fast food will save you enough money for a number of store-brand ketchup bottles in time to come.

This ketchup story reminds me of another similar situation I experienced a few years ago. I was in Nevada for a conference and had shared accommodations with another graduate student. This dude used to collect all those miniature shampoo bottles and soap bars from the room everyday. Once, I remarked to him, “You know, that shampoo is not really good quality, are you sure you want to use it later?“. To which he replied, “I know the stuff is not good.. but hey, it has already been paid for, so I will take it anyways“.

Now, one could argue that the bottles would anyways be wasted if not used - so it’s a frugal thing to carry them and use them up. But that was certainly not his intention - plus, he didn’t even like the shampoo! He was just more interested in trying to squeeze the most out of that hotel stay. And by the way, he wasn’t even paying for his stay - the school was picking up the tab. I don’t know what he did with all those bottles… probably he emptied them in his regular shampoo bottle or, more likely, just threw them away.

Anyways, the point is that such attitude is often misrepresented as being *frugal*. In my opinion, that’s just hoarding - because stuff is available for hoarding. Other examples, of such hoarding attitude are:

• stuffing pockets with those free candies/mints that restaurants offer after meals.

• eating *too much* at a buffet - just because you have paid for it and now you want to make it worth every penny.

• stuffing bags and bags of office stationery at career fairs - you should really see this circus, it’s awesome. Young soon-to-be-graduates, who should be more interested in talking to prospective employers, are usually busy collecting pens and rubber-band balls.

• an extreme (hypothetical, but pretty relevant) example would be to stand near those free sampler kiosks in a SAM’s club or Costco outlet, and keep stuffing yourself with whatever they serve in those tiny cups until you are no longer hungry. You probably paid for it with your membership fee, so why not?

Frugality is making the most of *your* resources. How can people be called *frugal* if they are reducing their own expenses by grabbing someone else’s resources? Is it *frugal* to take more than your fair share - even if it is free?

Just for kicks: some quick calculations for those who are interested in nitpicking on the ketchup article. Suppose you grab 10 extra ketchup packets with each drive-thru trip, it will take you 1000 trips to gather 10,000 packets. If you spend an average of $5 per trip, that’s about $5000 right there on junk food! That’s not frugal, dude.

Elsewhere, it has been estimated that it takes about 50 small packets of ketchup to fill up a 14 oz. bottle (which costs about $2 at present). Which means, 50 packets contain $2 worth of ketchup (4 cents per packet), or 10,000 packets contain about $400 worth of ketchup! Which further means that you can fill about 200 ketchup bottles if you hoard steal 10,000 packets. Man, shrewd people can start an eBay business with this kind of thing.

It appears to me that this whole wedding thing has become a profit-loss business for some people. Just read this ungrateful rant on Yahoo! Answers:

I myself am planning a wedding. It’s costing me about $35,000 give or take. (And that’s not a big number for a wedding) Now I understand if you are traveling super long distances (I have a guest coming from France to my wedding in Canada) but people that live by me shouldn’t have a problem. Right? If you break it down, I think it will cost me about $230 per person. Now, whenever I go to a wedding, I try to find out how much it cost for a plate, add 15% or more. I thought that was what everyone did. I know that maybe not everyone has tonnes of money, but it’s a wedding! I plan on doing it once! Isn’t the point of weddings (other then getting married) to help start off a couple? When it was my fiance’s brother wedding we gave him $900 between us. He’s family! I see people asking “what is a cheap gift for a wedding?” … and I can’t help feel insulted for the wedding couple.

Tell me am I out of line with my thinking??? Should I expect only $20 gifts from people?

Forget about the ridiculous numbers in that text, just concentrate on the attitude.

Fortunately, the rant received some suitable chastising replies, and probably the lady who asked the question finally learned something at the end of all that. The best answer to that rant was this:

…and by the way, you are having a wedding, not a fund raiser!

Now, I have met a few people/couples who are not as ungrateful as the author of the above rant, but they do try to *estimate* the value of gifts received, so as to find comfort against the rising cost of their wedding. They are not blunt enough to say “I am expecting wedding gifts“, but somewhere at the back of their mind, their calculators are running, and they are hoping that guests will give them *reasonable* gifts.

I can understand the feelings of people/guests, who, with their own free will, genuinely wish to give something to the marrying couple to help them start a new household. Such noble feelings extend beyond the boundaries of culture and tradition, and are perfectly sensible from the point of view of the giver.

But, I haven’t fully understood the logic behind a couple or a person who expects (or for that matter, just accepts) gifts on their wedding? Are you expecting gifts because everyone else gets gifts for their weddings? or because of cultural and traditional obligations (like your parents want you to accept gifts)? or because you really need the help that the gifts will provide in setting up your new household? or are you just taking them because people are in the mood to give? I am not asking these questions in a fit of ranting mood - I would really like to know what goes on in the mind when it comes to expecting gifts.

People share this common, often quoted, philosophy - “it’s the thought that counts“. If it’s really the thought that counts, then why not just accept good wishes and blessings as wedding gifts instead of merchandise and/or cash? and if you are ready to accept just the thoughts, why not proactively ask people to not bring any gifts? “Proactively” is the key word here - without which, the line between “expecting” gifts and “accepting” gifts becomes blur.

Why not save hundreds of poor souls from situations like this, and advice like this on how to avoid overspending on wedding presents? Why not save yourselves (and/or some of your family members) the trouble of ridiculing people who give *cheap* gifts? Just politely ask everyone to not bring any gifts and a lot of problems will be solved.

If you think that would be an earth-shattering, revolutionary way of doing things, take heart; people have done this before. For example, here is a part of a wedding invitation I received last month (from an economically average, middle class gentleman):

We (me and my wife) had a similar wedding “policy”. It wasn’t within the norms of our cultural and/or traditional mindset, but we did it anyways. We had a lot of reasons why people shouldn’t spend money and time on buying gifts for us, but we never found a single one that convinced us to accept any gifts from anyone.

I would be glad to hear from people who have (or have not) accepted gifts at their weddings, and the reasons behind doing so. If you are planning on getting married in future, would you consider proactively asking your guests to not bring gifts (or even flowers)?