Category Archives: Saving Money

Convert spending into winning and trick yourself into saving

Money is inherently psychological. If we as a society lose our faith in our paper currency, it loses all its power and instantly becomes worthless paper. In a way, we only believe money is real because everyone else believes that everyone else believes it’s real. If you follow me.

But it’s also psychological in other ways. If we loan money to a friend, it immediately changes our relationship. We don’t feel that way when we loan tools or clothing. Why is money so different?

Fortunately we can also use money’s psychological powers in clever ways that become money-saving tricks. Next time you’re likely to make a mindless impulse purchase, try this trick out and let me know how it works. I do this from time-to-time and it helps me stay out of trouble.

The trick is this: convert the dollar amount you’re about to spend into money you just won or found. By employing this method, you can reset the importance of that money to your brain, helping you make different choices.

For example, say you’re about to blow $6 on a delicious, hot latte. Mmm, hot latte! Now, logically you know you’ll just be draining that latte into the toilet in about an hour, but oh, it’ll taste so good! But would you just throw $6 into the toilet? Hell, no! To resist the temptation, try converting the dollar amount in your mind to money you just found. Ask yourself how you’d feel if you reached in your desk drawer and found $6 you didn’t know was there. You’d be psyched! But by not buying the latte you’re saving the exact same amount! Remind yourself of the happy feeling when you find money and it’ll help you hold back.

Money can seem small or large depending on the context or price of what you’re buying. If you were buying, say, a TV, one unit might be “only” $200 more than the next one. You rationalize to yourself that it’s not much more to spring for the slightly better model. You whip out the card and make the purchase. But if you remember the exhilarating feeling you got last time you won with a lottery ticket* you can trick yourself into remembering what the real value of $200 is and restrain yourself. Congrats, you just won the lottery!  Or if you found $200 in an old jacket pocket. Would you be so casual about that?

Imagine a van pulls up to the side of your house one day and a guy runs up to your door to hand you an oversize check for $200,000! Wow, that’s a lot of money! What a great feeling! But by downsizing your house some of you might be able to get that $200,000 in your hands, but you ignore it. Don’t you want to win $200,000?

Pretty much the only casino game I’ve ever enjoyed playing is craps. It’s complex, fast-paced and I generally make some money at it. The fact that it’s relatively easy to walk away with cash is probably why it’s getting harder to find craps tables in casinos. Instead, the casinos are packed with slot machines which are very carefully designed to relieve idiots of hard-earned money.

One of the calls I’ve been procrastinating on making lately is to my insurance agent. I need to make several changes to my policies, but I’ve been waiting until I sold some real estate so I could do everything at once. I figure my family should be able to save $100/month once the changes are in place. That’s $1,200 every year! I would be psyched if I won $1,200 playing craps! That would be an amazing amount of money to walk away with! Yet, here I sit with my thumb up my butt waiting for the “perfect time”. OK, that’s it, I’m going to call today! See? It works!

What about you? Do you have any clever ways to trick yourself into saving? 

*I hope none of you have ever really done anything as stupid as buying a lottery ticket.

Save money with a tool library

All the tools, none of the price

The tool library workshop space

The tool library workshop space

As I mentioned previously, my wife and I clearly bought too much house when we moved into our current home. We paid $625,000 in 2008 in a collapsing market, thinking we totally scored. Unfortunately we didn’t wait quite long enough as home prices continued to decline, putting our potential sales price well below our purchase amount. (We’re about back to even now, not including commissions, interest and work we’ve done to it.)

This mid-century classic home is built like a tank and is the first home I’ve owned with completely straight and plumb walls. It has a warm, cozy feeling throughout and has a classic layout that makes most areas of the home quite usable. It has a lovely view of the Puget Sound and beautiful Vashon Island.

But, as always with real estate, there have been a few issues. The upstairs and downstairs bathrooms were both shot. The kitchen had been remodeled in the 80s or 90s and was poorly done. We’ve replaced all the windows and switched the giant, dirty oil furnace for a new, natural gas model. We almost immediately remodeled the upstairs bathroom and rushed to redo the kitchen last year before Pretired Baby showed on the scene.

As we became more serious about getting to our full pretirement as soon as possible, however, we made some abrupt spending cuts and looked with some dismay at the money we’d put into this house. If we had bought a totally adequate $400,000 home and put the difference into our pretirement accounts, we’d be just about there. Whoops! It’s a lesson I hope anyone thinking about buying a home can learn from me and avoid their own mistake.

So we developed a strategy to get out of our situation and still reach our pretirement objectives. Without diverting to a whole post on our house situation, we decided we need to make some prudent updates to this house to position it for eventual resell at a higher price (hopefully in an appreciating market as well). One of the tactics we came up with is to update our open and awkward basement layout to add two more bedrooms (will function as a storage room and an office for us) and to update the completely disgusting downstairs bathroom. That should let us sell for $20,000 to $30,000 more. Note that we may even downsize into a rental for a few years before we sell as part of a grander plan we have cooking.

Break out the tools



Thirteen years ago when I bought my first home, I didn’t even own a hammer. I always wondered how old men always seemed to know how to fix stuff on houses. Now I know. After owning half a dozen pieces of property over the years, I have acquired a massive collection of tools. My operating plan for tools has been this: Don’t buy any tool until you absolutely need it. When you need the tool, buy the best quality tool that will fit your needs and repeat as needed.

Projects take much longer and are more dangerous if you don’t use the proper equipment and as much as possible I’ve tried to avoid buying cheap, junk tools because they fail too quickly. Those tools (**cough** HarborFreight **cough**) are basically disposable, which is usually more expensive in the long run. There are a few exceptions to that rule, particularly related to tools that I am pretty sure I’ll never need again. And while renting tools can be a great option, it’s very often cheaper to buy these days, depending on how many hours you’ll need it.

Enter the Tool Library

More tools

More tools

Today, though, I have another option. I had the opportunity to help, in a very minor way, launch a local “Tool Library” in our community a couple years back. It was a project put together by Sustainable West Seattle, a thriving nonprofit where I served on the board of directors for a few years.

The concept is simple: Instead of every person in the neighborhood storing, say, a pressure washer in their garage for 364 days per year, these tools are centralized and checked out as needed. There are other benefits, too. The group loans tools out en masse to community groups doing work in the area. For example, this this recent project where a garden was created to help a local food bank. (Now hopefully the food bank will be able to offer more fresh food in addition to the more processed fare so often donated.) In addition, tools are available to the community in times of natural disaster, with shovels, axes and saws available as needed.

Nowadays there are even classes to learn how to take on various projects and there is a rentable workshop space with some larger tools.

It came with extra nails -- sweet!

It came with extra nails — sweet!

The tools came from donations and from some purchases using start-up funds received via some government grants and private donations. Many of the initial purchases were rounded up during the massive community-wide garage sale that occurs here every year. Many of those were picked up for just a dollar or two with many more just being given freely as people learned about the concept.

Since I already had such a massive tool collection and haven’t been doing as many home projects lately, I haven’t really needed to borrow anything since we started the tool library. But since we decided to kick off our basement project, I did my first check-out last week.

Everything you need to attach wood to concrete

Everything you need to attach wood to concrete

At first I had forgotten it was even there! Needing to attach my walls to the concrete floor of my basement, I had gone in search of a powder-actuated tool. This tool fires a nail into concrete with what is basically a .22 bullet shell. I first checked with family (lots of construction folks in my family) to see if anyone had one I could borrow. No, it’d been loaned out to another family member and was now lost. Next I checked the prices over at Home Depot. Wow, $559 for the Hilti DX 36. Looks sweet! Old me might have just went down and bought that baby on the spot. Or more likely one of the cheaper versions since I won’t need it much after these walls are up. Like this one for $22. Plus I’d need to buy nails and shells. There was nothing decent on Craigslist.

But then I remembered: I have a tool library right here in my neighborhood! I even helped with the launch! I checked the inventory and sure enough, there it was, a Remington Powder Actuated Tool just like I needed. For the low, low cost of FREE. When I got it home I found it even had leftover shells and nails in the kit. Score!

It was busy at the Tool Library while I was there. Someone was loading their car with a load of rakes and shovels to attack a spring project while another person was returning a small rototiller. A couple folks were using the rentable shop space.

Now I know some of you are thinking: “Well I don’t need a Tool Library because I never need tools. I don’t even own a house!”

The embedded nail

The embedded nail

Sorry, but we’ve got you covered, too! In addition to having tools available for community projects, the definition of “tool” has been expanded as well. Available are canning tools, a cider press and even books. Wait, books at a library? Mind=blown! There has even been talk of having some loaner dishes available for banquet events and even some sound system equipment or projectors for meetings. We’ll see what happens as it grows.

There really is something for everyone. Do you ride a bike? Check out the bike repair tools! Need to move something heavy? Or just concerned about Zombies? We’ve got you covered. It’s a pretty cool concept. Check around. You may have one in your community as they’ve been sprouting up in recent years. If not, why not help start one? Our team has put together a sweet starter kit to help you get going.

So how did my powder actuated tool loan work out? Awesome! I started by framing in the walls, getting them all dialed in just the way I want. After YouTubing how to use the tool (these donated tools often have no instructions with them), I was ready to go. You insert the nail into the barrel end. Then a cartridge (the “bullet”) is placed in the upper section. You press down hard where you want the nail to go and whap with the hammer. It pops like a gun going off and your nail is safely embedded into the concrete. A few more and the wall is totally solid. The basement is looking awesome so far. I just have a few more walls to go and I’ll be well on my way to a home that’s ready to rent, sell or just enjoy!

Anyone else have a tool library in their community? If there was one available, would you use it? 

Greeting card tyranny

greeting_cardAt this point in the development of capitalism, it is well understood that the most profitable businesses are those that sell a product that consumers cannot resist buying. Cigarettes, oil, electricity, insurance and heroin are all examples of products that once a consumer is hooked, he cannot help but to buy. I put greeting cards in this category.

Americans purchase 6.5 billion greeting cards each year, blowing $7-8 billion for the privilege, according to the Greeting Card Association.

Sure, it’s not much money per person, maybe $30 each on average. But for what?

Trees are mowed down or, in the best case, recycled paper fiber is processed into sheets of printing stock. These sheets are then printed with cute little phrases and pictures (often in China), are shipped to the U.S. then distributed to individual stores. At the local stores, the customer plays his or her role, flipping through the cards as quickly as possible until one is found that will “work” — not perfect, just “good enough.” The card is mindlessly purchased, a name is unemotionally signed and the card sits until it’s time to hand it over to the receiver. That moment is funny, too, with the giver anxiously waiting while the receiver opens the card, fakes a chuckle at the joke and says a heartfelt “thank you.” If it’s a group setting, the card is then passed around so everyone can enjoy the hilarious joke. And, then, of course, after the journey from forest to factory to store to lucky recipient, the card is usually recycled into an eggshell carton, fulfilling the much more important job of gently cradling an egg.

My biggest complaint, though, isn’t about the environmental waste of greeting cards nor is it the financial cost, which is relatively small on an individual basis. No, it’s the societal pressure to acknowledge these special dates with a decorated and branded piece of paper. Somehow the greeting card industry has managed to create a world where I must buy something to remain in good social standing. Instead of getting points for buying something for you, I get punished for not buying something. Now by spending my money on a greeting card, I get to zero. It has become, literally, the least you can do. (OK, actually sending birthday greetings on Facebook is doing even less, but you get the idea.)

For many years now, I’ve mostly opted out of buying cards for people. I feel no pressure to tape a card on top of a gift just to complete the picture. I don’t buy a card for someone to acknowledge their birthday. Cards I’m OK with are condolences card for deaths in the family, thank you cards (buy in bulk to have some on hand for less money) and occasionally I’ll spring for one just to hold a gift card. My wife and I have an understanding about this, which helps a lot. Occasionally we’re still caught by this exploitation for certain special occasions, such as a parent’s anniversary or similar event, but it’s been liberating to largely free ourselves from this tyranny.

What about you? Do you still buy greeting cards or have you found a way to escape this trap? Or do you not look at as a trap and buy cards without feeling it’s a such a horrible thing?

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