Regulation D

Oh egad, now "they" want to dictate the way I handle my money.  "They" being the powers or people that are the ones who keep telling us we "must" do this or "must" do that.  Like, for example, changing to digital without any choice in the matter was a few months back.  It feels more and more like my life is not my own anymore.  There is always someone telling me that I must change but I don't want to change their way.  I want to do things the way it makes the most sense to me.  What am I upset about? 

For a long time I hated the idea of not getting my cancelled checks back and having to pay a fee to get a copy of one if there is ever a question about whether I paid a bill or not.  Now the banks are getting even more control over my (our) money.  We don't have a choice in the matter.

This morning I heard about some new banking regulations that are going to be in effect next  month.  I thought my readers might want to know because it may change the way you do banking too.  We are going to be limited to 6 transactions a month including automatic bill pay, atm transactions, and some other things.  I'm not sure if this means regular checking accounts or just savings accounts or what.  I'm still trying to figure it out myself and how it's going to change the way I do banking.  Especially online purchases and store purchases with my card. 

You may want to check the website of your own bank to find out more.  I think I'll look at my bank's site after I finish in the kitchen.  This is a link that explains Regulation D better than I can. 

https://www.ufcu.org/tools/help/reg_d_faq.php 

Thrift store finds

Look what followed me home yesterday.  A trip to the farmer's market then a trip to the thrift store and a lot came home with me. 

The stair basket is a gift for my daughter.  She didn't know it's for sitting on the stairs to the basement.  Instead of making a hundred trips down and up the stairs, items are put there and one trip is all that's needed.  The hand mixer is for her too if she wants it because I have one already.  The yarn is for me to test out my  knitting machine when I've finished the quilts for the year.  It's acrylic yarn because that's all I could find.  No one seems to be donating wool or cotton yarn.  Hmm.... maybe a knitter got there before me and took it all?

I was looking around my house yesterday and realized there are a lot of things I need to finish ASAP.  There's a chill in the air that reminds me cold weather is only a few days away.  Cold weather means higher utility bills.  The tv news is reporting we can expect to pay even higher than usual for gas this year.  Geeze! 

I hope to install the window quilts.... very soon.  I've been saying that for a while now and they haven't been installed yet.  Too many distractions happen to pull me away from my plans.  I'm determined to get the quilts put up in at least one room by Monday.  Right after I get the greens put into the freezer and after I finish the quilt on the machine and after I pull out the winter clothes and after......

You see what's happening?  Too many distractions.

Create a price book

Now that you have your list of items you want to keep in your stockpile, it's time to think about how much you will pay for those things.  I was talking with my daughter yesterday and she mentioned that she was tempted to just go out and buy everything for her stockpile.  That's not the way to save money.  Of course she knows that, she is just feeling tempted (anxious) that's all.  She will need to buy things when they are at the lowest cost possible. 

She also asked me if the price of canned tomatoes on sale this week was a good bargain?  Good question.  I wish I could honestly answer that question.  The last time I bought canned tomatoes was about a year ago so I couldn't answer her question.  I admit, I've been pretty lax in doing frugal things the last few years due to the overwhelming machine quilting schedule I used to keep up with. 

This is a rough draft of how my price books will look.  I don't have the right size books I need yet but I wanted to post about creating one anyway.   I will try to do another post on my price books as soon as I get them made.

Creating a price book will help save money.  A price book is an organized way of comparing prices.  You can use it to check whether a bargain really is a bargain or just clever advertising to part you from your hard earned money.  You can use a price book when looking through sale ads as well as checking a price while in the store.  In the picture you will notice that my chart is in ink but the prices will be in pencil.  That's so I can erase and change information without messing up the chart.  One thing I forgot is a place for how many I want to have in storage (ink) and how many I have of each already (pencil). 

In my opinion the price book should be small enough to fit into your purse so you can carry it with you all the time.  It will be with me if I happen to come upon what looks like a bargain but I'm not quite sure.  Actually two small, purse sized spiral notebooks would be ideal.  One for food items and one for non-food items. 

I will use one page per item with stores listed, the price paid (or price copied from the shelves), size, and the date purchased.  My price book will be created using my stockpile list as a guide.  Every item on my stockpile list will get a page in my price comparison books.  The last time I had a price book I also had a "normal price" column.  I wrote down prices as I shopped so I knew which store sold which item cheapest when not on sale.

In my opinion a frugal shopper should never be without their price books.  Oh my, am I a bad shopper or what?  I haven't carried a price book in a long, long time.  If there is a question about whether a price on an item is a good bargain or not..... look in the price book.

My daughter has come up with her own version of price book using her computer to create a spreadsheet.  She plans to have only one sheet per store with her stockpile list under each store.  She was telling me how she can sort in all kinds of ways to get the information she needs.  I'm more of paper and pencil type person but she is a computer person.  Either way will be fine so long as it's created and used. 

No organizing system will work if it's not used. 

One thing to remember is to not go overboard and spend money on over priced items just to get a stockpile created.  A stockpile is all about saving.... not just having.  A stockpile is created by getting items as you find them at their lowest price possible.  Hmm.... it's kind of like knowing there will someday be a flood but not panicking and sitting there waiting to be rescued years before it actually happens.  You want to be prepared but not panicked. 

You want to stay within your normal grocery budget and at the same time add to your stockpile.  For example, say you find that tomatoes are at the lowest price in a long time.  Drop something from your normal shopping list so you can stock up on the tomatoes. 

Hmm.... maybe this will make more sense.  I think most people have heard about how to "snowball" your way out of debt.  That's where you pay off the lowest debt.  Take the money you would have used to make a payment on that lowest debt and apply it toward the next lowest debt until it's paid off.  Take the money you would have used on those two payments and apply it toward the next lowest debt and so forth until all debt is paid.

 Well that's how I believe a grocery stockpile should be created.  Start with the cheapest item (or the current sale item) to put into your stockpile.  Buy enough that you won't be buying more until it's at it's lowest price again.  Use the money you would have spent on that item to purchase the next cheapest item and so forth until your grocery stockpile is full.  Then you only need to maintain your stockpile by buying items at their lowest price again.  Stay within your budget!  Don't panic and spend without a plan.  It will probably take months to get a really good size stockpile created but you won't be overspending just to create a stockpile, if you buy wisely.

Understanding utility billing

I mentioned in my last post that I have a goal.  My goal is to save as much as possible on my living expenses so the money can be saved to do major repairs on my house without getting a loan.   I was looking at my water bill and the gas/electric bill.  Can you read the writing on the bottom of this bill?

Ok, it's blurry so I'll tell you what it says.  "On January 1, Louisville Water Company rates increase 4.5%."  That does not mean just add 4.5% to your total bill.  What it means is that each 1,000 gallons of water we use will cost 4.5% more.  Or at least that's the way I understand it.  I do have some time to prepare before January.  It's still 3 bills away.

Our gas/electric bills will be increasing again too.  The public service commission just approved an increase in the cost of renting our meters.  I forget how much the increase is.  Right now I pay $5 per month to rent the electric meter and $9.50 to rent the gas meter.  Did you know you rented the meters?  Yup, you rent them.  That's what the "customer charge" is on the utility bills.  My neighbor's utility bill goes up $14.50 per month even though his utilities were turned off about a year ago.  That's the rent for two meters every month even without using anything.

Those are My current bills.  Gas/electric is on an equal billing plan.  It's $127 a month.  There was a yearly adjustment made last month.  The water bill includes sewage and drainage bills.  It's $76.24 for two months.  Those aren't bad compared to what they were when my daughter and Ladybug lived here.

Well anyway, I thought you might like to understand how utility bills are calculated.  I believe this would be the same method all over the USA?  Basically both our gas/electric and our water bills in this area are calculated the same way.  It's both a tier based system and a demand based system.  What does that mean?  Hmm.... I hope I can explain it so it's understandable. 

The tier based system is sort of like when you file taxes.  If you are in a lower income bracket the amount of your income owed for taxes is a lower percent.  Move to a higher bracket the percentage is higher.  Move to an even higher bracket and the percentage is higher.  You following me so far?  That's a tier system of billing you for taxes. 

With utilities if you use "lower than average household use" in KWHs, you are in the lower tier so you pay less per KWH.  Move into the "average household use" and you are in a higher tier.  Move to "above average household use" and you are in a still higher tier.  While a household that is below the average might pay .07 cents per KWH those in the average household might pay .10 cents per KWH, and the above average household may pay .15 cents per KWH.  These are just made up costs to show the example.  Check with your own utility company to find out the exact figures.  Still following me?

Next is the demand billing part.  Demand is when "the most people" are using it.  Like in the morning when more people are waking up to take a shower, brushing teeth, fixing breakfast and coffee, using a blow dryer, or generally just getting ready to go to work.  Or there is late afternoon when "the most people" are getting home from work, turning up the air conditioner, starting dinner and the dishwasher, turning on the tv and the computer, and so forth.  The more people using utilities, the more the demand.  This translates to higher KWH prices during those times.

Demand costs (peak hours) are billed at a higher rate per KWH than off peak hours of less demand.  What this means is that even though you may fall into a certain tier for most of your usage; if you are running appliances and tvs and computers when "everybody else" is doing the same thing.... you pay more per KWH.  So during off peak times you may be paying .07 cents per KWH and during peak time you may be paying .15 cents per KWH and those in higher tiers are also paying more.  Still with me?

According to the back of my electric/gas bill, the average household uses 1,000 KWH of electricity per month.  1,000 KWHs use would be the middle tier or "average".  I used 1,132 KWH this month so I'm about in the middle tier.  If I can get my usage to below 1,000 KWH per month, say 500 KWH, I will be billed at a lower rate per KWH.  I'm going to call LGE Tuesday to get a rate schedule for my area so I will know for sure what tier I fall into and how much it's costing me.  It will also tell me how far down I must cut my usage to be in the lower tier. 

There's one other factor to the billing.  The area you live in is figured in there somehow.  I'm not exactly sure how because I can't remember.  I think it was by income area or zip codes or something like that.  It too is based on a tier system.  Live in an area where more people are likely to have the utilities turned off and the rate is higher.  Live in a different area that seldom has cut offs and the rate is less.  

The same tier system is used for the water company billing although I can't remember them having a high demand time rate.  I'm not sure what the average household water use is in this area but the bills are based on 1,000 gallons per unit of cost.  I think I'm about average with a use of 2,000 gallons per month.  If I can cut the amount of gallons I use then I can move into the lower tier billing.

Did you know that businesses like laundromats and car washes pay a lessor rate per 1,000 gallons than the average household does?  It's true.   Their bills may be higher dollar wise because they use more water but the actual costs per 1,000 gallons is less than you or I pay.  The same is true of a business that uses lots of electricity and gas like a restaurant or an office building.  Their rate per KWH is less than the average household.  Hmm... I may have to check this out since I haven't seen a rate schedule for a long time.  The rules may have changed since then.  I highly doubt there was a change though.  Businesses have always payed a lower rate than households.

You may wonder why I decided to explain about utility billing.  Well, my opinion is that if you are educated about HOW you are billed, you can use the knowledge to change your habits and save money.  For example if you know that running the dishwasher during peak hours cost a certain amount, maybe you can set the dishwasher on a timer to run in the middle of the night which would costs less.  Also, I needed to refresh my own memory of how the billing works.  Type talking about it helps. 

Can anyone think of anything I forgot about how the billing works?

Analyzing the bills

I happen to be looking for a receipt yesterday which ended up with me doing a "file it" session.  That's one thing I can cross of my to do list.

Then it occurred to me that I haven't analyzed my bills in quite awhile.  I like to go through them every once in awhile to see if I can cut back or in some cases see if I have lost control of what I use.  For example my gas and electric bill. 

 I'm on the equal payment plan but it's about 75 dollars more a month this year than it was last year.  How can that be?  I did have the house well insulated last year and a new furnace and water heater installed.  The bill should be smaller, not higher!  My guess is that a big part of the difference is the hike in costs our utility company has gotten over the past few months.  I'll have to do more researching to know for sure.

I have a meeting later this month to meet with a financial planner.  I am pretty good at figuring out how to save money but it's always nice to have another person to talk with.  An in person conversation between two or more frugal minded people is good.  They may see something in my plans that I don't see and can point it out to me. 

Anyone who has been reading my blogs for awhile know that I desperately need some work done around here.  I have over grown trees in the fence line.  I have major wood damage (pre-termite treatments) to the outside of the house.  I would like to get a stairway built to the basement in order to use it at last.  I will probably need to replace the roof in about 3 or 4 years.  It has a 30 year warranty that will run out about then.  You know what happens when a warranty runs out don't you?  It never fails to need replacing.  There are other things I need too. 

What I'm hoping to do is figure out a way to pay cash for the repairs I need instead of getting a loan.  I hate going into debt if I can avoid it.  I do have a plan in mind which is why I'm meeting with the financial planner.  I want to do this without going back to work full time too.  I like my retirement and really don't want to give it up.  I really hope my plan works!