Have you ever met someone who chases after electronics? They seem to survive in a whirlwind of batteries, plugs, beeps, vibrations, and the occasional sidewalk wrap-around product debut line. This is not a financial sin by any means—so long as that person has the money to do so—but you could certainly save money and some aggravation by waiting to purchase a “new” electronic until it is deemed “old” in technology years where products age much more quickly than dogs. That is because there are known truths of electronics: prices always drop, and the technology always gets better. It just takes time, and typically not much at that. Let me show you what I mean.

MP3 Player - iPod

The iPod was introduced to the market on October 23, 2001 at a price of $399. It had 5 Gigabytes of storage, and could only work on Macs. On July 17, 2002, just 9 months later, the price of a 5 GB iPod drops to $299. At this point there is also a 10GB model being offered at $399 (twice the memory of the first model for the same price), and a 20GB offered at $499. The 10GB and 20GB models are equipped with an improved user interface: a new touch-sensitive Scroll Wheel instead of an actual moving wheel (which early users found to damage easily). On April 28, 2003 the third generation of iPods was introduced. This time the price points came down more again with the added bonus of increased storage:  10 GB ($299), 15 GB ($399), and 30 GB ($499). These third generation iPods also work on Macs or PCs, and had touch-sensitive controls. Of course today you can get an 8 GB iPod Nano for $149, or a 2 GB iPod Shuffler for $49.

It is possible that by 2002, just 9 months after rushing out to purchase the first generation of iPods, you would have felt “behind the times” all ready, with your possibly damaged $399 product.

Flash Drives

Flash drives were outside of my budget when I lived in Florida near my aunt and uncle (2006-2008). I remember many dinner table conversations with Uncle Andy where we touted the latest 8 GB flash drive prices. I was horrified at the $80+ price tag when I first moved to Florida, and then near the end of my time there, Uncle Andy had announced that he had found a price of under $20. That is more than a $60 price drop in less than two years.

The first flash drive product (available commercially on December 15, 2000) provided 8 MB of storage. I have researched for hours and could not find the price of this first product (does anyone know either from a link or from personal experience in purchasing one?). However, the first generation of flash drives had a short estimated lifespan due to device fatigue from too many read-write cycles, and came with only a one year manufacturer warranty (warranties for flash drives now can be found for five years). Less than three years later you could purchase one with 128 MB for $33. Today, you can get 8 GB for under $10.

e-Book Reader – Kindle

The first Kindle (e-book reader) was introduced in 2007 for $399. This device had 250 MB of storage, and had expandable storage through an SD Card slot. The Kindle 2 was introduced in February 2009 for $359 months before being reduced to $299, and then months before another reduction to $259 ($140 cheaper than the debut product less than two years earlier). This model offered 2 GB of internal storage. In 2011, you can purchase a Kindle for $79 (ad-supported) and $109 (non-ad supported).

It appears that different versions of the Kindle throughout the last several years have waivered in price (for example, the Kindle DX Graphite was produced after the Kindle 2 in July 2010 and cost $489 before being reduced to $379; then just one year later the price of the new model cost $79). So while this example does not necessarily show a continual reduction in price, each of the generations of Kindles saw an improvement in the product design and use. Overall, the price dropped by approximately $320 from 2007-2011.

Flat Screen LCD Televisions

As this article from CNN shows, 32” LCD flat screen Televisions averaged a staggering $1,566 in 2005. One year later they averaged nearly half of that at $873. If you had delayed your purchase by just one year, you could have saved yourself $693. By 2010, the average price was $374.

Being the first to purchase new electronics really puts you at two disadvantages: you are not getting the product at its peak when all of the glitches have been ironed out and maximum capabilities have been added in, and you are paying a very high price. Of course the people who are brave enough to purchase the first generation of a new electronic allow for the improvement of future generations of products, as well as for the reduction in price for the rest of us. If you don’t wish to be this person, something that you might want to consider this holiday season is purchasing last year’s model—unless your recipient is one of the people on the electronic treadmill. In that case, I might go with a nice pair of wool socks (those haven’t gone out of fashion yet, right?).

Paul has wanted to purchase a flat screen television for two years now. I have to admit that I have no real desire for one. There are two things that I like about flat screen televisions: the amazing definition and vibrancy of colors on Planet Earth, Blue Earth, and other neat shows, and being able to mount the unit on a wall so that they take up less space. But these two positives are not enough for me to choose to prioritize a large chunk of money towards the purchase of one. However, Paul has diligently and patiently waited for two years, prices have dropped since 2005, we are both gainfully employed, we’ve built up a fully stocked emergency fund, and we are out of non-mortgage debt—who am I to say no now?

I still do not want to pay full price for one and thought I had found the perfect deal to be able to surprise Paul on Christmas day: a 40” Toshiba LCD HDTV for $380 at Best Buy. But when I reached the store it turned out that I had missed the sale by a few days. The sales associate felt bad about it, and with a wink and a nudge-nudge he confided to me that at midnight on Thanksgiving Day I could grab a flat screen television for an incredible $199. He even suggested that I stand in line at about 8:00 p.m. to increase my odds of scoring one of the coveted 30 his store will have. I thought about it for a moment, me leaving whatever warm and cozy home I am in surrounded by family to stand outside on the cold cement sidewalk with the glow of Best Buy’s fluorescent lights on my face. It took about half of that moment to figure out that there was no way I would do that. I thanked him and left.

There is a growing trend in consumerism that is making me uneasy: the Black Friday selling and buying frenzy is encroaching on Thanksgiving Day. Instead of each of these days getting their own time to shine—a day centered around friends, family, and food, and then a day centered around incredible deals—an evening of full bellies, love, and laughter could now be spent standing in a line with hundreds of other cold, impatient people to try and score a flat screen for $199. This year Best Buy, Macy’s, Kohl’s, and Target will be opening at midnight on Thanksgiving Day. True, midnight is technically the next day, but in order to score the incredible deals people will need to do something crazy—like eat Thanksgiving meal, watch a football game, gather in a living room for an hour, and then haul off to stand in line at around 8:00 p.m. when all of the other people trying to score a deal will be out and about. If the stores continued to open at 4:00 a.m. or so on Black Friday, then at least everyone would get the entire evening to spend with family and friends. This trend appears to only be getting worse; as one competitor announces it will be opening its doors at midnight, the others must follow suit to not lose consumer dollars.

With more stores rolling out Black Friday deals at midnight on Thanksgiving Day, I thought I should ask: are we united in buying things or are we united in Thanks?

What are your thoughts?

P.S. Happy Thanksgiving!!!!!

It started in late September during the final load of “my-mom’s-coming-to-visit-better-get-things-clean-including-rugs” laundry. I put the last load of wash in and headed into the shower. When I came out I was met with a pile of drenched, semi-cleaned rugs and an inch of water on the laundry room floor. By rerunning the load I immediately saw what was happening: as water went into the basin it immediately filtered out onto the floor.

Over the weekend I called a washer repairman. After describing to them the issue they theorized that it was a bad water pump and estimated that the cost of fixing the washer would be $150. This was the washer and dryer set that the previous owners had left us (thank you!), and they had lasted us two years while we recovered financially from a down payment on our home, a few renovations, and paying off all of our non-mortgage debt. While repairing would be the cheapest option, these machines are definitely older and we thought it was not best to sink money into them.

This led us to somewhere I had not been since my post-college, first apartment days: the Laundromat. Back in 2005 I had this great routine that really optimized my time on Saturday or Sunday afternoons. I would put two loads of wash in simultaneously, read a magazine, then as soon as I switched them over to the dryer I would go directly next door and grocery shop. By the time I was finished at the grocery store my loads were dry. I folded them, lugged everything out to the car and called it a day. How nice and simple! Now our routine is different though. Over the last month and a half Paul and I have rotated turns at the Laundromat, typically on Sunday afternoons. I’ve had a lot of time to think in the Laundromat, and thought I would share these thoughts with you from the perspective of an outsider (i.e. previous owner of a washing machine).

Laundromat Economics

First off, Laundromats seem to be one of the great equalizers as far as time is concerned. I saw both single people with their over-the-shoulder laundry sack as well as large families with several filled trash cans rolling behind them both get their laundry done within the same time frame because of being able to simultaneously use 1-5 (or more) machines. Aside from getting bogged down during the folding phase, this seems to be quite a time saver for large families.

However, in my opinion the costs of using a Laundromat are substantial. Here is how this Laundromat’s costs broke down:

• Largest Washer: 14 quarters, or $3.50
• Triple Loaders: 10 quarters, or $2.50
• Regular Loads (a bit smaller than our washer at home): 4 quarters, or $1.00
• Dryer: 1 quarter for 8 minutes

In my old Laundromat days, I used to pay $3.50 per week (I remember trying to think of how to save money on this cost even back then!). For us to do our two loads per week as well as to dry them it averaged us $10.00—this is an average because it depended on the type of machine that was available. It would have been extremely cheaper to use the $1 machine that is roughly the size of ours at home (it is smaller, but I was okay with cramming); however, there were only six of these machines and they were constantly in use (for obvious reasons). We eventually minimized the $10.00 per week to around $5-$7 by just washing the clothes at the Laundromat and then using our dryer at home.

Another high cost is forgetting your soap, which at $8.00 for XXX ounces, is a hot commodity here. We forgot the soap one time and after I saw the price (and gasped!) I drove the one mile home to pick up my own.

Losing Money, Literally

I think they are running some sort of scheme with their machines as there are many without signs of “Out of Order” that will eat your change and the manager—the only person who would have a key to the coin box for the machine—is conveniently never around. Every single week, without fail, I lost money inside of a machine. And every week, without fail, I was denied a refund. Sometimes it was user error, like when I got to watch $2.50 swooshing around in an empty triple front loader because I put the money in first and the machine locked up and did its business. Regardless, I thought it was poor customer service on their part to put us out about $5.50. Fortunately for us there was a learning curve and by last week I only test-drove 1 quarter before realizing I was at a machine that would not work.

New Washer/Dryer, or Laundromat?

Over the entire month I estimate that we spent $30 on our laundry. If we had not used our own dryer, that would have been approximately $40, or $480 for the year. There is water and electricity (or gas) use for running a washer and a dryer as well, but it appears that you could purchase a new set and be paid back within two years (if you do two loads a week), or sooner if you have a larger family. For example, some of the families at the Laundromat were using 5 washers at once; at five loads of laundry per week (estimated at $80+ per month), their investment would be paid off in less than a year. Every year afterwards would be a nice return on the investment. And of course it is always much more convenient to own your own set. Before the washer broke down, I had a great routine of laundry on Friday mornings (I work a compressed Monday-Thursday schedule). It was almost a mental obstacle to figure out when to go to the Laundromat, pack everything up, and to actually do it.

In the end, we decided unanimously to purchase a new or new-used washer and dryer (the dryer is not going to last more than a year as sometimes I have to repeat half the time to get our clothes dry). To our local money-eating Laundromat, it’s been real. Sorry, but you’ve lost yourself another customer to the home washing machine.

Other Articles You May Enjoy:

Our $300 Pile of Laundry
DIY Laundry Room Renovation Results

Is anyone else out there tired of sales and clearances? I never thought that statement would come out of my mouth, much less from my keyboard, but sales and clearances are being advertised by stores on a daily basis. I am under the impression that merchandise and services cannot be “on sale” or “on clearance” all the time, so it leads me to the conclusion that prices are being artificially inflated to begin with so that a respectable percentage can be taken off during the sales campaign and the consumer feels as though they are getting a good deal. This practice has obviously been around before, but it seems to be everywhere since the beginning of the recession.

“Sale” and “Clearance” are used so much that unless you are having one of these, you can’t even compete among consumers—these words are a cost of entry to the marketplace. Since products and services cannot possibly be on sale or on clearance all the time, stores are finding ways to use these buzz words to attract consumers, but restrict their profit losses by adding in robust fine print language. I have found some really restrictive language in the fine print—some even ridiculous—and would like to share a few with you to show you what I am talking about.

• Macy’s Exclusions on 15% Off Sale: Macy’s has had more “one day” sales in the last few years than I care to count! Even though they seem to be quite generous with their sales, they are notorious for excessive exclusions. Currently (November 5, 2011), they are offering 15% off select departments…and honestly I don’t know which departments are left after this list of exclusions. From their website, this sale “EXCLUDES: 7 For All Mankind, Asics, Birkenstock, Born, CWX, Coach, Converse, Chantelle, Donatella, Ed Hardy, Emporio Armani, FitFlops, Goddess, Joe’s Jeans, Lacoste, Levi’s®, Minnetonka Moccasin, Nike footwear, Puma footwear, Reebok footwear, Skechers Shape-ups, Sofft, The North Face, Tretorn, Va Bien, baby gear, kids’ shoes, toys, cosmetics & fragrances, sunglasses, Sunglass Hut, select fashion jewelry & watches, gift cards. FOR HER: bridge & designer handbags, B.Tempt’d, DKNY lingerie, Dolce Vita, Donald Pliner, Felina, Impulse, Jezebel, Lauren by Ralph Lauren, Le Mystere, Lunaire, MICHAEL Michael Kors, Naturalizer, Not Your Daughter’s Jeans, Sperry Top-Sider, Wacoal. FOR HIM: Armani jeans, Cole Haan, Dockers®, Ecco shoes, Hugo Boss, Johnston & Murphy, Polo Ralph Lauren, Tommy Bahama. FOR THE HOME: All-Clad, J.A. Henckels, Le Creuset, Tempur-Pedic, Tumi, Wusthof, furniture, mattresses, rugs, lamps & lighting, electrics & electronics, regular-priced china, silver & crystal. Savings do not apply to Everyday Values, jewelry specials, Jewelry Super Buys, Specials, web busters™…”
• Shoes.com Sales: I found the following caveat for Shoes.com sales (currently there is a 25% off sale for boots and shoes):  “All discounts, price matches, coupon and promotional codes, including the Friends and Family program, exclude bags, wallets and all regular-priced merchandise from the following brands: Adidas adistar Raven, Adidas Barricade 6.0, Adidas Supernova, Born, Born Crown, Brooks, Clarks England, Dr. Tuxedo, Dyeables, Frye (certain styles**), Hunter, Jonathan Kayne, Keen, Kork-Ease, K-Swiss, Livie & Luca, Liz Rene, Mephisto, Merrell, Minnetonka, Morgan & Milo, Olukai, Reebok Classic, Reebok Princess, Reebok RealFlex, Reebok Zig, Sofft, Softspots, Touch Ups, UGG Australia and Vintage Shoe Co.” On top of this, the following brands are excluded from all promotions: “Belted Harness, Campus, Dakota, Engineer, Harness, Heath, Jane, Jayden, Jesse, Melissa, Paige Tall and Veronica Slouch.” This is a total of 43 brand exclusions from a sale that is supposed to be for all boots and shoes.
• PetSmart Sale Shipping Exclusions: On January 1, 2011 I was looking on the PetSmart website to price cat products (cat litter, dry food, and wet food). I had a coupon to use, and saw an advertisement from them stating that shipping was $5.99 on orders of $60 or more. I thought I could save myself a trip to the store. However, in the terms and conditions of the deal, it read:  “$5.99 shipping offer excludes purchases of dog food, cat food, cat litter, heavy items, or materials requiring special handling.” Even though I knew I was getting a really good deal with such a low shipping cost on heavy items, I thought it was kind of crazy for the exclusion of what the majority of people go to PetSmart for: cat food, dog food, and heavy pet items (and what is the definition of ‘heavy items’ anyway?). What probably happens is people do not figure this out until they are in checkout, and by then they don’t feel like emptying the cart and finding another website for shipping savings.

It is not likely that “sales” and “clearance” advertisements will end any time soon. After reading all of the exclusions above, I think that stores should start listing what is included in the sale or clearance instead of what is not. If nothing else, the fine print would shrink a bit.

Other Articles You May Enjoy:

New Coupon Fine Print
The Anatomy of a Coupon

Sometimes when I am dining out I feel like I am eating off of a Thanksgiving turkey platter and drinking from a two-liter bottle when all I really wanted was a casual Wednesday night dinner. Obscene portion sizes have also been glorified on television with such shows as Man v. Food: one man’s attempt to conquer restaurants’ largest selections by gorging himself in front of a camera (not something I watch). I would rather be served less food at a restaurant and pay less money for the dish than be served a huge portion and pay too much. I know that I am not alone in this desire for smaller portions, as Gordon Ramsay advocates for smaller dish sizes in his shows where he attempts to rescue failing restaurants. But it seems that for most of my adult life restaurants have gone in the latter direction by trying to outdo one another with steak size, plate size, drink size and even the size of doggy bags. I guess it makes a good headline—no restaurant was ever known for the smallest steak in the county.

I thought that a trend of downsizing would result from the recession, and it definitely caught on among food manufacturers. However in this case, food product sizes have decreased and the price has stayed the same, such as ice-cream containers with the same lid size that taper off on the bottom, or the shrinking yogurt container, or the shrinking orange juice container. Fortunately, restaurants seem to be taking the consumer’s needs to heart and downsizing products while also decreasing the price. Here are a few examples:

• DQ Mini Blizzard: In August of 2010 DQ came out with the Mini Blizzard priced between $1.99 and $2.49.
• Carrabba’s Italian Grill Smaller Menu Portions: In 2010, Carrabba’s did not stop serving its huge portion sizes, but instead offered smaller sizes with smaller prices in addition to the regular size on many menu options.
• Chipotle: In April 2009 Chipotle rolled out the “Low Roller” items (priced between $2.35 to $6.35) in a test city (Denver). The options included single tacos, soup and salad sides, and a kids’ menu.
• T.G.I. Friday’s: This restaurant was actually one of the first to start offering smaller portions for less money in 2007 with their “Right Portion, Right Price” menu. However, in 2008 they announced it would be a permanent change to their business, as well as added several more portion-control menu options.
• Quiznos: In 2009 Quiznos started offering a “Toasty Torpedo” sandwich at $4.00 to compete with Subway’s $5 foot long.
• The Cheesecake Factory: This is one of my favorite restaurants, due in large part because there is one located near my aunt in Washington D.C. that we used to go to when we went to the “big city” as kids. As an adult I still see The Cheesecake Factory as an occasional treat, but must admit that their portion sizes have always been humongous. In 2009 they introduced the Small Plates and Snacks menu, which offers 16 items priced from $3.95 to $6.50 each.

Are these new smaller and cheaper portion sizes here to stay? I am not sure. If the restaurants and food manufacturers could only be proactive in offering these less costly, smaller portions during times of a good economy instead of just during a wayward economy, perhaps we would all be better off with healthier waistlines and healthier bottom lines. Of course in the end, it is all about our own choices in how often we go out to eat, and how many meals we make out of one dish.

Are you a fan of large portion sizes, or do you want to see smaller options that cost less money? Would you go out to eat more often if these changes occurred? Do you think the trend will continue even after the economy comes back? 

If I were to tell you that going through your closet and choosing twenty items to donate, sell, or recycle/trash would make a difference in your life you might be hesitant to do so. You may wonder how it would change your life, why it would change your life, and what was the big deal of keeping things in your closet if you had the space anyway. In fact, purging your closet of just twenty items may not be enough to see a huge effect, but it could start a snowball of change in your life. This is because less is more. But what is less more of?

Hoarding: An Extreme Example

Anyone who has watched the show Hoarding: Buried Alive will easily come to the conclusion that less is more. You watch in horror as the homeowners meander through what appear to be World War II underground bunker lanes carved throughout their impacted homes. In many episodes you learn of the huge financial ramifications of leading a life of collection, such as people who have whittled away their retirement on trinkets that they can no longer find. The energy of these homeowners is getting sucked out of them each and every day, as soon as they wake up and hobble off of their makeshift beds and into the kitchen for anything they can find to eat. I cannot imagine the amount of energy it takes to make it to an opening outside of their home, and that is after the near-miss falls from getting to the bathroom. The day must seem insurmountable by 8:30 a.m.

Even more than the financial and health ramifications of leading this sort of life, what practically screams from the television screen is stunted potential. There is no physical space in these homes.  A cluttered home leads to cluttered thoughts, and without space there is little potential for creativity.

No energy, no room for creativity, and depleted money are huge effects of a cluttered lifestyle. But the overarching finding from watching this show is that more (stuff) equals less time. So, less (stuff) means more time. Less is more…time.   

Coming to this Conclusion in My Own Life

It doesn’t take hoarding to see the potentially negative effects of more stuff in your life. Moving makes you very aware of your belongings, and I have moved a lot in my short lifespan. Having first moved from a room at home, to a college dorm, then to multiple apartments in multiple states and countries, and then finally into a home, at times I’ve felt like a hermit crab. My belongings first fit into a few duffle bags that I schlepped between my parents’ homes. Then I could fit everything into my 1997 Chevy Cavalier. By my first apartment outside of college my life fit into my Chevy Cavalier and my father’s 13-passenger van. Then in our last move into our home, it took a Moving Truck with two men working for two hours to unload our belongings.

While we have built up a suitable level of comfort in our lives (we still have one room with no furniture and are entirely okay with this empty space), I am very wary of introducing more things into our home. Why? Everything we choose to bring into our home adds time onto our lives’ upkeep. Stuff requires cleaning, situating, organizing, decluttering, figuring out, playing with, adds to choice-making, etc.

Coming to this realization has shaped my philosophy on things. If something doesn’t have a purpose of being in my life, then I shed it. And purpose for me has become much more utilitarian over the last few years. Perhaps something’s purpose is in the future—say five years from now—in which case I will take the space to store it for the time being out of sight. But if it has no purpose for us, then it is easy for me to get rid of it.

The Zero Sum Strategy

There are many people who tout the benefits of what is essentially a zero sum strategy: if you bring something into your home, your closet, your cupboards, etc., then you choose to take something out of it to donate, trash, sell, or give away. This will create a sort of stasis in your life, ensuring that your home stays at its current, manageable state. Ofcourse, if you feel it is entirely unmanageable at the moment and your life feels off balanced, you will then need to purge a large chunk of things before instituting the zero sum strategy.

I love this idea, and though the last few years has been spent accumulating basic things for us (couches, bookshelves, fireplace tools, etc.), I feel that I am either at stasis in our own household, or a little over the edge towards excess. To counter this, over the last year I have begun making several donations throughout the year from our closet, garage, bookshelves, and any other overcrowded area in our lives. Every time I comb through another room, closet, or area, I feel more at peace.

Benefits of a Decluttered Life

The obvious benefit to maintaining a more minimalist lifestyle is the financial savings in doing so. Even if this means you need to declutter a lot to get there, you can sell some of your belongings and/or donate with a potential tax deduction (if you itemize) to recoup a little of the amount that has been spent. By not introducing lots of new things into your home from here on out, you are preserving some cash flow for future months that you can use to experience life, pay down debt, or save for future needs and wants.

The not so obvious benefits are an increase in your time, energy, focus, and creativity. While it may seem at first that you simply have given yourself less choices for what to wear in the morning, purging some of your closet actually feels liberating. Less things means there will be more space in your home, and who knows what potential lies there. Physical space oftentimes leads to mental space. Less time spent thinking about the things in our homes also leads to more energy for other areas of our lives.

I have truly begun to grasp this concept after quite a few transitions in my life. In a world where time has become just out of our reach, paying attention to the things that we bring into our home and into our lives is of the utmost importance. On top of the time that it can open up for us, it will save us money in the future, and hopefully bring more balance into our lives.

The general understanding is that the more retailers and manufacturers in the marketplace the lower the prices for consumers will be due to fierce competition that leads to price slashing—lots of companies fighting over too few dollars. This understanding has played itself out recently when the US Department of Justice filed papers in federal court to block the $39 billion merger of AT&T and T-Mobile. The US Department of Justice was mainly concerned with the outcome of this merger on consumers because these two companies are key competitors that allow prices to remain low in the marketplace.

While it’s not often that consumers lose (have to pay higher prices) when there is competition in the market, a recent story about GameStop removing free coupon codes from inside a wrapped product due to competition made me wonder how many more cases are out there. Let’s check some out below.

GameStop Rips Competitor Coupon Out of Product

In the wrapped packaging of the PC version of Deus Ex: Human Revolution there was a coupon for OnLive. This coupon was put there by game publisher Square Enix without GameStop’s knowledge, and was offering customers a competitor’s product for free (OnLive is a service for game streaming). Customers were angered by the fact that their “new” game was opened before they received it, as well as by missing out on a coveted coupon. In order to make amends, GameStop has offered customers who purchased this game a free $50 GameStop gift card and a Buy 2 Get 1 Free pre-owned purchase.

Cost to Consumer: Free product worth $49.99

Patent –Protected Prescription Drugs Right Before Facing Generic Competition

Prescription drugs take a ton of research, development, and marketing. After a patent is given and the Federal and Drug Administration (FDA) gives it the blessing, prescription drugs have an average of 11-13 years without facing generic competition. While this gives these drugs a monopoly in the market (and time to recoup the huge costs in making the drug to begin with), the real price hike tends to happen right before a patent is due to expire.  Allowing generic drugs into the market can bring brand drugs’ market shares down to 10% in a very short amount of time. As such, prescription drug companies sometimes go into “pay to delay” agreements with generic manufacturers in order to delay a generic version coming to market (thus keeping the market price artificially high for longer). On top of this, AARP found that brand drugs closest to the date when they will face generic competition had the largest annual price increases (between 8.9% and 13.7%).

Cost to Consumers: Varying prices; however, typically generic drugs are much cheaper than brand name drugs

iTunes Raises Pricing Despite Increasing Competition

Apple iTunes decided to change its pricing from $0.99 for most single tracks to $1.29 per track (a $0.30 increase) in 2009. This ‘variable pricing’ decision (some tracks are now $0.69 and $0.99), despite increasing competition in the digital music realm (such as Amazon’s MP3 store) was due in part to pressure from the music industry which has been suffering from revenue loss ever since MP3 players came out on the market.  

Cost to Consumer:  Between -$0.30 to +$0.30 per song depending the year it was created; for new music, it will be an increase of $0.30 per song

Netflix Raises Prices (note, this changed on Monday)

Netflix was able to easily dominate the rent-by-mail DVD marketplace. However, they now are facing fierce competition in online television and video streaming from such companies as Google, Hulu, Amazon, and Apple. At the same time, Hollywood is demanding higher payouts when negotiating rights with Netflix. Despite fierce competition, Netflix raised its prices in September 2011. You used to be able to get one DVD rental plus unlimited streaming for $9.99. Now you can either get the one DVD at a time plan for $7.99, or the one DVD at a time plus unlimited streaming for $15.98 per month.

Cost to Consumer: $5.99 per month if choosing same plan of one DVD at a time and unlimited streaming

A few of the examples above are of companies which have increased prices for consumers as a result of other market influences, such as an increase in the price of supply (both music and movie industries are demanding more money for their products). However, for all of these examples, stiff competition was not enough to maintain low prices or to decrease prices.

Do you have any examples of where competition has increased the purchase price for consumers?

Last week during the television show Downsized, the Bruce family was faced with losing their entire emergency fund again due to an acute health problem and the resulting hospital bill, a car breaking down, and various other unexpected costs with the kids. The husband (Todd) was dealing with the problem by negotiating with the hospital, car repair parts place, dentist, and each of the other vendors in order to lower their overall bill. But the wife (Laura) had another idea all together: sell her engagement ring and wedding band.

This sparked up quite the conversation in our household, as I had once suggested we do the same thing. When Paul proposed to me in June 2009 he presented me with a gorgeous engagement ring. It was a platinum band with a beautiful clear-cut diamond cast between two diamond baguettes. The proportions were perfect for me—the diamond and band were not too wide or gaudy—and the setting was not so high that I felt it would catch on everything. And then I found out how the ring felt like it was made for me: Paul had designed it with the jeweler. Over the course of several weeks after deciding that it was time to propose, he had spent lunches with a jeweler on Buffalo Speedway to mold some metal and a stone into a beautifully shaped token of love. I gladly accepted.

We did not want a long engagement so we began planning for the wedding almost immediately. I had not been saving for one as most of my teenage and young adult life I didn’t think I was the marrying type. In fact, the only reason why I said yes was because it meant that I got to spend the rest of my life with Paul—the rest of being married I figured we could work out. Combined we were $25,000 in debt at that moment, we wanted to put a decent downpayment on a home, and we wanted to pay for our wedding in cash. All of this was to happen within the next 8-9 months. One day during a pragmatic conversation about finances and the wedding day I decided to throw out an idea he might be up for. “I think we should sell my engagement ring to help pay for the wedding.” It was almost dead silence after that, followed by a few minutes of a look of disbelief coming my way.

I knew that selling the ring would get us a notch closer to being where we wanted to be. In my mind, having a wedding band would signify I was married and since I do not wear much jewelry anyway what on earth would I do with two rings? On top of that, I thought it was a beautiful sacrifice I was willing to make for our newly forming family—if nothing else, it showed that expensive things were not what I wanted out of this relationship. Am I reminded each and every day when I wear one of these rings (admittedly I typically do not wear them around the house on weekends) of Paul’s love, our commitment, and our relationship? Absolutely. But personally, I get the same reminder from seeing Paul, talking with him, running through memories in my head, perusing our photos, working around our home, and anything else in our lives.

Paul had a different reaction all together, much like Todd’s reaction on Downsized. To Paul, this ring encapsulates his love, devotion, and commitment to me. Even though it is just an object, it is an emotional symbol for him that holds much more than a stone. My willing to sell it made his heart hurt. Paul and I are both reading the book The 5 Love Languages, and gift giving happens to be one of the languages in which some people primarily express their love for others, or primarily receive love from others. I do not think this is Paul’s primary love language, but gift giving and receiving certainly holds emotional value for him. Wedding rings in particular hold a lot of sentimental value for almost everyone—including myself. They are written into most wedding ceremonies, forever symbolizing love and commitment towards one another. They are so symbolic that when a marriage is on the rocks or towards its end you oftentimes see the person stop wearing the ring all together or wear it on another finger.

We never ended up selling the ring. I am glad that we did not have to or that we chose not to, as it still holds sentimental value to me and will continue to do so until the day I die. Yet I would still be willing to sell it if a situation arose where the sacrifice was needed, and I could do it without questioning our relationship, our future, or our devotion to one another.

I would love to open this up for discussion from everyone here. What does an engagement ring/wedding ring mean to you? What sort of emotional values are tied with yours? Have you sold your engagement ring/wedding band in the past? Would you consider doing so in the future if put into a bad financial situation, or even if just wanting to secure a better future for you and your family?  If you are divorced, did you sell your wedding rings from your previous marriage/relationship or did you keep them?

Even as a child, I loved to watch people. What were their habits? What were they thinking? How did their facial expressions change when they thought no one was looking, or when a particularly interesting thought crossed their minds? Instead of remembering people’s names, I remembered distinct things about them such as what they were wearing, the items in their homes and cars, and other details of their lives. I got into the habit of equating certain products with stages in life and daydreaming about using these gateway products to ensure my rite of passage. As a child I watched teenage girls with a gleam in my eye, noting their use of smelly body products from places like Bath and Body Works, how they read Cosmopolitan, kept a brush strategically placed in their lockers and backpacks to keep their hair shiny and polished, and wore clothes with the Gap label. When a teenager, I admired the twenty-somethings who had carried around Starbucks coffee cups like accessories, had large VHS collections, and owned dark-framed glasses from the 60s that somehow made them look hip and intelligent, not dated like old photos of my grandmother.

Commercials point out some of the rite of passage products in our culture, such as the 16-year old who receives a car with a big bow wrapped around it, or the newly wedded man with his grill on his newly-laid back patio. Advertisements have us believe that iPods go hand-in-hand with a college education and climbing the corporate ladder entitles you to purchase a Rolex.

 It is such a relief to find that when you reach certain ages or stages of your life you can, in fact, enjoy those times without any of these products. Some of my product fantasies were comical—a never-ending supply of the ‘cool’ kind of hair scrunchies, a wardrobe of different colored socks with no holes in them to match lots of different kinds of outfits, all-white hangers hanging in my closet (I have, in fact, fulfilled this one)—and were obviously brought about by some sort of never-ending, unfulfilled want. After all, living in an extreme can sometimes make you swing to the other extreme (think Scarlet O’Hara in Gone with the Wind with her resolute promise to herself to never go hungry again after a stint of poverty and starvation; she then went on to put the almighty dollar above her friends, her family, and her marriage). The hope is to settle somewhere in the middle between affluence and deprivation—a lesson Miss O’Hara and many of us have yet to learn.

Now as an adult, I am noticing that there are “rite of passage” products for this stage as well: two cars, a home, a grill, granite countertops, flat screen televisions, iPods, laptops you can carry under your arm, and the grandiose Kitchen Aid mixer. These products have become symbolic products for many that they have “made it”. The only thing is, I’m not fantasizing about them anymore. Perhaps this is a rite of passage all on its own: realizing that life progresses, moves on, and comes alive without the things that others perceive as life stage-defining products, or without the things that I have perceived as life stage-defining products.

Have you purchased products in your life to symbolize rite of passages? Do you notice ones in our culture?

I would venture to say that all stores who have loyalty card programs have a privacy policy where they reassure consumers that our information will not be sold or shared with third parties. When you sign onto search engine reward programs, you click off that you’ve read and agreed with the Terms of Service which includes a privacy policy of some sort. Credit Cards also send out their privacy policies every time they are updated, or annually. Sometimes it almost seems overkill that with everything we sign up for and sign onto we have to click that we’ve read the terms and conditions of service/privacy policy, and we agree with it.

Yet if you take a closer look at privacy policies, they don’t necessarily save you from having your information given or sold to other companies. As Suba from Wealth Informatics explains, a privacy policy still allows companies a lot of freedom with your information. They are allowed to give your information to other brands in their family of products and “partner” companies, they can give your information to any company they merge with or which buys them out, and they can still legally sell your information so long as your name and address is taken out of it. Just check out Safeway’s privacy policy under “Disclosing Personal Information” for an example of how this works. Privacy policies for consumer monitoring also will not save you from having your data subpoenaed for a court case.

I am not a lawyer and do not understand all of the intricacies of the privacy policy, but I have found examples that an everyday consumer like myself would have thought were protected by a privacy policy. Let’s take a look below of how consumer monitoring data has been used against us.

FBI Mines Grocery Store Data to Find Terrorists

In 2005 and 2006 FBI agents mined through data collected by San Francisco-area grocery stores in order to look for people who purchased Middle Eastern foods. This program was short-lived because the FBI realized that it was ridiculous to profile people according to the food that they ate. Still, the information was handed over because the grocery store and/or credit card companies had monitored consumer purchasing behavior.

FDEA Subpoenas Purchase Records of Drug Dealer

Washington Post reported in 1998 that Smith’s Food and Drug Centers in Arizona had released information to the Drug Enforcement Administration on several occasions. In one example, it was information pertaining to people who purchased large amounts of plastic bags, as this could be an indicator of a drug dealer. Special Agent James Molesa explained that investigators can use the files to establish the whereabouts of a suspect and find clues about his behavior. He also stated that this information, coupled with other gathered information, is enough to create evidence.

Using Consumer Data In Personal Injury and Family Law Court Cases

A man sued Von supermarket after slipping on yogurt in a Safeway and shattering his kneecap making him unable to work. During settlement negotiations, the mediator for the case revealed that Von’s reviewed the man’s grocery store purchase records to establish that he was an alcoholic and if the case went to court, they were prepared to use this against him. The plaintiff settled because of this.

In another court case, one ex-spouse used another ex-spouse’s purchasing records to make the case that they could afford a higher alimony payment. This was based off of all of the fine wine purchases.

Firefighter Falsely Accused of Arson Based on Grocery Records

In 2004, firefighter Phillip Scott Lyons was falsely accused of arson when his grocery store records indicated he had purchased the same fire starter product used to set fire to his home. This arrest was made despite Lt. Lyons putting the fire out himself and calling 911. His arrest took place two and a half weeks later after an investigation turned up some questionable things found around his home on top of his Safeway loyalty card records which showed the fire starter purchase he made one month earlier. He was acquitted five months later when the man responsible came forward and confessed.

While these are just a few examples of how consumer data can be used against you, and in most of these cases using someone’s consumer data was in an effort to bring them to justice, it does add some hesitancy in the collection of consumer data. If someone can subpoena grocery store data in order to raise their ex-husband’s alimony, or if the FBi can get their hands on how much cheese you purchased over the last two years, then who is to say healthcare companies can’t get their hands on the non-nutritional foods and cigarettes you may be purchasing? Perhaps they will then start using this information to raise your premium.  Where does it all stop?

Bottom line: if the data is collected, then someone can get their hands on it with or without a privacy policy.