Coffee heat rising

Not all Costco gas is equal

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The other day while I was at Costco topping off my gas tank with the last gasoline priced under $4 in the future history of humankind, SDXB happened to go into the Costco on his side of town for the same purpose.

He paid $3.86 a gallon.

Say what? I paid $3.93 a gallon: a seven-cent-a-gallon difference! Same day, same time of day, same retailer.

Only difference as far as we can tell is the demographics. My Costco is a ghetto store that serves a downscale clientele in a tough part of town. His Costco, located on the booming westside, caters to the upper middle class and a large, relatively affluent retirement community.

Why, one might ask, should low-income customers have to pay seven cents a gallon more than people who can afford an extra ding at the pump? Beats me. Only thing I can figure is Costco must figure us pore folks are too dumb to know better, too lazy to drive across town to get a better price, or too broke to run our cars far enough to get out of the ‘hood.

This has long been so of grocery store prices: they’re always higher in areas where many of the customers don’t own cars. A friend worked as the manager of a ghetto grocery store, and he reported that they jacked up prices across the board because they had a captive audience of people who either could not or would not drive further afield to buy food and household products. Maybe Costco does the same.

Message: If you live in a downscale area, consider driving to a more affluent district to seek better prices.

4 Comments left on iWeb site

BeThisWay

I noticed that same thing about grocery stores long ago.Touristy areas also always charge an arm and a leg, too.

It’s good to know, though, while planning your purchases. I often bring non-perishables on vacation just to avoid that type of gouging as much as possible.And if you need gas and are going to see SDXB or have to be in the other Costco area anyway, you can do your fill-ups there.

Tuesday, June 10, 2008 – 08:38 AM

Karen

A Costco representative came to my business awhile back to sell memberships, and she they do price the gas individually.Basically, people go out in the morning in the immediate area and compare the local prices so they can price just below all of them.
But as some areas are more expensive than others, two Costcos in my city that are 30 miles apart will definitely have different prices.
Needless to say, I go to the “ghetto” Costco when I need gas.:-)

Thursday, June 12, 2008 – 07:27 AM

Karen

P.S.I realize this is the opposite than what you experienced, but it may have also been timing.
I’ve gone to fill up twice in one day for our second car at Costco, and paid a different price!

Thursday, June 12, 2008 – 07:30 AM

vh

It’s true that in general gas prices are lower on the westside. That may account for the difference.

But we pay dues for the privilege of spending our money at Costco. That should buy us consistent and fair pricing across the board–not a gouge because we live in a downscale neighborhood a few miles away from a different neighborhood in the same city. That’s unfair and unreasonable.

Personal finance nerds 1, spendthrifts 0

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So, who’s “funny about money”* now? In the face of a recession that could deepen to the point of (dare we say it?) depression, frugality is suddenly a trend. Such a trend, we might add, that think-tank scholars are climbing aboard for the ride.

David Brooks, writing in today’s New York Times, reports on a paper from the Institute for American Values titled For a New Thrift: Confronting the Debt Culture. To make 19 column inches short, the gist of this document, to which 62 scholars have signed their names, is “get out of debt, stay out of debt, and live within your means.”

Brooks puts an interesting moral spin on the issue, suggesting that fundamental American values have been corrupted by an evil confluence of forces: credit-card debt, the growing financial polarization between the haves and the have-nots, lotteries, pay-day lenders, and even Wall Street with its obscene executive compensation.

Uh huh.

“The Devil tempted me and I did eat.”

Brooks offers a few half-baked attempts at solutions to this metaproblem, none of which are worth much. But he does point out something that probably is correct:

Benjamin Franklin spread a practical gospel that emphasized hard work, temperance, and frugality. . . . For centuries [the United States] remained industrious, ambitious, and frugal. . . .

There are dozens of things that could be done. But the most important is to shift values. Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future.

Lordie! Let’s hope we reform our evil ways before we’re all tossed out of Eden!

*Funny about Money’s title came from a (former) friend who, imagining no one was listening, remarked on another friend’s voicemail that I was “a little funny about money.” She’s in her mid-70s now, working three jobs to pay off the huge debts her million-dollar appetite racked up. Observers tell me she looks very tired.

The value of reconciling your check accounts

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Saved from my own stupidity! Whew…

The credit union still sends paper statements, and so I still reconcile my accounts against the monthly statements. This is a function of mental laziness: I’ve never worked up enough energy to figure out how to reconcile against the online records.

But I do keep an eye on my accounts online, and this month I wondered why the CU’s bottom line was SO radically out of whack from Quicken’s. Alarmingly out of whack, one might even say.

Come to find out, I had failed to shred an $840 check I thought I’d voided, but instead had blithely sent it along to Vanguard…and then wrote and sent an identical check to replace it. Oops!

Meanwhile, believing the first check had been atomized, when my next extra-large paycheck arrived I wrote a third check to Vanguard in the same amount. Each of these payments was to transfer money from a second income stream into savings. So, where I thought I’d written checks for $1,680, I actually had arranged to transfer $2,520. This error would plunge my checking account to the bottom of a puddle of red ink the depth of Lake Tahoe!

Luckily, I had not yet mailed the last check. (And luckily, I had not taken Vanguard up on the opportunity to make electronic transfers from my checking account directly into mutual funds.) So, voiding and shredding the third check recovered the error.

If I hadn’t been in the habit of reconciling my bank accounts regularly, I wouldn’t have tumbled to that Senior Moment until it was too late to avert an overdraft.

Catching your own errors is just one good reason to reconcile your accounts at regular intervals. We all make mistakes-and even the bank sometimes enters errors in customers’ accounts (Johnson Bank once credited me for $10,000 deposited for someone else!). It also will allow you to catch fraudulent transactions. Personal finance software such as Quicken or MS Money hugely simplifies this chore, or in the case of the arithmetically challenged (such as moi), makes it possible.

If you don’t use a program to keep track of your funds, you should reconcile your checkbook each month. The steps are as follows:

  • Compare your check register with the statement. In your check register, subtract any charges (checks, ATM withdrawals, automatic payments, bank fees) appearing on the statement that you haven’t already deducted from your balance. Write this figure down.
  • Still in your check register, add any new inflows, such as deposits, automatic paycheck deposits, and interest or dividends. Add these to the amount you got in step 1.
  • Now enter any deposits made after the statement’s ending date. Add these to the total you obtained in step 2. Write this total down.
  • Next, in your register, check off each check that the statement shows as as having cleared the bank. On a separate piece of paper, list the check numbers and check amounts. When your list is complete, add the check amounts to obtain a total.
  • Subtract the total you got in step 4 from the figure you got in step 3. The result should equal your check register balance.

If it doesn’t, the first thing you should do is check all your arithmetic. If that doesn’t reveal the error, then you get to compare each figure in the statement and the check register, very very carefully. Over and over and over again.

Programs like Quicken, as you can see, circumvent a great deal of agony, first by doing the math for you and second by making it relatively easy to spot errors. If you’re reading this blog, you probably already use financial software. But lest you wonder why your mom or your weird cousin Bob has never reconciled a checkbook, ever, and figures the account is out of money when the checks run out, it may be that she or he is math-challenged. There is simply no way I could reconcile my bank accounts manually — it’s flat out of the question. I’ve tried. After I finished tearing out all my hair, I just gave up. If SDXB hadn’t insisted that I try Quicken, I would have no idea what is going on with any of my accounts.

What a mitzvah! The cheapest PCs out there will run Quicken, Money, or downloaded freeware. It’s well worth encouraging the arithmetically puzzled and the computer-bamboozled to learn how to use such a program, even if they never do anything else with a computer.

1 Comment left on iWeb site

Mrs. Accountability

Clicked through from the 156th Carnival of Personal Finance to read about your expensive doggies – hubby and I have one that we love so much, hope nothing expensive ever happens, we’ll go in the poorhouse for him.I agree with your reconciling checking accounts post – I read on a blog not too long ago that the person never did reconciliations, and why they didn’t think it was necessary to do so.I would be a bundle of nerves!The blog writer said they watch their account online regularly, so felt comfortable to not reconcile.I have reconciled my accounts for over 25 years with both paper statements and online statements, and have found enough errors that I would not be comfortable giving up this monthly chore.I read your “Life’s a Killer” story, awesome how you handled your stress situation.I also participated in the 156th CoPF (my 3rd entry) with my free Gas Calculator (MS Excel format).I really like your writing style, adding you to my reader.Nice to meet you!

Monday, June 9, 2008 – 07:01 AM

Estate Sale Coups! And a bonus: how to sharpen your knives

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The other day La Maya and I drove to an enticing yard sale in a somewhat distant suburb. It was a long drive, but it was worth it, because we landed several good catches.

Best, pour moi, is a Brighton wallet with 19 card slots, a clear ID slot, space for a checkbook, two interior compartments, and a zippered outside pocket. Incredible! The closest style Brighton is advertising today sells for $119. Add Arizona’s 8.3% sales tax for a total of $128.88. I got it for ten bucks.

I also picked up a classic Gerber chrome, diamond-surfaced honing steel, an item that apparently is no longer made. Wüstof makes something similar, $79.95 at Amazon.com, marked down from $140. With local sales tax if purchased from a Phoenix-area retailer: $151.62. My price: $8.

But it didn’t stop there. For another eight bucks I grabbed a brand-new Henckel’s Twin Cuisine Five-Star 10-inch high carbon stainless steel slicing knife: $110 brick-&-mortar retail. Add the 8.3% sales tax, and you’d pay $119.13 for it.

Not bad: $26 for $399.76 worth of merchandise! You could save a fair amount by purchasing from Amazon.com-the Brighton’s not available there, but check out the alleged price difference for the other loot…and the honing steel and knife both qualify for free shipping.

As soon as I got home, I sharpened and honed the knives. The new Henckel’s took a superb edge, and my favorite old standard knives perked right up, too.

BTW, another blogger recently advised using a steel to sharpen your knives and posted a good video showing how to use one. That’s only half the story. A honing steel is for honing: putting the finishing touch on the sharpening process and keeping your knife’s edge polished between sharpenings. To actually put an edge on a knife, you need to use a stone or a knife sharpener.

Using a stone takes some skill. You can learn it, but don’t practice on your best knives until you know what you’re doing. And electric knife sharpeners should should be banned by federal law: nothing will wreck your knives faster than one of those things. They eat into the blade and leave you with a misshapen piece of metal. Over time-and not very much time-an electric knife sharpener will eat away so much of of the blade that your knife is useless.

An effective, easy, and harmless alternative is a manual knife sharpener. They look a bit like an electric sharpener but do not plug into an outlet. And as you can see from Amazon’s little ads, they’re very cheap, especially compared to the $150 price tag on an electric model. You pull the knife through a slot flanked by two stones set at the correct angle. These shape the metal to give you the correctly shaped cutting edge without eating up the knife. Once you have the knife sharp enough that it will slice a sheet of newsprint with no pressure applied, you can run the blade over a steel for a final honing to create that clean, razor-sharp edge.

I have a Chef’s Choice manual knife sharpener. Wüstof makes one for Asian knives, which I’ve not seen in person. They’re cheap and they work: best investment in kitchen gear I ever made.

BTW, if you take your knives to a “professional” for sharpening, ask the person what he uses for the job. If he proudly displays his electric knife sharpener, don’t leave your knives there! Many knife-sharpening shops use the same blade-eating Chef’s Choice electric sharpener you can buy at Amazon.com or Williams-Sonoma. Doesn’t matter who uses it: an electric knife sharpener will destroy your blades.

Report: Does hypermiling work for a Toyota Sienna?

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In a word: Yes.

Last night on the way home from work, I heard on the news that the price of oil had jumped another $10 a barrel, and that gas prices are expected to reach $5 a gallon by July 4. Even though I was down only a quarter-tank of gas, I figured I’d better stop by Costco to top off at a price we’ll likely never see again.

At $3.939 a gallon, Costco’s gas had jumped since SDXB filled up five hours earlier. The lines stretched to the street; 25 other drivers had conceived the fill-up idea before I did.

My car took 4.6 gallons. That amount had carried it 118.8 miles, for an average 25.8 miles per gallon.

Not bad, for a lumbering minivan whose year 2000 EPA estimate was 18 mpg in town-a figure we know to have erred on the high side. The gummint’s revised estimate is now 16 in the city and 22 on the highway, for a combined 19 mpg. Since about half the 118.8 driving miles took place on the surface streets, we might take the EPA’s combined mpg as what we could expect. So, using a very basic seven frugal driving techniques gleaned from the hypermiling set, I managed to squeeze an extra 6.8 miles per gallon out of the old tank without much practice or expertise.

Next steps:

  • Check tire pressure; inflate to maximum
  • Use lowest recommended weight oil for next oil change
  • Change air filter

Time to buy a new car?

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With $5.00-a-gallon gasoline staring us in the face, I’m wondering if it’s time to trade the Dog Chariot, a 2000 Sienna, for a more gas-efficient vehicle, even though it looks like careful driving will yield almost 26 miles a gallon.

I know I should be looking at used cars. However, I don’t know enough about cars to tell whether I’m getting ripped off, and around here not a single car dealer can be trusted. Toyota dealerships are especially obnoxious for their high-pressure tactics. I don’t own a male voice-studies have shown that women consistently get worse deals from car dealers than do men-and so I buy through a broker. The guy I’ve used in the past will negotiate only for new cars, so if I’m to have a man front for me, I’ll have to buy new.

I’d planned to drive the Sienna for 10 years and then get something smaller and, preferably, much jazzier. However, with gas prices soaring, the value of large vehicles is crashing. Right now the Kelly Blue Book value of the little tank is $5,610, precious little compared to the price of a new vehicle. I have about $15,000 in savings to buy the next vehicle, which I expected would be the last or second-to-last car purchase of my lifetime. If I buy a new car now, that will guarantee I’ll have to buy another one before I die-meaning I have to pinch still more pennies to stash another 20 or 30 grand for that purpose, just as I’m about to retire. Whee!

So, what’s out there?

The Prius gets 48 mpg in town and 45 mpg on the highway. The lowest-priced model, the “standard” hatchback, costs $22,870, slightly more cash than I have in hand, assuming I actually get the Blue Book value for the Sienna. That mileage is very nice, but

a) I’m suspicious about the long-term reliability of the new technology; and
b) that’s really more than I want to pay.

The Camry hybrid gets 33 mpg in town and 34 mpg on the highway. Its price tag is $24,740, more than the Prius. Its gas mileage is not all that much more than the 26 mpg I’m getting right now…certainly not almost 25 grand worth!

The Toyota Corolla gets 26 mpg in town and 35 on the highway. The cheapest model costs $15,166. Uh huh. I should pay 15 grand for a roller skate that gets the same mileage as a paid-for vehicle that can actually carry some cargo? Even if hypermiling extracts a few more mpg, I don’t think so.

Even as gasoline reaches the exorbitant level, the cost of a new vehicle is so much more exorbitant—and such a black hole into which to throw money, because depreciation converts what ought to be an asset into a distinct liability—that it’s not worth trading in a functional though relatively low-mileage vehicle.

We need to drive less and drive smarter.