frugal

Now Trent Hamm’s Just Daring Us To Name Him Financial Retard of the Month

April 27, 2012

There’s GOLD in them there textile fibers!

By far our favorite punching bag here at Control Your Cash is Trent Hamm, the hyperfrugal crazy person who runs The Simple Dollar. 14 times a week, he writes about compulsive, creepy, maniacal methods for shaving undetectable amounts off your expenses. Meanwhile he writes next to nothing about how to increase your revenue, which is swell because we don’t need the competition.

In previous posts he’s recommended bypassing the toothpaste aisle at the drugstore so you can collect the ingredients to make your own inferior version, and also told female readers that they should never spend more than $3 on a swimsuit. When a commenter pointed out that $3 swimsuits don’t exist, Trent helpfully suggested that women swim in their underwear. Yet people still continue to read this corn-fed monster of impracticality, and not always for the undeniable comedic value. That he has any audience at all is testament to the axiom that stupidity begets stupidity. Also, people = sheep.

By the way, Trent Hamm didn’t suggest homemade toothpaste brewing as a fun craft project for the kids on a night when the TV and the internet are down. He suggests it as a legitimate way to save money. And dozens of his devotees cyber-chime in to nod their empty heads.

One of his latest money-saving tips is so bizarre, so utterly immersed in minutiae, so microscopically unhelpful, that we had to let it sink in for a few weeks before choosing the right way to poke fun at it. Here, we’ll let Trent take it away:

Several months ago, I was curious about how much heat was lost when I opened up the oven to inspect a dish cooking in there. I put an oven thermometer in the oven, waited until the dish I was cooking was almost finished (a casserole cooking at 400º), then opened the oven door for about ten seconds to inspect it.
During those ten seconds, the thermometer dropped almost 20º. When I closed the door, the temperature slowly returned to 400º, but during that period, the oven had to put in some extra work to return that heat.
How much? It’s really difficult to exactly calculate that without a meter running specifically for the oven. My best estimate, using a lot of math and thermodynamics, is that you lose about 2¢ worth of energy every time you open the oven door.
My solution? I turn on the oven light when I’m cooking anything in the oven. That way, I just lean over and check what I’m cooking without opening the oven door.

Where to start? With his discovery of the oven light? It’s not quite the game-changer that Leif Ericsson landing in the New World was, but it’s close.

How about that! Those forward-thinking engineers in the appliance industry researched the problem and put a light, a source of illumination, INSIDE the oven. Combined with a glass window that sits between the interior of the oven and the outside world, that means you can look at your food as it’s cooking.

Trent? You know we’ve sent men to the moon and back, right? That was 43 years ago.

Now that we’ve made fun of his stunning appreciation for the glaringly obvious, let’s not forget Mr. Hamm’s bread-and-butter: the cheapness that would put Hetty Green to shame.

It costs 2¢ to open the oven door. Even if you’re opening the oven door for no better reason than to warm up the kitchen a little…well, you don’t need us to tell you that 2¢ isn’t going to bankrupt anyone who can afford an oven, electricity, and food. We wonder how long it took him to calculate the 2¢ figure, and whether he could have spent that time earning money instead.

Throughout your life, how many times have you opened an oven to check on a dish before it was ready? Does 100 sound about right? If you have, that’s 2 WHOLE DOLLARS you figuratively flushed down the drain. You could have used that money to buy several servings of Trent Hamm’s homemade laundry detergent. Instead, you just tossed it away like it grows on trees. Nice going, you wasteful pig.

Nor does Mr. Hamm show his “math and thermodynamics”, presumably because he thinks the rest of us will flee at the sight of an equation or two. Then again, given his readers’ intelligence, that presumption might be the most rational thought Trent Hamm has ever had.

But wait. Light bulbs don’t power themselves. So where’s he getting the money to turn the oven light on with?

The light bulb uses less than a cent of energy per hour of use …”

Well, that’s a relief. Measuring the difference between the two, you can replace your daily regimen of oven-opening with one of light-keeping-on and be on your way to economic self-sufficiency in no time.

Mr. Hamm isn’t just taking his obsession over minute amounts of money to its nadir, he could be indirectly responsible for the deaths of millions. Why, he’s openly encouraging his readers to die of trichinosis:

If your recipe says “Preheat the oven to 400º” and then later says “Bake for 30 minutes,” don’t preheat the oven at all. Instead, put your food in the oven, then set the temperature to 400º. Then, add about half of the preheat time to the cooking time. Why? When you open a preheated oven to put in your dish, it’s no different than opening the oven to check the food near the end of the cooking time. You lose that 2¢.

(Italics and boldfacing ours.)

“Damn it, don’t you people understand? Those 2¢ increments are valuable! You wasteful reprobates probably keep your toasters plugged in when you’re not using them, too.”*

And if that doesn’t beat all, this will. Here’s another excerpt from The Simple Dollar archives, from February 26, 2009:

There’s also a group of what I would call “frugality extremists.” These are the Ziploc bag washers, the people who will gladly invest quite a bit of time to save a dollar or two. I find these people and their ideas interesting, but not necessarily applicable to my life.

Got that, everyone? Washing a Ziploc bag is going over the line, but calculating that it costs 2¢ every time you open your oven door to check on what you’re cooking is completely normal. Trent Hamm, you’re magical. Since we have to pick a Retard of the Month 12 times a year (a calculation which required lots of math, not so much thermodynamics), promise us you’ll never change.

*Of course, he’s written about this too.

The Limits to Frugality

October 21, 2011

What, are they saying white women are cheap?

Note: This post appeared in a vastly different form on Adaptu, where Greg contributes. Really, the only similarities are the message and the title. Go there and read it, after this.

In the 1930s, people made ends meet during the Great Depression by moving out of the Dust Bowl and eating possum stew. Today, people ravaged by the worst financial crisis since then are valiantly fighting economic stasis with…scissors and paper clips.

With the rarest of exceptions, coupon clipping is penny wisdom and pound folly. For all the effort the average coupon clipper puts into saving a few quarters on toaster pastries and bottled water, there are better and more financially rewarding ways to spend one’s time.

(Oh, and by the way? “Coupon” is a noun, not a verb. Now excuse me as I resume paragraphing.)

The jar of pickles that your coupon reduced from $2.99 to $2.59 is not a 40¢ saving. It’s still a $2.59 outlay. Food producers aren’t in the habit of leaving money on the table, any more than anyone else is. Rather, they’re just testing multiple prices on the same public and seeing which guinea pigs bite, as it were. If a manufacturer issues a coupon and thus reduces its profit on each jar by a few pennies, but the result is that significantly more people each buy a jar than otherwise would, then the manufacturer’s learned some valuable information about its clientele.

Of course, we’re more interested in coupons from the consumer’s perspective, not the producer’s. From the consumer’s perspective, the time involved in achieving that miniscule saving is almost never worth the effort rendered. Especially when there are so many easier ways to save money, and especially when people insist on confusing spending with saving.

Take the recent multitudes lining up to buy the TouchPad, Hewlett-Packard’s dead-on-arrival competitor to Apple’s ubiquitous iPad. The rush on TouchPads didn’t start until HP announced they weren’t going to make any more of them. Ever. No improved model down the road, no software updates. Just the opposite, in fact.

TouchPads went for $500 the day before HP announced they’d stop making them, $100 the day after. To the common gullible consumer, that means an extra $400 in his pocket. But here’s a truth that’s so obvious that it’s easy to miss:

Buying a consumer product – any consumer product – doesn’t make you money. It’s not as if each customer is skipping out of Best Buy, triumphantly waving four $100 bills that he wouldn’t have if he’d never entered the store.

Retailers dropped TouchPad prices 80% out of necessity – unsold inventory is no fun – and the masses did what masses do. Given how quickly smartphones and tablets lose resale value (my own HP Pre went from $550 to a $30 eBay cut-and-run sale in under 2 years, an inevitable byproduct of technological progress), even $100 for an end-of-line product can be a lot.

Why do people spend beautiful Sunday afternoons indoors, sorting through flyers when they could be out enjoying life? Or waiting in line for a durable good that will almost certainly be a paperweight in a couple years’ time?

They fall victim to the oldest psychological trick in the retailer’s playbook, anchoring. Instead of offering a product at price x, offer it at price x+y with a y discount. It sounds so simplistic that you’d think it couldn’t possibly work, but it does. In the early 2000s a sewing supply shop in CYC’s hometown took out the same tiny ad in the local paper, every day. The ad stated that you could bring it in to buy a particular sewing machine for $168, or pay $899 without the ad. This example is more blatant than most, but it’s an important reminder that a coupon has no intrinsic value. It’s not worth 40¢, $1, or in the case of the sewing supply store, the price of a flight to London. If you’re altering your behavior to spend money because of a perceived saving, think about the 100% saving you’d enjoy if you didn’t spend the money in the first place.

Speaking of psychological tricks, say you can buy a certain shirt at a store across the street for $40. But the exact same shirt is available on the other side of town for $10. Would you drive across town to buy it? (Or to phrase it differently, Would you still buy it across the street for 4 times the price?) Most people who like the shirt, and even some who don’t, would make the trip for a colossal 75% saving. Sounds reasonable, right?

Okay then, would you buy a new car for $29,658 across the street, when a dealer on the other side of town is selling it for $29,628? Most people (who haven’t been exposed to the previous question) would prefer to stay close to home, rather than waste time and fight traffic to take advantage of a measly .1% saving.

Hopefully I don’t need to point out that the two scenarios are equivalent. To be consistent, you should say yes either to both or to neither. A $30 saving is a $30 saving, regardless of how expensive the underlying item is.

Why are coupons so popular? Because taken at face value, they appear to be one-sided marketplace victories gained without effort. I got one over on the grocery store. But more often than not, using a coupon means buying something that you’d otherwise have been ambivalent about at best.

Instead of spending valuable hours saving microscopic amounts, go for the big fish. Every year, buyers leave billions on the table because they’d rather spend their time dealing in impersonal printed discounts than learning the fundamentals of negotiating. The same people who devote one day a week to clipping coupons are by and large the ones who are terrified to try to talk a house seller or mortgage lender down a few thousand dollars.

If you’re buying necessities, and don’t have to change your behavior to acquire them, coupons could make sense in theory. (You’ll notice that your power company and water utility aren’t in the habit of issuing coupons.) If you’re buying frivolities, things that only caught your eye because of the reduced price, then you’re not saving money no matter how hard you justify doing so. And if you’re buying expensive necessities – a house, a vehicle – the amount you’ll save by learning how to stand your ground and walk away if necessary will dwarf anything you’ll save by making the supermarket clerk scan Universal Product Codes.

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