“Would you like that whip or no whip? Non-fat or soy? Tall, grande, or venti?” Your answer should depend on the size of your metabolism and your wallet, but if that was the way most Americans shopped, our country would be a lot less obese and not nearly as deep in debt.

For those of us in the latte generation, these questions have become an integral part of our culture… and a gradual source of strain on the pocketbook, so gradual that many of us don’t realize where all our money has gone until we see “Starbucks” listed multiple times on our monthly statement. $3.25 for a coffee may not seem like much, but when you multiply that by a couple beverages a day and add that up over the course of a week and a month, our Starbucks expenditures become substantial. The same goes for any temptation—getting your nails done, buying music or books, seeing movies… You know where you tend to rather be a sucker.

By introducing the Starbucks Card, the company hoped to make it easier for people to get that Frappachino without feeling like they were going over budget… and have they ever succeeded. After all, the money is already on the card, so why not spend it and spend it, right? It acts like a debit card, so you never have to worry about overspending. And when you run out, it’s so easy to hand over your credit card and load another $20. Did I mention that you can “save more money” by getting a Starbucks credit card which can serve as both a universal VISA and as a debit card at Starbucks? Now you can earn Duetto dollars with every purchase outside Starbucks and use that money towards your next latte. It’s all about customer service, right? As they say on their website: “A coffee break on a Card: A Starbucks Card is the easiest way for you – or someone you know – to enjoy Starbucks. How can we help you today?”

So you want to still enjoy your coffee or other little self-indulgence, but not hand your entire paycheck over to a Fortune 500 company? No problem. I take a different view on how to use what I like to call the “latte card.” Just follow these easy steps that work for me:

As long as you use your Starbucks card to your advantage and not the company’s, you will have a fatter wallet and a slimmer waistline! My own Starbucks spending has decreased maybe two-fold. I keep thinking, “Mmm, I only have ‘x’ dollars on this card. Maybe I’ll hold off this time.” And I keep passing up Starbucks!

On Aridni, we encourage our readers to work for themselves since this is generally the best means of aquiring independent wealth; however, we also need to remain cognizant of the trials and challenges that face the self employed in our society including the burdens of paying one’s own health insurance and life insurance premiums, having no guaranteed source of retirement, and coping with the unpredictablility of each month’s income. Among the most fortunate entreprenerurs, these costs are not an issue, but for those of us who are just starting our own businesses or are experiencing a drop in revenue as a result of the economy, the above can mean the difference between being able to pay your bills or going into debt. That’s why saving and managing our resources is so important.

Take my dad for example. He has been an alternative health practitioner for 30+ years and is widely regarded as #1 in his field internationally. He used to earn over $200,000 a year, but after my mother died three years ago his business slowly started to dwindle and now is falling apart. As of last week, he had depleted the mere $30,000 in his savings account and now keeps saying that he doesn’t know how he will get through the month. Yes, he still earns over $100,000 a year, but after he has paid the mortgage, $500/month for each of three individual health insurance plans, car insurance for two vehicles, life insurance, disability insurance, homeowner’s insurance, $15,000/year for the rent of his office space, etc. there isn’t much left over to save or spend. How can people like my father avoid disaster? If you are an established business owner, I suggest that you make a list of all the costs you have each month and try to put aside enough funds to last you for a year. Do not dip into these savings unless you absolutely have to. You simply never know what may come down the road later on so it’s best to save while it’s easy to do so. In the event that you are just starting out, try to save enough for at least three month’s rent. This may mean not buying that Starbucks coffee you are craving or waiting a little while before taking a trip you planned, but trust me you will be glad you did.

Another thing to keep in mind if you are self employed is the amount of time you need to dedicate to maintaining your business (i.e. recruiting clients) and how much time you must devote to your current tasks at hand. This is where networking becomes cruical. One of my dad’s problems was that once he became “successful” he simply assumed he would always have the same level of clientel and did not devote enough energy to obtaining new patients. So when people stopped being able to see him due to their own financial woes, he did not have people to replace them. Now, he is starting to seriously network again for the first time since he started his business.

While the self employed don’t have to worry about “losing their jobs,” in many ways they have less financial security and less cash flow than those of us who hold conventional jobs. Although they don’t have to pay for the overhead of a personal business, they have more monthly costs to contend with and in today’s world it is becoming increasingly important for these individuals to save not only for their own retirement, but for unpredicted expenses. The CEO of a trade association who earns $200,000 a year has significantly greater cash flow than someone like my dad who has to spend at least half of is income on overhead.

So if you are considering starting your own business, by all means go for it, but don’t forget to take into consideration the obstacles you will inevitably encounter as you start out.

If like many Aridni readers, you are saving every extra dollar for your next investment and are striving to make money work for you, there are lots of reasons to vote Democrat the next time you go to the polls. Sure, Republicans swear by lower taxes and fiscal responsibility, but who cares how well they can “eliminate wasteful spending” when our president can’t even balance the budget (which his Democratic predecessor left at a surplus) and average people like you and me are emptying our wallets so that the wealthiest 2% of the population can get tax relief while the middle class pays for it? Unless you are part of that 2%, you won’t save any money by voting Republican except maybe a little bit in income tax if you’re lucky.

Republicans love to say that they will “cut frivilous spending,” but what does that mean for you and me? It means they are going to cut back on essential social programs like Medicare and Medicaid to make their tax cuts possible and create “responsible alternatives” such as tax-free Health Savings Accounts to make those cuts appear fair and reasonable. In reality, only those who are already economically solvent can afford to put this money away and don’t need to save it to begin with. People who are living pay check to pay check cannot take advantage of these policies in a way that improves their standard of living.

Would you rather pay a little more in taxes or be able to afford health insurance As of this writing, approximately 45 million Americans do not have health insurance due to a Darwinistic culture in Washington that lobbies for the survival of the fittest or the wealthiest. The people who are getting these tax cuts don’t need health insurance anyway so why let them save their tax money while you’re struggling to get by?

Even for people who are part of the top 2% of the population, the tradeoff of lower taxes is a breakdown in city services including trash pick-up, snow plowing, and recycling; more crime on the streets due to fewer police officers; less money spent on mental health services for would-be-criminals which means your tax dollars are being used to keep these people alive in jail; bad roads which can result in expensive repairs on your car, and less environmental regulations which translates into an unhealthy, polluted planet for all of us. Irresponsible cuts are no better than irresponsible spending because budget cuts end up hurting all members of our society, especially the most vulnerable citizens. As MA Democratic gubenatorial candidate Deval Patrick describes the damage done by the tax cuts of the Republican Romney-Healey administration, “Our local communities have been left on their own, abandoned to carry most of the burden for the essential services our citizens need and deserve.” *Patrick also recognizes that lowering income taxes will simply result in a rise in property taxes, making it harder for many members of the middle and working classes to afford their homes.

So next time you go to the polls, remember to vote for the party that represents all of us, not just the top 2%. Don’t be penny-wise and pound-foolish by voting for short term gains at the expense of long term losses in your pocket book and quality of life.

*For more information, please visit: www.DevalPatrick.com

How can we achieve the American Dream if we fall prey to American commercialism which is addictive and consumer-based? Whether it’s junk food, drugs (including cigarettes and alcohol), money, politics, body weight… we are all subject to mass commericalism which convinces us that we simply cannot be happy if we don’t have a particular product that will change our life for the better. Because taxes are so low here compared to our trans-Atlantic counterparts, Americans can afford to buy these products in bulk which means we need to work harder to reduce the impulse to buy. If you are struggling to find a balance between these perpendicular forces in our society, it’s time to take a lesson from the people of Europe and Canada who have much higher taxes than we do and as a result, tend to be more penny wise.

According to a savy friend of mine who has lived in Canada, France, Great Britain, and the U.S.A., people in the first three nations think twice before spending double or triple the amount Americans spend on gasoline, depending on the country. Yes, that is quite expensive, but in exchange for their tax dollars, these countries offer free universal health care and subsidized higher education to all their citizens which gives those governments an incentive to take care of their people- much more so than here. After all, if you are paying for someone’s health care and education, you want to make sure they have a healthy, productive lifestyle so that they can give back to the country in the form of their tax dollars. In Sweeden, there is a 25% sales tax and 50% income tax. Amazing, yes?

People in these countries are more careful about spending money on food and are therefore less obese than Americans and on average have fewer health problems. The tax on cigarettes is much higher than in the U.S. and as a result smokers have a financial as well as a health incentive to quit. In essence, smokers pay for the cost of their chemotherapy through the tax on each pack. European countries make it harder for people to impulsively buy products without thinking twice about the impact on their wallets.

I’m not suggesting that you pack your suitcase and move to France (although that would be nice), but the next time you go shopping, try to put yourself in a European frame of mind. If that product was 25% more expensive would you still buy it? If so, then you probably need it, but if the answer is no, put your credit card back in your wallet where it belongs!

Are brand-name products worth the extra cost? Can you get the same results with generics and have a few extra dollars available for your next investment? US Airways Magazine writer Aviya Kushner answers this question with an affirmative yes. In her article Plain or Fancy? Should You Use Generics or Brand Names? Here’s What the Experts Say, Kushner argues that as long as the generic product contains the same active ingredients as its brand-name counterpart, consumers can save up to 50% by going with the generic option while getting the same results they are used to. However, Kushner warns that in some cases, the off-brand just won’t do. The present article offers some guidelines on how to determine which products you should buy generic so that you get the most quantity for your buck without sacrificing quality.

When it comes to both prescription and non-prescription drugs, it is usually okay to go with a generic brand. Dr. John Abramson of Harvard University Medical School says that “you need to know the active ingredient of the brand-name drug you want to buy the generic in… and you do have to be a good label reader.” (81). Dr. Abramson notes the importance of getting the chemical equivalent of the brand-name drug. For instance, “the chemical is the same, but the other components that make a pill or powder can be different… maybe that pill crumbles a litte bit easier, or maybe there’s a different texture to the powder” (81). In order to get the benefits of Advil, one can buy a store brand of Ibuoprofen such as CVS or Hannaford and get rid of that headache in the same amount of time. Yet, for other medical products such as earswabs, Abramson suggests that the brand-name may be better since there is no federal regulation stating that all Q tips must have the same amount of cotton (81).

As for food products, Kushner finds that at times it’s worth the extra money to buy brand name goods, especially if one is loyal to organic products. In an interview with Mollie Katzen, author of The Moosewood Cookbook and a consultant to Harvard’s Dining Services, the chef told Kushner that she is “conscious about… anything that needs USDA approval, [especially] dairy products and eggs because they can have growth hormone in them” (80). She is also aware of “package v. product.” Felder says that “nine times out of ten a generic product will be packaged by a brand name product and a lot of them come from the same source” (80). Eve Felder, associate dean at The Culinary Arts Institute of America tells Kushner that soy and corn oil are the only two generics she uses in her professional life, but at home she refuses to give up certain brand name products such as tobasco sauce and mayonnaise (80).

Ask Felder about the potency of generic olive oil and the consummate chef’s eyes light up. She says, “Olive oil is just like wine… it’s a fruit, and and a vintage. It’s not so much a brand, but which harvest. Did Spain have a really good harvest this year or did it rain a lot?” (80). Salt and honey are other products Felder never buys generic. She also recommends that people buy brand-name knives, although generic wooden spoons are permissable (80).

Kushner also discusses the viability of generic cosmetic and personal care products. According to Etienne Taenaka, winner of the Los Angeles Blow Dryer of the Year Award, given by Harper and Queens, it’s fine to go generic with blow dryers and combs, but not with brushes or shampoos. He enthuses, “brushes I’m very particular about, because many generic brushes are made in such high volume that the way they’re glued onto the base will pull the hair. With a well-made brush, the ball and the bristle is all one piece” (81). So next time you go to the salon, buy a Mason Pearson brush instead of a Goody brand at the drug store. It will last much longer and you’ll keep your hair longer too.

The bottom line: If you do your research and pay attention to the labels, you can be a smarter and wealthier consumer, but don’t be afraid to pay more for brand name products if the generic substitute is not a generic equivalent.

Sources:

Kushner, Aviya. “Plain or Fancy? Should You Use Generics or Name Brands? Here’s What the Experts Say” in US Airways Magazine, Aug. 2006 (Greensboro, NC: Pace Communications). pp. 78-81.

For those of you who read my article last week regarding my fall-out with my friend in Virginia, I am back to report that I spent my time off visiting a close friend in North Carolina. My friend Carrie lives in the “sticks,” about an hour’s drive from the Outer Banks, and her family confirmed my belief that people who are least able to afford life’s luxuries are also the most insistent on making their guests comfortable and meeting their every need. The principle of creating a hospitality savings account (see my earlier article) seems to apply to the majority of true Southerners, especially those who work hard for what they have and take pride in being able to share their modest, but well earned comforts with guests. Carrie’s mother told me that from the time she was a child, she was taught to make every guest feel like a “queen” even though her family was barely able to scrape by. For these people, hospitality is one of their greatest virtues.

Carrie’s family lives in the poorest county in North Carolina with the state’s (and for that matter, the nation’s) lowest ranked public school system. In order to offer their three children a chance at a better life, Carrie’s parents denied themselves luxuries many of us take for granted so that they could send Carrie, her brother and sister to parochial high schools and then to college. I was amazed at this family’s commitment to education, a commitment that on one level is even stronger than in the greater Boston community in which I grew up where 95% of the kids in our public high school matriculate at four year colleges. I was not considered successful for going to college- it was simply expected and to do otherwise was unthinkable. I would have only been a topic of cocktail gossip if I had gone to Harvard, and even Harvard is considered “normal” around here. Yet, for families like Carrie’s, getting into any college is a major achievement and their dedication to education is so pervasive because they can’t afford to feel otherwise. They have seen the alternative first hand, while the people I grew up around were hardly aware that most Americans were living a different reality.

It seems to me that the working poor and working classes are more conscious of the value of money than any other socioeconomic group. They put in long hours to earn their small paycheck. Consequently, they value every dollar much more than a single mother on welfare whose monthly government check reflects tax payer’s dollars and not her own labor. Carrie’s father works at a paper mill and while I was down there this week, he was working the night shift every day so I barely got to talk to him. However, he asked me to let him know if there was anything he could do to make my visit pleasant. The working poor may not know the ins and outs of CDs, 401Ks, and IRAs, but they do know how to use a savings account and they put money away for things that have lasting value like education and a comfortable, welcoming home as opposed to saving up for an Ann Taylor suit as I did once in high school. If I had grown up like Carrie, there wouldn’t have been any Ann Taylors within a 100 mile radius and I probably would have been using my earnings at McDonalds to help pay for my private school tuition if that opportunity was within my reach.

So the next time you lament about not being able to afford a new car or a bigger house, think about families like Carrie’s who are struggling to afford their mortgage and the rising cost of gas. When I offered to pay them back for the cost of the gas to and from the airport, her mother said “don’t be silly. You are our guest.”