This is a response to Trent’s post The Backlash Against Frugality, which itself is a response to Anya Kamenetz Yahoo Finance article Staying Frugal in the Age of the iPhone. The long and short of it is that Anya wrote an article about frugality, and the comments left on it are very, very divided. Although there was a lot of positive, the negative comments unfortunately stick right out.

What really stuck out for me were all the comments calling Anya’s life “miserable.” Most of the negative comments took offense to the idea of Anya buying second hand clothes, and not having a TV. (Since when, I wonder, is the television the only bringer of happiness?)

My own situation is not all that different from Anya’s. In fact, in some respects, I’m more extreme. I’ve been Compacting since January - that is, not buying anything new except for food and toiletries. So I started thinking about it - am I more or less happy now, as compared to before I started compacting?

Before I get into anything, I would like to say that this is entirely non-scientific. There are a lot of other things that have changed in this time period (my job, my major, this blog, the house I live in…), so it’s nearly impossible to tell. Still, it’s worth musing on.

The Television
I’ve spoken before about my ability to live without a television, and I stand by it. I now often forget that I can flip on the television and watch live broadcasts - I’m no longer used to the idea and it almost never pops into my head as an idea for entertainment, or even as a procrastination tool!

Not watching TV has given me so much more time, and flexibility in my time. The television I do watch, I watch on DVD or on syndicated internet - I choose when I watch it. I believe I am much happier having control over my TV instead of being bound to its time slots.

Yes, you could argue that a Tivo would offer me the same benefit, but think about it. I already HAVE that benefit - why would I need to buy a Tivo and pay a monthly subscription for a benefit that I already have?

Second Hand Clothes
Easily the second biggest beef negative commenters had with Anya’s article. I have to admit, I haven’t actually bought any second hand clothes… ever. Not even since I’ve started Compacting. I have a dresser and a closet full of clothes, so the need for new ones simply hasn’t come up.

I have no problem with the idea of buying and wearing used clothing. I’m not sure why it bothers other people, but I can’t see it affecting your level of happiness. I don’t think it matters at all where clothes come from - what matters is how they look and make you feel. If a sweater falls really well on you, does it matter that it came from Goodwill?

Not Buying… Things
I have a “things” problem. Even now, after having moved house and scoured my possessions, trying to only bring with me things that really mattered… I still have too much stuff. Most of my stuff is still sitting in boxes, waiting for me to get around to organizing my new bedroom.

Even having not purchased any “things” in the last 9 months, I still have an entirely messy room with too much stuff in it. Getting more stuff is simply going to compound the problem.

Buying Experiences Instead
I’ve been to more concerts and amusement parks. I’ve gone out with my friends on hikes and seen places in my neighborhood that I had no idea existed. I hang around on my campus and enjoy the free or cheap entertainment ($1 for two comedians this Saturday - I’m so in!). I hang out with my friends and play wacky card games.

Spending less money on things means having more money to spend on life. A few months ago, I tried to think about the thing that matters to me most. It’s not my computer (although sometimes it may seem that way), and it isn’t my collection of all seven seasons of Buffy the Vampire Slayer. It’s my friends and my family.

I love my computer because it’s an easy tool for contacting people. I love my car because it takes me to the places where people are. I love talking about Buffy with people even more than I love watching it. The things I value most in my life are those that help me reach people. I’m happiest just spending time with people. Just last night I had the time of my life… grocery shopping with my friends.

Happiness is not confined to objects for me anymore. I know, it all sounds very cliche. But not spending money hasn’t turned me into an awful miser. I feel much happier having a handle on my money, and I really don’t believe anymore than owning “things” is the road to happiness.

It’s Student Loan Refund Open Season, and the line at Student Financial Services is about to get pretty long. For college freshman and anyone else who might not know what I’m talking about, Student Loan Refunds occur when you get more money from your financial aid than your school needs for your tuition and other billable expenses. And then they cut you a check for the difference.

So what’s to be done with this sudden, extra, seemingly-free money? “BUY BOOZE!” you say. And that’s a valid use of it (also not the best use of it), but I’m not necessarily talking about what you should spend it on. I’m talking about where you should put it.

You’re probably already making out the deposit slip to drop in your usual checking account at your brick-and-mortar bank. But is that really the best place for your money?

In a checking account, your money is basically just going to sit in the account until you’ve depleted it. Even in a regular savings account, it’s probably not going to earn more than .2% interest (a fifth of a percent). And sure, interest is good, but how much money is .2%, really?

What’s the average you get back on a refund check? I don’t know, but I’ve never gotten more than $350. Some people actually get enough from their checks to pay for their off-campus room and board for the semester, so it might be a lot higher, like $2,000. So let’s just use $500 for the example, because it’s nice and round.

So $500 in your savings account earning .2%. Now that $500 isn’t going to stay there for a solid year, but let’s pretend it did. After a year, you would have earned… *drum roll please…*

$1.00

Wow, that hardly seems worth it. In fact, considering you’ll deplete that $500, and won’t even earn a whole dollar, it doesn’t seem worth it at all to put it in the savings account instead of the checking.

But hold up - I’ve got an idea. In fact, it’s what I’ve done with this term’s refund already. Are you interested? I’ll be getting a 3.5% (not 3/10ths of a percent, a whole 3.5 percent) return on my refunds. And I got a $25 bonus.

So how much of a difference can 3.5% and a $25 bonus make? Well, to start with, there’s that $25 bonus. So we’re up to $525 in our example already. And $525 at 3.5% for the year would be… *drum roll again…*

$18.37 - putting the total up to $543.37. Without breaking a sweat.

Alright, alright, so you’re sold on the 3.5% with a $25 bonus idea - where can you get it? ING Direct’s Electric Orange Checking account. It works just like a regular checking account, with a few differences:

1. You get a 4% APY on money sitting in the checking account. You can also open a Orange Savings account with them, and link the accounts together. Money in the savings account earns 4.3%.
2. The account comes with a debit card, but no check book. If you need to send a check, they have an electric check system - or you can move the money to your brick-and-mortar checking account (so don’t cancel your old account!)
3. You get an Overdraft Line of Credit instead of “courtesy overdraft protections” - that thing where when your account drops below $0.00, instead of declining your purchase, your bank graciously lets the charge go through and then slaps you with a $35 fee? Yeah, instead of charging a flat, outrageous fee, ING charges a normal interest rate on the amount your account went below $0.00. If you manage to make a deposit in the next few days to bring the account back into the positive, you’d only be charged pennies - instead of $35.
4. You get a $25 bonus if you open the account with a referral link and your opening deposit is $250 or more.

So that refund check sitting in your checking account? The one that’s probably for $250 or more? Go open an account with it. Remember how I said you could move money from ING to your brick-and-mortar checking account? That link works both ways - you can move $250 from your regular checking to ING for the opening deposit.

So whether you’re saving this refund for next term’s textbooks, or you’re slowly draining it for expenses - it doesn’t really matter. Either way, you should be making some money off of it while it sits in your account. 

ING referrals have moved here: $25 ING Referrals. Sorry about the inconvenience, but it was a bit of a pain to upkeep two pages of referral links!

I did something that probably falls under the category of “insane.” I pulled up all of my credit card statements for the past two years (thank goodness for online statements!), and I opened a new Excel spreadsheet. And I started entering all of the purchases I’d made on my credit card since the last time I had a $0 balance (March 4th, 2006).

The point of this exercise was not just to look at what exactly the purchases were that got me into credit card debt, although that was certainly something that I was able to do. But my real goal was to see which of these purchases were the ones still sitting on the credit card. What was is it that I’m paying off exactly, when I make a payment to the credit card?

So after putting in all of the purchases, I put all of the finances charges I’ve accrued. I’ve decided that in my mental account of what’s on my credit card, the interest goes last. I don’t even begin paying off the interest until I’ve paid off all the purchases. This makes figuring out what I’m paying off a lot easier.

After listing all of the purchases and finance charges, I started subtracting all of the payments I’ve made to the credit card since I started carrying a balance. After a purchase was “paid off,” I would put a strike through it. As I began doing this, I decided to estimate where I would end up. What am I paying off right now?

My guess was that if I were to make another payment to my credit card today, it would go toward something I bought in my big spender month of July, 2006. And when I finished moving down the list and subtracting payments and crossing off the paid off purchases… I ended up at a purchase from July 23rd, 2006.

Some pretty good estimation skills I’ve got there, huh?

So it turns out that when I make my next payment to my credit card, it will work to pay off my digital camera. The one I’ve had for over a year. The one I bought impulsively to make myself feel better when I dropped and broke my camcorder.

I also found that I have racked up $362.77 in interest so far. Ew.

I can’t wait until the day I cross off the last purchase on this list. Actually, the day I cross off the last finance charge on the list and can say “There. I’ve got a zero balance again!” It will be so nice to not have the purchases of last July still hanging over my head.

In the mean time, I’m going to try and find some credit cards with 0% balance transfer offers. Because these finance charges? Just not cool.

I had the privilege and the pleasure of being interviewed for REPORTER Magazine, the weekly campus magazine for Rochester Institute of Technology. For those of you unfamiliar with the REPORTER, it’s the only full color weekly college magazine in the US!

I was honored to be given the chance to share my story for an article on student debt, an issue that I unfortunately know a lot about, but also care a lot about, as well. I’d like to take a minute here and welcome anyone who’s come to the site because of the article, and help you to find your way around the site!

If you’re interested in more information about my dropping out of school, and then my return this quarter, then check out these posts:
Why I Left School (January)
Why I’m Going Back to School (May)

These posts might give you a little insight into my personal financial situation:
Financial Aid Dilemma (August)
Net Worth Update: August 2007
About Poorer Than You

And the following is a taste of the college-themed articles on the site:
The Road to Millions Starts at Age 16
Sold on Rented Textbooks?
College Freshman Checklist
Money Advice for the College Student

If you enjoy reading the posts here at Poorer Than You, please consider subscribing to the RSS feed to get updates whenever I post! I also offer an email subscription option, if that works better for you. Also, you might want to join the newly formed “Poorer Than You” Facebook Initiative, if you’re a Facebook user.

Thanks for coming by, and GO RIT TIGERS!

I’ve had a high yield savings account with E*TRADE since February, and it ranks as one of the best high yield savings accounts, in my opinion. At the time I opened it, they were offering a $25 bonus to go along with their 5.05% APY on the account. They’ve stopped offering that bonus to the public.

However, I got an exciting email from them. They’re offering me the opportunity to offer you the $25 bonus for opening the account, as well as giving me $10 for each one of you that signs up! Yes, this is an awful lot like the ING referrals that you see everywhere, except for a few differences:

• E*TRADE’s APY for this account is 5.05%, higher than ING’s 4.5%.
• The minimum deposit to open the account and get the bonus is $1, unlike ING’s $250 opening deposit (to get their bonus).
• This is a limited time offer. You have to get it before 10/31/2007.

There are no fees on this account, if you were wondering. No low balance fees, no annual fee - nothing like that. I’ve had just over $6 parked in it for several months, and it just sits there, racking up interest!

Interested? Leave a comment on this entry, and be sure to use your first and last name and email address. I can only send invitations to this via email, so that’s why I’ll need you to leave your email address. If you’re not comfortable leaving your first and last name in the comments, you can contact me through email instead.

If you’re not comfortable giving me your first and last name, you can try using a fake name. But I am not responsible if this gives you trouble when you try to open the account - do this at your own risk!

You can check out the terms of the E*TRADE Complete Savings Account, but remember that if you apply directly on their website and not from my email, you will not receive the $25 bonus!

 I’d like to take this opportunity on a lazy Sunday (although it’s not so lazy for me - I’ve got a pile of homework to get through!) to pull together some interesting bits of this and that from around the web-o-sphere. Take a look.

Feed the Pig - this little calculator is out to beat the “latte factor.” Or the “anything factor” really. The default example of taking a bagged lunch instead of eating out actually reflects my situation really well. I have to fight to remember to bring food with me to campus instead of succumbing to one of the seven (yes, seven) eateries on campus - but knowing that it could save me $867 over the year might just help.

Feed the Pig also has a Credit Card Payoff calculator if you’re wondering how long it will take to pay off your plastic. (Hint: it’s usually longer than you think.)

VA posted 6 Painless Ways to Save Money on a Tight Budget a few weeks ago and I keep meaning to mention it. I have a VA addiction and I love it even more when she pops through with financial advice.

Got a blog? You might want to enter into the $4,000 blog anniversary prize drawing. This is the longest list of prizes I’ve ever seen in a blog giveaway! I’ve been hoping to redesign PTY with a custom logo and everything one of these days - winning this contest would get the ball rolling on that!

And lastly, I have a question. I’m hoping to find a new way to connect with PTY readers. If anyone would like, they’re free to email me, or send a message to my AIM name, StephaniePTY. But I’m also hoping for more of a group activity: would anyone be interested in an IRC chat, an AIM chat, a Skype chat, a TalkShoe interactive podcast, or just a regular old message board? I want to find a way to get more “internet face time” with you guys!

In honor of my 21st birthday in a couple of weeks, I’ve added a little widget to Poorer Than You - if you look to the right of this entry, there’s a little section called “Birthday Special” and an icon imploring you to buy me a beer for my birthday. For those of you who don’t live in the United States, 21 is our legal drinking age - therefore, I’m finally entering adulthood. Unless you want to count 25 (the age at which you can rent a car) as the final milestone…

Anyways, I thought it would be a fun little thing to put up for my birthday. It uses the PayPal donation system, and you can pay as much as you like. The suggested price is $3.00, but any amount is appreciated.

Rest assured, the money donated will only be used for booze. If you wish to donate for any other purpose, please contact me.

Ahh, the first day of class - the day I am reminded that my school does not believe in holidays. That’s right - I’ve got class on Labor Day! Luckily, my first class isn’t until 4pm.

After stepping off the plane last week, I ran around to take care of all the paperwork needed to let me go to class today. This included finally making a decision about my financial aid dilemma. Aside from the usual chastising myself to look for more scholarships, the question really came down to the Federal Loan, a Private Loan, or a Prosper Loan.

After much talking and deliberating and looking up of interest rates, I decided to apply for the federal loan again this year. This loan will have negative consequences for my parents no matter what - if it’s approved, they will be the ones on the hook for the loan, and if it’s denied, then I will be awarded a Unsubsidized Direct Loan, and they’ll get a black mark on the credit report for being denied the loan.

Even so, we decided this was the best move. Every year we go through this, and every year we decide it’s the best option… which really, in a word, sucks. But it’s the best option because no matter what, I get the loan I need, and the interest rates aren’t too high. My parents just wish I would go ahead and graduate already, so that this stops happening every year!

I can’t wait for the loan to go through (whichever loan that may be) so that I can stop thinking about this for the rest of the year.

This month went very well, but it didn’t feel like it because I was desperately watching what’s going to happen in September: a big ol’ bundle of student loans. But September’s inevitable tumble in net worth (which will knock out all of the progress made on this graph, and then some) is not the topic here… yet. So, let’s focus on this month.

Change: $491 or +1.73%

My boyfriend’s generous gift of paying for my summer plane ticket deserves almost all of the credit for this month’s increase.

There are some interesting bits coming into play for next month. First of all, I’ll be driving again, and much more than ever before, as I begin commuting to school. So there will be the gas to pay for. Also, textbooks, a new cell phone battery (mine will no longer last a day on a full charge), renewing my license ($50), and some other small expenditures. Not to mention those student loans!

But, I’ve gotten back my old on-campus work study job, and I’m working on getting another job that I could do from home (a friend put in a word for me, but I haven’t heard from the company). So I’ll have more coming in than before, which should help offset the increase in expenses.

Also, although I am wracking up student loans again, they’ve gone into “deferment” which means I’m not making payments on them, and they’re not wracking up interest - except for one, my Federal Unsubsidized Direct Loan, which wracks up interest whether it’s in deferment or not. And I’m going to try really hard to pay off that Unsubsidized Loan interest as it’s added, so that it doesn’t roll into the principal when I graduate.

For a breakdown of my assets and liabilities, check out my NetworthIQ for August. There’s also an explanation of my NetworthIQ categories.