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| Thursday, November 20, 2008 |
| Failing Home Economics |
 The New York Times article: Failing Home Economics points out that consumers who are trying to save by spending less, are sometimes pinching pennies here only to throw away dollars there. All around the country, at similar cosmic moments, perfectly sound brains have been seizing up like an old car on a frigid day, particularly in the last few weeks. As Americans attempt to perform cost-benefit analyses of their needs and behaviors, they are whittling pennies from cable bills only to squander dollars on gas driving miles to discount stores, or on coupon-spurred splurges for nonessential items, like Cheez Whiz or organizing supplies. Pinched by shriveled retirement and college accounts, battered by ballooning mortgage costs, rent and co-op maintenance increases, and hedging against the possibility that a job might vanish, some are practicing economies that may not deserve the name.
When Best Buy announced its latest sales figures last month, the company reported “an unprecedented drop in consumer buying of items like flat-screen televisions,” said Ori Brafman, a business expert and an author, with his brother, Rom, of “Sway: The Irresistible Pull of Irrational Behavior,” out since June from Doubleday Business. “But when Wal-Mart released its report last week, there was a surprise. Consumers had increased their flat-screen purchases. Somehow, because Wal-Mart feels like a bargain store, shoppers who have deprived themselves of luxury items elsewhere rationalized their purchases at Wal-Mart as ‘getting a good deal,’ ” Mr. Brafman continued. “Granted, flat-panel TV’s at Wal-Mart might run a little cheaper than elsewhere, but no financial adviser would include one on his or her list of Items to Buy During Tough Times.” While I had read that Wal-Mart was experiencing a surge in shoppers, I had not heard that little factoid about the flat-panel TVs. That does seem pretty crazy - but then I am a huge tsk-tsker over the flat-panel TVs. I think they are far too expensive and worse, they cost more to operate than a regular TV (takes more to power them so your electric bill is higher month after month after month...) But I may change my tune about flat-panel TVs once the LED models have been on the market for a few years and start coming down in price...
But this example of strange spending in the article really annoyed me: And then there are those who are attempting to save money by spending it. Last month, Terence Lance Buckley, a Manhattan public relations executive, spent $400 at Overstock.com on an electric fireplace, hoping to keep his thermostat off this winter. Mr. Buckley had just moved, and the rent on his new apartment includes electricity but not gas. He now has a beautiful fake fireplace and mantel, but the thing gives off barely enough heat to warm his hands. “Now I’m cranking up the thermostat to stay warm,” he said, “leading me to believe that my brilliant budget plan to save money on heating costs was a waste of $400, money that I could have put towards holiday gifts.” I have a couple of issues with Mr. Buckley. First, your landlord might be providing you with "free" electricity for your apartment, but you are still paying for it - in your rent. So buying a huge energy sucking device like an electric fireplace which you had hoped to run 24/7 to heat your apartment and avoid turning on your heat, will get you one of two things - a huge rent increase at renewal time or a notice that your lease will not be renewed. In other words, don't abuse your "free" electricity and expect someone else to suck up the cost for you.
Secondly, if you had just thought critically about what you were trying to accomplish - heat your rooms by some electric means, you would have been wiser to invest in some oil-filled electric heaters (you could have purchased multiples for the same cost as the fireplace). They take far less electricity to operate (so much gentler on your landlord's electric bill) and you can move them around, store them in a closet when not needed - just a much more cost effective, and less wasteful solution all around. |
| posted by Boston Gal @ 8:52 AM *
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| 11 Comments: |
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BG,
While I agree with your point, you need some fact checking:
"They take far less electricity to operate (so much gentler on your landlord's electric bill)"
Any resistive electric heater uses exactly the amount of energy per unit of heat. In fact you can directly convert between watts, BTUs, therms, etc (see Dept of Energy website). There is no such thing as a more "efficient" resistive heater. Technologies like heat pumps that extract heat from the outdoors are an exception but clearly anything you just plug in, is resistive heat.
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even though the electricity may not be "free", mr. parsons would need to weigh whether any potential increase in rent would be more/less than his gas bill during the winter months. in a way, it's like a 0% credit card arbitage as he's not paying for it until the new rental period (or never, if he decides to move out...)
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Not sure why you think Flat panel TV's consume more power.
My 50" plasma consumes much less power than my old 32" CRT TV.
Plasma, LCD and rear projection sets all consume less power than a traditional CRT set.
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Here you go Boston Gal The basics of TV power
It looks like flat-panel TVs are forced to get more efficient starting in Nov 2008 - so the TVs on the market now are more efficient than the first round of flat-panels that hit the store.
I will have to check my set to see if I have it running in "retail" mode. I purchased mine 2 years ago and yes, did notice that my electric bill jumped once it was installed.
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I hate that attitude of being so smart and trying to figure out a way to get something "free" when all you are really doing is making someone else pay for you.
I have a neighbor in my condo building who runs an extension cord to the hallway outlet when she vaccuums. Now the board just wrote in a fine to the bylaws for anyone caught doing that. Other floors reporting seeing people using the hallway outlets to charge cell phones or other devices. Sometimes people try to hide what they are doing by putting a laundry basket in front of the outlet or something like that. Most of the offenders are renters not owner-occupants. So you just know they are like this guy - trying to get something for free.
What really chaps my @$& is people are paying anywhere from $1,800 to $3,500 to rent these places. If they can afford that rent they should dam well be able to afford the electricity to charge their iPhone!
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Hear hear. I also got irritated at that comment about the flat screen TVs at Walmart
Look, a flat screen TV is a flat screen TV no matter where you buy it.
Anyway, people pinch on groceries but then blow it buying a new unaffordable car and rationalizing the $300/month lease as being cheap.
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Sometimes I wonder if a $5 rebate on my cell phone purchase is worth it. I'm starting to think that maybe the small savings are more important on recurring purchases, such as daily lunch at work. Even so, I won't be able to resist saving anywhere I can!
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I think that you are missing the point of the article. People might be pinching pennies, but they also might be spending on things that they need to have, or have been planning on spending for a while. I have been saving for a year for a new LCD TV. I need it as my CRT in my 25 year old TV is going bad. I have been saving up to get a nice, 42" LCD. I see the black friday specials and can get one for about 800 bucks after tax. That is something I have been looking forward to buy for a year. So people going to Wal Mart might just be looking for the "off brand" names that Wal Mart carries, and looking for the $50 bucks they are going to save on the TV. Hey, $50 ($54 after tax here in Indiana) a new winter coat or part of a grocery bill. I would take that if I felt the quality was good. Some people just don't care about the quality, but that is another story. Best Buy would be one of the LAST places I would buy a TV from. They are known to have great overhead costs, and I have never seen them be competitive on cost. Of course this comes from someone who has researched them for 20 years, so take what I say with a grain of salt.
I also would like to point out some info you might be missing about the LCD TVs and their power consumption. First is what are you comparing LCD TVs to to make your statement that they are power hogs? I have a 27", 25 year old CRT TV at home I am looking to replace with an LCD. That TV, when turned on, Draws near 4.5 amps, or 495 watts. That means it costs me 10 cents to watch 2 hours of TV. Now the LCD I am waiting for Black Friday sales for, gets (according to the manufacturer) 195 watts. That means about 5 hours of TV for 10 cents. I think I will take 2.5 times the savings in power. Yes LCD is not a ton better than my main projection TV, but it is almost two times better than Plasma.
Finally I think your comment about the individual and the furnace is off base. The landlord in you might think he is trying to be sneaky, and he will get his come-up-ance, however, he was trying to do the right thing. Proven fact that individual heaters are more efficient at heating smaller spaces than a whole house heater (like a furnace). So he could save money overall by setting his house at 62 degrees and running a whole room heater for pennies when he is in the room. Yes it defers some of the cost to the land lord. However he is not trying to run a meth lab with 10,000 watt lights, he is running a furnace that will be used when he is home, and in that room which is designed to be efficient.
Now dude made a big mistake in what he purchased, however, that is not the point you were trying to make. Yes all the people here stating that people plugging into hallways, etc. That is stealing and I agree, fine the heck out of them. However, this method of electricity cost was outlined in the rental contract. Unless there is a line in there that stated usage (which would be my first thought as a land lord) then you cannot blame the guy for doing what he did. I mean what did the landlord think will happen in the summer when he runs AC? If he keeps his place at 65 degrees, since electricity is free, are you still going to call the guy a thief?
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The rules for Energy Star ratings for flat-panel TVs is changing. So a 2009 model (same size) might be more efficient than a 2007 model.
But in general terms - using the same size (42" CRT vr 42" LCD vr 42" plasma) and same model year, you will find: CRT's draw less power than an LCD which draws less power than a plasma. It works out tom something like CRT's use around half that of an LCD. Depending on the brand of plasma, they use around 50% more than LCD.
The new "Green" LED flat panel TVs will change this formula. But they are so expensive right now that it does not make sense for the average watcher to invest in one. But wait a few years...
CRT tvs are so cheap now and used CRTs are practically being given away. So it makes sense to either purchase new or used and hold out for a few more years.
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The one that gets me is the woman who paid $7 for four cans of artichokes. Not because she paid $7 -- because she thought $5 was reasonable!
I pay somewhere around $2.99 a can at Trader Joe's, and they're good artichoke hearts. There's a TJ's in Manhattan -- they can't be raising their prices *that* much. (Here in Boston, the Trader Joe's in Back Bay seems to have the same prices as the suburban ones.)
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I guess I would fall on the landlords side on the issue with the guy plugging in the electric fireplace. I am sure the landlord figured in higher bills in the summer because of an air conditioner, but when the tenant has an alternate means of heating the space (baseboard, radiator, whatever the built in heat source) and that cost is up to the tenant - it does seem like stealing to me that the guy was trying to circumvent.
The article really makes it seem that he hoped to never turn the heat on and this $400 fireplace would take care of him all winter.
A friend rented an apartment which included electric in the rent (so did not have to pay seperate bill). I remember a group of us meeting at his place and then heading out from there for a night on the town. As we were leaving I asked if he wanted to turn off some lights or at least turn off his TV or computer. His response was "No, its ok, I don't pay the bill" and off we went. Such a waste.
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BG,
While I agree with your point, you need some fact checking:
"They take far less electricity to operate (so much gentler on your landlord's electric bill)"
Any resistive electric heater uses exactly the amount of energy per unit of heat. In fact you can directly convert between watts, BTUs, therms, etc (see Dept of Energy website). There is no such thing as a more "efficient" resistive heater. Technologies like heat pumps that extract heat from the outdoors are an exception but clearly anything you just plug in, is resistive heat.