Melanie_Alnwick's Blog

We've all heard the definition of a recession: " Two consecutive quarters of negative growth".  We haven't had that yet.   Last month, the economy actually grew.  And here in the DC area, the Greater Washington Board of Trade is predicting 3% growth for the next 5 years.  Yet consumer confidence is in the tank.  Why?  Because there is such a thing as a "mental recession", and I daresay we in the media are partly to blame.   When all we hear is bad news -- we eventually start believing the bad news -- and then we start behaving like the sky is falling.  If you think it's bad here... do a little research in to the high cost of living in entitlement and tax heavy European countries.  Unemployment is still at historic lows.  That's no comfort to people out of work right now (and i've been right there with them) but, change is hard. I believe our economy is going through a fundamental shift... and, just like building muscle, you have to break down the fibers to make it stronger.  

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Everyone has a story about getting "taken" by movers. Here's mine: When I was moving from Raleigh, NC back home to DC... I figured the drive time for the crew would take about 4 and a half hours. After all, it usually took me about 4. My stuff was loaded up in the truck, the guys drove out of the apartment complex, and I started the clock. I left about a half hour later ... but when I got to the storage facility in Alexandria... they weren't there. They actually didn't show up for another two and a half hours! The manager on the phone admitted to me that the guys didn't hit the road directly from my apartment, but went back to the office to pick up some stuff, then got gas before their journey. I ended up having to pay them for the extra time (several hundred dollars) because they said they wouldn't unload my things unless I did.

NOW I find out that's illegal, and I could have called the police to intervene. So, expensive lesson learned. I know there are honest, legitimate moving companies out there, but you have to approach this area with caution. You have to ask all kinds of questions up front -- and get it all in writing. I didn't specifically ask if these guys were leaving directly from my apartment, or whether they'd include any stopping times along the way.

We've added links on our Money page to local consumer protection bureaus where you can check out the complaint records of moving companies, and check to make sure they're licensed for your type of move. Interstate movers must be federally licensed. In Virginia, local movers have to be registered with DMV. Also, be wary of quotes you get from companies on the internet. Make sure they have a physical address in your state, so you have some state protection if things go wrong.

What are your moving nightmares?

Normally I don't like to advocate in my blog -- but this time, I'm going to make an exception.  Small businesses need your help.  In April, bankruptcies for small businesses hit their highest level since 2005.   We can't afford to let the little guys go under.   Small business accounts for 99 percent of non-governmental employers, and contributes 40 percent of our gross domestic product.    Partner America, a consortium that represents small businesses... says the government needs to do more to help them.   It's suggesting the same low loan rates that wall street companies can borrow at... economic disaster relief packages... and dramatic increases to the Small Business Administration budget.   Whether you agree with government intervention or not -- we can all make these tough times a little easier for the mom & pops by patronizing their businesses.    So the next time you want coffee -- go to the local cafe instead of a national chain.   Pass up the big box retailers now and then -- and visit the corner store.    You'll be doing our small businesses, and our retail landscape - a lot of good.

So, you get a great quote on that rental car this summer, and you're going to save lots of money by declining any of the company's expensive add-on insurance and waivers.  That used to be a smart move... but it may not be any more.   According to the Insurance Information Institute... rental car companies are increasingly pursuing "loss of use" and "diminished value" claims if your rental car is damaged.   Auto insurance companies in most states say they do not cover those claims... and customers end up getting stuck with the bills.    So now, insurance companies are advising their policy holders to actually BUY the collision damage waivers  -- at a cost of  $13 to $26 a day -- if they want total protection. 

Credit card companies have their own damage waiver products that are supposed to cover loss of use and diminised value claims -- but there's a catch.  Visa, MasterCard and American Express all say they require vehicle logs from the rental car companies to substantiate the claim of "loss of use" -- and rental car companies say, they don't give that information out -- once again, leaving the consumer with a potentially costly bill.

Michael LaPlaca, an attorney who represents rental car companies.. says there's a basic misunderstanding on the part of the credit card and auto insurance companies.  LaPlaca says the claim is not for loss of revenue, which would have to be proved, but for loss of use... which is a "common law" right for property claims.   Just the fact that the car isn't on the lot, at the company's disposal for anything..even just to LOOK at... is loss of use.   He says consumers should press their insurers to pay the bill -- and it seems that insurance companies would prefer you buy the collision damage waiver instead.  Still, I think it brings up the question... just because the companies CAN charge for loss of use, should they?   Should our insurance companies pay for claims that can't be substantiated? 

There are a few interesting things to consider:  Though it seems like a gouge... the Collision Damage Waiver may be a good idea if 1) you don't want your auto insurance company to ding you for a claim or 2) the total cost of the waiver is less than your auto insurance deductible.    We've done a lot of the research for you & it's here on our website... but you should always check with the rental company, your insurance company, and your credit card company first.

Got any good rental car insurance stories?  We'd love to hear them.

More and more working families are finding out that the calculation of moving further out to get a bigger, more affordable home -- isn't paying off anymore.    It's not just the high gas prices, but the decreased fuel efficiency because of traffic congestion.  Because of that, the Federal Highway Administration's cost per mile has tripled since 2000.   It' a bit of a complicated formula to explain... but it's now 20 cents per mile.   So how do you figure the cost of your commute?    I had Scott Bernstein of the Center for Neighborhood Technology explain it to me.    He says you take the number of miles you drive in a year... divide it by 20 (cents per mile) ... then multiply it by price per gallon.    For the average DC household, it looks something like this:

21,614 miles / 20 = 1030.7 

1030.7 x 4.00 = $4122.8

That's the variable cost.   Feds say the fixed cost of owning a car  is $5068.  So for the average DC commuter... the cost per year is $9130.     But if you drill down further and look city dwellers vs. exurb drivers... there's a several thousand dollar difference.   Someone in Arlington who drives only 14,230 miles spends $7914.. while a Loudoun county commuter at 25,155 miles spends $10,099. (double it if you're a two-commuter family)

So, you think you're saving money by moving further out, when the percentage of your income you spend for housing and transportation together... is much greater.  Not so great of a deal anymore.

Use this website... to look at all kinds of interesting factors related to commuting costs -- and to figure out what your cost for transportation & housing together are.

http://htaindex.cnt.org/map_tool

Whew! What an incredible day we had yesterday with Fox 5's Credit Survival Guide.   We had panels of experts here in studio and online, throughout the day taking your questions about credit.   The response was overwhelming, and I think it really highlighted how difficult it is for people to navigate the complicated credit world, and just how many people are in tough financial situations these days. 

A lot of people called to get information about how to check their credit scores and dispute errors.   Did you know that 1 in 4 people have "serious" errors on their credit reports that negatively impact their credit?    There were some really heartbreaking situations, too.  Families about to their homes because the payments had spiked so high -- unable to sell as they had planned when those ARMs looked like a great idea... because the home value has fallen.    Moms and dads on the brink of bankruptcy, because their child has a serious medical condition and they've maxed out their health insurance benefits.  Retirees on fixed incomes, using credit cards to make up for the high cost of living right now.... and students, just starting out into the working world... awash in debt.    

So what's your financial picture these days?   Do you think Congress should pass the Housing bill to mitigate the ripple effects from all these foreclosures?   And finally, if you called or logged in yesterday, did you get the help you were seeking?

My first experience with food shock was about a month ago... when I discovered that the organic milk I buy for my two kids... is now SEVEN dollars a gallon.   I had started to wonder why my grocery bills were steadily creeping skyward... but this finally sealed the deal.  Some grocery stores have even posted signs apologizing for the high prices of milk and eggs.   So who's to blame?   We've been told that the use of corn for ethanol... is taking grains out of the world food supply.    The United States supplies 75 percent of the world's corn.   We use corn for everything from human food to animal feed to corn starches and corn syrup used to produce other foods.  Now we also use corn, to make ethanol.   Today the National Corn Growers Association said yes, a small part of increased food prices is because of the bio-fuel boom.. but that's only part of the complicated equation.     Severe drought in Australia and Europe has brought short crops ... developing nations have also developed an appetite for corn & corn-fed foods.  But the Industry pointed the biggest finger at oil prices.    Corn is a very fuel-intensive crop.  It requires a lot of fertilizer.  Farm equipment uses a lot of oil.. and corn crops travel about 1,000 miles from the farm to the grocery store shelf.    That's also the argument against ethanol... that it takes too much fuel to produce it, to make it worth the energy we get out of it.

So perhaps ethanol is not the culprit.  But it may not be the answer, either.

The Economic Stimulus Check is in the mail.  The idea is that if you put money into the hands of people who need it, they'll spend it, and boost our economy.   Two thirds of our Gross Domestic Product is tied to consumer spending, and the government definitely wants you to spend it.  Now, I've heard some financial experts on TV... telling consumers to ignore the government's plan, and save the money.  The truth is, most of us, regardless of what we tell the pollsters... will end up spending it in one way or another.     Some of it will go to gas, some will go to groceries, and some will probably go to those little splurges that we feel we're owed while we stick it out through this downturn.   And even IF you use it to pay down credit card debt... economists say that just buys you some cushion to spend in the future.   What are your plans for the money?

It's finally happened.  A gas station owner in Bethesda has broken the four-dollar barrier.   Granted it's for premium unleaded ($4.05 to be exact), but it's still a psychological number that's hard for us to swallow.   

Nationally the price for regular unleaded is still at $3.50.   It's $3.43 in Virginia, $3.47 in Maryland -- though you'd have to go way out to the edges to get those prices.   The average in DC for regular unleaded is $3.57.. and hovers around $3.51 in the suburbs.  Today we're going to be taking a look at the contributing factors to those prices... and why there's so much local variation.    

But have the high prices changed driving habits?  I talked to one young professional today who said she can't afford to fill up her tank for running errands.  How have the prices affected you?

Think you don't make a lot of money these days?  I was shocked to learn that US Airways skycaps at National Airport.. make $2.13 an hour.. plus tips.  Now, I'm sure while we're all feeling the pinch... no one who depends on tips is doing very well these days.   But these guys have something else working against them.  

They say the recent $2. per bag charge at curbside check-in... robs them of tip money. Passengers we talked to say they assumed that some of that fee was going to the skycaps.. but it doesn't.   One dollar goes to the airlines, one dollar goes to their contract employer, Prime Flight Aviation Services.    A lawyer for the group says that at the Philadelphia airport, the US Airways curbside fee collected 1.2 million in just two months.

The law says an employer can pay below minimum wage if it can ensure workers make up the difference in tips.  By my math, they'd only have to clear another $4.87 an hour for the fee to be legal...  but I'm guessing for the skycaps, it's about more than just money.

Skycaps bust their butts for our convenience... they give their backs, and their knees to the job.  They have no union, they get no benefits.  Should they have to give up their dignity and beg for tips, too?

I have been unemployed twice in my life -- not counting my post-collegiate job search.  The two layoffs came as a surprise, and the unemployment check, while a paltry sum, was better than nothing.   And these were the times that I had to say, "Mom, you were right!" ( I know she loves that!)   My mother made me take a typing class in high school.  It got me a summer job at the Pentagon for 4 consecutive years,  a part-time job in the Business Department during school, and plenty of temp work while I was between jobs or deciding what I wanted to do.   I worked as a para-legal, I worked for a French telecommunications company,  I spent a week or so with the World Wildlife Fund, I spent several months with the American Gear Manufacturers Association (exciting, huh?)   Typing even helped me land my first "big market" TV job - as the Newsroom Secretary at WUSA-TV.   I took the job that was available  -- so I could work my way up the ladder.    

The job forecast doesn't look so great right now.   The numbers can sound a bit scary.  But it's important to remember that 5% unemployment, in historical terms.. is REALLY good.   The bad news, is that there may not be a lot of jobs in a particular sector.  So, you punt.   You use the time as an opportunity to try something new.   You may decide, you like it.

For those of you who have a job -- and want to keep it... check out our link to Motley Fool's "What to Do When Layoffs Loom".  It's tough advice -- no slacking anymore! -- but absolutely necessary.

I stopped clipping coupons long ago.   Sure, it had something to do with having two toddlers and no time to pore through the Sunday paper, scissors in hand.   But I also found that it took me twice as long to shop with coupons... trying to decide which coupon with which product was a better deal.   Now, we're all dealing with sticker shock at the checkout stand -- so many people are changing the way they shop.

To cut your grocery budget the most, you have to be willing to go to another store.  Consumers Checkbook says that Shoppers Food Warehouse has consistently lower prices, by about 10%, than Giant or Safeway.    Surprisingly, it also found that Wegman's had really good prices on the staple foods... but that's because they put a really high profit margin on their prepared and convenience items.    

I do like the convenience of online shopping, but I'm sure there's a better deal in the aisle that I'm missing.   I also find that when I'm shopping online, I stick to my list, which is good for me since I'm a terrible impulse buyer.  Last weekend I compared online shopping sites..and did find that Peapod was about $10. cheaper than Safeway.com. 

I'd love to hear how you're cutting back on grocery costs... you can also see more grocery saving tips in our story... and on our web links.

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Wooo-weee that's mad!  Mad like only a mom & wife can get, I mean, blistering, berating mad.   What pushed Mrs. Tisdadt over the edge?  Teens, repeatedly calling her home from Wednesday night into Thursday morning.  You see, her husband, Dean Tisdadt, is the Chief Operating Officer for FCPS, and the guy who makes the all-important snow closing call.   The students say since Tisdadt is a public official, he's fair game to be called at home. 

They claim only polite questions were asked about the closing decision criteria.   FCPS  offcials say the calls were completely inappropriate and have also forwarded some "threatening" e-mail to the police.   Of course, you can't leave an angry message anywhere these days without it showing up on YouTube.. and that's exactly what happened.    So... take a listen to Mrs. Tisdadt's response to this student -- and let us know what you think.    And please, leave the ugly, foul language out of it.

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When you have loved ones far away... online shopping seems like the perfect solution.  But did you get what you paid for?   Two of our producers said -- they didn't.  They paid extra for gift wrap  -- but the gifts arrived unwrapped... and with the invoice attached! So much for that Christmas surprise.  

We want to hear about your online shopping experiences  -- we might even use your post on the air!

Ok, I admit it... I'm feeling guilty.  Guilty that I don't let my toddlers play with my iMac.  Guilty that my kids don't play video games.  Guilty that they're not enrolled in super-enrichment programs.   This feeling creeps up every once in a while -- and it came up again as I was out doing my story on Tech Toys for Tots.   Today's preschoolers, it seems, are quite adept in the ways of computers, digital cameras, mp3 players, and more.   Those tech items are the hot sellers for the 3 and over set this holiday season.  I had to wonder... am I doing my kids a disservice by not getting them technologically geared up?   But then I came back and read some studies by the American Academy of Pediatrics.  Key points:  "Play and unscheduled time are important components of social-emotional learning".  "There is no scientific evidence to suggest that any toy is necessary or sufficient for optimal learning".  Perhaps the most important point... that no matter what the toy... low-tech or high-tech... what matters most is that parents participate in play with their children.     So, I guess I'll start letting my kids tinker with the computer.   But I'll have to make time to explore it with them. (they'll probably end up teaching me a thing or two!)