麻豆传媒社区入口

• January 25, 2013

• WalletHub.com News; John Kiernan; Jan. 23, 2013

By John Kiernan

If Uncle Sam was on Oprah, it’s a lock two of his “favorite things” would be debt and booze.

That obviously sounds pretty bad, but it’s unfortunately true.  Not only have we incurred at least $35 billion in new credit card debt each of the past two years, but outstanding student loan balances now exceed $1 trillion and mortgage holders continue to default in droves.  What’s more, roughly 66% of U.S. adults consume alcohol, and around 1% of the average person’s annual expenditures are on alcoholic beverages.

My point?  Well, I’m not going to tell you to stop drinking if that’s what you think.  Not only would it be hypocritical to do so, but it’s naïve to think people won’t inevitably buy alcohol.  Instead, I merely want to help you save as much as possible in this major spending category.

The question of the hour therefore is:  How does one go about saving at the liquor store?  To answer it, we turned to experts in budgeting, economics and, of course, wine.

• Check out Card Hub’s look at how the wine industry fared during the recession

Saving Tips

1.  More expensive doesn’t always mean better

Just like there are bad credit card offers that charge hundreds of dollars in annual fees, many expensive wines are truly inferior to the right bottle at a much lower price point.  So, rather than throwing a pity party, have some fun trying to find the best bottle that fits your budget.

“There are very decent wines that sell for less than $10 a bottle,” says Dr. Tony Lima, a wine economist and professor at the 麻豆传媒社区入口 – East Bay.  “I think when people find themselves in financial straits, they should look at this as an opportunity to experiment with some of those lower-priced wines.  I’m not going to make any specific recommendations.  My general recommendation is that the way you learn what wines you like is by trying them.  When you find something you like, stick with it. … I would look at this as an opportunity to learn something about wines that you might have passed up before simply because of the low price.”

2.  Shop around

It’s important to understand that price is also driven by where you shop, so it’s important to determine which area store boasts the best combination of low prices and broad selection.

“I suggest shopping in one of three places for wine:  1) a local wine store with a knowledgeable staff who can steer the customer in a proper direction; 2) a bodega with seemingly too-large a wine selection; or 3) Costco/Trader Joe’s,” says John Herbert, a Washington, D.C. sommelier.  “The local store will have the best selection, and if you engage the staff, are forthright about what you’re willing to pay, and express a willingness to try something new, the odds of walking out with a good bottle are high. The bodega is more of the ‘needle in the haystack’ approach. Assistance will be lacking, so a good base of knowledge is necessary.  Discretion must also be exercised because there’s a good chance no value is present, but if there’s dust on the bottles and they’re mostly a few years old, there’s reason to get excited. Costco has perhaps the best wine buyers in the world, and their purchasing power and ability to exploit economies of scale make it a tremendous place to find value. The wine stock will be limited to about 100-200 bottles in most locations, but especially in the $15-$30 range it will be a wonderfully curated selection. Also, I have had success with both the Kirkland and Trader Joe’s house brands, which are always underpriced for the market, and especially in Kirkland’s case, nearly always good.”

3.  Ignore “expert” scores

Nascent wine drinkers can be easily swayed by marketing materials (much like inexperienced credit card users).  The problem with those placards that you see accompanying bottles in the store is that they inevitably contain glowing reviews and/or reflect the tastes of one individual or another.  Like with any other food or drink, people’s tastes in wine vary.

“I always tell people ignore those scores.  The problem is that your taste is different from my taste and both of us have tastes that are different from Robert Parker’s.  Therefore, what Parker thinks of the wine is pretty much irrelevant to whether I’m going to like it or not,” Lima said.  “What I try to do is read the description on the back label, and after a while you get pretty good at interpreting what those are saying.”

4.  Participate in wine tastings

Finding your favorite wine requires a lot of trial and error.  The good news is that, for wine enthusiasts, trying and learning about a bunch of different types of wine is likely more of a fun activity than a burden.  The trick is simply to not increase your wine consumption or waste money in the process.  Wine tastings can be a big help in that regard because they’ll allow you to sample a variety of different bottles, learn about each, and save money – especially since you can often find daily deals for them.

5.  Keep detailed records

I don’t know about you, but the sheer breadth of the wine selection at most stores easily overwhelms me and I have a hard time keeping track of the different bottles I’ve tried.  In order to refine your tastes and avoid repeating mistake purchases, keep a journal of each wine you taste, including the producer, type of grape, vintage, price, and overall observations.  You’ll quickly get a pretty good idea of your likes and dislikes, and you’ll be able to quickly reference great value buys when it comes time for a dinner party or other special occasion.

6.  Consider your payment vehicle

You can save a lot of money on wine simply by using the right form of currency.  For example, if you live in a state that sells wine in grocery stores, the Blue Cash Preferred Card from American Express could prove quite valuable.  It offers 6% cash back at supermarkets, 3% at gas stations and department stores, and 1% everywhere else.  Plus, you get a $150 bonus for spending at least $1,000 in the first three months, which makes the card’s $75 annual fee no big deal.

Recommendations

Now, it’s understandable if many of you are interested in cutting to the chase and getting some specific recommendations for value wine buys.  Such suggestions are tricky because so much depends on personal opinion and availability, but since we’re talking booze why not give it the old college try?

With that in mind, I flipped through my rolodex and sought the opinion of John Herbert – the aforementioned Washington, D.C. sommelier who happens to be both a close friend of mine and the biggest wealth of wine information I’ve ever met.

Here’s the approach that he recommends:

• Look to the South of France:  “Wines from the Languedoc [region], especially Corbieres, offer a flavor profile similar to Chateauneuf Du Pape and other wines from the Rhone, but at a pittance of the price. In Sicily, Nero D’Avola provides a structured, full bodied wine for under $20, while Frappato brings the elegance and perfume in spades for the price of a decent six pack,” Herbert says.  “Perhaps the best values in the world are from a well-known region in the most wine-centric of countries, the Loire Valley in France – Cabernet Franc for the reds and Chenin Blanc for the whites.  A Jackson [$20 bill] will allow you to purchase world-class examples of each, and both are singular varietals, whose flavor is more interesting than just about any Napa Cab or Chardonnay.”

• Think undervalued international wines over domestic producers:  “While I don’t mean to be too critical of domestic wine, there just isn’t much value to be found on our home soil.  The few places where value did exist, like Paso Robles, have dried up in recent years,” according to Herbert.  “There’s still good value to be found amongst the table wines of Portugal, lesser known Spanish regions like the Costa Brava offer new-world styled wines in an old world package, and if you can get your hands on them, [wines from] the Canary Islands offer some serious juice at a damn good price.”

He also suggests trying wines from the following producer and region, respectively.

• Castelmavre:  “This is a producer that’s reasonably widely available.  Vintage after vintage is outstanding, and a bottle only runs $13-$15.”

• Texas Hill Country:  “There are some pretty interesting, inexpensive wines being produced in the Texas Hill Country right now.  They can be somewhat difficult to find, but are a cool grab if you see them.”

Budgeting Tips

You can become an expert in making value wine purchases, but if you don’t adhere to a monthly budget – both in this purchase category and across all other expenses – you’ll still end up incurring debt on a regular basis.  That’s a difficult task for a lot of us, seeing as only about 43% of Americans say they keep a budget and closely track their expenses, according to the National Foundation for Credit Counseling’s 2012 Financial Literacy Survey.

With that in mind, we touched base with Dr. Richard Serlin, a budgeting expert and professor of personal finance with the University of Arizona’s Norton School of Family & Consumer Sciences.

His No. 1 piece of advice for becoming a better budgeter (and improving your overall personal finance performance):  read “All Your Worth,” by renowned personal finance expert and current Massachusetts Senator Elizabeth Warren and her daughter Amelia Warren-Tyagi.

“For budgeting, the biggest message is that the main focus has to be on the big fixed expenses, and less on the little things,” Dr. Serlin told Card Hub.  “The big fixed expenses she calls ‘must-haves.’ These are things that you really have to pay each month (like a mortgage, or car payments) to avoid very bad consequences. This is opposed to discretionary spending which she calls ‘wants,’ like eating out. You can stop eating out immediately if there’s a financial crisis like a job loss, but you really can’t stop making the mortgage payment without disaster.”

Both Serlin and Warren recommend cutting the amount you spend on “must-haves” to less than 50% of your after-tax income.  Among the tips the former gives for reaching this threshold is buying a less expensive home with a 15-year mortgage and opting for a used car that you maintain well instead of buying new. Unfortunately, research indicates that the average consumer’s must-have spending has increased from roughly 55% to around 75% in the last 25-50 years.  Much of this certainly has to do with our penchant for over sized, overpriced luxuries, but perhaps even more worrisome than our affinity for such things is the fact that we believe them to be necessities.

“Part of this is advertising, but a big part is that income inequality has exploded over the last generation, and this contributes to what Cornell economist Robert H. Frank calls ‘expenditure cascades,’ where those higher up start to pull away, and so those underneath really stretch themselves to not be left too far behind in how prestigious they look to others, and seem and feel to themselves,” according to Serlin.  “A generation ago, people were happy driving a Honda Accord that had a high mileage engine with half the horse power of today’s version; the tires were about half the size, and the car itself wasn’t much bigger than a Civic today.  But people were happy driving those cars and they seemed prestigious and respectable and nice and high-quality to them because that’s what all the middle class pretty much were driving.  Today, most people would be too embarrassed to buy such a car, because just about everyone has tires twice as big and twice the horsepower.  Giant tires and 250 or 300 horse power don’t really add that much pleasure the way most people drive, but with the prestige arms race, so many people feel bad being seen in anything less, and anything less now has the feel in their mind of cheap and crappy.  But a generation ago it felt prestigious and high quality.  It’s really important to try to break out of this, to never get used to a level of price, consumption, and material prestige that you can’t afford without making your family’s finances risky and fragile.”

So, here’s what we recommend:

Look over your bills for the past few months and make a list of your recurring expenses

• Rank your expenses in order of importance and make the tough choices when it comes to cutting those that are superfluous and scaling back others.

• In addressing Steps 1 and 2, strive not only to limit your “must-haves” to less than 50% of your after-tax income, but also remember to fund an emergency account (the goal is to have a rainy-day fund with at least a year’s after-tax income in case you lose your job or encounter other difficulties) and make sure not to rely on debt in order to afford discretionary expenses.

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  • Remember that spending money on something like wine isn’t necessarily bad, provided you’re responsible with your actions both monetarily and otherwise.  If it’s a choice between any discretionary expense and staying out of serious debt, you should obviously go for the latter, but hopefully being smart about what you buy on a regular basis will prevent you from having to sacrifice leisure activities that you enjoy.