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Saving Money Taxes Only The Creativity Of These Oregonians

Times are tough for many Oregonians. The state will announce the latest monthly unemployment rate Wednesday. But unemployment has remained stubbornly high — at more than nine percent — for two years now.

Many people are cutting back on spending. And as Kristian Foden-Vencil reports, Oregonians are finding all kinds of ways to save money.

See more ways OPB news sources are saving money.

In the front yard of his house in Southeast Portland, 10-year-old Adin Coveny plays ball with a friend. He’s been learning recently how to save money.

“I make sure my lights are turned off when I leave the room,” Coveny says.

Adin’s mom, Sandra Coveny estimates 64 percent of her pay-check currently goes to pay for her house. So she’s been coming up with ever more creative ways to save some money.

“We’ve stopped drying our clothes for the summer in the dryer, to see how much money we can save. We make our own pasta, because we like fresh pasta, we’re addicted to it. But I’ve also started again making my own lotions. We’re going to make lip balm here.”

She’s got a jar of shea butter in the fridge along with tubes of aloe vera and lanolin. She says she can make a big jar of hand cream for about $4.

That compares to one in the store that would cost about $18. And both Sandra and her son Adin are proud of their large new wooden drying rack.

Adin Coveny: “So the drying rack is right there. It can fold up.”

Kristian: “Yeah. You could put a whole week’s worth of clothes on there.”

Adin Coveny: “Yeah. And it’s small, it fits in a corner and when you’re not using it, you can fold it up.”

Kristian: “In the winter, when it’s wet and cold. Do you have any problems with mold or anything like that. Or do you hang it out in the room and it’ll dry?”

Sandra Coveny: “No. It takes forever. What I had done was put it in the living room over the heating vent. It takes three days if I don’t.  My kids will say it’s fine, but they both made me swear, I would never dry towels on the drying rack anymore.”

That’s because the towels dried on the rack stand up on their own — they’re not very soft.

Across town, Eva Schweber has also been working on ways to save. She buys food in bulk and makes sock monkeys and rag dolls out of old sheets and towels as gifts.

“My twin niecelets  have these cute little pink dresses that the first time they wore they got chocolate ice cream on. But the bottoms are really nice so I am cutting off the tops and making skirts for them.”

Schweber says she gets most of her clothes at swap meets.  That’s where people bring their old clothes and trade them. There’s even a Portland webpage called ‘swappositive,’ where you can find the next meet.
In December , it lists a swap for toys and books for the holidays.

The  ingenuity of some savers is impressive. There’s a man who uses just one plate, one knife, one fork and one spoon to save washing-up; a family that unplugs all electronics to save electricity; and several people have taken up bike commuting to save on both a gym memberhsip and a car.

Ann Snyder farms sheep, goats and pigs on a ranch in  Central Oregon — 25 miles away from the nearest town. She asks her neighbors to pick things up for her when they’re planning to go shopping. She’s is also into bartering.

“We haven’t paid our auto mechanic in probably 10 years, because he has a family to feed and he gets a pig about once every year in his freezer and we get auto mechanic labor,” Snyder explains.

She also barters with her massage therapist, her hair dresser, the local coffee roaster and the person who sells her fire wood.

“You know people aren’t having to worry about coming up with dollars to pay for something. If you have what they need and they have what you need. It just seems to work better that way.”

Snyder says bartering is about building community as much as saving money.

That said, the IRS treats bartering as if each person had sold the goods or services they’re providing.

Adam Kobos is a tax lawyer at Stoel Rives in Portland. He says bartering can have tax implications.

“This is an area that the IRS is starting to look at. There are reporting rules that impose reporting obligations on barter exchanges, once they become a commercial venture,” Kobos said.

Since we’re on the subject of taxes, what about swapping? 

“If you bought a pair of jeans 10 years ago for $50 and you’ve worn them and maybe they’re worth $5 now. If you swap them for another pair of jeans that are worth $5 you’re not going to have a gain. Even if it is a taxable transaction.”

Kristian: “But if those jeans are worth $10 . Then you’ve got a $5 gain that you’re meant to tell the tax man.”

Adam Kobos: “That’s right. If you bought those jeans for $5 a week ago and swap them for jeans that are worth $10 now, then yes, you could have gain on that transaction.”

Kristian: “But practically, the feds aren’t really paying attention to this kind of thing. What they want to catch is the somebody who says, I’ll give you two Rubens for a Picasso, or something like that.”

Adam Kobos: “Yeah, they’re going to be looking at the bigger transactions.They’re going to be looking at the established exchanges.”

So, tax consequences for some saving methods aren’t a big concern.

What’s the best way to save?

Bend entreprenuer, Brennan Morrow, says getting away from commercial temptations has its advantages. He has set up his business so he can take several months out of his year to live simply with his four kids.

“My family and I moved to Tenakee Springs, Alaska, where there are no cars, no cell phones and our family is saving thousands of dollars each month in money we’re not wasting,” Morrow says.

He goes to the store once every two months and that takes a couple of days.

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