Tennesseans find creative ways to adapt to tough times

Gas prices reached a record of $4 per gallon in Nashville last week. Inflation nationally has risen to its highest level in 17 years. And wage hikes aren't keeping pace with the steady drumbeat of rising prices on everything from eggs to energy.

Nashville residents, pinched by the changes, are coming up with innovative solutions to cut their own costs or earn a little extra money. Middle-class families no longer covet those mammoth SUVs. Car pooling is suddenly in fashion. And some residents are making huge lifestyle changes — moving closer to their jobs or taking jobs closer to home.

The end result may be to fundamentally change the way many Middle Tennessee residents live their lives or even reshape the cities in which they live. Here are some of the ways consumers are adjusting to the soaring cost of living and sluggish income growth.

Move closer to work

Suburban living has less of an appeal to Hermitage resident Lori Casteel nowadays, especially after she figured out she and husband Mike spent $1,200 in gas in April.

The culprit: driving her daughter back and forth to a private school in Nashville. Plus, the total commute sometimes reached four hours, counting the time it took running errands in town.

So now, the Casteels have signed a contract to buy a house in East Nashville that will be closer to their daughter's school. Both husband and wife work out of their homes, so job location wasn't an issue.

"It's not because our situation is dire,'' Lori Casteel said. "It's not that we're not making our bills. I just don't see the need to pay that much for gas. I have a family. There are better things for me to spend my money on than gasoline."

Realizing that home prices are higher in East Nashville than in Hermitage for the same amount of space, the couple decided to spend a little more for a three-bedroom Craftsman bungalow with an office than what they paid for their Hermitage home six years ago. That 3,200-square-foot home in Hermitage cost $226,000.

Still, more than money was part of the equation.

"Our time has a value on it,'' Casteel said. "Whatever choices I can make to better control our situation, I can do that. We don't have to sit back and be forced to pay whatever fuel prices are."

Mandy Wachtler, a broker with Pilkerton Realtors in Nashville and the president of the Greater Nashville Association of Realtors, said she has seen an increase in the number of clients trying to move closer to town because of gas prices.

Two clients in La Vergne hope to move to Nashville. Another living in southern Davidson County wants to move closer to the downtown area.

"It's not necessarily an inexpensive thing to do,'' said Wachtler, who advises clients they can estimate paying 7 percent of the purchase price in fees, insurance and other closing costs.

But she thinks she's seeing the beginning of a trend, especially with developers building thousands of condo units in and around downtown Nashville.

"We may get a slowdown, but for the most part, people are wanting to come back to the city," she said.

Share resources

Gayden Fite doesn't want to buy a new home, but she does want to reduce her gasoline consumption, in part because she'll feel better about her impact on the environment.

The 62-year-old recently replaced a 12-year-old Honda Accord with a Toyota Prius, which cost $25,000 and has leather seats.

She estimates her new Prius is getting 45 or 46 miles per gallon, saving her about $140 per month on gasoline with gas prices hovering around $4 per gallon.

"I really made a decision that I wanted the immediate savings versus the long-term savings,'' Fite said of her car purchase. "Obviously when you finance your car, some of your savings is going to be eaten up in debt service.

"I feel better about getting better gas mileage, being a little greener, and using less gasoline and being better on the environment."

Plus, Fite is car pooling with a colleague from work. Fite drives about 30 miles each
way from her home in Kingston Springs to her job as the clinical director of a residential facility for adolescents in Nashville.

Fite and her car-pool buddy, a nurse, stay flexible about each other's schedules. If one has to stay an hour late at work, the other can find some work to do in the meantime. Or if one has a dental appointment late in the afternoon, the other will head home early, too.

Others are making similar decisions.

The Metropolitan Transit Authority, Nashville's bus system, has seen an 11 percent increase in trips in the fiscal year that ended in June.

Sales of compact cars have climbed compared with last year, while truck and SUV sales are falling, according to automobile research company Edmunds.com. Sales of the Toyota Prius soared 70 percent last year to 181,221 vehicles, the company said.

All of the changes are leading to falling gasoline consumption in the United States. Consumption has dropped 3 percent from July of last year, according to the federal government's Energy Information Administration. That is a significant number, according to economists.

In fact, the decline runs counter to years of progressively increasing consumption. Economists attribute the slowdown to high gas prices and a weaker national economy.

The federal government's Energy Information Administration projects gas prices may fall a bit by the end of the year, but will average $3.89 per gallon nationally through next year. Many believe such high gas prices will continue to keep Americans cutting back at the pump.

Get a closer job

Rosalyn Davis didn't want to move closer to work. She wanted her job to come to her.

The 51-year-old Madison woman took a job working for her sister, in part so she could be closer to home. Davis went to work at her sister's restaurant, The Veggie Cafe in East Nashville. Previously, she had been commuting to a job at Vanderbilt University Medical Center.

"It takes me 10 minutes to get to work now, when it used to take me 30" minutes, she said.

Davis may not be coming out ahead financially, because her new job pays about $11 per hour versus the $14 per hour she made at Vanderbilt.

"I knew my pay would be lower,'' she said. "But I knew I wanted to do this."

Share grocery costs

Motivated by inflation, Tim Mitchell, a 42-year-old who is married with three children, is trying to trim his grocery bill and his neighbors' as well.

He and his wife, Sheila, have started making discount bread-shopping trips for themselves and neighbors in Old Hickory in recent months. It works like this: Whoever plans to be near the Colonial bread store on Gallatin Pike takes orders from three neighbors and makes a shopping trip on behalf of the group.

A recent trip found them stocking up on 10 loaves of bread at 80 cents per loaf, six bags of bagels and hamburger and hot dog rolls.

The bread comes from the local Colonial Bakery in Nashville, which is owned by Sara Lee Corp.

The store, a longtime Nashville discount option, reports a sales increase of about 25 percent to 30 percent so far this year compared with a year earlier.

Make the best of it

With low interest rates hurting many retirees who depend on income from investments, such as bank certificates of deposit, Jackie Andrews has devised a way to fight back.

Every month, she calls more than 30 local banks and asks each one for its best offer on a CD. She compiles the results in a chart. About a dozen friends call her to find out where the best rates are. About six or eight friends do so regularly.

"I've had fun with it,'' she said.

Andrews, 77, has the personal phone numbers of client representatives, bypassing the toll-free numbers of many banks and saving time. She prefers this method to going online at a computer and checking Web sites that aggregate CD offers from a variety of banks.

She also prefers dealing with banks that have a local presence.

"For myself, for my friends, they want to hand someone a check and receive the CD in their hand,'' she said. "They don't want to do it any other way."

What's the best deal she found recently? It was at Wachovia. The bank last week was offering 4 percent for a seven-month CD or 4.25 percent for a 12-month CD. That deal isn't better than the rate of inflation, but it's better than nothing, Andrews said.