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The Cost of Stamps is Going Up! How to Avoid the Increase.

{ Posted on Jul 06 2010 by Marcus Alston }

The postal service is raising the cost of stamps again.  Don’t worry, I have some great tips on how to avoid the increase.

On Tuesday, the U.S. Postal Service announced that it plans to increase the price of first class postage.  Quick, does anyone remember how much stamps cost today???  I find it hard to remember since I rarely use stamps anymore.  The proposed increase would take the cost of a first class letter from 44 cents to 46 cents, beginning in January 2011. The price of a postcard would increase 2 cents to 30 cents.  Other postage costs would see an increase as well.

The Postal Service admits it is losing money as mail volume has decreased due to availability (convenience and or low cost) of other alternatives such as the telephone, faxes, e-faxes, e-mail, net meeting services, paperless statements, electronic bill receipts and payments, wire transfers, competing delivery services, courier services, and the Internet in general.

The Postal Service lost $3.8 billion in the fiscal year 2009, even after cost cutting measures such as cutting 40,000 full-time positions and making other reductions.  What is scarier is that the Postal Service projects losing $7 billion in fiscal year 2010 and another $7 billion in 2011.  Even the proposed rate increase which is estimated to raise $2.5 billion, will not offset these losses alone.  Other cuts are necessary.

Quick Notes:

  • The current 44-cent first-class rate took effect May 11, 2009.
  • The Postal Service has raised stamp prices annually since 2006.  Prior to 2006, postage rates stayed fixed for more than three years without an increase.
  • Forever stamps purchased at the current 44 cents or at lower will remain valid and no additional postage will be required.
  • In addition to the proposed 46 cent rate for the first ounce, the cost for each additional ounce would go up a penny to 18 cents.
  • Associated Press reports that postage for periodicals would go up about 8 percent, and other rates for advertising mail, parcels and services would rise by varying amounts.
  • The proposed rate increases must go to the independent Postal Rate Commission for approval.  If approved the new prices would take effect Jan. 2 2011.
  • Besides the first-class increase, postage costs would rise an average of 5 percent.
  • The Postal Service is reportedly in the process of implementing cost cutting measures, including  reducing mail deliveries from 6 days to 5 per week, closing some offices, restructuring prepayments of retiree health benefits, creating a more flexible workforce and expanding access to products and services to places more convenient to customers.
  • The Postal Service, despite being part of the U.S. government, does not receive tax dollars for operating expenses, and uses the sale of postage, products and services to fund its operations.
  • According to its news release, the Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes.  If it were a private sector company, the U.S. Postal Service would rank 28th in the 2009 Fortune 500.

Two Tips on How to Save on the Cost of Stamps in Order to Stretch Your Budget.

1.  Buy Forever Stamps now at 44 cents before the increase and save over 4% on the cost of the proposed increased price!

2.  Also, use cheap alternatives to mailing items that I mentioned above such as: telephone, faxes, e-faxes, e-mail, net meeting services, paperless statements, electronic bill receipts and payments, wire transfers, and the Internet in general.

These savings are worth pennies, but pennies add up.  One hundred (100) pennies make a dollar.  If you string a few of the cost saving methods together that I have written about in my numerous blog posts, you should start realizing some significant annual savings that could be used to help reduce your debt and or help build your wealth.

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3 Responses to “The Cost of Stamps is Going Up! How to Avoid the Increase.”

  1. Good article. I like buying the forever stamps in bulk to save.

  2. Agreed. Buying Forever Stamps is what I do too. I rarely use them, but I have been carrying them around in my wallet for a while “just in case”. Buying in bulk is a great idea. The Postal Service looks like they will honor the Forever Stamps pretty much “forever” so 10 years from now, you could be saving a lot more.

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