I’m an oddball in a lot of ways. And I’m on my way tomorrow to rub elbows with a whole bunch of other personal finance oddballs at FinCon14 down in New Orleans.
I’m also an oddball because of my feet. I have a clubfoot. Thankfully I’ve been able to go for nearly 25 years without any operations, and in the grand scheme it’s a very, very minor problem. I’ve known people with this problem that would never be able to walk.
The small price I pay for my odd feet
Around a year ago, I was tagged on Facebook to share seven things about myself. Since I’m a Level 47 troll aspiring to become Level 48, I answered, but only really ended up sharing one fact about myself: that I had two different-sized feet. The other facts were deducible from that one fact. Some cried foul, but I don’t care (hehe).
The last of the seven, which I’m sharing here, gets to the small price I pay — and also to the motivation for this post:
Compared with most other people, I spend about twice as much on shoes. The store employees still feel the need to make it clear that I have to pay for both pair. Almost as if I would expect them to hold the non-fitting pair until a guy with the opposite problem — my “evil shoe twin,” if you will — happened into the store, happened to need shoes, and happened to like exactly the same style that I have. “Why, Mr. Laceheel, have I got a great pair for you!!!”
For a long time, I used to get a pretty good discount on the second pair: about a third off. Then the stores stopped discounting them at all for a while. So I stopped asking. And I ship the shoes I don’t wear off to the National Odd Shoe Exchange, which has the acronym NOSE. No, really.
Then I got the statement again …
We were at the mall this weekend, and we went to Dick’s Sporting Goods to get my New Balance 623’s, which I’ve been wearing for years. I told the store employee the sizes (plural) I needed.
“You know I can’t mix the sizes,” she said.
“You can sell me two pair though, right? I mean, I didn’t expect you to keep the other pair for someone with the opposite problem I have!” And I laughed.
… but I found out why they say it
Of course she could sell me two pair. When she brought the shoes back, she explained why she had to make it clear that they wouldn’t mix and match.
Another customer came in and had made a freakin’ scene when the store didn’t sell him one pair with two different sizes. Called over the store manager and everything. I imagine the guy left mad because they didn’t do it for him.
That’s just plain unreasonable. No, actually, it’s tacky. The mismatched pair is of no value to the store. It’s unreasonable to expect that they would sell the shoes, likely at a loss, to an occasional customer. (Now, if Dick’s actually did this for me, I would be sure to give them a whole lot of business.)
When I heard this, I sympathized with her, and told her that it was unreasonable, and made it clear that I wasn’t that kind of customer.
She came back with a $10 coupon. It pays to be reasonable.
There is no shortage of personal finance advice available. I’ve been known to produce a bit myself here and there.
There are recurring themes like “buy vs. rent,” “spend less than you earn,” “the magic of compounding,” and so forth which are the cornerstones of personal finance, saving, and retirement planning. They’re cornerstones because there’s a lot of wisdom behind them.
Checklists and more checklists
I ran across Richmond Savers today, which is run by a couple of CPAs in my part of the country. The community is local to Virginia’s capital, but they have a list of financial guidelines that they try to live by every day.
If you’ve read lists like these before, the themes are very familiar. They’re the important financial issues that most of us deal with at one point or another: credit and debt, big expenses like automobiles and houses, health and wellness, and investing.
The points they list pass the reasonableness test. None of them are that off-the-wall. Lists like these are rarely off-the-wall.
What “reasonable” and “not off-the-wall” are not
Some of the items get pretty specific. Here is a flavor (check out the website for the rest):
- “Do not buy a house if you’re planning on moving within 5 or even 10 years….”
- “Make regular contributions (we suggest twice a month to coincide with your paycheck) to your investing accounts….”
- “Always automate as much of your financial life as possible, including your contributions to savings and all your bills….”
Are these and the other few dozen points reasonable? Of course they are. To the first point: There are a number of reasons why buying and quickly selling a house costs a lot of money. To the second: By making regular contributions you can reduce the effects of market timing. To the third: You’re less apt to miss a payment if it’s done automatically.
Reasonable advice, though, is not universal advice. We moved from our first house in less than ten years, but we kept it, and rented it out. It’s less than four years from being completely paid off now. Making regular contributions to an investment account, or automating your finances, puts things on auto-pilot, but auto-pilot may not work for you, because it allows you to become complacent and forget about those monthly withdrawals.
It’s still up to you to determine what to do!
Every website that gives this kind of advice should have a disclaimer. Richmond Savers does (at the bottom of the pages) and this site does on the sidebar.
Website owners put disclaimers to protect them from liability in the case that someone follows their advice, and bad things happen as a result. Richmond Savers can say “[b]uy a reliable car, such as a Honda or Toyota, and drive it for 200,000 miles[,]” but if you stretch to get that car (which run a bit more expensive than some others) or if you pour a lot of money to keep the car running 200,000 miles, and fall into financial hardship as a result, then perhaps it wasn’t the best idea to follow that advice.
In fact, even if you pay someone for this kind of advice, it’s still up to you whether you follow it or not! Setting aside that there may be criminal intent, advice is still just that: advice. Not a command, not a sure thing: just advice.
There’s always context. No one knows that context better than you do. Which is good, because you are the one responsible for your financial decisions. As Tim McCarthy went into great detail in his book The Safe Investor, not only do you need to look at your own goals, but you also need to verify what your paid advisers are telling you. Extending this to the free advice you get from this blog and everywhere else, it’s up to you to verify the sources and cast the advice in the context of your situation.
The post The one person responsible for your financial decisions appeared first on Mighty Bargain Hunter.
Economies of scale are a wonderful thing. The more you’re willing to buy from a particular vendor, the better the unit price they’re inclined to give you. Selling a thousand items a hundred times is a lot more work than selling fifty thousand items twice. It’s less bookkeeping, less tracking, less shipping, and less labor to sell bigger chunks of your inventory at once.
Likewise, businesses buy the materials for their operations in bulk all the time. It’s part of being competitive, and profitable. Lower expenses mean that businesses can price more competitively, which translates to higher volume, and more profits.
Team up with your business-owning friends to get bargains
Local economies have a good mix of variety and personal relationship. In a mid-sized community there is a spectrum of business owners that serve a good number of customers. But the scale is not so big that it’s impersonal. Small business owners are friends with non-business owners, go to church together, have their kids on the swim team together, etc.
Your friendships with small business owners can be used (ethically) to tap into certain economies of scale, which effectively allows you to buy wholesale with the price, but not the quantity. Here are a couple of examples:
- End-of-season Italian ice. There was an Italian ice shop that was in business during our engagement and during the first few years we were married. (The owner’s wife made our wedding cake.) We spent quite a bit of money there, for sure. One of the last years he was in business, near the end of the season, we asked him if he would sell one of the containers to us for the winter. (It was near addiction-level at the time .) He sold a large container to us pretty much at cost.
- High-quality munchies. A friend of ours has a niche food business. He buys some of his food supplies by the pallet. On a whim, I asked him if he’d consider selling some of the raw supplies to us; one in particular we consume quite a bit of, and the quality of what we have isn’t the best. I knew that he bought supplies that were high-enough quality that we’d have to go to a specialty food store. The price he quoted me was about half of what a comparable product would cost from Walmart.com, and was cheaper than the “meh” grade we get now.
How to be a welcome side-customer
These were great bargains. We bought in quantity, but we didn’t buy so much that it would go bad before we got through it.
Still, I do think there are ground rules to trying this out on your business-owning friends. Follow these guidelines and you’ll be welcomed back for more:
- Don’t use the material to compete against them. Hopefully this would go without saying, but using the good deal you just got to compete against them in their market would be a really good way to ruin a friendship.
- Don’t try to get the main service they offer at a steep discount. It might appear that we kinda-sorta did that with the Italian ice guy mentioned earlier, but not really. Yes, Italian ice was his main business, but he wasn’t going to sell us anything off-season anyway. We asked him at the end of the season. We didn’t consider asking him in the middle of the summer. As for our friend with the niche food business, we’re not even trying to learn how to do what he does.
- Treat the deal discreetly. The two deals I mentioned above don’t create a problem for the people who gave them to me. The first guy is no longer in business, and I was vague on purpose in talking about what I bought from the second. If you tell people about the deal, your friend will get pinged for the same deal, and then you’ve created a problem for them. (They’ll probably know it was you who blabbed.) They may want to offer the deal to other people, but that should be their business decision, not one that’s foisted upon them.
- Make sure it’s win-win. We got great deals, and we didn’t argue the price down any further. If the deal become too one-sided, the business owner may do it as a favor once because of the friendship, but if it’s inconvenient, or a financial loss, they’re not going to want to do it again. (If my friend did sell his stuff at a loss, I’ll make sure he doesn’t do it again! But I doubt it. )
Have you gotten wholesale prices from your business-owning friends on some of these side deals?
Saving money, and spending less money, are two crucial activities for people looking to take, and maintain, control of their personal finances. And, as with most things, there are classy ways to go about it, and … less classy ways.
On the spectrum of ways to spend less money openly, one can be (in order of decreasing classiness) frugal, cheap, or tacky. Merriam-Webster defines each in context:
- frugal – Characterized by or reflecting economy in the use of resources.
- cheap – Stingy; sparing or scant in using, giving, or spending.
- tacky – Characterized by lack of good breeding.
Frugality is typically a virtue. It’s off the beaten path, and a little unpopular, but still a virtue. Cheapness is Ebenezer Scrooge, or the guy that puts in a quarter when people at the office are collecting for a retirement gift. Tackiness will result in you being asked to leave, and never come back.
“Weird Al” Yankovic parodied Pharrell’s contagiously catchy song “Happy” with an ode to tastelessness, “Tacky.” There are a few money lines peppered in this song. Do they all fall under the description of “tacky?” Let’s see:
- (0:21) “We can go to see a show but I’ll make you pay.” A friend of mine had bought some extra tickets to see Itzhak Perlman, and he reached out to his musician friends for takers. The tickets were $62/pop. (This is Itzhak Perlman, after all!) Initially we refused, because we really couldn’t see spending $124 as a couple to see him. Well, the day before the concert arrived, and he still had no takers for two of the tickets, and offered to give us one. (The other he had given to another friend.) I still ended up paying him for the ticket, because we could afford one. Though I don’t think it would have been tacky to not pay, it certainly would have been cheap.
- (2:08) “Bring along my coupon book whenever I’m on a date.” I don’t see this as being either tacky, or cheap. It’s frugal. Besides, if you’re single, frugal, and are looking for a frugal mate, a good acid test of whether or not they’re like-minded is whether or not they bristle when you pull out the coupon book. If they whip out their own coupon book when you do — well, that’s true love right there!
- (2:21) “Took the whole bowl of restaurant mints. Hey, it said: ‘They’re free.'” Some time ago, I went with someone to pick up pizzas. As we were waiting to get the pizzas, he took a lot of napkins — far more than we actually would have used even with four adults and a bunch of kids — saying, “They’re free.” This is tacky. It’s a fine line between tacky and not tacky, but this person crossed the line. Why? It’s the difference between using supplies at a business (napkins, salt and pepper, toilet paper, or mints) and overusing or stealing them. If everybody took 70 napkins, either prices would go up, or the businessperson would ration the napkins. What might happen too is that the businessperson would call the person out. Or, subsequent orders may be “unintentionally” screwed up. “Sorry about that, sir. You probably want to take your business elsewhere, I suppose …”
Where do you draw the line between frugal, cheap, and just plain tacky?
Personal finance boils down to recognizing, and acting on, good deals in their proper context. What’s a wise finance decision for one person could easily be a foolish decision for another.
In deciding whether something is a good deal, it’s often useful to quantify its cost in terms of something familiar. While raw amounts like “$500″ do indeed quantify the cost, $500 could mean wildly different things to different people:
- $500 to the average laborer in Indonesia is nearly a year’s salary.
- $500 is a bit over two weeks’ pay to someone at the federal poverty level.
- $500 to a middle-class worker is a few days’ pay.
- $500 to a CEO at a mid-sized company is pocket change.
- $500 to someone with Bill Gates’ wealth is hardly worth picking up if he dropped it, as it would cost him more than that in time to pick up!
It’s the analogies that put the amount of money into context, because everyone’s financial situation is different.
Here are a few useful ways to describe the cost of something in terms other than raw dollar amounts:
- Pocket change. This is an amount of money that can be spent without a whole lot of thought. In context, it will hardly be missed. People can budget for this category of spending, and there needn’t be a whole lot of planning as to how it gets spent.
- A pizza. I find myself using this one quite a bit, for some reason. We don’t eat a whole lot of pizza, but if we give up one here or there in exchange for something else, we cook pasta or grilled cheese that evening instead.
- A nice dinner. A slight upgrade from “a pizza.” We do this less often than pizza. Not something that breaks the bank, but also not something we do every night, either.
- A day’s pay. Now the numbers get a bit bigger — perhaps a few hundred dollars. The cost of a purchase begins to hit home when we realize that I’ll work for a full day to pay for this.
- A mortgage payment. This could also be described as “car payment” or “rent check.” A full month’s worth of either transportation (if you owe) or housing. Certainly not something to be taken lightly, and probably something to give a lot of thought to.
- A paycheck. As we were looking for a larger TV last November, I described the cost of some of the newer models as “more than a paycheck.” These are expenses that almost certainly need to be saved for.
- Two months’ salary. This is the self-serving guideline that the diamond industry puts out for guys to shell out for their fiancee’s engagement ring. We didn’t come anywhere close to that amount.
- A car. Five figures. Something you might buy only a few times in a lifetime.
What other money analogies do you use?
I’ll admit it. I’m a card-carrying member of the grammar police, the spelling police, and the style police.
“Weird Al” Yankovic released his newest album Mandatory Fun less than two months ago. He parodied a Robin Thicke’s “Blurred Lines” with “Word Crimes.” If Weird Al’s song speaks to the innermost parts of your being, then you understand.
And, it you’re scratching your head: No worries; we can still be friends!
Below is a list of commonly used, but redundant, money expressions. The phrases either deal with money directly, or deal with issues that can cause people to spend a lot of money.
- PIN number. The acronym PIN stands for personal identification number. Saying “number” again at the end is redundant. The same would be true of the phrase “SSN number.”
- LIBOR rate. LIBOR stands for London Interbank Offered Rate which makes the extra “rate” unnecessary.
- ATM machine. One doesn’t deposit or withdraw from an automated teller machine machine.
- $12 million dollars. Writing this amount either as $12 million or as 12 million dollars gets the point across as to what unit of money we’re talking about.
- Cash money. This phrase is used in sales pitches and street-side negotiations. Nonetheless, cash is money, right?
- Free gift. Whatever is being received isn’t a gift unless it’s free. (Whether the gift should be looked upon with suspicion or not is another matter.)
- Preboard. Some passengers might board an airplane before other passengers, but none of them can get on the plane before they … get on the plane.
- Hot water heater. We’ve had to replace water heaters (at great expense), but never a hot water heater. It’s unclear whether a hot water heater is (a) a water heater that is hot, or (b) a heater that heats water that is already hot. (We might need both a water heater and a hot water heater, then — just so the hot water heater actually has some hot water to heat!)
- UPC code. The bar codes that are scanned at checkout are called universal product codes. “Code” is part of the name.
- Safe haven. These types of investments or accounts are extra-safe, apparently. A haven is already “a place of safety” so a “safe place of safety” really has a lot of safety going on, doesn’t it?
- IRA Account? This one might be redundant, or not. The IRS defines an individual retirement arrangement that gives tax-advantaged status for contributions that are governed by deposit, withdrawal, and reporting restrictions. The same abbreviation also is used to describe a particular account — an individual retirement account – which plays a part in a person’s individual retirement arrangement. If the intent of the phrase “IRA account” is to describe an account that is part of an individual retirement arrangement, then it’s not redundant.
So … beware of people who enter their PIN numbers into the ATM machine to withdraw $300 dollars in cash money from their IRA accounts to buy a new hot water heater.
The post Ten redundant money expressions (and one curveball) appeared first on Mighty Bargain Hunter.
The pillar of responsible personal finance is to spend less than you earn. If you’ve heard that once, you’ve heard it thousands of times.
There are three ways to work towards spending less than you earn:
- Earn more.
- Spend less.
- Both 1. and 2.
One area that discourages people with finding ways to spend less is that “spending less” often translates to “doing it yourself,” and that takes time. Indeed it can.
There are ways to spend less that don’t involve spending a ton of time. I’ll describe five ways that you’ll be able to easily save $5 (or more!) in five minutes (or less!) Five bucks in five minutes is $60/hour. This is mid-level executive wage!
- Check Amazon. If you have an internet connection, it’s quick to look for just about anything you’d care to purchase on Amazon. The technique is called showrooming and it’s here for a long time. Head to your favorite store, find the item you want, and look up the price on Amazon to see if it’s better there.
- Use a rebate site. It’s shopping online but … cheaper. Instead of going directly to, say, bloomingdales.com, you go through a rebate site, click the link there, and you accumulate rebates that you can cash out. There’s really not much more to it than that. Even better: Hit a rebate site comparison engine that racks and stacks the rebates that they offer. Here are the results for the Bloomingdale’s rebate comparison on mine.
- Brew your own coffee. A friend of mine said that coffee always tastes better if someone who likes coffee makes it. If you make it yourself, you’ll do it right, and you’ll easily save a buck per minute of your time.
- Get an Entertainment Book or a local coupon book. For the times you eat out, having this in the car is an easy way to save at least $5. This book pays for itself quickly (even more quickly if you get a rebate!) If it’s not an Entertainment Book per se, then there are local ones (like the Attractions Book in our area) that are often sold by fundraising groups. These sell really well because they pay for themselves so quickly. Normally these books don’t have junk in them.
- Comparison shop in the supermarket. Almost every grocery store worth its existence will have unit prices on the shelf price tags. The tag that has the smaller unit price is (almost always) the better deal. How long does it take (under normal circumstances) to determine that one number is less than another?
What other tricks do you have that are worth $60 in savings per hour of your time?
Rebate sites are a great way to save money easily when shopping online. Just click through these sites instead of going directly to the store, and they’ll keep track of your visit and rebate you a portion of your purchase.
There are quite a few of these sites out there, and they compete against one another. These rebate sites get paid when you shop there, too. That’s how they earn the money that they share with you.
I’ve been working on an improved version of my cash back comparison engine. It now has a browse feature for the stores. You can do a rebate site comparison over a dozen sites in the engine now:
- Coupon Cactus
- Mr. Rebates
- Be Frugal
- Panda Cash Back
- Top Cash Back
- Cash Back Cat
- Active Junky
- Mr. Rebates Canada
- Rewards Runner
- Big Crumbs
- Rebate Blast
Try it out and see which site is giving the biggest rebate for your favorite stores!
I was chatting briefly with a colleague yesterday about married life. (He was going to be best man in a friend’s wedding in a couple of weeks.) In the course of the conversation, I admitted that saving money was a heck of a lot easier before I was married, but that I wouldn’t go back to being single by choice for anything. Everything has pros and cons.
He saw the picture of my daughter that I have in my cube, and pointed to that as one of the pros. I certainly agreed.
Our daughter is our one and only. Being an only child has pros and cons, too, of course. One of the pros is that whatever part of our income that would go to her enrichment is hers alone. No one else is competing for that slice of our income in that way.
Most bigger families have more restrictions on what they can do for their kids
Likewise, being part of a larger family has its pros and cons. The opposite side of the pro above is that larger families are more likely to need to make tough choices about what their kids participate in. If the money needs to enrich the lives of three or four children, the pot of money either needs to be bigger, or the children cannot do as much as would otherwise fit into their schedules.
The restrictions might be matters of practicality, as in running the children to different practices just isn’t possible because of schedule and time. Or, rather than participating in, say, three activities, they may only be able to participate in one or two each — on the reasonable assumption that favoritism is inappropriate, of course.
The sliding fee scale
Activity clubs don’t ignore the fact that participation gets expensive when you have several kids, and many charge a smaller fee for additional children. Large families, in effect, get an activity discount.
Though I could perhaps get bitter about this, and observe that the people in charge of setting the fees stand to be subsidized by smaller families like mine — due to the fact that they themselves have large families — that’s not really a productive way of thinking. It does more harm than good to start judging a large family for being large. (Who’s to say that the large size of a family is due to abundant blessing from God, or due to reproductive irresponsibility? Certainly not I!)
Besides, there’s more to it than that. Economically, it makes sense to encourage families to sign up more, or all, of their kids.
Let’s say that there was no discount, so a family with one child would pay $800/year, and a family of five children would pay $4,000/year.
Is it a fair charge? Yes. It is an onerous charge? Yes, it is. Might the parents stare down the barrel of that $4,000 expense and opt out? Possibly.
Now, let’s say that the club charges $800 for the first child, $700 for the second, $600 for the third, and $500 for the fourth and beyond. This is still expensive for the five-child family — $3,100 — but the family can see the nearly 25% discount they’ve been given, and are more willing to pay it.
The silver lining
Yes, they’re paying $620/child, and we’re paying $800/child. At the same time, though, a larger club activity can take advantage of their scale, and the experience will likely be better with more participants.
Regardless, though, our total payout is $800, while theirs is $3,100. We’ll still pay less, total. That will always be the case. I guess we’ll take that!
I use rebate sites for as many of my online purchases as I can. After getting a free account, it’s only a small amount of extra work to save a few dollars — or even more than a few! — on thousands of online stores.
Mr. Rebates is one of a number of rebate sites available. Using Mr. Rebates is simple:
- Sign up for a Mr. Rebates account, which is completely free.
- Log into Mr. Rebates before you shop online.
- If Mr. Rebates offers cash back on purchases from your favorite stores, go through the links on Mr. Rebates to get to the store instead of typing it into your browser.
It really is just about that easy to start accumulating your rebates!
How it works under the hood
Mr. Rebates has to get their money from somewhere in order to pay you your rebates. They wouldn’t stay in business very long if it came out of the website owner’s pocket, right?
The quick answer is that the store you bought from awards a commission to Mr. Rebates for sending them your business. What Mr. Rebates then does is share part of that commission you. The part they retain is their profit, which keeps the lights on and puts food on the table.
Features of Mr. Rebates
Mr. Rebates has been around for quite a while — since 2002. They hit the market early, but now there are quite a few other competing sites. But, like other sites, Mr. Rebates has unique features that make it different:
- Reasonable minimum payout. The minimum amount required to receive a quarterly payment from Mr. Rebates is $10.00.
- Monthly pay-out with PayPal. My rebate money goes in to my PayPal account as long as I request it before the month changes. It’s very reliable.
- Sign-up Bonus. There’s a $5 bonus that comes with your first purchase. Ka-ching!
- Store of the Week. This Mr. Rebates feature is a store that has higher-than-normal rebates for a full week.
- Weekly Deals. The front page features extra store-specific incentives, like a flat percentage off any order, free shipping, etc.
- Seasonal extra rebates. Depending on the time of year, a group of stores will qualify for extra rebates. So whether it’s back to school, Valentine’s Day, or the holiday season, expect that the places you’ll shop to have extra rebates.
- Favorites List. You can consolidate the stores you shop at most in a list for quick access to the rebate links.
This rebate-site has been around for over a decade You don’t stay in business that by not paying your rebates, so I see Mr. Rebates staying around for some time to come!
A washer and dryer are mainstays in many households. They are in our household, for sure.
We bought a used washer and dryer set four and a half years ago. Over the past couple of weeks, the washer was whining loudly. First we heard it within the drain cycle, then in the spin cycle. When it started squealing during the wash cycle, I sensed that its time was almost over, because that sounded like a transmission problem.
Our family had done some repairs on it already to fix a bent support frame, but a new transmission runs upwards of $100.00. Considering we paid $200 for the whole machine, this expense was questionable.
Time to hit Craigslist for another set, right? I’m of the opinion that older is better when it comes to most large appliances. So, off we went, and started emailing and calling people.
Unfortunately, we aren’t the only frugal people in our area
Looking on Craigslist for a used washer and dryer was a bit of a treasure hunt. The sets that were any good didn’t last long. The Craigslist ads were being removed left and right by the posters as other bargain hunter scooped them up.
One gentleman we called fixed up machines for a living, and he was selling them as fast as he could fix them, basically. He recommended that we drove out to his place early Sunday morning to pick one of the two he had left. This wasn’t feasible because we do the church thing, but it was clear that if we didn’t come out, he would get another buyer quickly.
We visited one woman with a machine. She didn’t know the capacity of the machine. As I told my newsletter subscribers, I would have had to pay to find out the capacity of the machine, but it would have been worth it to do so since it was too small for what we needed.
On the way home from that visit, we stopped in a secondhand store. Several washing machines were out front — sold. One more was in the back — on layaway.
For used washing machines, it’s definitely a seller’s market. There’s a lot of buyers out there.
Getting a used machine can take time — more time than you may have
We ended up getting a Roper machine from Lowe’s. There was a sale going on, so the price was pretty good for a new machine: under $350. It seems to get our clothes clean, but man, it sounds … different. Maybe part of this new sound is driven by the manufacturers doing their best to get clothes clean on a tight, mandated energy budget.
No kidding: the washer sounds like a robotic goose in heat. And from what we can gather, this is normal for the newer machines!
We got this newer machine for a couple of main reasons: (a) the price was decent, and (b) we could get it right then. The second one was the more important consideration, actually. Our dirty clothes were piling up, and our old machine was noisy, which was not normal. Basically, we didn’t want to risk completely breaking our current machine, because that would put us at a big disadvantage.
Were I to do this again, I’d plan a bit further in advance than we did. We had a bit of notice — a few weeks, maybe — and could have looked more than we did. We waited too long to look in earnest. The best time to look for a used washing machine is before you actually need one!
Saving (potentially) $200 or more is a fair trade-off on paying with time vs. paying with money. But that depends on leaving enough time so the search can happen.
A big part of personal finance advice revolves around finding ways to spend less. Less money going out the door means more money staying in your bank account.
By and by, some purchases draw an above-average amount of fire. Bottled water is one of them.
I’ve seen at least three posts over the past few weeks that include bottled water as one of those things you shouldn’t buy. Though I do agree that it can get expensive if you drink it all the time, bottled water does have redeeming value.
There’s always context to be considered
I’ve been writing things online for nearly a decade now on personal finance and money issues, and it’s easy to get an echo chamber effect in this area. It’s fairly easy to boil down the basics of personal finance to a few core ideas. The ways to save money found in The Tightwad Gazette are still valid. And many of those ways to save money weren’t new when she published them in the 1990’s.
Tap water, passed through a faucet-mount filter works out to be about a dime a gallon. A gallon of drinking water from Walmart is about a buck. The math is pretty easy there.
But sometimes, there’s more than just math to consider.
I had a meeting in a neighboring town with some colleagues. We went up in two vehicles because we were coming from different places. On the way back, it worked out that I rode back in the other vehicle. One of my colleagues — also a mentor of mine — had a nice, roomy vehicle.
In a compartment in the inside of the back door, he had some bottled water, and told me to help myself.
I remember that because of how hospitable it was. Looking back, it was a pretty inexpensive way to earn points with me. If it was an “ethical bribe” then he slipped me a nickel as he shook my hand. In the grand scheme of things, bottled water is cheaper than soda, and it’s almost certainly healthier.
I’ve also experienced the flip side of this. Our Toastmasters Club had an open house. I had bought a reusable seven-gallon water container with a plastic faucet, and filled it with water to bring for refreshments. I was looking to kill two birds with one stone: bring refreshments to the open house, and get a water container for our personal use so we could prepare a bit for storms and the like.
That container, filled up, weighed almost sixty pounds. After the party, I think it weighed about fifty-nine pounds as I lugged it back to my car. Filtered tap water just wasn’t the first choice of anyone. With all of the other beverages there, I can’t blame them.
To summarize …
Is bottled water expensive compared to tap water? Absolutely. Are there times when bottled water is inexpensive compared to the value it delivers? Yes. Are there times when the cheaper alternative is a waste of effort? Yes.
It’s all about context!
There are lots of advantages that come out of being in a healthy marriage. A healthy marriage takes work, and lots of communication, especially about financial matters.
Over time, I’ve come to view differences of opinion on money matters with my wife less as argument, but more as different perspective. Partners have different ways of looking at money, and taking both into consideration is better than either perspective alone.
“Oh we’ve got eggs now …”
We’ve talked for around a year about getting some chickens. We eat a fair number of eggs — as do our dogs, from the dog food we make. Raising chickens is one way to work towards our own egg source. It’s also an exercise in hedging against dependence on external grocery supply chains. (Prepping on a small scale, if you will.)
My wife did a lot of the legwork for deciding which breeds to get. We tended toward breeds that were more or less egg-laying machines. She and her parents also did a great deal of design and construction work on the garden and coop area in our backyard. Though we bought a few female chicks, we also had the opportunity to take over care of three hens.
The hens (at least one, maybe two) started laying eggs again after they had overcome the shock of the new surroundings. When the chicks we have grow up, we probably will be getting a few dozen eggs a week. That’s more than we would want to eat.
Naming the chickens: Two philosophies
The majority of the chickens we got were either Sussex or Red Star hens. The Sussex, being an English breed, got names of queens: Elizabeth, Mary, etc. The Red Stars, though neither Russian nor Soviet, got names of Russian and Soviet first ladies: Yekaterina, Raisa, etc.
I was a bit more pragmatic with my naming (which didn’t fly): Egg Laying Profit Machine 1, Egg Laying Profit Machine 2, etc.
This also feeds into how I saw us distributing the fresh eggs that we weren’t going to eat. We have about three months before the chicks will be old enough to start producing.
Selling the extra eggs: Two perspectives
I wanted to start up the bidding war. The eggs will likely be brown (which commands a premium in the right circles) and will be free-range and organic, which also command premiums. Therefore, sell the limited supply of extra eggs to the highest bidders — the people within our circles that were willing to pay the most for them.
Well this was flatly rejected. Her plan was to sell them at a more nominal price to friends if they wanted them, or give them as gifts. Initially I was thinking Why why WHY are you underselling them like that?! but I suppressed being too heavy-handed and heard that her take was to build relationships.
That simmered me down a bit, because there’s a lot of merit to that. Taking care of friends is indeed extremely important — not because there’s the expectation of getting something in return, but because good friends are a lot more valuable than the few extra bucks per dozen that some people might shell out for the eggs.
Ebates was the first rebate site I used. I’ve been a member since 2002. The site has been around since 1998. That’s last century, if you’re keeping track.
I use rebate sites all the time. Every chance I get, as a matter of fact! For a miniscule amount of extra work, I can save a few dollars or even more than a few on a lot of online purchases.
Using Ebates is simple:
- Sign up for an Ebates account, which is free.
- Log into Ebates before you shop.
- If Ebates offers a rebate on purchases from your favorite stores, go through EBates to get to the store instead of going to the store directly.
And that’s about all there is to start accumulating your rebates!
Briefly behind the scenes
You may be wondering where Ebates gets the money to send to you in the form of a rebate. (No free lunches, right?)
The short answer is that the store you bought from sends the money to Ebates in the form of a commission. Ebates referred you to the store, so they get the commission, but then they turn right around and share part of it with you. The part they retain is their profit for making it all happen.
Features of Ebates
Ebates has been around longer than most rebate sites, but there are a number of other competing sites now. Still, Ebates has unique features, even though the look and feel of the site seems just like I remembered it in 2002! Here are the special features that make Ebates different:
- Low minimum payout. The minimum amount required to receive a quarterly payment from Ebates is $5.01. That’s low for the range of rebates sites.
- Daily Double. One store a day is the Daily Double. For one day only, the rebate for that site is … wait for it … double what it normally is. Truth in advertising at its finest!
- Seasonal extra rebates. Depending on the time of year, a whole bunch of stores will qualify for extra rebates. This time of year is approaching back to school time, so a number of clothing stores have higher-than-normal rebates going on.
- Browser add-in and apps. The browser add-in and apps will detect whether or not your store qualifies for a rebate, and makes the sign-in process even easier to get to saving money.
- Product search. If you’re looking for a particular product, you can try the keyword-based product search feature. It draws from the inventory of rebate-eligible sites and shows which sites have the item, and how much rebate you’ll get when you purchase it there.
- Periodic sign-up bonuses. Occasionally Ebates offers a sign-up bonus for new accounts.
But, as I mentioned, this site has been around a long time. It was around when the Internet’s inventor was Vice President! (Well, not quite, but it has been around for 16 years!) You don’t stay around that long time by not paying your rebates, and I don’t see Ebates going away any time soon!
It’s not a secret that people give away or throw away lots and lots of stuff. Stuff that’s outlasted its usefulness. Stuff that’s broken. Stuff that reminded them every day of their lousy purchase.
We’ve gotten useful castaway items right from within our subdivision. We scored a nearly-complete set of patio furniture that just needed a little bit of cleaning. Recently we happened upon a stash of building materials: pressure-treated wood and other odd pieces.
A few days ago, my father-in-law picked up a Radio Flyer wagon that was thrown to the curb. The front axle was bent. He fixed that very easily, and now it works great for carting small garden equipment back and forth from the house to the garden.
Easy fixes … if you know how!
People throw away things because it’s a good deal for them to do so. The value of what they’re throwing away is less than the value of the space it’s occupying in their lives, whether that space is physical, emotional, or both. None of us are a room without a roof.
I’m all for taking advantage of good deals. If it’s better for them to throw something away, then great.
On the other side, if it’s a good deal for someone to pick up the discarded merchandise, that’s great, too!
Here are five reasons that should not be deal-killers when you’re deciding whether or not to pick up free stuff:
- Missing parts. If it’s only one or two parts missing, they most likely can be replaced with a bit of scavenging or researching.
- Dirt. The patio furniture we picked up needed a good cleaning. But that was it. After that, it was in remarkably good shape.
- Rust. Rust can be removed if it’s slight, and not structural. Covering the item with a rust-preventive paint will keep it from coming back too quickly.
- Cosmetic damage. A dent in an otherwise functional item isn’t a big deal. Heck, I pay for damaged items! (At a discount of course!)
- Slight structural damage. The wagon my father-in-law picked up was slightly damaged. Slightly-damaged items can be fixed with some tinkering.
What other things about discarded items shouldn’t scare you off?
The post Five things about discarded items that shouldn’t scare you off appeared first on Mighty Bargain Hunter.
The blog A Young Pro had this year-old article in his Twitter feed recently. The title: “When is it Okay to Spend Money?”
He recounts the story of a really bad week with his car. He gets in an accident, and then locks his only set of car keys in the car, while the car was running.
If it were I, the only thing more depressing would be finding out that my daughter has started listening to Hanson.
But then there’s “the list”
So, naturally — and reasonably! — he wrote a list of things that, to him, were worth spending money on.
And, naturally — and reasonably! — “spare keys” was at the top of the list. (That was his only set that he locked in his car!)
Completely for fun, though, I’m going to take his list, and turn it upside-down. I’ll argue that these are awful things to spend money on.
- Spare keys. Your car is on its last legs. Why buy an extra set of keys? It’s going to the junkyard anyway.
- Real Estate. I can rattle off three people that I know personally who have been foreclosed on. And how many people got burned in 2008 with the real estate crash?
- Work Clothes. Unless there’s a uniform, who are you trying to impress? Your materialistic peers?
- Transportation for Work. Why are you traveling so far? Time is money, man! Have you never heard of telecommuting?
- “Experiences” with my Wife and Daughter
- Movies. Overpriced concessions, sticky chairs and floors, and excessive advertising are “experiences” I can do without.
- Travel. We’re sitting in a car, or being groped by the TSA, or being handed our airline ticket prices from a roulette wheel. All to stand in line for 3 1/2 hours to see the freakin’ Frozen princesses.
- Trips to the Zoo/Aquarium. Remember, pandas are bears. And tigers are not just big versions of Morris. You’ve been warned.
- Family Ice Cream. Two words: lactose intolerance.
- School. Isn’t this one self-explanatory? Let’s get tens of thousands of dollars into debt just for a glorified (job) hunting license.
- Professional Training. Congratulations! We certify that you paid money for the training we delivered to you.
- Stocks/Bonds/Mutual Funds. Risky/risky/risky.
- Insurance. We, as your insurance company, will ensure that we will do everything in our power not to pay you.
- Food. (OK, this one I can’t turn upside down without being mean.
Statistically, I’ve passed the midpoint of my life. As I’ve gotten older, I’ve been thinking more about calling, and legacy. Calling, in my mind, is the most important thing I can do, which would be the most difficult for someone else to do had I not done it. Legacy, in my mind, are the traces of my life left here after I’m gone.
Calling is something that both my wife and I have been talking about. After all, we agreed to go through our lives together, so we each need to consider, and value, what God calls the other to do.
It sure would be neat if He called us to do the same thing.
A couple’s common calling
A family we know is participating in hosting an orphan for a few weeks this summer through Project 143. (Please check out their website to learn about Project 143′s mission.)
We attended a presentation that discussed the particulars of the outreach. In the presentation, the father talked about how he and his wife were led to do this as a couple. Hosting the orphan was “a God thing” first and foremost — but beyond that, it was they who were called to do this more so than he or she was called to do this.
The “they” part is important. They’re waiting to see how God uses this hosting — which is wise. Nonetheless, this is a step that they’re taking together, and it’s one step toward discovering a common calling for their lives, regardless of whether that calling ends up dealing with orphans or with something else.
Wise stewardship of finite resources
Hopefully it’s not too much of a jump to call this kind of joint calling a “good deal.” The positive impact we can leave is limited by money and time. Time is by far more important than money, because eventually we run out of time. But, given that happens to everyone, there’s also the consideration of money.
Hosting the orphan for just a few weeks is not cheap: thousands of dollars. A family typically has only so many thousand-dollar chunks of change lying around. And, unfortunately, money can only be spent once, so this money cannot be used for something else — like, another completely different, separate calling.
Now, a calling is a calling — and who am I to say that two separate callings are bad? — but a couple with a common calling enjoys a number of benefits:
- More resources available to make an impact. Reducing the number of competing “draws on resources” increases what can be put toward one particular need.
- Economies of scale. A larger chunk of change can open up volume discounts, setting up a foundation for wider reach, etc.
- Increased impact through a wider skill-set. Husbands and wives in strong marriages tend to complement each other well. One is strong in an area where the other is weak. Doing something together can cover the bases better.
- Efficiencies of time. If one person can work 5,000 hours on a calling in a lifetime, then two can work 10,000 hours. The number of hours is the “hard limit” that can’t be overcome. Even better: Working together they might be able to be far more efficient than just the “sum of the parts.”
- It’s a good accounting for one’s life. I believe that we will all be asked to give an account for our lives. A joint calling, with the person you promised to spend the rest of your life with way back when, certainly isn’t a bad accounting. And, in a practical way, a common meaningful and purposeful activity is a good way to strengthen the bonds with your spouse.
If you’re married, finding a common calling is a good thing to do with your spouse. This is one of life’s good deals, in the big picture.
A high school friend posted a link to this Mother Jones commentary on an Economist article dealing with education in personal finance.
The main point brought out is that “courses in personal finance do not appear to have an impact on adult behaviour.” The article specifically mentions that financial education had no impact on degree of saving.
Knowing is half the battle …
I either never learned about, or completely forgot about, the safety lessons included in G.I. Joe cartoons. (But, with the magic that is YouTube, I can educate myself.)
How things went down: Someone would get themselves into an unsafe situation, like having their arm set on fire, or getting near a downed power line, or becoming stuck on the center of a frozen pond. A G.I. Joe guy would just happen to be in the vicinity to get them out of the mess, and would explain for all of our benefit what the safety hazard was, and how to get out of it.
The grateful civilians would then say, “Now we know! … ”
And the red-laser-shooting G.I. Joe guy would say: “… And knowing is half the battle.”
… but it’s only half the battle!
Getting back to the personal finance education topic, I suppose that I wasn’t surprised to hear that classes in personal finance didn’t really have much of an effect on later behavior, for a few reasons:
- People learn far more from their adult relatives’ actions than in the classroom. I didn’t learn about spending less than I earned from a textbook. I learned it from my parents, and my grandparents. That was how they dealt with their finances, each day, every day. Their actions spoke, and taught, far more than any classroom would have.
- Basic financial literacy is … really pretty straightforward. I wouldn’t expect that the basics of personal finance would really round out a full year-long class. Possibly a semester-long class. But stretching the material out, it would seem, would get pretty dull pretty quickly. This would give people reason to tune out when they otherwise wouldn’t.
- Knowing is only half the battle. Learning how to balance a checkbook, or how to budget, or how to save for big expenses, is one part of the equation. Let’s be generous and agree with the G.I. Joe guys: it’s half the equation. The other half, then, is following through. It’s the lack of follow-through that gets people, even if they know the right thing to do. Getting 50% right is still failing under most circumstances.
- The other half, frankly, isn’t fun and carefree. Restraint from impulse buying, saving for a rainy day, and packing lunches just doesn’t get the juices flowing for most people. As much as evangelists may try to make this a fun activity — I suppose I’m one of them — in a way it feels like living life with the throttle on. It takes discipline and constant work to maintain a frugal, financially-responsible lifestyle. I’ve even come to the conclusion that it isn’t supposed to be fun. But, I also suspect that if it were actually fun, everyone would be doing it, and that’s not the case.
- The not-fun part usually wins over the I-should-know-better part. That’s the crux. People who know better don’t do better because they’ve gotten used to a certain level of “fun” that is more than they can afford. They don’t want the pain associated with the absence of that fun — even if they know that down the road it will cost them lots more.
So, even if people do know about good personal finance, knowing is only half of the battle. The other half is doing it.
Where did you learn about personal finance? Did it have a lasting effect on how you handle your finances now?
Free Money Finance was one of the first personal finance blogs I commented on. This was in 2005, so nearly … TEN years ago?! Yikes.
FMF is very successful, and I’ve had the pleasure of meeting him in real life. I can attribute what I know of his success to a number of things, and one of those things is that he practices every bit the personal finance he writes about.
Seventeen years of year-by-year data
The post today showed the year-over-year change in his net worth.
What struck me with this table was not the (multiple) double-digit gains. It was the length of the time period. He’s used Quicken faithfully and has seventeen years of his financial transactions at his fingertips.
What a great asset that is! A full financial picture for that long is incredibly useful both for accurate reporting come tax time — IRA contributions and other transactions need to be tracked more or less forever — as well as for seeing trends and changes over a good part of a lifetime. It’s a financial baseline of epic proportions.
The cost of (re)collecting these data
The trick to pulling this all together is to process the data as they come in, in a timely manner. At the point of the transaction, the financial institution or business is basically required to provide you with a record of the transaction free of charge. It’s yours for your use, or non-use.
Further away from the time of the transaction, though, they’re not obligated to produce the record for you for free, or even at all. There may be requirements imposed on them to keep records of financial transactions, as well as requirements as to how long they have to provide them to you if asked, but don’t count on them producing them after that.
A few examples where letting your data slip through your fingers can cost you:
- IRA contributions. My tax software asks for total contributions to IRAs. As in, all of them. If I don’t have all of them, then I can go back to the brokerage to get them — for a fee. As in $10 per statement, possibly plus labor. It’s not free, by any means. But, there can be tax consequences to not having this information when it comes time to withdraw.
- Bank statements. Recovering paper statements are the same deal: it costs. But even electronic statements are sometimes only available for a limited time. It can be a few years’ worth, but that’s not “all of them.”
- Individual bank and credit card transactions. Slightly different from statements but containing the same information, the transactions are in a structured format suitable for importing directly into Quicken. A friend of mine found this out the hard way. Our credit union was moving over to a new back-end system, and they had announced for months that people needed to download their transactions, because they wouldn’t be kept after the cutover. Well, my friend waited until the last minute, and they cut over a bit early, but there was nothing that could be done anyway. Procrastination kills. He didn’t lose all records, but he did have to enter a few hundred transactions by hand into his accounting software.
- Receipts. Much of what is deductible needs proof. You either have the receipt, or you don’t. For store purchases, there’s often no recovering a missing receipt.
Archiving — and even better, processing — your financial data is a good bargain. I wish I had done it more regularly myself.
So … have you been doing this regularly? Any times you wished, like me, that you had done more? I’d love to hear about in the comments!
I’ve been a musician for most of my life. I play piano in two church services each week. I doubt I could quit if I wanted to.
For most of that time as well, I’ve been a bit of a closet drummer. Lately I’ve also had the chance to hit the kit at church as well. (I’m still too loud. I need to be more like Steve Gadd and less like Animal.)
The drum set I bought at a pawn shop a while back is at the church. I finally got some new heads for the drums so that they didn’t sound like #4 washtubs.
Guitar Center … for drummers?
I got the heads at Guitar Center. They had a clearance bin with some decent deals, and I loaded up. The guy working there helped me out a lot with my questions, and the heads work great. A few days following the purchase, I got an email from him asking how the heads worked out. That was a nice touch!
I go to Guitar Center fairly regularly these days. I guess I gave them another chance after what appeared to be a raw deal on a keyboard. Following that incident I’ve overall been pleased with the service I’ve gotten there.
The last time I was there, I saw a sign advertising: “Fresh Sticks for a Year!” It’s called the Guitar Center Stick Club.
The sign in the store didn’t list the price of the club. The link above indicates that it’s $20/year. This gets you a card that entitles the owner to $5 towards sticks each month for a year.
Intrigued, I checked the fine print. (There’s always fine print.) The fine print from the link:
Limit 1 per customer. See a sales associate for details … Year’s worth of sticks is $5 per month for 12 months. Card will never exceed $5. Monthly amounts do not roll over. Ask your local expert for details. Stick Club is only available in-store.
So I can conceivably get $60 worth of sticks for $20, here’s how the fine print taketh away:
- “Limit 1 per customer” — The maximum amount I can save with this deal is $40. Forty bucks isn’t insignificant, but … that’s it.
- “Stick Club is only available in-store.” Not online. In-store. Which means I have to go into the store to get the deal. Which takes time, and gas …
- “Year’s worth of sticks is $5 per month for 12 months.” To get that maximum $40 savings, I have to buy sticks each month. They win either way. Either I come back into the store — which I have to do to get the deal (see above) — or I don’t, in which case they’re ahead $15. Four visits is break-even.
- “Card will never exceed $5. Monthly amounts do not roll over.” So if I miss a month, it’s gone. Too bad, so sad.
- “Ask your local expert for details.” There may be even more terms and conditions! Yay! Not.
So, is the Guitar Center Stick Club a snare? *** rimshot ***
As with all other things, it depends. From Guitar Center’s standpoint, they’re playing the numbers. They’re selling you up to $60 worth of merchandise for an upfront $20. They’re hoping that (a) you forget, or (b) that they make it up on the back end by getting you into the store those twelve times.
But … if you’re a drummer and go there regularly anyway, then no doubt you’re already buying sticks, so why not? Or, even if you’re not a drummer, but go there regularly and have a lot of drummer friends … then sure, why not? The once-a-month visit to the store would not only not be a chore, but people wouldn’t have to twist your arm at all!
It’s all about context! Store deals are usually a win for you if you’re already dropping a lot of cash there.