Should I change the format?
So, I’ve had several comments recently stating that I’m not going into enough depth with some of my posts – that I could take topics a lot further than I currently am. I agree, there are definitely things that I’m leaving unsaid in some of my posts. However, the current 500-ish word format I’m doing right now doesn’t lend itself very well to hitting home more than one specific point in a post. What do you think – should I move to a longer feature format and decrease my posting frequency?
I’m thinking I might try out a MWF posting schedule and then double the length of the posts. The additional time will give me the opportunity to intersperse some graphics and other stuff in the posts as well. What do you think? Is that the right way to go, or do you prefer the shorter, daily commentary?
Cheap people aren’t lazy
Are you someone who goes out of his or her way to save a buck? Do you walk places, not for the exercise, but because you’ve calculated that the extra food you eat is less expensive than gasoline? Do you bring your own sandwiches to restaurants? Do you spend countless hours doing comparison shopping for a $50 item? Did you stop buying frozen food because it’s cheaper to make it yourself (not because you like to cook)? Have you ever bought an espresso in a large cup at Starbucks, just to go over to the coffee bar and load it up with milk and chocolate powder (the poor mans mocha)?
If you can say yes to more than one of the above questions, you’re probably a frugal person, and your friends might think you’re cheap. I make the differentiation in that cheap people will spend money on themselves but not on others, where frugal people just don’t like to spend more money than is necessary. But whatever way you cut it, cheap people are pretty much never lazy people.
Think about it? Being cheap almost requires you to do things the hard way – people pay for convenience, and if you’re cheap, you go out of your way to avoid those conveniences, much to the chagrin of those around you.
Okay, so you’re asking, why the heck am I writing about this? Because cheap people are on to something. I’m not saying you should start making poor man mocha’s to save yourself thirty cents – what I’m saying is that you should go out of your way to save money where it matters most. Shopping for a new apartment is a great example – you could just sign the dotted line when you find a place you like. Or, you could haggle with the landlord for a hour to save yourself $100/month. Better yet, maybe you did some comparison shopping and saved yourself even more.
Call the cable company and ask for a discount. Spend consciously, rather than having money leak out of your wallet. Spend more time shopping around for larger purchases. Yeah, it’s going to take you a bit more time than going the easy route, but learn something from your cheap brothers and sisters – sometimes taking the road less traveled will save you several hundred dollars that you didn’t need to spend.
But please, if I see you making the poor man’s mocha at your local coffee shop, particularly if you use up all the milk and there’s none left for the rest of us, prepare to get smacked around.
The Soda Machine Factor
Okay, so today some of my coworkers were giving me crap about Monday’s post. First off, even though they thought I might be a bit off my rocker, at least they are reading it – so thanks for the support. They wanted to see a follow up post from me about how all of that stuff I talked about Monday really doesn’t apply to you if you are buying an investment property.
Okay, I admit it, the post assumes that you don’t have anyone paying you rent, and it also assumes you bought a house that was in livable condition. However, since I have never been a landlord and I’m not all that handy with power tools, I think I’ll skip that discussion and just say that I’m not saying a house can’t be a good investment, just that renting isn’t throwing away money, and you can make out on top without ever buying a home.
All of that being said, I want to talk about something else we were chatting about at work – the fact that I buy sodas from the soda machine in the office. First off, I guess there is a perception that because I write a financial blog, I think you shouldn’t buy stuff. I buy stuff all the time and I have a budget for it – at long as I’m not breaking that budget, I generally don’t worry about what I’m spending. That being said, a point was made that I could bring soda into the office and probably save myself a ton of money over my current spending.
I have already cut out the coffee spending – I bought a pod coffee maker and threw it on my desk. I even have something that makes pods for you that was given to me as a gift, although I will admit I have yet to use it (and the guys at work think it’s lame – that’s probably where they got the idea that I didn’t want to spend the money). So it makes sense for me to bring soda into the office, right?
From a financial standpoint, definitely. I’d probably save myself $2 a day if I stopped buying sodas out of the machine for a buck and a quarter. What I’m worried about is that I’d end up drinking even more of it because it ended up being so convenient. I already drastically cut back on how much of it I was buying for my house – if it’s not easy to get to, I don’t drink as much of it.
But let’s run the numbers – $2/day is about $10/week, or about $40/month. That’s $480/year. That’s not bad, but not a game-changer as to how much money is in the bank. What I will say is if I were to cut out all spending during the work day, and bring everything from home, I’d probably save close to $8/day, or $160/month. Now we’re talking about something that’s worth considering. Because let’s be honest, the effort of bringing in drinks from home isn’t all that much lower than just making my lunch.
Now, the question I have for you is this – do you have the time and discipline to pack your own lunch everyday and bring it into the office? I do, off and on, but I don’t seem to be able to keep up with it. Maybe I should – anyone want to start a bring lunch from home club?
Dilbert makes you money
Today has been a busy day for me, trying to arrange for my girlfriend to have a happy birthday. Unfortunately, that means I didn’t have time to put towards a full length post. Since I didn’t want to just slap something together, I decided to point you at a post on another blog, to tickle your fancy.
Financial Markets Explained by Dilbert
Scott Adams actually has an MBA from U.C. Berkley, so he’s far more qualified to give financial advice than I am. Crazy…
Renting – is it money in the trash?
I hope everyone had a fun 4th of July weekend. As with a lot of holiday weekends, there were parties, picnics, and all the other obligations that come with being ‘civilized.’ What I have been noticing this year, probably because I’m spending so much time writing this blog, that a lot of people actually do talk about money in social settings – far more than I had previously realized. I don’t know how much of it is the economy, or the lower expectation of privacy that came along with the Internet age, but no fewer than three separate people decided to bring up a money-related topic, and no, I didn’t prompt them.
A common theme through all of these discussions was renting vs. buying a home – more specifically, that renting an apartment was throwing away your money. Of course, I took my usual stance that buying is not something that is going to get you ahead. I talked about how it was 20% more expensive for me to buy than it was to rent, if you factor in maintenance costs on my home and all of the phantom costs. But the conversation kept coming back to “I don’t want to keep throwing away money on rent.”
Rent is not a waste of money – particularly if you are getting a good deal on your property. Rich people rent places all the time – it’s middle class, middle income people who are obsessed with home ownership, even if it doesn’t make good financial sense. Renting is even less expensive when you consider the hassle and liabilities of home maintenance and repairs – I most certainly didn’t expect home ownership to have been as expensive as it has been.
The key to making renting work for you, rather than against you, is to have a concerted investment plan. Figure out how much you could pay for a house – most people pay more for their homes than they would to rent the same size place. Take that number and go apartment shopping – your goal is to find a place that is at least 10% less expensive than whatever that number ended up as. If you can afford $1000/month in rent, find a place that you can rent for $900. Then, take that extra $100 and invest it every month in an index fund (DOW, S&P 500, Russell 2000, take your pick – just make sure it’s an index that is diversified). Do that for the next 20 years – more likely than not, you’ll end up on top.
Don’t believe me? Dinkytown has a great calculator for running all sorts of different scenarios – I popped mine in and it turns out I am going to just about break even over twenty years. And I bought relatively low. People who bought at the top of the market are probably never going to recover. If you’re someone who can leverage that tax credit from the government, you already have a sizable down payment, and you can buy a place you’ll be happy with for the amount you’re willing to spend you ‘might’ come out on top, so run the numbers. But don’t forget to factor in things like your HOA fees and maintenance costs (the calculator has a section for that – I recommend adding 1/12 of your monthly payment to this field to cover maintenance, plus whatever fees you would have).
All of this is why I don’t think spending money on rent is throwing money in the trash. What do you think – am I crazy?
Cable Company Madness
I received my Comcast bill this month and I was unhappy to discover it was $60 higher than it was last month. Apparently, my eligibility for their ’special’ (i.e. regular – who pays retail for cable anyway?) prices was up, so they thought maybe they could jack up my rate without anyone noticing. Talk about a load of crap – that’s a $720 price increase for the entire year. It really bugs me when utility companies think they can get away with this stuff. I was tempted to just cancel my service right then and there.
However, since I didn’t feel like spending a vacation day waiting around for Verizon to set up FIOS, I gave them a call to see what they would do to keep me as a customer. I talked to their standard customer service rep, told him my problem, and mentioned “I received an advertisement from Verizon for what appears to be the same level of service for about what I was paying before.” Talk about magic words.
Less than five minutes later, his manager (probably actually someone in retentions) has me set up with a deal that’s better than my old one (faster Internet) for $4 less a month than I was paying before. Amazing. And all I had to do is give them a call.
Think about this – I just effectively made $2800/hr since the call took me no more than 15 minutes. Would you do something, even if it made you a bit uncomfortable, for that much money? Have you ever made that much money in such a short period of time before? When people tell me that comparison shopping is too much of a hassle, or that they don’t like the awkwardness of asking for a discount, sometimes the only thing I can do is shake my head. You can get huge discounts if you know who to talk to and what to say. Next time one of your bills (cell phone, cable, Internet, whatever) comes in, and you think it should be lower, try making this call:
Company: Hi there, what can I do for you today?
Me: I just got my most recent bill, and I’m unhappy with the cost – I would really like to be spending less money on this every month. Can you help me out with that?
Company: I’m afraid there isn’t much I can do for you, I’m sorry.
Me: Really? Well XYZ company is offering the same level of service for less – maybe I should consider switching.
[if there is no competition, you can say you are considering canceling your service outright - that works just as well]
Company: Before you do that, let me see if my manager has anything he can do.
[two minutes on hold]
Company: My manager has authorized me to put a $25 monthly credit on your account – is that acceptable?
Me: Sounds great!
Okay, so a $25 monthly credit doesn’t sound like much, but that’s $300 a year, all from a 10 minute phone call. You just made yourself $1800/hr – it’s that easy. Congratulations!
Peddlers and Purveyors – Medicine Made Complicated
As a lot of you all are already aware, I have moderate to severe allergies that pretty much have me medicated daily. I’ve done the shots, pills, nasal sprays, sinus washes, etc. Basically, you name it, I’ve tried it.
Anyhow, I was at the pharmacy yesterday getting my first refill on my allergy prescriptions and I’m surprised to find out that my insurance is trying to give me the shaft (surprise!) on a generic allergy medication I’ve been taking for several years now. Basically, they want to charge me 5x as much for the generic drug because there are ‘over the counter’ options available, which quite frankly just don’t work as well for me.
You would think these companies would want to keep their costs down by giving you what you need, right? If I’m properly medicated for allergies, I get sinus infections a lot less frequently, which equals less total money out of pocket for them. If I’m forced into the OTC alternative, I tend to have problems more frequently. So I call them and try to get them to honor what is listed as the “generic” copay on my insurance card. And I get no customer service whatsoever – as a matter of fact, the only thing the person on the phone can tell me is that there is a P.O. Box in Salt Lake City I can send a letter to for an “appeal.”
Great. No wonder medical costs in this country are sky high. Thank you United Health Care.
Now that I’ve ranted for a few hundred words, you’re probably thinking, what the heck does this have to do with this site? Well, I started looking around, and it turns out there are free prescription drug programs available that actually beat out your drug coverage in some cases – for this particular prescription, one in particular saves about $10 a month, which although not a ton is better than nothing.
Seriously though, what gives? Why is it cheaper for me to get allergy medication using some card I printed off the internet instead of getting it through my health insurance? These modern day drug peddlers, the ones licensed by the DEA, don’t seem to care how this is handled – they just want you to pay. And I’d really like to know why some drugs seem to get substantially more expensive as they get older – it’s the exact opposite situation that you see in every other business.
I’m going to try out some of these programs and see how well they work – I’ll report back later. Hopefully, I can convince the pharmacist to use the discount card or my insurance, depending on which one is cheaper. Otherwise, I’ll have to pick up my prescriptions at two different pharmacies, and that just sounds like a pain.
What’s with kids and credit cards?
Who are these parents that are giving their kids Visa cards? I was at Dairy Queen yesterday picking up a Blizzard for my girlfriend (who wasn’t feeling well and wanted something cold/sweet) and the kids in front of me were paying with plastic. I thought, okay, maybe these kids are teens with jobs and checking accounts – but then I got a look at the card and it was issued by a major credit card provider, not a bank.
I can only come to the conclusion that these kids parents signed them up as authorized users on their credit accounts. The question is – why? Does your kid really need the convenience of plastic to buy a soda or maybe a Barbie doll? Seriously? I don’t even want to think about the finance charges a kid could rack up if they realized that your card was basically a license to spend.
Don’t get me wrong – I think it’s great for a working-age teen to have a debit card so they can learn how to handle their finances like an adult. But I have a big problem with that same kid having access to a line of credit, particularly one they are not on the hook to pay for. Now, that being said, and with the caveat that I don’t have kids, I want to open up the question to everyone else – do you think it’s okay for a kid to have a credit card?
Regularly Scheduled Posting
I should be back on my regular posting schedule starting tomorrow, now that the month without a day-off is over! Yay!
Are you lying like the governor?
The governor of South Carolina came out yesterday with the news that he has been having an affair, and decided to travel to Argentina with his mistress. And he mislead his staff about where he was going. Not to mention that he didn’t follow proper protocol, so the state was practically without a leader for about five days. He was lying, and it all started by him lying to himself, telling himself he’d never get caught. Isn’t that what everyone thinks when they are trying to get away with something?
Guess what, you’re probably lying to yourself about your finances right now – and trust me, you’ll get caught. Are you carrying too much debt? Are you living off your credit cards? Heck, are you just trying to keep up with the couple down the street that happen to have a ton more ’stuff’ than you do? All of these are common things that we do, and we convince ourselves that we’ll figure out how to pay for all of it later. We’re lying to ourselves, day in and day out, trying to make ourselves feel better about all this debt we’re carrying around.
The first step we have to take is very similar to what the governor did today – we have to admit we’ve screwed up. Maybe we don’t have to do it in such a public way, but at the very least we need to be truthful with ourselves, and realize we’ve dug ourselves in a hole that won’t fill itself in. As I understand they say in all of those twelve step programs, we first have to admit that we have a problem. Maybe that problem is carrying debt, or trying to keep up with our friends new cars, or maybe our problem is that we just buy too much crap that we don’t need. Whatever it is, fessing up to it is the first step to fixing whatever financial mess we’ve gotten ourselves into.
Can you do that? Can you come to terms with our failings, and then take whatever steps we can to rectify them? I was reading somewhere this week that people who are too far in the hole tend to wait too long before declaring bankruptcy. Why? Because it takes a lot of guts to basically announce to the world “Hey, I screwed up and I need help.” I’m not saying you need to go so far as that to fix your problems – hopefully you don’t. But it’s time to be brave – putting it off just makes it harder.
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So, you want to know what's up with the brackets in the name? "Curly brackets (also called braces, or "squiggly brackets") are sometimes used in prose to indicate a series of equal choices" and "Square brackets are mainly used to enclose explanatory or missing material usually added by someone other than the original author, especially in quoted text." So basically, if you really want to be wealthy in life, you have to figure out how to get happy. Since that whole spiel would make a crappy name for a blog, I decided to do something a bit creative with some brackets.
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