5 Brown Bagging Tips...

How to save money by bringing your lunch? These 5 tips help me save money by making it convient to brown bag our lunches.

Tip 1: Pack your own soda. I stocked up on Coke a few weekends ago @ $1.99/12 pack. That is $16.6 cents/can. Instead of 60 or 75 cents/can, pay less than 20 cents. Even better don't drink soda, but that's not an option for my DH. So he takes a can or two cans a day. When he was a graduate student we'd put 2-3 cases of soda under his desk and he'd sell them for 75 cents/can to people too lazy to walk to the vending machine.

Tip 2: Use a reusable lunch bag and tupperware. Some people take actual brown bags and put sandwiches in ziploc bags. This is easy to portion control your servings and even easier to prepare for the week. But it costs money to buy brown bags and ziplocs. Instead use a tupperware and wash it out and use a foldable cooler.

Tip 3: Buy large bags of snacks and portion it out. If you love eating chips, cookies, or veggies, don't buy the individual snack size. Instead buy the family size bags and portion it out. This way you can control your calories by only eating one portion. Plus it's cheaper than stopping by the vending machine to buy an individual package.

Tip 4: Make leftovers. Personally DH hates sandwiches, and with most receipes serving 4-6 we usually have enough for lunch the next day. The great part about this is as a couple we don't waste leftovers. Also it's cheaper to cook in bulk instead of buying smaller portions of meat and vegetables.

Tip 5: Prepare your lunch the night before. This is simple for us. We usually pack up our dinner leftovers and decide what we want for lunch as we clean up. Occasionally we'll make a sandwich. This way we aren't rushing in the morning to prepare lunch. Instead we reach into the fridge go.

These rules make it easier for us to save money buy bringing out lunches. DH now spend $5/week eating out and I spend none. For us we conserve our eating out to dinners when we're tired. A lot of people easily spend $25-50/week eating lunches out. Try these tips to save a few bucks.

Festival of Frugality #102

The #102 Festival of Frugality is hosted by cheap healthy good. I submitted my post on "Income versus Frugality."

Couple of great posts is "Make your finances Six Sigma" by PFOdessey. Just made me think of my DH. Second fun post is "Talking money is like French Kissing," by Monevator.

Enjoy the Festival.

Cheap Gym Option

A cheap gym option for Costco members is $199/year at 24 hour fitness. I loved that gym because it had so many classes. Also when we lived in CA they were everywhere, so I could always find one close to home to work out.

Unfortunately now there isn't any 24 hour fitness gyms nearby so working out is a lot more expensive. However for those who have a 24 hour fitness nearby check out this deal.

Staying fit and working out should be a priority for everyone. It's great to be financially fit, but you have to be healthy enough to enjoy your money as well. There is no point in saving for retirement if you die before you get there.

Even thin people need to exercise to fight osteoporsis as they get older.

Festival of Under 30: Give Thanks Edition

The Festival of Under 30: Give thanks edition is up at How to Make a Million Dollars. My article on Single Life was submitted.

I like this festival for under 30s. But it's so small, so please try and participate if you are under 30.

Carnival of Personal Finance #128

The #128 Carnival of Personal Finance is up at Stock Trading to go. I submitted my post on "Managed Car Insurance".

Again a fun carnival check out the great posts. Two posts to check out is "22 Money Maximizing Moves" by Moolanomy and "Why passive investing is better than active investing," by everything finance. I wish my DH would read and agree with these articles.

Have I saved enough?

https://ww3.janus.com/Janus/Retail/StaticPage?jsp=/jsp/RetirementCenter/IRALanding.jsp&WT.mc_id=5027

On a board I visit, I was surprised that someone posted hating saving for retirement. They did not want to save 15% for retirement. Instead they preferred paying off their home. This couple was 33/35 and made $165k/year. However they had saved about $50k for retirement.

A poster on the board put up this link for a nifty retirement savings calculator. Assuming the average age of the couple to be 34, they should have saved at least $94k to have $1M @ age 65. This should generate $40k/year.

However this couple didn't want to save 15% of their income. Instead they preferred to try saving 15% of $40k, or the average family's income. They felt that if the average person saved that much they should be okay. WRONG thinking.

They aren't living on $40k now, so I don't understand why they would expect to live on $40k in retirement. I wonder if people don't justify saving less by saying they'll scale back their lifestyle in retirement? Which might be a problem if you consider rising health care costs and longer life expectancies.

Anyway I apparently need to have saved $57k, which I do. However DH needs to have $67k, which we also have. However we assume we'll need $3M, so we should have 3x that amount. I think we're moving in the right direction because it appears that between 26-27 the amount saved is only $4k. We're saving about 5-6x that much for retirement. But we have a long way to go.

So to that couple, I wish you would rethink you're priorities. I understand it's nice to be debt free, but it's even nicer to be able to even retire. If you place saving for retiement so far down on the list what will you live on in retirement?

What's Important?

What is important in life? What is the bottom line? Is it wealth? Debt Free? Family? Love? Happiness? Health?

The year is ending and it's time for people to make their New Year resolutions. But what resolutions will be at the top of your list? What is important to you?

For my topping my list is losing weight. I am attending weight watchers and have lost 10 lbs. I am doing this to improve my health. It's so I can live a healthier lifestyle and hopefully extend my life with my DH. Sure it costs money, but if I die earlier watching my pennies, then I'll have had little enjoyment in life.

I guess for me what's important is family and love. And being healthy enough to enjoy sharing my life with them.

I just wanted to post to get people thinking about their resolutions for the new year.

Christmas Budget Poll:

Well the poll for Christmas budget closed. It was interesting. It appeared that 10 people spend between $100-$500, while 13 people spend between $500-1000 for Christmas. That equals to 31% and 44% respectively. So the bulk of people fall into this category. I wonder if the majority of these voters fall between $250-750?

Also 3 people spend less than $100 and and equal number of people spend above $1000. This equals to 10% of voters.

I fall into the $500-1000 category for everything. I guess I'm in the median/average number. Do you think this is high?

Cost of Living Calculator

I thought I'd have fun and see how much where you live matters. So I used the cost of living calculator at Money Magazine to determine different cities I'd live in.

Now, starting out I put in Boston, MA and moving to Seattle using a $100k salary. Woohoo. I found out that I would only need $84k to live in Seattle. Wow a 16% decrease. Awesome. Basically housing and utilities will cost us 20% less, groceries and healthcare will cost 8% less, and transportation is equitable.

Now to move back to San Diego, CA we'd need $108k instead of $100k, which is an 8% increase. Gee whiz. How so? Well housing is about 40% more expensive, however utilities are 23% less. And transportation is 5% more, but healthcare is 8% less and groceries will be 2% less. So it computed 8% more money is needed.

Phoenix, AZ would only cost us $74k to live on instead of $100k in Boston. Wow. That's amazing. Groceries will be 17% less, housing will be 40% less, utilities will be 27% less, transportation 6% and healthcare 22% less.

So where you live matters. It really affects your ability to save and live within your means. So does this mean you should move to an area solely for the cost of living? No. But it probably should be considered when looking at job offers. And how cost of living will affect the lifestyle you desire to lead.

Black Friday

Well today is Black Friday. The first day of the year when most stores finally go into the black. Meaning they are finally out earning their expenses. Sadly it takes them until basically the last month of the year to "break even" or make an income. Crazy. This is the biggest shopping day of the year in the US.

I usually enjoy Black Fridays because it's fun to get deals on things I plan on buying anyway. And I'll get up early to enjoy it. I don't stand in line, but I will go after the store opens. At least that's what we did this morning.

We went to circuit city, best buy, sports authority, and sears. All in all it took us with driving and parking 3 hours. Not bad. This year we were considering staying at home until an ad by Circuit city drove us out. Our two big items we wanted were Mario Galaxy for $35 and a Sony car stereo for $99.

Yep normally we buy a game here and there, and I've been dying for Mario Galaxy. However due to our schedule we thought to wait to buy it used at Christmas. Well low and behold CC had it on sale for $35! We sold our used Paper Mario for $40 after buying it for $50. I bet if we finish this by Christmas we can sell it for $40.

As for the car stereo, mine's been broken for a few months. And we've been looking at used car stereos and a replacement face on ebay. But it hasn't been a priority. However this stereo was $99 including installation! What a great deal, plus it has an ipod adaptor. DH could do it himself but he didn't want to so when we saw the deal we made a huge push to make sure we went and go it.

And since we were going out anyway we decided to swing by the other 3 stores and pick up things we needed. I got two sweaters and two workout pants, DH got a sweater. We also got Fever Pitch, 2 handsfree bluetooth headsets and ipod accesory kit. Now all I have left is CVS shopping and we're done for Black Friday.

Did you score some major deals? Previously we've scored some nice deals including an external harddrive, computer monitor, telephone, and camera. But this year we didn't really need much.

Happy Thanksgiving!

Happy Thanksgiving! I enjoyed a great meal of smoked turkey, cranberry & grapefruit relish, stuffing, apple pie, homemade ice cream, candied yams, butternut squash and pesto casserole, green bean casserole, and spinach and artichoke dip. The only thing not homemade was the gravy, I cheated since we smoked the turkey.

And I guess while I'm at it, I'm thankful for my DH, family, friends and everyone's health and well-being. A lot of family has passed early in the year, but now it's better. I am ever greatful for the blessing heaped upon my family. The most important is their well-being.

So onwards to the new year!

Single in your 20s?

What's it' like being single in your 20s? It's a time when you are getting established, working your first real job, and making real money. However you are also encountering your first real expenses like paying back the student loan, rent, utilities, car insurance/car payment, setting up your own place, etc. None of these adult behaviors are cheap.

However, an important area of your life is meeting the right person. And in meeting the right person having a courtship, planning a future together, and eventually entering coupledom.

But the courtship proces is a long and difficult one. Because the average age of women and men marrying has increased it appears that people are becoming more selective and careful during the dating process. But because of this, the dating process has also become much longer and more intensive. People can spend years dating before marriage.

So what's expected in your 20s? Well the problem is that you have to be able to go out to eat dinner. At least once. Maybe not the first date but at least maybe your second or third dates. And if you are the man you should treat (so much for feminism). Then as the women you might pay for drinks. And then it follows from there. Unfortunately couples also go out to pretty nice restaurants, not just fast food. So it costs more than in college. Apparently it's to establish how well off your are.

All these extra financial expectations are hard to meet in your 20s. So what should you do? Should you try to keep up? Or give up entirely? I've heard from all my single friends and the thing is, even when you aren't dating, you're pretty lonely at home so you often go out and eat with other singles or couples just to be kept company. You also participate in more activities to keep not be alone. So singledom is expensive.

So pondering my friends comments, told them, well you're investing in your mental sanity. You can either go out and have fun and try to find "the one" or sit at home popping anti-depressants. Sure it costs money to but if you aren't happy, sitting there counting every penny saved with no one or even people to share it with is lonely.

I feel their pain. Of course marrieds in the 20s...well we have a whole other set of problems...

Festival of Under 30

How to make a Million dollars hosted the "Festival of Under 30." Looks like a small carnival but it might be interesting for those under 30.

Heating going up..

Well I thought I lived in an expensive area. Looks like according to Energy Department the most expensive area to heat a house is Boston. I guess I was right. Here's an article discussing heating costs.

Yes the northeast is not colder than Minneapolis or Buffalo. However, the cost of heating using natural gas or oil is substantially higher in the northeast. So though people in New Englad use less energy to heat their homes, their bills look disproportionately larger.

Another factor is that in New England people heat using inefficient oil. But it's very expensive to update a house and install a natural gas system. I'm fortunate in that I have a natural gas furnance and just installed a gas fireplace insert. Unfortunately I still live in an area where it costs 40 cents more a therm for natural gas heating than Minneapolis.

Hence why I complain about my $200/month electric bills for 650 KwH a month. Yet when comapred to other people who use 2000 KwH and pay $200 as well. So I'm using a lot less electricity for a the same amount of money. And why I try to buy the most energy efficient solutions because in the long term they will pay off for me.

We leave our house at 60 when not home and usually 65 when home. This year we can finally heat the bottom floor to 65! Before we left it at 50 because that's what the furnance in the ATTIC would get it too! It would struggle to push heat down 3 stories.

Right now DH is tracking our heat pumps, new fireplace, and regular furnance. We have some baseline readings but we've only done about 2 weeks. We really need the cold weather to kick in and a longer period, maybe a month before we make a determination. I'll post when we figure out our efficiency more.

Festival of Frugality #101

This week Rather Be Shopping is hosting the #101 Festival of Frugality! Lots of great posts including my tip on "Entertainment Book Frugal tip".

Check out these couple of articles. "Have a Christmas you can Afford" by Jennifer Derrick @ Savings Advice. Which is a website I enjoy reading. Seriously have the Christmas that is appropriate. But more on that later.

And is "Frugal Living the New Trend?" by being frugal! I sure as heck hope so. I'll be in with that group of people.

I guess the truth is in my heart of hearts I'm a frugal gal and unlikely to change anytime soon!

Carnival Of Personal Finance #127

The Carnival of Personal Finances #127 is up at Moolanomy. I submitted my article "Do I need a FICO score?"

Looks like a great carnival. However check out these articles by Quest for a Million "Car Lessons", wowsa I can't believe how many cars this guy has had. I feel so indulgent having even one car bought new. He's had 9 cars, sure maybe some were used, but if I buy one car a decade for the next 5 decades of my life I wouldn't have so many cars. I should poll how many cars people have had.

Also check out a Penny Closer for "Home Financing Options". Personally on our first condo we did an 80-10-10, which is pretty good considering how little we made. We did consider a 90% mortgage without PMI offered by Washington Mutual, but were determined to pay down the 10% asap. Turns out it was a better deal. But check out what a Penny Closer did.

Managed Car Insurance...

Today's the day auto insurers propose new rates for car insurance in MA. MA is the only state which state regulators set the auto insurance rates. This article in the Boston Herald discusses the new proposal. So today insurance makers will show state regulators new proposed rates. These rates if accepted will go into effect April of 2008.

The reason for the regulation of car insurance in MA is the fact people are terrible drivers. About 30 years ago the state attempted to have a free market car insurance, but rates tripled. Hence the current system in place is one which manages risk for all drivers by making insurance affordable. Basically it penalizes all "safe" drivers.

So should I support this new car insurance? Well when we lived in CA, we paid a premium being under 25 with new cars although we were good drivers. However since moving to MA, DH does not have the best record. So honestly this managed system of car insurance benefits us a lot. After DH's accidents our insurance only went up $100/year. Not to say we weren't paying a lot for liability insurance about $2k/year for 2 cars and 2 drivers.

However, I cringe when I think what our rates might be if we were to go to a competetive rate system. I think we're personally better off under the current system and so are most MA drivers. Everyone we know has a lot of damage to their cars, even supposedly good drivers. Friends who have moved from elsewhere and never had accidents before, claims that they've had tons of accidents/damage to their cars since coming to MA.

So will this system really work? Can a truly free market system work for car insurance in MA?

Bergmans...millionaire?

This article is about millionaires in the making, featuring the Bergmans. Unfortunately I don't think money got this at all right. This couple is young 25 and 28 years old. However only due to an inheritance were they able to have any money saved. They make approximately $60k/year.

They have $9300 in a TSP (military 401k), $4500 in a Roth IRA, $8500 in a 529, Mutual Funds $15,200, and $2300 cash. What's the problem?

Two years ago they inherited $50k and yet they have no savings. They also sold a house and made a $25k profit, and again there isn't much savings. Instead they paid off CC debt (great move) about $15k. And they invested $10k in mutual funds.

However they put $21k down on a Honda Odessey. They still pay $440/month on the van and $230/month on a new Toyota Corolla. Because of this they spend about $800/month on car related expenses, which is about 16% a month of gross income on cars.

I don't think they are really used to saving. They spend more on cars than they do on saving. This is for a family living on base with minimal expenses.

According to the article they should hit millionaire status in their 50s and at 41 when Micheal retires from the military they should have $300k. Honestly I think it should be substantially more if they had used the inheritance more wisely and instead of buying a car invested it.

What do you think?

No Match 401k?

Well someone ask Walter Updegrave about whether contributing to a 401k without a match is worth it?

His answer was yes, try and maximize your retirement savings before you start investing in a taxable account.

This is exactly my thoughts exactly. Because the 401k has many advantages over the taxable account. First there is a tax break. That means you don't pay taxes on the income until you withdraw it.

Second, the gains are not taxed annually. In a 401k the gains are reinvested and compounded. However in a taxable account you have to potentially pay taxes on gains, dividends, interest annually. That amount is not compounded and reinvested.

Third, the limit on the 401k is a lot more than Roth IRA. It's hard to imagine retiring on just $4k/year. However with the 401k you are able to save $15.5k/year. That's substantially more. Plus this increases the diversification of your portfolio. How so? Well instead of just saving in a Roth IRA and taxable account, you also have a tax deferred retirement account. The more diversified investments you have the better off you'll be. You never know what the tax brackets/rules will be in the future. It could be that all 401k withdrawals after a certain age is taxed only at 15%.

So overall, I agree with Walter Updegrave. I'm happy that he talks about maximizing retirement savings first instead of ignoring the 401k just because of the lack of a match.

How to accelerate savings?

Honestly? Well first of all don't have any major fixed expenditures in your budget. If you already commit 25% of our income to housing, another 25% to cars, another 25% to taxes, you'll only have 25% left. How can you save a lot when out of that 25% is your living expenses? And some of those expenses will also be fixed, such as life, health, care insurance, utilities, and groceries.

The best way to accelerate savings is to lower your fixed expenses. That way you have the flexibility to increase and decrease your saving ability as needed.

Another reason to do it early, in your 20s, is that you'll grow into your income slower. You won't get use to spending so much. That way you'll have the flexibility to go back to school, change careers, stay at home with kids, or not work if you so choose.

Savings gives people flexibility of choice. So accelerate your savings by living below your means, and keeping your fixed expenses low.

Income versus Frugality...

If your income suddenly doubled would you keep the same money habits or would they change? If your income suddenly decreased by 50% would you change your money habits?

This question came to mind last night over dinner. I mentioned buying the Entertainment Book to our roomie. I suggested giving it away to friends as a Christmas Gift. It's $30 and a great deal for couples to go out to eat because most of the coupons are for Buy One Get One Free meals.

Anyway, roomie says most of his friends aren't frugal. They would never use a coupon. They aren't concerned about money. The average income for where live is $100k. Thus most people can easily afford a very nice lifestyle.

Truth is does your income affect your frugality? I think that it does a little, in the sense that you worry less about money. However, I think naturally frugal people still pay attention to spending more than they need to. These frugal people would never pay full price for an item they can get on sale. However, the increased income would allow them to buy a better quality shirt, car, or item than they previously would have. That I think is a trait of frugal people, buying the best quality they can afford.

Unfortunately not all people who are frugal do so by choice. And not all people who spend lavishly can afford to do so.

Hence do you think you're frugal for your income? Or not?

Entertainment Book Frugal Tip...

The Entertainment Book is a coupon book for eating out in your area. Most of the coupons are for buy one meal get one free, or 50% one entree. Usually restaurants in the book are trying to drum up business. People usually purchase the book from kids selling them for fundraisers, online, or even Border's.

Yep I bought my book at Border's. Best part about it was that the book was $30 but I had a coupon for 30% off the list price. So I paid $21 for the book. I wonder how much I'll save? I think eating out 2x should cover the price of the book. Although I am considering using my first coupon tomorrow for a hockey game (which will save me $23.50 according to the coupon).

I do realize that by eating out and using coupons I'm spending money to save money. However I look at it this way, DH and I like to eat out. So if we're going to eat out we might as well do it using a coupon. Also it encourages us to try new places. So buying an entertainment book just makes sense.

I write monthly we spend $200-300/month eating out. And I do try to use coupons, for example the McCormick's deal. But for others out there who enjoy eating out, try buying an entertainment book.

But to be really frugal don't eat out at all :)

Do I need a FICO score?

Do I need a FICO score? Should I be worried about it? Is it important?

No you do not need a FICO score. At the same time maybe you should be worried about it. And it could be important.

What does that mean? Well it means that if you do not feel a FICO score is important then you don't need one. If you do not want to finance a car, house, or purchase then a FICO score means nothing to you.

However, you should be aware of potential repercussions of not having a score. Currently many potential employers will pull your credit reports during a routine background check to determine how trusthworthy you are with money. This might not be important in some fields more than others such as if you handle money like working at a bank or doing accounting for a company. This could lead the employer to determine if you are likely to embezzle money. Or if you are in research and development at a company, are you likely to sell secrets due to debt? Also some companies use it as a measure of responsibility. If you are a person who pays their debts on time, could imply that you will be responsible at meeting deadlines at work. I've talked with friends in Human Resources and these are a few of the reason they look at a person's credit report/score.

Another reason a FICO score could be important depends on your age. If you are 60, nearing retirement and not planning on financing another home then perhaps it doesn't matter. But if you are in your 20s, 30s, or 40s, and considering moving up in home and still need a mortgage, then it's definitely worth considering. Now people comment all the time about getting a manual underwriter.

However there are two things against manual underwriting, one only a few specific companies do it. So this limits your options about getting a mortgage. If like myself a company is paying for your purchase and you can choose from 3 banks, would you really pay closing costs at a manual underwriter or would you have taken the free closing costs from the company? Second, the rate from a manual underwriter even for the "best" rating is never as good as someone with stellar credit shopping around. Why? Because competition for the mortgage is less so the loan company doesn't need to give out the best rate. I've asked multiple brokers about this and they all say the same thing. It costs more to manually underwrite a loan so they can charge more.

Another reason a FICO score could be important is that it is currently being used for evaluating your risk in car insurance. It's only one factor but not having a score could cause higher rates. Also it determines in many states whether a deposit is necessary to start utilities. The companies want to know what sort of risk they are taking supplying you with cable, internet, or phone.

But do you really need a FICO score? No. Can you live happily without worrying about it? Yes. Just pay all your bills on time and a stellar score will naturally follow. Personally still being in my 20s I definitely am concerned about my score and I do plan on buying more homes. I also probably will move and get another relocation package. So I will have to use again the bank chosen by the company. And I'd rather get a great rate than stuck with a mediocre one because of principals of avoiding debt.

Groceries for the week

This is what I bought for meals for 3 adults (2 males, 1 female). We have most of the meat for the week, so all I bought was mostly fruits, veggies, etc. I am posting because I was wondering if there are any coupons out there. Also I wonder if my groceries are cheap or expensive.

Green Peppers .81 lb @ .98./lb = .79
Maille Mustard $3.39
Red Peppers 1.42 lb @ 1.98/lb = 2.81
Yellow Onions 1.47 lb @ .59/lb = .87
Strawberries Qt = $3.98
Broccoli 1.54 lb @ 1.49/lb = 2.29
Carrots 1.75 lb @ 0.49/lb = .86
tangerine .37 lb @ 1.49/lb = .55
Lemon 2 @ $1/2 = $1
Dried Kiwi $2.94
Butternut squash 1.34 lb @ 1.99/lb = $2.57
celery hearts $2.49
Baby Bok Choy 2.25 lbs @ .99/lb = $2.25
Scallions 1 @ .90/2 = .45
Curry Blocks 3 @ 2.19 = $6.57
Panko (bread crumbs) 2 @ 2.29 = $4.48
Coconut Milk 2 @ .79 = 1.58
Coconut Milk 1 @ .89 = .89
Szechuan Peppers 2 @ .89 = 1.78
1 gallon milk $4.39
1 qt Heavy Cream $4.29
Flour Tortillas $2.29
Ginger .11 lb @ 1.99/lb = .22
turnip 1 lb @ .69/lb = .69
white potatoes 1.59 @ .79/lb = 1.26

Total = $55.68 not bad, but I can't believe how expensive groceries have gotten over this past year.

Weekly meal plan
Sunday Dinner - pork tenderloin
Mon Lunch - pork tenderloin leftover
Mon Dinner - strawberry Salmon + rice + butternut squash + bok choy
Tues Lunch - pasta + sausage
Tues dinner - Salmon repeat
Wed Lunch - turkey sandwich
Wed dinner - spinach and cheese pizza + broccoli + carrots
Thursday Luch - spinach and cheese pizza
thursday dinner - macademia halibut + broccoli + carrots
Friday Lunch - halibut leftovers
Friday dinner - seafood mac and cheese from scratch
Saturday Lunch - leftover seafood mac and cheese
Saturday Dinner - take out

I also made scones for breakfast for the week. I'm probably going to buy some ice cream on sale later this week.

Bad Customer Service

So according to MSN, which company has the worst customer service? Can you guess?

It's Sprint! According to this article they listed the top 10 worse customer service companies. Rounding out the top 10 is B of A, Comcast, Time Warner Cable, AT&T, Citibank, Wal-mart, Verizon, Wells Fargo, and DirecTv. Dishonorable mentions include Dell, Circuit City, Best Buy, Home Depot, Sears, and Macy's.

I'm not surprised that Sprint topped the list. I've had quite a few run-ins myself with them. And like many I often felt like jumping off the bridge while talking to and waiting for a customer service rep.

In fact it was with Sprint which sold my account information and had a false account created which wasn't paid and sent to collections. Rather than contacting me directly Sprint went straight to a Collection Agency. When I called they refused to talk and work with me. Instead they stonewalled me and refused to acknowledge some insider had sold my information. Ever since I've had major issues with Sprint.

As for the rest, well what can I say? Read this article about a nice little old lady charged with assault against Comcast. I feel for her, sometimes I feel like that when I talk to Verizon. They have terrible customer service and often I'm put on hold for at least an hour.

But these companies all have major monopolies and a death grip on their consumer. People with cell phones will rarely change because they often choose companies based on which provide their friends and family have. Or where we lived in San Diego, there was only 1 cable company provider, so to get any TV you had to use Time Warner Cable. So of course they can treat customers poorly when there is no other option. Same thing with banks, there often are limited choices with the consolidation of bigger banks buying out smaller banks. There are less branches and atms, so people are stuck with few choices.

But what can the consumer do other then complain? We are guilty of using these services. I hate B of A, but they have many branches and our company paid for a mortgage through B of A. It seemed easier than trying to move our mortgage and checking.

Do you have any companies you hate or won't use?

Poll Votes: How many CC do you have?

The results are in. Most people (15, 71% of voters) have between 1-2 cards. A few (3, 14% of voters) have no credit card. An equal number have between 3-4 cards (3, 14% of voters). And no one appears to have more than 5 credit cards.

I believe I have more than 5 credit cards. Admittedly I use pretty much two cards, one mastercard and an american express for Costco. But I have never cancelled the other cards we have. I know we have a discover card, best buy, home depot, and Jordan's credit card. I'm not sure if we have any more. Since we don't use them I probably should call and cancel them and make sure no charges have been made. But laziness ensues where I don't feel like taking the time to cancel the cards or look for them. I also need to pull my credit report.

Christmas Budget

I've been slowly decreasing the amount we need to spend at Christmas. I now send a $25 Harry and David Gift Basket to multiple people in the family. My grandmother, great-grandmother, great aunt, 4 siblings, 3 aunts/uncles, 4 cousins, and two parents. The number used to be so much larger when I bought for all my neices and nephews.

But I decided about 2 years ago after we got married, that I would do family gifts. I felt more like a "married" person and grown up than a kid just sending out gifts. I never sent to my siblings instead we would send each kid a $25 GC to a store. Plus my parents, grandparents all got individual gifts as well.

Now we just spend about $750 because I try to give a gift around $25. Before it was a lot higher with so many individual presents. Also we spend a bit more than the $25/per family because for our parents we'll be giving out $100 GC to Ruth's Chris. Plus we usually buy something for our office, like a box of candy. It's so much less stressful than trying to pick gifts which people will like.


Also this year since we'll be alone together and at home, I'm thinking of actually buying DH a gift. Usually we don't but I may ask him to splurge and have an extravagent dinner out in Vancouver, but we'll see.

How much do you budget for Christmas?

Christmas package updated..

Well we booked our package for whistler. Not the cheapest deal, but a pretty good rate. The worse part about booking it was the weak dollar made us pay 10% more because the US dollar is so low compared with the Canadian dollar. arrgh.

So what'd we get? We booked 4 nights in Whistler at the Hilton hotel. Beautiful luxury hotel. I've noticed my DH has been less and less inclined to stay at cheap roach motels. Since I conceded this vacation as his 30th birthday present I can't complain. Plus we included 3 out of 4 days skiing at Whistler-Blackcomb. Combined price of the package is $1042 including taxes.

Right now the trip total is $1042 + 90 flights + $350 dog boarding = $1482. Whew, it seems like a lot, and we haven't even booked a few days in Vancover, eating out, and activities. I wonder if we can do the 8 days for $3k? The biggest expense of the trip was the Whistler hotel and snowboarding lift tickets. Snowboarding each was $180 at least. This might be our only snowboarding trip of the year.

I am just hating the weak US dollar. I remember when the $1 USD was worth $1.6 CAD. That would have made the trip more palatable. Although right now travelling anywhere with the USD is a bad idea.

Dog's Health Plan

I pay $30.95/month for each of our dog's health plans. It is the Banfield Optimum Wellness Plan. My dogs have Basic Plus Plan.

This includes annual vaccines, two comprehensive physical exams, annual dental cleaning, and blood and urine analysis. Also included is tests for lyme disease, heartworms, parasites, etc. Another bonus is at any time we can get a health certificate for travel, which usually costs $50/certificate. Also any extra care is given at a 15% discount. I've found their rates to be competitive with other vets in the area.

The best part of the plan is our ability to see a vet at any time without a fee. Typically an office visit costs $45-50/visit. And because Banfield is nationwide in many Petsmarts, you are allowed to go to any Banfield pet hospital and see a vet free. This is awesome. Once while camping, our dog got a tick and we rushed to a nearby Banfield Hospital.

I guess the question is it worth what we are paying for? We pay $371.40/annually. If we took our dogs in annually once, with vaccinations I think we would spend $150-200/year. So about 40% of the cost of our plan. The difference could be saved in case of emergency or if our dogs needed more care beyond the vaccines. However yesterday I rushed my older dog Stefan to the doctor again after finding a tick on him, and I didn't have to pay the $45 office visit fee.

I think it might be a bit cheaper to go ala carte with dog care, but as our older dog is now almost 12 years old, I think it's better to keep a close eye on his health and monitor more carefully than just one quick visit a year.

Of course the cheapest alternative would be to not worry about it, until he's really old and then just put him to sleep. But that just isn't our philosophy.

Do you have a health plan for your animals? What do you normally spend on them annually?

October Spending and Net Worth Update

We had a pretty good month overall. We spent $271 on groceries for the month of October. Not bad considering we had guests again for the first two weeks of the month. Plus we spent $224 eating out. Also good considering we had guests for part of the month as well. Also within the $224, was the $79.99 spent on McCormick's Gift Certificates which we still have $50 to eat out with. So overall a pretty decent month on food. What I've noticed is that the price of food has increased a lot over the year, considering I keep a price book and I haven't seen as many deals on foods as I used to. It feels as though food has increased exponentially this year.

Unfortunately with guests we were out and about more than usual and spent $193 on gas for the car. Down from our high of $229 in September. However I've noticed gas is creeping up again, so perhaps it's time to adjust our monthly budget from $120 to $140. We typically fill up about 1 week @ almost $30/tank. I rarely drive and DH switches the cars out so we get balanced usage of the cars.

Other than that our spending was pretty much the same in all budgeted categories.

As far as our networth went we increased our net worth by 3.04%. We increased our retirement by $3117 and our cash on hand was up to $11k. However, since the beginning of the month I noticed that our cash on hand is already down to $5k. Typical of our fixed bills. Looking back 1 year ago our retirement was at $29k and currently is at $68k. I see we're making significant progress in our savings. When I figure out our ESPP that will increase our monthly savings, although it mostly is for DH's tuition.

One stock shot...

I am firmly against investing in a company you work for. Why? Because you believe in the company probably more than regular investors. You work there, you buy into the company mentality. You often assume you know more about the company than other people. Also because you work there you often believe in the product and it's potential. And you often turn a blind eye to competitors and faults of the company. Why?

You work there. If you were not a believer why work there. Why dedicate yourself to the company.

Last year DH cajoled me into keeping his company stock because he really believed in the company. Personally, I wanted to sell and thought that it was a bad idea to invest anything in the company. So what happened? We lost about 50% on the stock and had to pay taxes on the original amount. It was given to use as company stock at $45 and dropped to $24.

I'm a pretty conservative investor, give me an index fund and I'm happy. DH loves big gains and his mom always hypes individual stocks. But recently she's finally taken my advice (and Warren Buffet's from 9/07 Money magazine), that index/ETF mutual funds are teh way to go. I guess we'll see how a year goes and she may yell at me or not. I think not.

Right now, we're in the position of rebalancing our portfolio and making choices for the end of the year. I want to get out of his company stock finally and dump it. I don't think it has potential for going up and I believe the risk (beta) is high it could tank.

So the question now is do we dump our position in his old company (he left for other reasons), or hold onto it in his 401k? We've left the 401k alone for now, but I'd love to consolidate it into his current position. But in order to do so we'd have to dump his company stock, which he really feels is going up.

Consumption Tax?

The question was raised on a message board about what sort of tax is fair. Interestingly the majority of people voted for a consumption tax. What is the consumption tax?

Basically it is a tax by the government on the purchase of a good or service. It is based on someone consuming a good or using a service but not a tax on the labor or material of the good or service. In some ways it is identical to a sales tax.

In order for this to be a workable system, taxpayers would still need to be given exemptions and deductions based on number of family members. This to ensure poor people and those with large families do not pay to consume goods. Also all savings would be deductible under a consumption tax system.

Surprisingly a number of people on the message board were in favor of this new tax rate. I was very surprised. Why? Because most of these people were middle class families, with one primary breadwinner, and two children.

Hence their actual federal tax rate after deductions, personal exemptions, child tax credit is less than 5% and many actually got money back from the federal government in form of child tax credit. If this is the case why are these people in favor of a consumption tax? They will pay a ton more in taxes because they definitely consume more than 5% of their incomes.

However, I think they do not even realize how much they consume. Nor how little they pay under the current regressive tax system. I think that these middle class consumers haven't considered the entire repercussions of changing the tax system.

I think more than a consumption tax a better way would be a flat income tax. More about that another day though.

Forced Charitable Giving?

I was reading on a message board about people who are forced to give to United Way at work. It seems that many of the larger companies pressure workers to give. Companies get plaques and recognition for a higher number of contributors from the company. It makes the company look like a member of the community.

I think it can be a good thing if the company matches donations to any charity. But to require giving by employees seems to take it a step too far. I am happy that DH's company matches 100% of charitable giving up to $1000/year. It's a nice bonus just to make employees feel good.

Although I like the idea of companies matching giving, I am appalled that companies feel it's giving when they are forcing or "encouraging" people to give strongly.

Flex Spending Account...

It's open enrollement time again. I'm not sure how much to put in this year. I wanted to get lasik eye surgery in 2008, but I'm not sure. I consulted the doctor and was told that yes pregnancy does change your vision. Stupid, but I should have done it last year or two. But I had to wait for my vision to stabilize. Arrgh. I hate being caught between a rock and a hard place.

But the choice is pretty difficult and we only have 2 weeks to decide. If I do it, I'll max out the FSA with $5k. I also have to consider if I would like to have some dental work done. I find it difficult to make these decisions so quickly.

Also if we get pregnant this year, we probably should set more aside. All these decisions to be made quickly. I wonder if we should overestimate or underestimate the number? And if so by how much?

Rich versus Wealthy...

So on a message board someone asked what's the difference between rich versus wealthy? Rich people spend their money in 1 generation, maybe 2 if they are lucky. Wealthy people pass it on for generations building upon it. I thought interesting way to look at it. This was referring to the press article about Britney Spear's spending habits.

Spears is just another star spending lavishly. However the question arises how long can she keep up this lifestyle? The really rich person is probably the one managing her money and writing her a check. Hence she's rich, but the other guy is probably wealthy.

To further the example her ex-hubby K-Fed made $500k last year in endorsements but only grossed $7500 after expenses. How does he maintain the lavish lifestyle? He had got $22k/month in spousal support and $15k/month in child support. But soon that will end and what will he live on? Another case of being rich, but not wealthy?

Is that an adequate description of rich versus wealthy?

Using Mileage...

Tonight my DH spent about 3 hours trying to book our Christmas vacation. We decided to try and use our mileage on United. Typically our schedules are not flexible enough to use mileage. But this time since we're going on vacation ourselves without visiting family, we decided to go whenever was available.

This trip is DH's 30th birthday. But we're trying to cheap out and use our mileage plans and CC rebates to pay for the trip. As of right now we're going to Vancouver/Whistler. The biggest expense will definitely be our snowboarding tickets @ $60/day.

To use our mileage it will cost 25k miles for a roundtrip ticket on United. According to flight groups online, to get the best deal for your mileage it should be calculated at 2 cents/mile. So our tickets should be at least $500/each to make it worthwhile. Currently tickets for this trip would cost about $500 including taxes. So while not the best deal possible, a reasonable return. It however will cost us $45/per person to use the miles.

Though we managed to use 25k miles I found that it difficult to use them. There are so many limitations and it took so long book. I wonder if it was worth the trouble?

Happy Halloween!

Happy Halloween. I guess my only little financial thing today is how many children are going to show up today? I bought two bags of M&Ms, peanuts and regular to give out. Last year I bought a box from Costco and I had tons extra.

This year I'm hoping enough kids come so that I don't have any extra. Unfortunately I have yet to have one trick or treater. What is going on? I used to be so excited to go trick or treating. I loved getting candy.

If not I guess I should donate the candy or get DH to take it to work. It's not the fact it was $4 for the 2 bags, but I will gain weight if I sit here and eat all the candy. Sigh.

Hope everyone else has better luck.

Festival of Frugality #98

The Festival of Frugality #98 is up at beingfrugal.net. Looks like a great festival. My article "Dining in can be expensive" was submitted.

A couple of articles I liked were "Top 10 Cheapest ways to exercise" by silicon valley blogger, and "Do vacations spoil you for normal".

My thoughts on cheap exercise is the way to go. Though living in CA, I had a great deal on a gym I used year round. Now out east, well let's say gyms are no longer cheap so I have to exercise outdoors/indoors alone. Ugh. I prefer the gym because the weather out here isn't the best.

And going on vacation spoils me because I hate going to work!

401k Match Bonus...

Every November the company my DH works for goes over their benefits and improves them. They also have open enrollement. Right now I'm debating eye insurance but that's another day.

For now I'm bursting with supreme happiness. Wowsa! DH got some fantastic news. Turns out the company has decided to do away with the vesting schedule with the 401k match. No more 3 years to vest. Fantastic. That means the 6% they've been contributing is ours immediately!

That's tremendous, it's like a 6% raise to DH's salary, without doing anything. DH complained he won't see the money until retirement, but every penny saved is a penny we don't have to save. Anyway it's nice to see our little nest egg growing fasting and knowing it's all ours. We don't have to subtract out the unvested portion anymore.

Plus, this new company every two weeks they deposit the 401k instead of the old company which took 6-8 weeks to make a deposit. And it every quarter they would make the match however it would the quarter after that the match would occur.

What a nice bonus.

Great Deal Eating Out...

I found a coupon for $25 for McCormick's and Schmick's. So yesterday we went to MS and had dinner. I had the monkfish, DH had the bluefish, and we shared the quahog appetizer. I took home half my meal and ate it for lunch.

The Monkfish was $20.95, Bluefish $18.90, and Quahog $8.85 the total bill was $48.70. The tax was $2.44 and the total was $51.14. So the $25 was applied and the final bill was $26.14. But I used a $50 gift card to MS. I bought 2 $50 GC to McCormick's = $100 for $80, basically a 20% discount. Also because I used am AmEx CC I get back 3%. So our bill including tip was $35.14. But we only paid 77% = $27 including tip!

For a seafood meal out for the two of us I was impressed with the deal. Plus they have a diner club where you get $1=1 point spent. So after 500 points you get a GC for $25. Another bonus.

Yes I could cook some of this fish at home, and I do, but I also enjoy eating out. And for a deal like this it cost less than going out to eat TGIF, Applebee's, etc.

Carnival of Personal Finance #124

The Carnival of Personal Finance #124 is up at the Millionaire Mommy Next Door. She did a simply awesome job. It is very well organized and beautifully done.

I submitted my question on Going Carless. Lots of great articles. I reccomend you checking them out. She has a poll going with different categories. And the winner in each category gets a free blog.

Anyway couple of great articles to check out, "the quiet millionaire" and "why personal finance is personal." Lots to read.

Poll: Lying to a spouse

72% of people say they never lie to their spouse about finances and 27% say just a little lies to their spouses. Very interesting. No one actually admitted to lying to their spouse.

I find that strange because there are many people who are in debt, and say their spouse refuses to listen or participate. On the Women In Red message board, there are women who hide their debt from their spouses. Often afraid of letting their spouses know the real truth.

For example, on Oprah this past week there was a woman $135k in debt. Yep you read that right, not a mortgage, but CC debt. And her husband had no idea. He had ignored their finances and left them entirely to her. So is it considered lying or denial on the part of the husband?

So I find it great that most people don't lie to their significant others. So if you have debt then your SO knows all about it?

Personally I think DH and I both tell over/underestimation of costs. We never sit there and lie but we do forget to metion some expenses etc. But nothing big, anything over $20 we discuss. But the details are sometimes fuzzy.

Cell Phone Data Plan...

My DH wants to add a data plan to his cell phone for $10/month. I am against this. Now I'm about to sound extremely cheap, but please try where I'm coming from. First, DH works all day and the cell phone is barely used. I don't know how and why he really needs to be texting people and surfing the web from the phone, when he has a laptop at work and at home. I feel it's just because everyone else has it he wants it. He wanted an iphone, which I said if he saved his blow money $10/week he could buy it.

Yes he earns a good income and we don't have debt, but I don't like the idea of increasing our fixed monthly expenses. Already I feel that our monthly expenses are huge. We have cable, internet, and phone. Cable is even premium with HD, DVR and movie channels.

Should I agree to adding on the $10 data plan we should cut the movie channels? Is this unreasonable? It's just $10/month, but I feel if we keep justifying these expenses they add up fast.

I really have become the saver in the relationship where he used to. He's been changing a lot since MBA school where now he wants a new car. When we meet (8 years ago), he called me foolish for wanting a nice car. He said it was to get from point A to B. But now he feels like we're poor compared to other students. I just want to scream about we are not going to finance anything. I already hate we're taking out $8500/year to pay for his private MBA and cash flowing the other $10k/year. Most people in school with him are 100% loans. We're saving maximum for retirement and paying 50%+ of the tuition, books, etc.

I feel that this is a slippery slope to be walking down.

Dining in can be expensive...

In this article by msn, the author claims that it's more expensive to cook than to dine in. The truth is that it is always cheaper to eat in. However, it is true that eating in can be expensive.

The real comparison is determining the if the exact meal you prepare at home is as expensive as restaurant food. The article claims that a man claims to have spent $30 for the couple cooking, shopping, and preparing a meal. But the same meal would only be $17 from a restaurant.

I find this rather hard to believe. For example as a couple we had two very expensive meals over the weekend. We had cajun scallops and NY strip steak both courtesy of Costco. The scallops were $9.99/lb and the steak $6.49/lb.

Now we ate a one pound of scallops + cajun style rice, entire meal for two with rice, veggies, salad, scallops = $12. However, maybe an hour of prep time which could be $50. BUT because we're both salary we don't get extra pay for working that hour so it really only cost $12. Plus for us to both eat scallop dish at a cajun restaurant it would be easily $18/plate = $36 without tip and tax. How is eating out cheaper?

Second example is eating the NY steak. That would easily cost us $25/plate but we ate it for $8 for the two of us sharing a 1 lb steak and all the fixings. $8 versus $50 doesn't seem like much comparison.

And yet we all eat out. The reason? Convience. There are some meals which are just easier to easier to eat out. My DH hates making ravioli, so we usually eat it out or buy it premade. He also hates making pizza nowadays.

But reality also is that there are some foods which are impossible to make. More ethnic foods like Indian curries which have expensive spices that can be difficult to find. We enjoy eating out those foods which are cheap to make if you already have all the ingredients on hand, but difficult otherwise.

I don't think you can compare eating out with cooking at home. Do you think it's cheaper to eat out?

Going Carless...

I have been thinking more and more about trying to go carless. Downsizing and getting rid of both of our cars and getting 1 car. But DH isn't buying it. He likes the freedom of having two cars. We only have two cars because where we lived apart for 2 years in Southern CA. It was impossible without two cars.

So we ate the major depreciation on the cars before we even arrived out East. When we first moved we thought about selling one of the cars. But then my DH got into 3 car accidents immediately and we negated the idea. But we've been fortunately accident free since then. I still rarely drive my car, though we have had issues with the focus.

So I decided to run a couple of numbers about how much we'd save by selling one car. We might get $4k for the Focus. Plus we would not have to pay for insurance and maintanence. Insurance would be $75/month savings we would have 2 drivers, 1 car, and no discount for multi-car. The gas would not drop much because we'd be carpooling, but DH drives to work daily, and I would need a monthly transit pass. Currently I carpool, bike, and use public transit occasionally. The pass would cost $90/month. So the savings might be close to a wash because I don't use pass now but rather pay as I go. The pass works best if you use the transit daily, and I can catch rides 50% of the time and biked daily during the summer.

I wonder if it would still be worth it? We basically would net the $4k for sale of the car. The monthly savings would be minimally. The biggest factor holding us back is the Focus is the car we use for hauling stuff around, going camping, going snowboarding. But it is a more unreliable car. The corolla doesn't have fold down seats and carry as much. But we'd have to keep it because it's so much more reliable.

I guess we still should discuss it more. I wonder if the convience factor is worth the $4k?

Pros and Cons of Landlording...

What are the pros and cons of being a landlord? I think there are many. On any financial board there is always someone asking the question of whether it's worth it being a landlord. And there are those who say it's great and those who say it's not. However the reality is that even landlords will tell you it's not an easy job.

The obvious pros of landlording, is having someone else pay your mortgage. If you buy a house in an area where rents are high and mortgages are low you'll come out ahead. Along with an enforced savings by paying off the mortgage, a landlord is able to reap the benefits of home appreciation. They are able to diversify their portfolio with investments other than stocks. Also in retirement, after the mortgage is paid off it a rental property can provide an alternative stream of income.

However, there are many cons against owning rental properties and becoming a landlord. First, renters do not care for the place like an owner. Thus, typically most rentals are trashed and require more $$ for upkeep. What sort of upkeep? Well if a water heater breaks on a weekend you can't tell the renter to wait, you need to fix it asap. Unlike being frugal at home, with a rental you have to fix the house immediately, not wait for a good deal.

Second, the possibility of a renter not paying and needing to be evicted. Or being unable to find a renter and having a property sit vacant. This means needing to have amount of cashflow to carry the property during times when the mortgage isn't being paid by the renter.

Third, landlords often have to carry extra insurance in case their renters get hurt or have someone visiting who is injured on the property. They should also form an LLC and protect their other assets in case any renter/visitor sues them.

But overall I think the pros and cons balance out. The main thing is finding a property which will have a return on investment of at least 8% annually by having a strong positive cash flow. I would never be a landlord if the rent generated by the property did not cover the mortgage, insurance, and 10% maintenance costs. If not I think the money and time would be better spent invested in index mutual funds.

Another factor is being a landlord takes time. If you hire a management company they will take 10% of the rent which increases the amount needed to generate a positive cashflow on the property. Hence it could be a good retirement or job for a stay at home parent. But it might be too time consuming for people working full-time.

California Foreclosure

Okay so I now know someone going into foreclosure over $50k. I don't know if this is a wise move or not. Yes it's a lot of money. And yes the person does have the $50k to pay it off, but they refuse to "throw good money, after bad."

The question, is this a smart move or not? The foreclosure will ruin the person's credit. However, is it worth ruining one's credit over $50k?

I guess it's much like bankruptcy. For one person $50k is enough to drive them to declare. While for others having $300k in debt is nothing. It depends on the situation.

Would I do it? Probably not, mainly because there are too many variables which could arise from the foreclosure. It will make finding another job more difficult. It can make getting any loans more difficult. But I say the same thing about BK. However I realize I could quickly end up in either position given the right circumstances.

I wonder though if this is the right move? To the friend, my advice was to carefully consider if it is worth doing just for $50k. That's barely more than what they paid for their fancy car.

CA wildfires...

I am hoping our friends home in CA are fine. They've all evacuated from the Rancho Bernardo area, Irvine area, etc. My best friend's house was very close to the wildfires. She was within 3 blocks of the fires. Our other friends also are hoping to hear news about their house. Right now they are just watching and waiting.

I guess this is a good reason to keep your insurance up to date. My best friend hadn't made her payment, but she caught up on Sunday. She was being lazy. Geez.

Car...what you need or want?

DH and I went to look at a couple of used cars this weekend. We specifically were looking at Subarus because of the space and AWD. We had never test driven or even seen a subaru. We just picked a Subaru outback, legacy, & impreza based on what everyone we work with and live by has said.

So we saw a pretty good deal on a used 2004 Subaru Outback Station wagon. But while we were there we also saw the new 2008 impreza wagon. They were similar in price $17k for the impreza and $13k for the outback.

We were very impressed with the handling of both cars. We were also very happy with the larger space in both cars than what we currently drive. But we realized that the two cars we saw were very different cars. The Outback was substantially larger than the Impreza. We decided we would start thinking about replacing my DH's Focus next year but we needed to nail down a target price range and car specifically.

DH preferred the Impreza, while I preferred the Outback. So we talked in the car. The Impreza is a car which we might have to replace in 3-4 years after we start our family. It's a little larger than our cars and has a bit more storage space. The Outback is easily a car we could fit 2 children, dogs, and stuff into.

DH said a car is a car, you should drive what you want. I think we should look long term and buy something which will be usable longer than just a few years. This lead to the discussion whether you should buy a car you can use 90% of the time or a car you think you'll use 70% longer term?

My DH's argument is that we'll use the smaller car for 90% of the time for the next 3-4 years. Then if we have to trade it in for something larger because of necessity, then at that time you reevalute it. He equated it to buying a stock, you reevaluate at each point in time. You buy a car you will use for 90% of the time and rent if necessary.

I pointed out that cars depreciate quickly. That if we bought even a used car, it would depreciate in 3-4 years and we'd again have to be dumping more money on the table to buy another new used car in 3-4 years. If we moved up into an Outback from an Impreza, then we'd eat a harsher depreciation, time, energy expended buying another car versus just buying a car we can grow into till it dies.

It's a difficult financial decision. So do you buy a car you need or want? Is it purely a financial decision?

So as you can see this is about 1-2 years away our decision but we need to start planning and looking. I would like to pick up something used. And it would be lovely if something would just drop in our lap. But we have to keep our eyes open and our finances ready just in case.

Review: Debt Consolidation Site

I said I'd write an unbiased, objective review of the Debt Consolidation Care Website. First of all this is a website for people who are in debt and attempting to get out of debt. This website does not appear to be associated with any financial "guru" or celebrities like Suze Orman, Dave Ramsey, David Bach, etc.

They provide a service where they help people to get out of debt. The first way they do is this by suggesting that people consolidate debt through them. This is supposed to lower interest rates and make the monthly debt payment more manageable. This appears to a standard service. Because I am not consolidating any debt, I did not attempt to try out the program.

The second part of their website, is the forum discussing debt. The forums covers a broad range of topics including getting out of debt, bankruptcy, and getting loans after ruining your credit. The topics in this area seemed well organized and easy to follow. It appears that many people have a lot of experience in dealing with creditors and how to pay them off. This area also appears to give support to those getting out of debt. This area does not however suggest cutting up any and all credit cards, etc. Rather it stresses getting out of debt but not being critical of those still using credit.

The third part of the website is blogs of people getting out of debt. The blogs do not appear to be the typical blogs I enjoy visiting, but I'm sure there are many blogs which would be helpful for those interested in reading blogs about digging out of debt.

Fourth, there is a section to read about how to get out of debt under articles. I really liked this section and felt there was a lot of information well organized into topics. Also the calculators for determining how long it will take you to get out of debt and how much to pay is easy to use.

Overall this is a very easy to use website. It looks like it could be supportive of those getting out of debt. It might be a starting point for those looking to improve their financial situation.

Curbing a spender?

If you are a saver in a relationship with a spender how do you curb a spender? Do you just budget all the necessary expenses and savings and allow the spender to use the rest? Do you ask for guidelines that they are allowed to spend $X per month or pay period?

When asked by the old roommate, about merging finances as an older couple, she mentioned her S.O was a spender. She has always been a saver. So so doubted that if they married, she would be able to curb his spending habits.

So the question arose how do you manage the situation? The easiest answer is marry/cohabitate with someone who has common financial habits. But that's easier said than done. I know I have it relatively easy because I'm married to a saver, while I'm considered in the relationship the spender. Which seems quite a stretch when compared I would say against the average. But to curb my own spending, is I typically ask myself "Do I really need it?" And I put down an item and promise to come back another day and get it if I really do want it.

So what creative methods have you found to curb your spendy partner's habit?

Coupon Update #5

Unfortunately I haven't been using my coupons very much. I am overstock on health and beauty aids for at least 3 years. And I am somewhat stocked on certain foods.

But I've still found that the majority of the food we buy and eat aren't huge coupon savers. One area I've started eating is Oatmeal. I eat it everyday for breakfast, so I suppose I can save a lot on a box of oatmeal.

But overall buying meat and fresh veggies hasn't changed. I've gone to eating frozen veggies, but my DH doesn't like it. He prefer fresh veggies and complains about it. So I try to do one day fresh, one day frozen. Apparently the vitamins provided by frozen veggies are substantially less than fresh/raw veggies because it doesn't withstand the freezing process

Has my couponing this year been a help or hindrance? I'm still debating, I think it's been more work than it's worth. But I did learn about getting free/cheap shampoo, toothpaste, deodorant, etc. So maybe it's not a complete waste of time.

I am doing still doing it but very, very slowly.

Dental Update #3...

To summarize, I refused to pay $350 for a cancelled dental appointment in July. I have sent back proof about changing insurance, I have sent proof the dental office was not eligible for coverage with my new insurance (they are but OUT OF NETWORK). I called and reported them to the insurance company, and it turns out they have been reported multiple times for violations of misleading people to get work done when it wasn't covered.

I have written two more letters saying I'm not paying it. Got another 3rd letter saying I'm responsible for the $350.

What are my options? My DH says to keep saying I'm not paying. This time to explain the cost of the cancellation was way above the reasonable guidelines of the state. They were deceptive, which they were but refuse to acknowledge. I also reported them to the state dental office, but hey they obviously don't care and have been reported before.

Can they send it to collections? How will this affect my credit? What are their recourse? Should I offer to settle for $50?

New Poll: Lying to a significant other?

The question is whether you tell financial lies to a significant other? Most people I guess will say no. However I wonder if it's really true or it depends on how you define lie?

In general I would have to say I don't lie to my spouse. However, I do sometimes get the numbers wrong and hence I do think I tell white lies to my spouse about our finances. Like what?

Well I bought this shirt for $8.99, I might say $10. Or I got a haircut for $40, but it was $42. Just sort of a rounding of numbers. I noticed my DH does it as well, he'll round up and down and be in the ballpark of the number. However later I might see the charge or he'll see the charge and ask why is it $X?

Is that a lie or just a slip of the tongue? Is it important? Should we be counting every penny and accounting for it?

Also is not telling your significant other the $ amount a lie? Where I go grocery shopping and he knows I went or sometimes not, and never realizes what I just bought? Should I say I went shopping this evening and spend $40 (more likely $37.xx). Or is it just water under the bridge?

Retirement Poll Results

Wow. Looks like people reading the site are doing great in saving for retirement. The poll closed this evening and it appears that 45% of readers have saved more than $100k for retirement. 18% have between $25-100k, and 31% have less than $25k, and only 1 person doesn't have retirement savings.

This is quite remarkable considering the average savings rate in US is supposed to be 1-2%. And that the average retirement savings in the US is $45k.

Great job! I look forward to joining the $100k club as well.

Why Tip?

Do you wonder why the US the only country where tipping is expected? That is most other countries they include tips in the price of food? The prices of services have already factored in the "tip".

I would prefer that we not tip as a society and instead increase the price of services. That way people don't have to sit and wonder about tipping. They don't have to ponder how much to tip a dog groomer, dog walker. Or what's appropriate for a cabbie who doesn't help you with your door and bags. Or do you need to tip your hair stylist every time and then extra at Christmas? Or your babysitter every time and Christmas as well.

These so called rules get very complicated and confusing quickly. It seems like you need to tip for every possible service in the US. Eating out, carrying a bag, delivering an item, etc. Often you feel awkward and unsure not only about whether to tip but how much?

If we moved to a system where a tip was considered a bonus I think it would be so much easier. We wouldn't have to worry so much about offending the tippee. Plus I think that the people expecting to be tipped outrageous.

Nowadays everywhere you go, there is a tip jar next to the register. Which leads me to wonder just for punching a cash register I need to leave a tip? Basically every time I spend a penny someone else is looking for more money?

Would it stop you from purchasing an item if it was a bit higher and no tip was necessary? I think not. It might make you consider your purchases more, but you'd feel it was more worth it because you wouldn't have worry if you were "breaking" the rule by not tipping.

Would you pay more to stop tipping? Or is tipping just part of the culture and too ingrained? Or are we moving towards overtipping?

Cell Phones...

We're out of our 2 year contract for cell phones and we're starting again. Our Motorola Razrs have been pretty much dead for the past 6 months. But we've been waiting until our contract was up so we could just get new free phones.

Of course to get the new free phones cost us signing another 2 year contract. I wonder if it's worth it? Would I really cancel my cell phone? When we lived in CA, we only had cell phones and didn't have a landline. As we were living apart during the week, it was cheaper than paying for 2 landlines. Plus I was able to chat for free with my parents, friends, and family.

But the phone my DH wanted was $79, so he talked to customer service and explained the need for retention of customers. After discussing with him our reasons for staying with Cingular they agreed and gave us the same phone for free. Here's the Sony Ericsson 580i we got for free.

I guess as usual it never hurts to ask. But we do have another 2 year contract. Would I live without a phone? Probably not and if I were broke enough to try my mom would buy me a spare line and give me the phone.

She'd die if I tried to go without a landline or cell phone. My mom's paranoid, in college I didn't answer the dorm phone so she sent the cops to check out my room. And then she had a peephole installed because I couldn't tell who was knocking. So I consider it an investment in my mom's nagging.

How much do you make???

Do you know how much other people make? I don't, I can guess based on their purchases and spending habits. At least I think so. But I could be completely wrong as well.

This came up because my mom was talking about how my Uncle knows exactly how much each of his kids make, and their spouses/SO make as well. She was so surprised. She couldn't believe that after meeting my cousin's girlfriend they knew as a nurse she makes $60k/year.

Which brought up and interesting question, my mom began to hint how much we make. I said enough, which is strange right? But my parents have never been honest about their finances, and until recently I had no idea exactly how well/poorly they were doing.

Then I was thinking, if DH and I can't even share how much we make with our own parents, how are others so open? How do they just spill all their financial details in real life? I'm more open here on my blog than in real life.

Do you know how much your friend's and family make? Do you share details of your financial life freely?

Broken Window

We have new double paned storm windows. Today the plumber came in to do our gas line and he opened two windows and broke the latches on both. He muscled the windows opened and I now noticed that the windows are unable to latch.

I am not sure how to bring up that he broke both latches. They were working fine because I've opened and closed both windows recently.

Should I let it go or tell him about it?

Webkinz...

I'm a bit behind my the times. As I find out last minute what the hot toys are. This year apparently my neice wants webkinz.

It's this toy where you purchase this doll, right now the hot seasonal item is a black cat, and you take this doll and register it online. Then you are able to play in this online world of games with your friends.

In this online world you shop and buy Kinzcash to pay for stuff. It's pretty nifty way to suck up the parent money. The toy itself isn't that expensive I think $10-15, but once a child has one they become addicted to having more and more toys within their collection. And they need to spend more money online to play games with friends.

Well I suppose my $10 gift will cost my sister a bunch of money more...oh well. Brillant marketing scheme.

Tithing versus Time Donation

I read the website Need To Be Debt Free, and think they are working really hard in pursuit of getting out of debt. They made over $10k net last month in income by working 2 jobs and overtime at their primary jobs. They worked something like 12-16 hours a day. I don't know if I could make that sacrifice to get out of debt by losing time spent with my family, but I do understand.

Anyway though, they mention a lot about tithing. Any extra money they make they tithe, or give 10%. I think it's fine, but I have suggested that they donate their time in exchange of money so they can get out debt faster and thus spend more time at the church and with family. I suggested that they divide the amount of money they feel they owe by their hourly rate and help the church by making flyer, stuffing envelopes, cleaning, cutting grass, basically anything.

Sure we donate money to charities monthly. But personally I don't find it very satisfying. The bigger satisfaction comes from actually going to the food bank and physically helping out. Or going to the woman's shelter and donating goods and helping them organize the goods. Those feel so much better.

Our roommate is a devout muslim and faithfully donates Zagat (muslim tithe and it's 12.5%). Anyway he also teaches Sunday School and helps out with prayers. The Zagat is a starting place, but he gives more time because he feels it's important.

Thus I do understand being loyal and having to give God 10%, but is tithing just because you have to? If it's not just because you have to, then why aren't you going out and helping the church above and beyond the money? Why aren't you donating more time?

Poll: Separate or Joint Accounts?

The poll for separate or joint accounts is now closed. Strangely the majority of people 65% have joint accounts. With 25% of people having 3 accounts, 1 joint and 2 separate. And only 10% of people having separate accounts.

I thought the number of couples having 3 accounts, would be the highest number. Because it seems like most people scream that couples need their own money and control of the money. Hence I thought having a joint account with my spouse and sharing all money was abnormal. Turns out it's not as weird as it seems.

It seems like most couples prefer to share their fiscal checkbooks.

To budget or splurge???

Here's the scenario...If you were remodelling your bathroom, and found tile you loved but it cost an extra $1.40 than you budgeted/expected. Meaning you had set your budget for $5 but found stuff you loved for $6.40 instead. This extra would cost you $700 extra to finish your project. Now you had come in and extra $200 on other items for your renovation. So it would just cost $500 extra.

Now would you pay the extra $500 and buy the nicer tile? Or would you buy tile you didn't love just because it fit in the budget?

Extra information. The couple is very financially wise. In fact they try to emulate the millionaire next door theory. So they coupon shop, and sometimes go overboard with being frugal. They save the maximum in your retirement accounts, have no debt except the mortgage. In fact their mortgage is due to paid off in 6 more years at 43. You pay extra money to the mortgage every month. They can afford the $500/month because they pay $1800/month extra to the mortgage, in fact they barely break a sweat.

But what should they do? Take an extra $500 and buy the tile they like? Or not buy the tile and stick to their original budget. Also they have extra cash in other sinking funds, so they can still make their $1800/month extra mortgage payment and instead slowly pay back their extra pot of money.

What should they do?

the 25% mortgage rule...

So a lot of experts recomend "the 25% mortgage" rule. Where you're mortgage including property taxes, insurance, interest is not greater than 25% of your salary. Some suggest this on a 15 year mortgage like DR, while others are content with a 30 year fixed mortgage. But which is right?

Well the average price of a house is $220k in the US while the median price was $227k. So assume the normal price of a home to be $225k. And a DP of $45k, so the mortgage would be $180k.

Now a 15 year payment @ 6% would be $1519/month. So PITI would be assuming 1% property tax and 1% repairs/annually, and insurance $600/year = $425 extra month = $1944/month PITI. This would require a net/gross salary of $7776/month or $93k/year. How many people make $93k, which is 2x the median salary in the US to afford just the average home of $225k?

A 30 year payment @ 6.5% would be $1138/month. So with the extra $425, the PITI would be $1563/month. So a family would need to earn net/gross $6252/month or $75k/year.

Honestly how many families earn that sort of income to stay within the 25% rules? I'd be very surprised to find many.

But I think for a couple starting out a 30 year fixed is not a bad choice. It makes it easier to afford a house. Plus there is the possibility of raises to help lower the % as they increase their incomes while the mortgage stays fixed.

But the 25% is probably best a guideline. It's not hard and fast, but something to really consider before you do anything. Personally I'm right at the 30% line and it's gone down since we bought. But we did consider what it meant to go higher and lower than the rule.

Budget Busters...

How to build a budget seems to be a common question for people in debt. Seems easy but what I've found from talking to people it's not the actual drawing of the budget it's sticking to it that's tough. So perhaps cash would work best to keep people from overspending.

But what I've found the major problem for people in debt, is budget busters. What's a budget buster? Well a too large mortgage payment, excessive car payments, large CC minimums, or huge student loans. Usually I've found that people are not overly spending on eating out, buying things, etc.

But those budget busters are something which society calls acceptable. Like stretching to buy a house that takes up 30-40% of your pay. Or cars which cost 25-50% of your salary. Or student loans 3-4x your income. These budget busters are all considered acceptable by normal standards.

Sure I think student loans, mortgages, and even car loans have a place in a financial plan. But not when they are budget buster. Not when you cannot afford to budget because there isn't enough money to cover basic living expenses. Then you've overspent.

Cutting lattes, cigs, eating out, cable, internet are nice solutions to trim a budget. It would save me $300/month. BUT that's barely a car payment, monthly property tax, or student loan payment. So you'd be better off cutting one of those big ticket items to make your budget really work, then trimming the fat.

There is nothing anyone can do to make a budget stick if 100% of the salary is gone to a car, house, and student loans, before you even get to food, clothes, and fun. But maybe I'm looking at most people's budgets the wrong way.

Wanting to be the Joneses...

Okay after my old college roomie visiting for last weekend and this weekend, made me a bit jealous. Not jealous where I wish for them to have less, but hopes that I can have as much.

So they both are working full time in SF earning obviously very decent salaries. And not being married and not owning a home means they have a ton of disposable income. It became very apparent from going out with them that they are awesome DINKS with tons of earning power. I also realize that they are on vacation so their spending is not typical.

But we sat chatting and talking over dinner and wine and realized that our lifestyles have sooo dramatically changed from college and living together. We no longer consider ramen noodles a meal and we both drive reliable cars (never had one and she had such a junker it broke down all the time). The lifestyle that once looked so beyond our reach we're now enjoying.

But back to wanting to be the Joneses. We spent the day out around the town and BF forgot his sunglasses. So he just went out and bought a pair of Revo Sunglasses for $230. This just set me back a tiny bit. But I realize they work super hard and deserve everything they earn. It just made me wish I had their life.

But then I snapped back to reality and realized it doesn't matter because you have to be happy with what you make period. So my friends are the Joneses, but hey they are very kind and generous by treating us to dinner. So I'd rather keep them as friends then chasing them away.

By the way these are not my only Joneses friends. My best friend is the same. And worse is they are major savers and investors too so they aren't irresponsible.

DIY versus paying someone...

Most people would say that doing it yourself saves you a lot of money. And in general I agree. But at what point do you stop and hire someone? We've done a lot of home repair, definitely more than average and I know my DH is handy. His family did pretty much all DIY. Unfortunately they learned the hard way that you occasionally should just pay someone to do the work around the house.

For example, our condo undertook building a backyard retaining wall. Beautiful, cheap, and relatively easy. Our share was $2k, great considering the additional value. However, we also need to repair the retaining wall holding up our parking pad. That is a much larger, more labor intensive job using special tools, not just hand. Could we have undertaken rebuilding it ourselves? Yes, but the scope of the project definitely made it worth hiring not only an contractor but engineer to certify the wall.

Another example of DIY not winning out is cleaning our gutters. One of our neighbors mentioned saving $150 it costs to clean our gutter by doing it himself. We nixed the idea when because we have a 5 story house and if he fell down, he'd die. Sure we'd have insurance, but there are some cases where it's better to hire a licensed/bonded professional who can accept the risk of falling off a roof. Besides the point that they are less likely to fall off the roof because they are an experience professional.

I guess the question is how to measure when a job even a small job is worth paying for because of risk, and a larger scope job is worth investing the time to do.

September Spending Wrap Up

Well I decided to sit and tally our spending for the month of September. This month was a lot harder to keep track of expenses, because we've had so many guests and still do. Unfortunately I didn't track our cash spending as well as I usually do, so I had to guesstimate.

But we didn't have as bad a month as I would expect. I estimated an extra $1000 in expenses and I think I was about dead on. We spent $550 on travelling. Which was still pretty good in all.

However for the month of September we spent $230 for gas, $110 overbudget. We fortunately only spent $537.92 on eating out because our parents paid for some of the meals. We also ate at home quite a bit spending $455.52 on groceries for the month.

I had been loading up on wine prior to my parents, in-laws, and friends arrival so I only had to spend $48.95 on wine in September since I had close to 6 bottles on hand. We finished 1-2 bottles a night depending on how many people were drinking.

Considering on average we had 2 extra people everyday this month I think we had a fantastic month budgetwise. We didn't totally blow our budget and I saved a ton by prebuying wine and some food stuff. Plus we were able to eat out some meals at cheap food court places which allowed us to only pay for ourselves instead of everyone.

All in all a nice month. We still have guests, everyone's finally leaving on Monday. I'm beat, this has been a stressful month and it's still carrying over to this month. This is our last really spendy weekend.

Part III: Splitting Dating Costs?

This part of the finances of an unmarried couple applies more to newly dating couples. I've found from interviewing dating couples, they fall into a routine where they both pay for things and feel it evens out. No one ever feels that one person is more put out than the other.

However when you start dating, I've heard from many singles it's tough. It's expensive and you never know how it will turn out. And they often hear from married/coupled friends to go on cheap dates. Which is great when you've already started more serious dating, but the reality is most people do not start out that way.

I think a perfect first date is coffee or a happy hour drink. Why? Because it's a cheap way to figure out if you have any chemistry. And if you don't it's easy to end the date while not suffering through an appetizer, dinner, and dessert. Then the next date can be a full dinner potentially or lunch.

But why is dating so expensive? Consider that most people will go out to dinner and have an appetizer, drink, dessert. Where I live, when all that is said and done with tax and tip at a restaurant where entrees cost $15-20 (average of chain restaurants), for a date you are looking at $60. Then a movie? Or music bar, etc. It adds up fast. But who pays?

Most men and women say men, but I question this. If both people are exploring the possibility of a relationship why isn't more the norm to just split the date? Why is the burden placed on one more than the other?

Our current roomie is single and he moans about the cost of dating. As a single guy it gets expensive to date. Plus even free dates like hiking costs him money because he has to rent a car, gas, and still pack lunch. Another cost of dating is looking good. This is more a cost factor for women than men. Having to maintain themselves to be able to attract the other sex.

So how did you split the initial dating costs? When and how did you switch to a more informal splitting of costs? Or is there a large disparity of income which makes one party more likely to treat the other?

Part II: Buying a house while being unmarried

Well yesterday we discussed how difficult it can be to merge finances as a couple. It appears to be increasingly difficult as you get older. Even harder to navigate is whether to buy a house together. At around 30 whether you are single or not, it seems many people get bitten by a bug to buy a home.

But the question is how do you buy a house together if you are an unmarried couple? The simplest route and one which I took is buying the house 50/50. Where both people put down approximately equal amounts and each pay 50% of the mortgage. Then if you split up, the house is split 50/50.

However the real trouble arises when there is a disparity between the couple regarding the down payment and affordability. K mentioned that they were in negotiations for how they will manage buying a house together as an unmarried couple. First problem is her BF will be supplying 90% of the DP, and she will supply 10%. This is causing a bigger problem because they have to negotiate all details in a written agreement because her BF's DP is a "gift" from his parents. Hence they need to settle what they are going to do.

BF wants the equity to be split on DP. But K wants to keep the equity she pays down because she'll be paying 50% of the mortgage. So I'm not sure what they are going to do. Because financially this is not just a business transaction, it's a relationship. I can see both sides of the argument, BF is taking more risk in buying the home by putting more money down. But K is also taking risk and she's paying down equity so she wants to keep her dollars.

But what is the answer? I guess we'll have to see what they decide to do. My advice? Don't buy the house, just get married then buy the house and it won't matter.

Part I: Finances as an Unmarried Couple...

Managing your finances as a unmarried couple is tough. There are many stages of dating, and even trickier is the many stages of finances. This weekend an old roommate (K) visited and is coming back next weekend. She's been with her BF for 3 years and they are 29 and 31 years old respectively.

So we were talking privately when she asked how DH and I manage our finances. We all had been joking about not having money and DH said "I never see my paycheck..." So she asked if we didn't have separate accounts? So we dicussed how to merge finances.

K said that even after dating three years and planning on moving in together next year, they hadn't discussed finances at all. She had no idea about his money yet, because they took turns paying for eating out. Then they knew the other person shopped and bought stuff but she didn't know if he had CC debt. She said it was tough because they were older, independent, and used to not answering to each other about every penny. They earned similar amounts of money but they didn't reveal to each other how much in retirement savings they had.

So she was a bit scared of sharing accounts and money. Having to be accountable to each other. But the plan was to move in and split all common bills in half. I couldn't give her much suggestions because I had nothing to hide when I met, moved in and married my DH.

I think that being an older, more established couple makes the merging of finances more difficult. You suddenly have to ask the other person to reveal their financial background. You have to share important decisions like buying a house, car, debt. You no longer have the final and ultimate say. It's so much harder to compromise when you've lived without ever needing to.

I don't know if K will ever have just one account. From the way it sounds even if they marry, K and her BF want to keep separate accounts. But I did suggest really discussing their future finances and finding out how much savings and debt they each have. She metioned they have glossed over these discussions but not in detail. He knows she's got a ton of student loans, and she knows he doesn't have much saved. But the details.

Part II...buying a home...