Thanks for all the great advice you guys give!
Power Bill: I hated my last power bill ($94), so I am now Whacking The Mole, unplugging things and asking myself and DH: "Are you watching that?" ... Thank you LuxLivingFrugalis! I also started reading my electricity meter ... Thank you Ima Saver! It really does help when you see how much you are using on a daily basis, rather than waiting until the end of the month and being "surprised."
Hair Cuts: DH has hinted that he wouldn't mind my cutting his hair ... Last time I was at Costco there was an electric clipper set w/ instructional DVD that was $24.99 and I went ahead and bought it ... In 2-3 haircuts, it should be paid for ... Thank you DisneySteve! (I'll admit I'm quite nervous that I'll screw it up, but I'm going to do it anyway.)
Dunkin' Doughnuts Coffee: This is actually a question for you coffee fans. Our Costco is now carrying Dunkin' Doughnuts Coffee, 40oz bag of Original Blend (Medium Roast) for $15.99. I currently use the Kirkland Signature brand, 48 oz for $7.99. The instructions on both packages call for using the same amount of coffee (heaping T per 6oz cup). I like what I am using just fine, but I have heard folks here and elsewhere raving about Dunkin' Doughnuts Coffee. I think buying one bag of this might be nice as a treat but ... Is it really that good? Do you think it's worth paying 2.4 times as much for? [Ms. Koppur, are you reading this?]
Archive for January, 2008
Thanks for all the great advice you guys give!
Haven't done an update on the house hunt for awhile, so here goes.
We have been doing LOTs of looking. All over the place. Not finding much focus. I started to get a bit frustrated and told DH I was starting to feel like this:
DH talked our situation over w/ one of his new golf buddies who is in real estate, and he said feeling like that is not uncommon for househunters here in Austin. The "problem" (if you can call it that) is that there are just so many nice areas in Austin to live, and if you are not limited by some factors such as job location, it can be very hard to narrow down your choices. In some towns, you can pretty quickly settle on one part of town you want to live in ... but not so here ... Too many great choices!
Nevertheless, we decided to focus on one particular area, one particular age of home, and one particular price range. Armed with those parameters, we found 6 houses to look at on Sunday that looked nice and ventured out boldly, feeling very confident. Well ... when we saw what sort of neighborhood we would be living in while finding a house that met our parameters, we realized that just wasn't for us. [Hmm ... isn't it funny how the internet photos didn't show the falling down trailer with 3 junker cars in the yard and Christmas lights still up on the same block ... LOL] We either have to spend more, lower our standards, or change the geography of our search.
So, back to square one, sort of ... Although I do feel better, because I know that we were able to set up some clear parameters once, and even tho they did not turn out to be the right ones, if we did it once we can do it again!
DH finished his on-line defensive driving course yesterday evening, then took the test and passed (w/ a fantastic 95% score ... pretty darn good in any circumstance, and really terrific considering the course was in English, his 2nd language). We immediately get a 10% discount on our auto insurance, good for the next 3 years. The course cost $20, and at the discount (based on our current premium) is $125 over 3 years, for a net savings of $105. It took him about 6 hours to complete the course, so that means he netted about $17.50 per hour of work ... Not too bad! Also, he seemed to really get in to taking the course and learned a lot ... He's not a bad driver, but if the course makes him even less likely to get in to an accident, then it definitely was worth the time! [When / if we purchase a 2nd car, I plan to take the course also.]
We filled our gas tank for the first time since getting our new tires at Costco. DH does a rough calculation of gas mileage each time he fills up (he uses the odometer to keep track of mileage between fillups) and he says our gas mileage improved from about 26 MPG to 28-29 MPG. Not sure if we can call the results of one fillup a trend, but I sure do hope it stays that high. I don't know if it's because we now have better (new) tires, or if it's because Costco fills their tires with Nitrogen ... I had never heard of filling tires with Nitrogen, but there was a brochure at the Costco Tire Center explaining how Nitrogen is supposed to improve handling & improve gas mileage. The tires on our car now have little green caps on them instead of black, which apparently is the symbol for nitrogen-filled. I can definitely say that the car handles better, tho' again I can't say whether that's because we now have new tires, they are filled with nitrogen, or both. I'm not a car person, so I can't offer an intelligent opinion on the "filling with nitrogen" issue, but would love to hear what others think. By the way, we didn't have to pay anything extra for the Nitrogen. That's just what our Costco Tire Center is using now.
I splurged this past week when grocery shopping. I bought a carton of Tropicana orange juice, and a bag of fresh baby spinach. Each was $2.99, and neither were on sale. [With the soaring cost of produce, we've been eating much more frozen lately, and buying fresh only when we find a "bargain."] They were both on my grocery list, so neither was an impulse buy but was a planned splurge. Hard to believe I spent that much, and hard to believe buying fresh produce that is not on sale is now considered a splurge! Funny times we live in, eh? They sure tasted GREAT, and they are good for us too ... DH & I both enjoyed every sip and bite...Yum!
(Navel-Gazing Alert: Be prepared to read the word "I" many times. Although this is a very self-absorbed post, if you are feeling discouraged about your financial situation, it is my hope that my little story will encourage you.)
For you young 'uns who may not know who Ann Landers is, she wrote a no-nonsense advice column that was published in newspapers nationwide for decades.....
Reading one of Ann Landers columns when I was in my mid-20's led to what Dr. Phil would call a "defining moment" in my financial life. I had forgotten about it until recently, when I was thinking about the state of my finances and pondering how I had gotten from where I was back then (anxious, had some nice department store clothes in my closet, but at a low point ate nothing but spaghetti noodles w/ ketchup for 2 days because I was out of money and that was all I had in my kitchen) to where I am today (contented and confident ... no Warren Buffet, but let's just say I'm pretty sure I'll never have to eat spaghetti w/ ketchup again unless I want to).
I don't remember what the reader had written to Ms. Landers about, but they were basically whining about how they were not good at something-or-other because their parents had not taught them properly. Ann Landers' reply was that the reader, who was by then an adult, had the responsibility to take charge of their own life, parent themselves, seek out the information necessary, and teach him/herself the needed skills.
Growing up, thanks to my parents and educators, I did learn some very important money-related lessons. I knew the value of hard work and earning my own money, to give to those less fortunate, to take care of (and refurbish) things to make them last, to make health insurance a priority, to balance my checking account, to pay off the balance on my credit card every month, and to build a good credit record.
However, I knew diddly-squat about comparison/bargain shopping, budgeting, saving, or investing. Emergency Fund? Retirement Savings? HAH! I knew nothing about any of those things, and I had an assortment of lame excuses, but the biggest one was that my parents had not taught me ... WAAAAH! So, Ann Landers response to that whining reader was a wake-up call to me ... I realized with quite a bit of embarrassment that I was just like that reader, sitting back and moping instead of taking responsibility for my own financial life.
I wish I could report that I immediately set out on a course of self-improvement and became a perfect financial wizard within 6 months. That wasn't what happened. Still hasn't happened, in fact! But I did start taking wobbly baby steps ...
The first thing I did was go to a bookstore and examine every single book on the shelves about personal finance. I don't remember how long I stood at that shelf, but it was hours. I ruled out books with a narrow focus (I was looking for good, general, broad advice). I also ruled out books that were offering pie-in-the-sky, get-quick-rich formulas or books where the author seemed to be hyperventilating (I did not want to add to my sense of anxiety). The book I ended up choosing was "Making The Most of Your Money" by Jane Bryant Quinn. I had seen Ms. Quinn in Newsweek magazine, and she seemed to offer very sensible advice in an intelligent but clear style.
I started reading that book and applying the principals. I did not do this as quickly or as systematically as I ought to have, but I stuck with it and made halting progress.
I started by "forcing" myself to save a bit from my paychecks. Back then, I was unfamiliar with the expression "pay yourself first" but it was what I did. When I went to the bank to deposit my check, I would put a bit away in a CD. [This was a comfortable first step for me, because I knew I could access that money, by surrendering some interest earned, in event of an emergency. I never did cash out a CD early.] This step was made more challenging by the fact that at the time I was dating a guy who was terrible with money, and he scoffed at my little attempts to save. [I told him about opening my first CD and he said it was such a small amount that it did not matter. Boy was he WRONG! It did matter!] I decided to keep my saving secret from him, and I kept at it.
Eventually, I saw my efforts at savings pay off. When minor emergencies arose, I was able to take them in stride. When I got married a couple years later (not to the guy who mocked my savings efforts but to my wonderful, supportive DH), I was able to pay for my own (modest but nice) wedding in cash.
I also started doing price comparisons, bargain-shopping, and buying in bulk where appropriate. I cut back on takeout food and started eating at home more and more (nothing fancy ... sometimes it was just the stereotypical single gal's sandwich eaten while standing over the kitchen sink). At that stage in my financial development, I still was not tracking my spending or working with a formal budget, but I was learning ways to cut back to make saving easier.
I really ramped up my efforts after I got married. I think it was the realization that I was suddenly responsible for a person other than myself that pushed me to become even more serious about securing our future. I started tracking every penny spent, and developed a budget. Many an evening after work I could be found sitting on our bed with the budget book (a green columnar ledger) and receipts spread out on the comforter. As time went on, we trimmed our spending more and more, gradually learning to spend less without feeling deprived. We budgeted ahead for irregular expenses (car repairs, taxes, pet illnesses, etc.).
We started saving for a down payment on a home, and I started reading up on home buying. When we did buy a home, we did not go for the amount the lender said we could afford. By that point, I felt confident in my own ability to "crunch numbers" and I calculated on my own what we could comfortably afford ... We ended up setting our sights a bit lower than originally intended and bought a condo.
When DH's company started offering a 401K, we began contributing to that. I don't remember the percentage we started at, but it was a small amount at first that we gradually increased. (A few years later, when my company started offering a 401K, we immediately started contributing up to the company match, and eventually raised the amount even more.) I started reading about mutual funds, and I chose 2 funds that required no minimum initial investments but we could invest in by having $50 automatically deposited each month. Neither of those funds were roaring successes and we ended up cashing them out in a little over a year, but they were part of the learning process. I read about a then-brand-new Treasury investment called TIPS and opened a Treasury Direct account. [That one was more successful. We still have our Treasury Direct account, and I still buy TIPS in addition to T-Bills.] I took a tax course at H&R Block.
Then, we started to prepare for DH to pursue his dream of owning his own business. I've blogged previously about the steps we took to prepare for him to leave his company and go out on his own, so won't bore you again.
That step has had the biggest payoff in terms of our financial life. It was a big step. But it was all of the little steps taken previously, learning to budget and save and invest, that made this big step possible.
Of course, we didn't stop there. When the internet became part of our daily lives, I started shopping around on-line for the highest-yielding bank accounts. We bought a house. We paid off our mortgage, while maxing out our tax-deferred retirement savings. We relocated to a lower cost part of the country. Our budget is a constant work in progress. I'm still trying to learn as much as possible about investing, and know I have much more to learn. I constantly seek out new sources of information (newspaper, books, magazines, on-line) that I can learn from and then apply what I have learned. Just this week at the library, I checked out another new finance book, "The Number" by Lee Eisenberg (note that I now check books out from the library instead of buying them!) ..... I joined the Saving Advice forum! .....
I know I still have much to learn. I want to find sensible ways to (legally) lower our tax bill. I must decide a reasonable amount to spend on our next house. I am trying to get a handle on how much we really should have saved by the time my DH turns 50, when he plans to try out for the senior golf tour. And there will be other issues that I haven't even thought of yet.
It's a never-ending journey that I assume won't end until the day I die.
When I think back on the girl I was when I read that Ann Landers newspaper column, I can honestly say to myself: "You've Come a Long Way, Baby!"
I read that financial knowledge peaks at 53 ... I'm excited to see where I'll be by then!
Thank you, Ann Landers! May you rest in peace.
1. AAA MMA / Bank of America: Anyone else have the AAA-endorsed MMA? I do. It was with MBNA, but then MBNA was bought out by Bank of America. I was pleasantly surprised to see the rates stay high for awhile after the merger, but I recently got a letter from AAA and it seems they and BofA "got a divorce" at the end of the year. I checked the APY on my BofA account and it had gone down a bit. It's not to the point where I'm going to close the account yet, but I am disappointed and will keep watching that account closely. It's getting harder and harder for us savers to find good rates. *sigh*
2. Credit Unions: Broken Arrow made a comment on my last entry that made me think I should look in to CUs again. I had looked in to opening a CU account in the past, but the rates they paid just weren't attractive enough, so I basically of ruled them out indefinitely. BA's post reminded me that I should stay open to new ideas, so I checked out CUs in my area. Unfortunately, they still don't make sense for me. Either I'm not eligible to be a member, the rates paid are too low, or the rates that are attractive are on accounts that have requirements that don't work fo rme. For example, uhcu.org offers a checking account that has a beautiful APY of 6.01%. However, it has the odd requirements that you have 10 debit card transactions and an automatic deposit transaction every month. I don't use debit cards, and I can't get an automatic deposit. I guess CUs must work for some people because I've read entries by people who love them, but they just don't seem to be a good fit for me at this time.
3. ETFs: ETFs are another thing that I have looked in to and they just don't seem to make sense for me. As they grow more popular, I look at them as an option occasionally; just did it again. I'm going to stick with my low cost mutual funds. Frankly, I'm puzzled as to why ETFs are so popular.
4. CVS: I'm still trying to figure this one out, how some people are so thrilled with the deals they get. They did not have CVS in Seattle, so CVS is new to me since moving to Austin. I looked carefully at this Sunday's flyer, but didn't see anything enticing. It may be because I buy most of my hygiene / toiletry / cleaning items at Costco and get better prices there by buying in bulk (buying the store brand when available). The other things in the CVS flyer seemed to be big brand name junk food or prepared food items, not things I buy regularly. I also do Harris Interactive surveys, and I can get free gift cards to use at Target for the few things I don't get at Costco or at the grocery store. For now I'm not jumping on the CVS bandwagon, but I'm going to keep my eye on those posts of those of you who are fans!
5. Suze, Suze, Suze! Suze Orman was on Larry King the other day. She made a comment about the real estate market. She said rather flippantly that you can get a bargain on a house if you can buy a house for $100K when they are asking $200K. That's 50% off of asking (obviously). That may be a reasonable number in some parts of the country, but not here in Austin where prices have not increased as dramatically. But of course my DH latched on to that comment. We have been having disagreements ... We both think prices are going to fall further, but he thinks they are going to go WAAAAAY down and so we should wait indefinitely or offer about 60% of asking price. I, on the other hand, think that if we could get a reduction of about 15% on a competitively-priced asking price on a house we like, that would be a fair deal. Suze, Suze, Suze! Am I going to be stuck in this small apartment for YEARS thanks to your casual comment?!? We'll see.
6. Tire Shopping: We're almost due for new tires, so I've been price shopping. Compared Firestone, Discount Tires, and Costco. We decided on Costco, as their total price for the same tires is lowest. It probably helps that they are having a $60 off sale that they seem to have each January. Some time in the next couple weeks, we'll plan a shopping and lunch trip to Costco. [You can't make an appointment, and usually end up waiting about an hour, so we might as well have lunch and do some shopping while we wait.] We're going with 80,000 mile tires which of course involved a discussion as to whether our car would last that long. It's a Toyota Camry that has almost 120K miles. We decided for that car 200K miles should be no problem. Total cost will be just under $300.
7. Estimated Taxes: 4th and final estimated tax payment for 2007 taxes must be mailed by tomorrow. I'll drop a check in the mail this evening, after the mailman has come and gone for the day. Of course I could wait until tomorrow morning, but I'm always nervous that something will happen and I'll be unable to mail it. Very silly, I know, but that's how my mind works, and I'll be da**ed if I end up getting a penalty for paying late. As always, I will be writing "YOU'RE WELCOME!" on the memo line. Yes, it's silly & a bit immature that I expect thanks for paying every penny of taxes I am legally required to pay, but somehow writing "You're welcome" on the check helps keep me from getting angry when I pay my taxes.
8. When I was preparing to pay for the new tires and for my estimated taxes, I started thinking back on my financial life and how I got to the point where I could absorb "irregular" (tho expected) expenses like these so smoothly, without stress ... There was a clear turning point (what Dr. Phil would call a "Defining Moment") that I had forgotten about until now. I'll write about that next time, as it may be a bit long. But as a teaser, I'll just say that Ann Landers deserves much credit! Curious? Stay tuned ...
In November, I wrote about getting a new HDHP (High Deductible Health Plan):
The next thing I needed to do was open a HSA (Health Savings Account). It was difficult choosing which institution to use for our HSA (none of our options seemed perfect), and 2007 tax year contributions don't have to be made until April 15th, so I put off making the decision.
However, it's time for DH to get his teeth cleaned, and of course we'd like to pay for the cleaning with tax-free money, so it was time for me to get on the ball and choose a HSA.
There's a fee when you open a HSA, and there is a fee when you close a HSA (no matter how long you've had it), so I wanted to choose the institution where I thought we'd be happy staying for a long, long time.
I narrowed my choices down to 3:
- Exante Bank
- HSA Bank (division of Webster Bank)
- HSA Resource Bank (division of Stearns Bank)
Exante Bank: I kept this as a top-3 choice because it was recommended by the health insurance company and I think I read that we would get reduced fees, etc with them because of the insurer we chose. But I ruled them out first. Their web site wasn't user friendly (no search feature, etc) and I couldn't find info on fees. Called customer service, and they said that fees varied so they did not publish them, but that the schedule of fees would be sent AFTER I opened my account ... um, not acceptable! Truth be told, I felt like I was dealing with an insurance company instead of a bank, and since they were recommended by the insurer I'm suspicious. I'd rather keep my HDHP and my HSA at arm's length from each other, with myself in the middle & in charge.
- HSA Bank (division of Webster Bank): Kiplinger's rated this one highest, mainly because of their high interest rates and low fees. I did find their rates to be a bit higher and their fees a bit lower than many others. I'm not familiar with Webster Bank: bankrate.com currently gives it a 3-star rating which is okay.
- HSA Resource Bank (division of Stearns Bank): I've been banking with Stearns Bank for awhile, and I adore them. Their customer service is hands-down the best I have ever experienced from any bank. It's very personal; when you call, you get a live human, and in fact you can speak with the same specific live person if you want to. I ask questions, and they never make me feel stupid or fail to answer clearly. Current bankrate.com rating is 5-star, and since I've been dealing with them it has stayed high. Unfortunately, their interest rate is a bit lower and their opening fee a tad higher than HSA Bank. And the worst part is that they charge a $25 annual fee (while HSA Bank charges none)!
On paper, maybe I should have gone with HSA Bank. But I decided to go with HSA Resource Bank in spite of the annual fee. Emotion played a role in the decision. It's reassuring knowing that if ***KNOCK ON WOOD*** DH or I suffered a medical crisis or long-term illness, our HSA is with a solid insitution that we can rely on for excellent, highly personalized customer service.
I did my app on-line, printed it out, and mailed it off with our initial contribution this morning. Then I scratched "Set Up & Fund HSA" off on my calendar where I keep a list of things to do called "Important This Month." Ahhh.
Yesterday evening I got a chi-chi hairdo at a fancy salon for only the 2nd time in my life. The first time was about 30 years ago, when my mom took my badly-in-need-of-a-confidence-boost-adolescent-self to a nice salon for a Tony Tenille style cut. At all other times, I've either let a family member (mom, sister, husband) cut it, or have gone to an inexpensive chain salon. For the past many years I've just let my hair grow long, and then once in awhile I'd get some whacked off for free at one of the chain salons to send to Locks of Love. Thanks to good hair genetics, I only rarely get a grey hair, so I plan on continuing donating as long as I can.
I've been overdue for a cut, but hadn't had any luck finding a place that would cut my hair for free. I was thinking about letting DH just cut it and mailing the hair off myself. But as luck would have it, my proscratination paid off and I found out that a fancy-schmancy salon here in Austin was giving free haircuts for Locks of Love donors! I went in yesterday and told the very nice young man who cut my hair that he could do anything he wanted with my hair as long as it was age-appropriate, that could be "wash & go" (no styling or product required), and that he left me enough so that it will be long enough to put up in a pony tail when the weather gets hot. I got a nice shampoo, conditioning treatment, cut that took what seemd to me a really long time (much longer than the usual 5 or 6 snips I'm used to), and professional styling with blowdrying. For me, all of this was a real luxury!!! [I know some people treat themselves to something like this often, and I'm not saying there's anything wrong with that, but for me things are much more special & appreciated when they only an occasional thing ... As in once every 30 years!]
What I thought was really cool was that my hair is thick enough the stylist decided he could do 2 ponytails, which means that the hair cut yesterday will make hairpieces for two kids. And he was able to cut off a whopping 14-1/2 inches. Yes - Proscrastination does pay sometimes, and not only for me!
Of course, I tipped the nice young man generously ($5 --- I hope that's generous --- Come to think of it I don't know what the going rate is!) since he did such a nice job. And I had to drive to the salon, but it was right by Costco so I made up a list before I went and did a Costco run to make the trip more cost-effective. All in all, I'd say it was money well spent.
Oh ... In case you're wondering what the new 'do looks like, think Diane Keaton without the highlights when she uses less styling product:
And do I plan to keep getting my hair cut at fancy salons? Naw ... Not unless I can get another free cut. But it sure was fun.
Just pulled one of my free credit reports at www.annualcreditreport.com
I know that ideally I should run one every 4 months (rotating the 3 credit reporting companies each time I pull the report), but honestly I'm averaging one every 6 months. I must really try to do better. It's such an easy thing to do; no excuse to not stay on top of that.
I've already made notes on my calendar 4 months and 8 months from now.
The report's clean --- No sign of identity theft --- No companies reviewing my account that don't have a right to (tho' really, why does Discover have to review it EVERY SINGLE month???) --- Whew!
I've checked my SCORE a few times in the past and paid for it, but DH told me that was ridiculous, and he was right. I was just doing it out of a sense of competiveness [as in "my score is higher than xx.x% of Americans, nanananananah."] --- silly, huh?
I no longer care what my score is ... well, I do care a little bit still (am I pathetically competitive or what?), but I'm not going to allow myself to get suckered in to paying for it. All that really should matter to me is staying on top of identity theft.
Five months ago, I wrote about my former neighbors "The Jonses" who lost their home in a foreclosure auction.
The bank that now owns the house just listed it for sale.
Since I have moved away from that area, I do not know how The Jonses left the house. Did they sneak away in the middle of the night? Did the sherriff's office have to force them out?
It is frustrating to think about how The Jonses desire to live above their means (and the mortgage lenders who allowed them to keep refinancing up, up and away) ended up costing so much to so many. For The Jonses themselves, I'm sure it cost them and continues to cost them an incredible amount of stress. (I wonder how their marriage is now?) The bank obviously lost. Their neighbors lost. But there were other losses as well that aren't so obvious: The county and city and all of the citizens who rely on the county and city services lost when The Jonses stopped paying their property taxes once it was clear they would lose the house. Our neighborhood home owner's association and all of the residents lost when The Jonses stopped paying their homeowners dues and the association had to use employee time to file a lien against their home. And no doubt the negative ripple effects spread even further than what I have thought of.
But you know what? In spite of the doom and gloom tone of this entry so far, I actually feel some hope. The reason is the price that the bank listed the house for. I know roughly how much was owed on the house, and I know that the bank is taking a pretty substantial hit selling at the price they have listed for. It's a semi-competitive price, the bank is going to lose money, and someone is going to get a pretty good deal on the house, especially if they can get the price knocked down a bit more. [The list price is about mid-point between what was owed and the lowball offer that DH & I threw out on the house months ago.] This gives me hope because it shows me that at least in this one particular case the bank has decided to "wake up and smell the coffee." They are not trying to maintain an over-inflated asset on their balance sheet. Looks like they are willing to cut their losses and move on. Yes, it sucks for anyone in The Jonses neighborhood who is also trying to sell their house right now and has to compete against that house. But in the long run, mightn't it mean that we are ever so slowly starting to work our way out of the housing market mess?
Here's my unsolicited tip of the day ... Get off of your computer, get out of your car, and physically walk in to one of those new bank branches that are sprouting like weeds. Ask them if they have any special promotions. New branches may have promotions to attract new customers that you won't find out about unless you ask. I did that yesterday.
I was able to open an MMA with an APY of 4.75% that is locked in for 180 days. I really like the "locked in" part given the direction that interest rates have been going. The new branch was offering this higher rate and the lock but other branches of the same bank weren't.
I also opened a free checking account with $100; it doesn't pay any interest but I'm getting a free $75 Visa Gift Card.
I've decided to take it a bit easy on myself for my 2008 $20 challenge. I'm going to keep track of all the times I save money or earn a bit of extra money using methods that I learn about right here on Saving Advice. I will cheat a bit by including things that I learned about from all of you in the past, such as doing Pinecone surveys. Since I learn so much everyone here, I've no doubt my numbers will be big this year! They'll certainly better than 2007.