Finance for the Rest of Us

Trying to cut back on some unnecessary expenses, I was looking into terminating my contract with DirecTV to save us roughly $90 a month. My wife was on board with this as we rarely ever watch television.

Apparently they want $20 per month left on the contract to cancel. This was raised from $12.50 that they used to charge. It’s still not an unreasonable amount, I guess. So, in my head, I thought: 9 months left on the contract x $20 = $180. Much better than the $810 it would cost me to fulfill the contract. Right? Right.

But hold on here, chief. I was informed that there is not 9, but 20 months still left on my contract!

How is this possible? I signed up 15 months ago to a 2 year agreement and haven’t signed anything OR agreed to extend my contract OR purchase new services since.

But, you see, sometime in June of last year my receiver started "shutting off" out of the blue. It just turned itself off. It took about 3 minutes to reboot it, and it would come back on.. And then go off again in a few minutes. This continued for weeks before I finally contacted DirecTV. They walked me through the steps to fix it. Of course they were unable to resolve the problem; So the solution was to replace my receiver. I was fine with that. At the time.

The problem: DirecTV extended my contract for another 2 years from the date of the new receiver. This is for a box that simply replaces their BROKEN one they had sent me before. I even had insurance on the broken one! The representative I spoke to actually said, "Somebody has to pay for the new box.” Why shouldn’t it be me?

Complaining to DirecTV was futile. In fact, if you check Google you can find almost a half million results about class action lawsuits filed against DirecTV for this shady business practice. It seems that they are all in vain though. It’s really a shame I did not know about this prior to signing up with these scam artists.

I don’t want to sound like a conspiracy theorist – but apparently my receiver can just keep "mysteriously" breaking for no reason and of course they just keep sending out a new one so they can just keep tacking on another 2 years forever. I wonder what the life expectancy is on this equipment? 6 months?

I haven’t decided if it would be worth it to pay the 20 months ($400) now to end my contract or wait a few months for it to go back down to a reasonable amount while having some semblance of entertainment. It’s a terrible situation.

Popularity: 12%

I’ll admit it. I’m a big fan of making peanut & jelly sandwiches. They’re easy to make and they’re cheap.

But did you know that eating one can help save the environment? Well, if you believe everything Larry West says, that is.

In his article. he outlines the following points:

• By eating PB&J for lunch over a hamburger you save almost 3.5 pounds of greenhouse gas emissions. Including 2.5 pounds of carbon dioxide. Which is about 40% of the carbon you would save by driving a hybrid vehicle every day.
• Every time you substitute a PB&J sandwich for a hamburger you save approximately 280 gallons of water that would be used to water the cow the hamburger came from.
• Animal products require 6 to 17 times as much land as soy to get the same amount of protein. Eating a PB&J sandwich saves as much as 12 to 50 square feet of land from deforestation, overgrazing, and pesticide and fertilizer pollution.

I think I’ll go make me one right now. Not because I’m trying to save the world, and not because I don’t enjoy a steak as much as the next guy, but because I’m hungry and PB&J is quick and delicious.

Popularity: 4%

I’m a huge soda junky. I always have been. In my teenage years, I would squander my money on Super Big Gulps at the 7-11 near my house multiple times a day. Doing some quick math, I must have spent at least $2,800 a year on pop alone.

10 years later I still drink soda on a daily basis. Not quite as much soda as I used to, but a lot more than I would like. I now probably average 90 ounces of diet soda a day. A huge decrease compared to when I was younger, but I doubt anyone would consider that a healthy amount.

In the past, mostly in an effort to get healthy, I tried switching to water. I don’t like the water from our tap. It tastes like you would imagine sink-water would taste after washing your dishes by hand. There’s no identifiable strong taste to it; but it definitely has some subtle traces of the greasy hamburger meat you had for dinner last night.

Bottled water was costing anywhere from $3.99 to $6.99 for a 24-pack depending on the sales when I bought it. I do think it saved me a little money over soda, but I didn’t enjoy it. I would drink it to the point where the thought of drinking any more made me queasy. And it never refreshed me as soda did. An ice-cold water just isn’t as refreshing on a hot summer day as an ice-cold Pepsi. It just isn’t.

Thankfully, I may have found a delicious, frugal medium.

The first thing I did was take care of my water issue by investing in a water purifier pitcher. The water filter, which I purchased at Walgreens, cost me only $9.99 and makes my tap water taste great — at least as good as any bottled water available and so much cheaper and environmentally sound.

The water wasn’t enough, by itself. I needed something to satisfy my sugary soda addiction. While browsing the drink aisles at Wal-Mart I came across this:

Iced Tea with Peach

It’s a tea mix, available in these nifty little pre-measured tubs that you can add to your now pure water for a cheaper, delicious and (maybe?) healthier drink.

They come in at least a half dozen flavors, so pick the ones you like. I recommend Peach, Lemon, and Raspberry. But so far they are all good.

They’re also sugar free with artificial sweeteners added; basically the same stuff you would get with diet soda. There’s 5 calories per serving, but compare that to regular soda at around 150 per can and you reap a huge caloric savings.

There’s no need to refrigerate them as with soda, and the “Best By” date is over 2 years in the future. Since the tubs are individually packaged,  one package of tea could end up lasting you a very long time. That is if you have some self control and don’t drink it over the course of a week like me.

Each package costs me $1.79 at my local Wal-Mart. Each tub makes 2 quarts (or more if you make the drink weaker, like I do) of tea for a total of 3 gallons per package. Doing some price comparisons for the average price of soda, I came up with the following spreadsheet:

Cost Comparison for Soda vs. Tea Mix

As you can see, not only do you get a lot more product in the package, its also cheaper by the ounce than soda. You can have four 12-ounce tea drinks for the same price as one can of soda. And that is if you’re buying your soda at $2.99 per 12-pack. Frequently we would end up buying it at over $4.00 for 12 cans when it wasn’t on sale because “it’s the brand we like.”

To put it in another perspective, if you spend the $5.99 above on the iced tea mix instead of soda; you would end up with 1285 ounces of tea vs. 288 ounces of soda. That’s one huge, delicious difference.

Popularity: 23%

Today, I received 3 bills from a lab that our doctor uses in Texas. My wife had went in for general checkups and the lab is where they sent her tests to be analyzed. To be honest it kind of bummed me out. I already had to pay the co-payment. I already had to pay the insurance premium. I already had to pay the doctor. I even already had to pay some machine manufacturer just because the doctor was using their equipment. And now I have to pay the lab bills. Getting healthy isn’t cheap.

I noticed a blurb at the bottom of one of the bills that said “Pay your Bill Online.” Not particularly wanting to waste 3 stamps to send these bills and my checks back, I went to their website and was pleasantly surprised by this:

Saving 20% on Medical Bills

Paying the bill immediately and in full saves me 20% off the entire bill!

Granted, all three of these bills were under $100 each, so the savings isn’t huge. But I never would have found out about this little gem had I not decided to pay the bill immediately upon receipt and took the time to go to their website. If someone had just read the paper bill itself, there’s nothing mentioned about saving any money by paying on time or in full.

I’m definitely going to start checking for any discounts like this on all the other bills I receive.

Popularity: 3%

Silver Jeans… No, not the color. The brand.

My wife came home today to tell me all about Silver Jeans. Apparently a girl at my wife’s work came in wearing these hot jeans which cost a hefty $280.00 at a local clothing boutique. No longer are Rocawear or XOXO good enough for the In crowd. Silver Jeans are the next big thing.

After a brief discussion on why we can’t afford to buy the new In jeans for my wife (We don’t make enough. That girl lives with her parents. Etc. Etc.) I decided to do a quick Google Shopping search on the jeans. Expecting to see astronomical jean prices on every trendy website; I was mildly amused that the highest price I found for the jeans was only about $90.00. The lowest I found was $30.00. Even reputable stores like Macy’s and JCPenney had them listed at around $54.00.

I’m not sure if this is a sad post on the plight of the gullible American consumer; or if it’s an educational post on how you should definitely Shop Around before making expensive (and stupid) purchases… But one thing is for certain: I’m seriously considering a side business buying these $30.00 jeans and reselling them to my wife’s friends.

Popularity: 16%

When we signed up with Verizon after our previous carrier was bought out by them 11 months ago, certain changes came to our plans. No longer could we text freely with reckless abandon. Our monthly minutes declined. Our data usage was squelched as the only phones that would “work” with our new plan were phones that didn’t support the web.

In an effort to save money, we declined to sign up for an unlimited text message plan under Verizon. It would have cost us $20 extra per phone per month. A luxury we could ill afford at a time where we’re having a hard time keeping up with our necessities.

And then the texts came pouring in.

From my wife’s family, who don’t seem to understand that “We don’t have free texts” means “Don’t send us funny text forwards every day”. To those lovely strangers whom, after a year, still don’t understand “This isn’t Cody’s phone number. Please stop sending me text messages.” To Dominos informing us of their new special pizza deals which we never signed up for – we’re assuming Cody did.

Should we dare to send a text to each other; we get hit twice. 20 cents for sending the text, and another $0.20 for the other phone on our plan receiving it!

The last six months of bills read something like this: $129.62, $128.70, $87.38, $133.80, $98.00, $116.81. All of these from a plan that should be costing us $59.99 a month.

Speaking with Verizon offered no help. I can not turn off texting on our phones. I can disable “premium” texting, which I did, and it did not stop picture messages from coming through at 25 cents a pop; so I’m unclear what Verizon classifies as a “premium” text. I can also request to block each person that texts us, individually. Talk about an exercise in futility. 

I decided to enable unlimited texting on our phones. It won’t save us any money over not texting at all. But, apparently, since we can’t stop texting entirely… It would have saved us $277.66 had we went ahead and ordered unlimited texting when we signed up with Verizon 11 months ago.

In the end it makes me realize that it’s not always my own decisions and self control that impacts my finances. Without alienating friends and family, the cheapest option (both financially and socially) in our case was simply biting the bullet and ordering unlimited texting.

Popularity: 16%

This year I did something that I have been putting off for too long; I filed for Homestead Exemption on my house.

About four years ago someone had mentioned to me that I should file for Homestead Exemption so creditors couldn’t force me to sell my house.

“Who cares?” I thought to myself; I was on good terms with all of my creditors (at the time). This sounded like it’s for people who want to get out of their responsibilities!

And then everything went downhill. I still don’t believe I have any creditors who could force me to sell my home to repay my debt, but I am not on friendly terms with a few.

Regardless, that’s not the reason for my filing. The reason I filed for Homestead Exemption this year was that another smart individual informed me that doing so would save me money on my property taxes.

Saving money on property taxes? I’m all for that!

So down we went to our county clerk and spent literally 5 minutes answering easy questions such as “Mailing Address?”, and “Is this your primary residence?”

Just how much would I be saving for 5 minutes of my time? 25%! My property taxes for 2010 are now 25% lower and they will remain 25% lower until I move or sell my house without re-filing.

The one caveat of this process is that you must inform the county clerk once you move or sell the house. Not doing so will allow the county to reclaim the portion of tax you saved while you were not living in the residence should they find out about it.

Popularity: 5%

My savings account started out as a No Fee savings account. I have a history of not using them and I knew if I had fees attached I would end up paying the bank far more than I was earning in interest.

There was a trade-off with having no fees, and it was that the interest on this account was pathetically low at 0.02%. At the time I opened it, the average was over 5%.

Things have changed. According to Bankrate.com, even the best U.S. savings account is paying a mere 1.5% APY today.

If the bank were to lower my interest rate, I don’t think I’d mind. I’m not making any money off the account anyway. The problem I’m now facing is that even though my ultra low rate hasn’t changed, my bank has decided to add fees to my savings account due to the economy. My account now charges $5.00 per month any time the balance falls below $300.00. And for my account, this would have been every month for the past year.

What’s a guy to do? Close the account? I have bills linked to it. It’s also linked to my Paypal account. It offers instant transfers to my checking account in case I need to cover a check in an emergency. It has its uses. But making money is not one of them.

In addition to this, my bank has also began implementing a checking account administrative charge if I fail to have a Direct Deposit once per month into my checking account. Since my employer does not offer direct deposit, and since I must also keep this account for work-related reasons, I’m kind of shackled to paying money to a bank for ‘allowing’ them to use my money.

It’s a warning for anyone that uses a bank account that you should always know what fees are on your account at all times. Those fees can quickly eat up any sort of interest you’ve gained. In my case, one month of fees will eat up more interest than my account has accrued over an entire year.

Popularity: 3%

We’ve been looking for a new Dachshund for a while. We already had one (a male named Jasper) and we wanted to get a female to give him some companionship. I know it sounds crazy, but ever since my wife started school, Jasper had been very depressed. Most days he would just lay on his bed waiting for her to get home. Not even getting up to eat until my wife’s home. It was very odd.

So we’ve been looking for a female but they seemed to be somewhat of a rare breed out here. The ones we did find were from stores and they cost between $1,000-1,700 for pet AKC registration. Now, to me, that’s a tad bit on the ridiculous side of things. We purchased Jasper for $350 with full AKC registration… Albeit, while we were living in Oklahoma. Well, a couple weeks ago we found an ad in the paper for Dachshunds for only $300!

I figured there had to be something wrong with them (mixed-breed, no registration, pet registration, etc.), but we called, made an appointment, andeventually came home with a beautiful little girl.

The dogs are doing great. They play with each other all day and sleep together at night. They’re already really good friends. But one of the thing we really didn’t account for in our frenzy to get this dog for so cheap was how much extra she’s going to cost us per month.

It started off with my wife bringing home “puppy-sized” toys. The toys for the bigger dog are much too big for a puppy, right? $20 here. And, well, we certainly can’t feed them the same kind of food right? Puppies need puppy chow! $15 there. What about baths? She’s only 8-weeks, she can’t use normal dog shampoo. $9 for that.

And that’s just the start. What about all the time and effort I have to put in cleaning up twice the dog droppings? Giving two dogs a bath instead of one? Clipping two dogs nails? Feeding and watering two dogs? Letting two dogs outside multiple times a day to use the bathroom? Time is money, and the dogs need a lot of our time. We find ourselves buying more than twice the dog food now. Why is that? You’d think since she’s a puppy she couldn’t eat as much, right? Wrong. They have turned eating into a competition! They have to eat their own food faster than the other one so they can hurry and get to the other bowl before it runs out.

And don’t even get me started on the price to replace stuff that the puppy chewed up. Dachshunds seem to have an affinity for chewing up cords for really expensive electronics. The cost of that $300 dog can quickly become several hundred dollars higher.

While we don’t regret buying the puppy, I thought I would throw this out there for other people so they can think through the entire purchase like we (unfortunately) didn’t.

Popularity: 33%

Today I saw an article on About.com about Changing your Own Oil and it got me wondering just how many people fall for this scam to save money.

For those that don’t know me, I’m really big on car maintenance. I have a fully stocked garage and do most things myself. One thing that I won’t do anymore myself is change my own oil. I find that not only is it a waste of time, but it’s substantially more expensive than taking your car to a shop.

I’m going to list a few reasons that people try to rationalize doing this and why it’s such a bad idea:

Reason #1: Doing it myself saves money!
Actually: Wrong. Oil change shops buy their oil and filters in bulk. They get it for a lot cheaper than you can. My last oil change at a shop cost me $21.85 and I wasn’t even using a coupon.  If I bought the same oil myself (QuakerState) at Autozone it is $2.99/quart. My car takes 5 quarts of oil. 5 x 2.99 = $14.95. And we haven’t even purchased the filter yet. Let’s add a Fram filter (which is basically the cheapest) to that at $7.99 and we’re now at $22.94. Now lets factor in your labor. Since you’re not a professional, it will probably take you about an hour and a half to do. Lets figure you make $15/hr. 15 x 1.5 = 22.50 (labor) + 22.94 (parts) = $45.44!

But wait, you say, you don’t have your own tools? Throw in an oil filter wrench ($4). Or a state-certified container to transport the used oil in? Better get one of those ($9.99). Plus the gas to drive it to a recycling center ($2). You end up with a grand total of $61.43. And that’s not even going into how much its going to cost if you don’t own a jack to get under the car to begin with. And that’s if everything goes right.

Reason #2: I get to learn about my car.
Actually: No, you don’t. You get to waste your time jacking up your car to unscrew one bolt and filter, screw the same bolt and filter back in and then dump oil in a hole. What did you learn? I hope you learned that you wasted your time.

If you want to learn about cars, take an auto class. Better yet, find an automotive blog or visit a library to read automotive books. Do something other than waste your hard-earned money and time on something as silly as this.

Reason #3: If I do it myself, I know it’s done right!
Actually: Wrong again. You probably aren’t a professional mechanic. You don’t do this every single day of your life. The chances of you screwing something up is a lot higher than a mechanic who does this every day.  It’s the same reason I don’t perform surgery on myself. Even though it’s a lot cheaper to just grab a steak knife and have a go at it; I’d rather pay a little extra to hire someone who has experience in the field.

Lets play through both scenarios real quick. First, we’ll just assume you screw something up:

What if you forget to tighten the oil pan bolt all the way? What if you tighten it too much and strip the threads? What if you forget to tighten the oil filter all the way? What if you tighten the filter too much and it crushes the gasket?

Well. If any of these were to happen, you’d not only have an expensive repair bill (from a few hundred dollars for re-tapping the oil pan to thousands of dollars for a new engine to replace your newly seized one), but you would also lose your transportation. Hope you don’t mind taking the bus.

Now lets just assume you’re right and the oil shop happens to screw something up:

Lets pretend they forgot to reinstall your oil bolt and, as you are driving home, the engine seizes. What happens? Well, the good news is that since you went to a reputable shop, they have insurance! And that same insurance will not only pay for your repair bills, but also for your transportation while they are making said repairs.

Which one seems like a better solution to you?

I realize I won’t be able to dissuade the die-hard oil changers out there, but I hope it will at least make you pause to consider the alternatives.

Popularity: 41%