LivingCheaply.net » Hints and Tips

Use an Informational Interview to Overcome Mental Barriers

jos — Tue, 13 Jul 2010 10:00:05 +0000

This post is from GRS staff writer April Dykman . Less than a year ago, I was stuck. I knew I wanted to start a side business that had potential to grow, but I had no idea what to do or how to do it. I was feeling stagnant, suffocated, and tired of dreaming about possibilities, but never making progress. In hindsight, it’s clear that I was spinning my wheels. I was optimistic one day, bursting with ideas and plans, and then the next I was deflated because I thought of 20 reasons why an idea wouldn’t work, or someone made a negative comment that made me believe it was better not to try. Wouldn’t want to waste my time if it won’t work out in the end, right? The risk of doing nothing Our barriers, or excuses, always seem legitimate when we’re creating them. Here are a few of mine that I can recall: “I can’t start a business without a website.” “I have a full-time job. Maybe if I didn’t have to work I could do it.” “No one can make money doing XYZ. So-and-so knows someone who tried it and failed.” None of these excuses hold water. Everyone has a life situation that might make their goal more difficult — family demands, kids, lack of money, lack of education — but if you focus on those, you’ll do nothing. And if you think going after your goal seems risky, doing nothing can be even riskier. Susan Su wrote about the risk of doing nothing at I Will Teach You to Be Rich: ‘Nothing’ is not innocent. It can carry huge potential risks. Remember opportunity cost from basic economics class? There are opportunity costs with everything that you’re currently doing — including nothing. Doing nothing might be your most threatening risk precisely because it’s so invisible. It’s invisible, but we can still measure it. Doing nothing seems to be completely unrisky — it’s sort of like hunkering down in a bomb shelter. What could possibly happen to you in there? Probably nothing. But even ‘nothing’ has a cost. If you do nothing — or if you hunker down in a bomb shelter — you’re probably safe, but you’re also missing out…on a lot. While most people create barriers against earning money on the side (“Oh no, I have to make business cards!”), their biggest fear should really be continuing to do what they’re already doing, and nothing more. It’s worth reading the full post to see her numbers-based example of how doing nothing can cost you money. Now, I want to pause for a moment here to point out that this isn’t just about earning money or starting a business. That was my goal. Maybe you share it, maybe you don’t. The bigger point is that we all have things we want to do and reasons why we aren’t doing them. Maybe you want to pay off your credit card debt, but it seems impossibly large. Maybe you want to see Thailand someday, but you’ve never been overseas, and you think it’s a pipe dream. Maybe you want to understand more about investing, but it’s so complicated and you failed 8th grade algebra. Doing nothing will cost you. Another use for the informational interview It took me awhile to figure out my path (I’m still working on it, and probably always will be), but one thing that helped me to get started was the informational interview . I wasn’t interviewing people as part of a job search, though. I was interviewing them to break down my self-imposed barriers. For example, last summer I was trying to decide if I should sign up for a yoga teacher training program. I was hungry for the knowledge I’d get in an intensive course, and I thought it might be a good business, as well, since it’s something I love. Unfortunately, my bubble would burst when I’d mention my interest to someone, and he or she would make one of the following statements: “There’s a lot of competition; there are so many experienced yoga teachers in this town.” “Yoga teachers are lucky if they can pay the bills.” “[Local studio] barely pays new teachers anything, and it’s impossible to get on the teaching schedule.” I probably took these statements to heart because the person was voicing a fear I already held, and in the past, I might have stopped right there and given the whole thing up. But luckily I really love yoga, and I also happened upon an interview with a yoga teacher who was making my salary and working less hours. I bookmarked the article and would read it over and over again, looking for both advice and inspiration, but I had questions, as well. One day, I worked up the courage to contact her through her website. I was hoping I could e-mail her a few questions, not wanting to take up her time. She wanted to set a date for a Skype call, and she wanted my questions in advance so she could give each one enough consideration beforehand. I was floored that she would be so generous with her time. As the call came to an end, she asked that I keep in touch to update her on my progress. Lesson: People usually want to pay it forward and help others who are serious about reaching their goal. Motivation, inspiration, and networking I started to use the informational interview to break barriers by finding people who were doing the very thing I wanted to do, and talking to them instead of listening to random comments by other people or even listening to myself and my excuses. I still review the notes from that Skype call for motivation and inspiration, and although I’m more focused on my writing business at the moment, I finished the yoga teacher certification in May and plan to start teaching regularly. The informational interview is powerful tool because you get an audience with someone who has already accomplished your goal. If you’re a single mom who is struggling with debt, find another single mom who paid off her credit cards. If you think you’re too old to start a new career, talk to someone like Helen Small, who received her undergraduate degree at the age of 87 and her master’s degree at age 90 . Even more important than the interview is making contact with people you can lean on when you’re creating barriers to your own success. Finally, if you setup an interview, send your interviewee a thank-you note immediately after, and send useful information or articles every now and then. Make sure you’re putting in as much as you’re getting from the relationship, not making contact only when you need something. I don’t know what took me so long to reach out to others, but I’ve learned that most people want to help. When negative comments, either from others or yourself, are holding you back, it’s time to meet new people.

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Use an Informational Interview to Overcome Mental Barriers

How to Safeguard Your Social Security Number

LivingCheaply — Wed, 07 Jul 2010 10:00:42 +0000

This post is from GRS staff writer April Dykman . In articles about how to prevent identity theft , I’ve often read that one should never give out his or her social security number (SSN) unless absolutely necessary. That sounds like good common sense. But I recently found myself asking, in what situations is it actually necessary? I’ve mentioned that my husband and I own land on which we are starting to build a home . The land is owner-financed, and we’ve had a great relationship with the sellers (who are also our future neighbors) for the past three years. Last week I received a message that they needed our SSNs. The full story wasn’t clear, but it seemed they had a new CPA who said she needed our numbers to complete their taxes. This immediately set off red flags for me. This isn’t to say I distrust the sellers. They are a lovely retired couple — the kind of people that invite you in for coffee when you drop off the monthly payment. But I didn’t know this CPA, why she needed our SSNs when they’ve never been needed before, and what precautions she would take to safeguard them. So I decided to dig a little deeper. Do you have to provide your SSN because it’s requested, and if not, how do you know which situations are optional? Social security numbers: Why they matter Someone illegally using your number can access personal information and apply for and use credit in your name, creating a financial mess that you’re left to sort out. Creditors can start calling, and you might be turned down for loans. According to the 2010 Identity Fraud Survey Report, last year more than 11 million people in the U.S. were victims of identity fraud — at a total cost of $54 billion. The good news is that most victims didn’t have any out-of-pocket requests, and those who did paid an average of $373. But the average time the victims had to spend to resolve the situation was 21 hours. Yuck. It’s important that you safeguard your number, taking the following precautions: Keep your social security card in a secure place, which does not include keeping it in your wallet. Consider your number confidential. When writing a check, firmly deny requests to write your SSN on the check. If an entity uses your SSN as your account number, request that it be changed. Don’t respond to e-mail requests for your SSN, even if they seem to be from a legitimate company with which you do business. Same goes for unsolicited phone calls. If an online company requires your SSN, such as for an insurance quote, make sure the server is secure and the company is reputable. Request your free credit reports each year to ensure no unusual credit lines appear. When your SSN is required In certain situations, you’ll have to provide your SSN, such as the following: When you start a new job, your employer will request your number. Your name and number must be accurate in your employer’s payroll records and W-2 so that Social Security can credit your earnings. Your financial institutions need your number for tax reporting purposes. Some government agencies, such as motor vehicle departments, can require your number. All agencies, from local to federal, must disclose whether your SSN is required or optional, how it will be used, and under what authority it’s being requested. When it’s requested, but not required Any business can request your SSN, and there aren’t many restrictions on what the business can do with it. Information resellers, consumer reporting agencies, and some health care organizations obtain SSNs and use them in a variety of ways . But when it’s not required by law, you can refuse to provide it (the flip side is that the business also can refuse to do business with you). If a business requests your number, ask the following questions: Why is my SSN needed? How will it be used? Is it required by law (if so, state the law or regulation)? What security measures does your company take with customer SSNs? What happens if I refuse to provide it? You also can ask to speak with a manager or supervisor to explain your concern about identity theft, and ask that they accept another identifier in place of your SSN. If you still can’t persuade them and don’t feel comfortable giving out your number, be willing to walk away and find another company with which to do business. In our case, the sellers said they no longer needed our SSNs because it was only required if they filed their taxes online, and they decided not to do so. I don’t suspect anything fraudulent in our situation, but even so, it’s prudent to keep your SSN confidential, even if you have to be a pain in the neck about it. A request for your SSN doesn’t mean it’s a requirement.

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How to Safeguard Your Social Security Number

Money Hack: When You Save Money, Actually Put It in Savings

cheapo — Tue, 01 Jun 2010 19:00:09 +0000

As part of the publicity push for Your Money: The Missing Manual , I’ve been a guest on a couple dozen radio shows around the country. This morning, for example, I spent an hour chatting with Joy Cardin of Wisconsin Public Radio. I was nervous about these appearances at first — I’m a hesitant public speaker, as I’ve said — but after the first few, I got the hang of it. Now I actually think they’re fun. Plus, I get a kick out of talking with callers, trying to help them with their financial problems. On the Joy Cardin Show today, the callers were great — full of smart ideas for working with money. Denise, for example, shared a little money hack that I really like. Whenever she goes shopping, she takes any savings and pays it to herself. For example, if she buys groceries and uses coupons and sale items, she’ll take the “you saved $10.73″ (or whatever the amount is) from the bottom of the receipt, and pay that much from checking to savings. This is the sort of money hack you can use on everything you purchase. If you’re shopping for a new mattress and manage to save $100 by haggling with the furniture store, you could pay that extra $100 into savings. (And if you combine this with targeted savings accounts , you could choose what you’re going to use this savings toward: your emergency fund , your self-insurance fund, or something fun like travel.) As I say, I love to hear the little games people play to make themselves get out of debt and save money. I haven’t decided if I’ll do a second book yet, but if I do , a short volume of money hacks sure would be fun, don’t you think? — Related Articles at Get Rich Slowly: Cool Money Tricks Use Your Grocery Receipt as a Cue to Save Cool Tool: The AIM BudgetBot Money Hack: Use CDs to Beat Falling Interest Rates Why You SHOULDN’T Prepay Your Monthly Bills

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Money Hack: When You Save Money, Actually Put It in Savings

Living The Examined Life: Personal Data Collection is a Powerful Tool for Change

cheapo — Mon, 24 May 2010 10:00:56 +0000

Machines are, in some respects, much smarter than we are. Specifically, their ability to collect data about us far outpaces our own ability to know who we are and what we do. Your computer can’t tell you why you eat, spend money, sleep, or watch TV. But it can tell you with much greater accuracy than your own memory the minute, often embarrassing details of when and how you do those things. Any regular reader of this blog is familiar with the importance of tracking the money that moves through your life. It’s the first principle of many money gurus, and a nearly religious commitment for some of us who do it (myself included). Why? Because it works. A wonderful recent article in the New York Times explores how personal data collection about any activity is a powerful tool for change . The author, Gary Wolf, looks at people tracking everything from their money to their drinking habits to the minutiae of what they do every two minutes. A lot of these people are extreme geeks. But we normal humans have taken up personal record-keeping with new zeal since smartphones and social media have made it so darn easy to not only collect the data, but also to search it for useful information. Perceiving patterns People are using the power that technology puts at their fingertips to track details about their lives like: how they spend money how much they drink what they eat and when their exercise habits their sleep everything they do And a variety of other things. Really, you can track anything you want to understand better. Having that data at our fingertips is life-changing for nearly everyone who succeeds at keeping the records. Records tell you what you have done, not what you wanted to do, or meant to do, or are afraid you did. They let you answer the question, “How do I spend?” or “How do I exercise?”or “What do I do all day?” In addition to helping you answer questions, tracking your moods and habits can help you answer questions you haven’t thought to ask yet. When you see parts of your life recorded on a graph, you notice things you might have otherwise missed. Wolf likens this to finding a dollar on the street and picking it up. There are all kinds of patterns in our lives that go unnoticed. I certainly collected a lot of dollars that were going to waste when I started tracking my spending. In addition to highlighting areas where it was easy to cut, tracking my dollars let me see how much more I was spending in some areas, like groceries, than I thought I was. It gave me a direction to focus my frugality in. The other great thing about collecting your own data is that it is so personalized to you. By tracking your spending, you can see how small changes in health, stress, or mood affect your spending habits. Tracking your concentration might reveal that a particular supplement works well to help you focus, while another doesn’t do much. Tips for tracking As Wolf acknowledges, though, data collection is only as good as the analysis you bring to it. Technological tools can open up new worlds of insight about how small changes affect our lives, but we need bring our very human perspective to reading that data. Perhaps the most important piece of this is to regard the naked data about our own lives with gentleness rather than judgment. The emotional roller-coaster of blame, shame, and worry can drive you right away from tracking your spending, your eating, your exercise, or any other activity you want more information on. If you’re afraid of the answers, doing the relatively simple work of recording your activities can be painful and useless. Here are a few suggestions to handle the emotions that come up around tracking an emotionally challenging topic, which money is for many of us: Make it easy. There are a lot of great programs out there that let you keep track of your income and spending with the press of a few buttons. Pick one you like, or go old school with a stack of index cards. Experiment a bit and choose a method that works for you. Set aside time to look at what you’ve tracked. Put aside an evening to go over your spending records. If you have a spouse or partner you share finances with, make a date to do this together. Aim to be rested, fed and relaxed when you sit down to the project. Breathe. Seriously. This stuff is stressful. A few deep breaths will help you stay calm and centered when dealing with it. Put aside judgment. It can be challenging to look at your money history without judgment, especially if you’ve been spending in ways you regret. But what you have when you look at those transaction records is just information. Approaching it with gentleness can help you accept yourself in all your parts. Then you can figure out what changes will really work for you. Looking into the mirror of your personal records can be incredibly stressful. For example: I think of myself as a non-shopper. But the truth is that I drop a few hundred dollars every couple of months on clothes, books, or household goods. It’s not a lot of shopping, but it can be stressful to see those blips on my spending charts. The trick to handling it, for me, is to take a deep breath and remind myself that this is just information about who I am. I buy more Stuff than I care to admit. Pretending I don’t — or beating myself up for doing it — won’t make it better. But I can add some shopping money into my regular budget and then feel happy when I don’t spend it, instead of stressed when I do shop and spend money earmarked for something else. This is the human angle: Am I asking my spending chart, like a magic mirror, to tell me who is the frugalist queen in all the land? Or am I using it as a map to gently show me where I tend to wander when I’m opening my wallet, so I can chart a more intentional course? Journaling adds juice The raw data could do either. I need to ask the right questions to make tracking my spending a useful, healthy practice. Without my perspective, it’s just a frightening wall of numbers. Maybe the best way to make data-tracking work in your life is to add personal journaling to it. Study after study has shown that personal journaling can be therapeutic. Instead of merely recording your spending, take twenty minutes a day for a week and write down your innermost feelings about money, debt, and your financial situation. A study by James Pennebaker at the University of Texas in Austin found that mid-career professionals who were laid off from their jobs had better luck in their job searches if they wrote freely about their feelings about the layoffs. Simple record-keeping of job-hunting activities was not nearly as effective as journaling, though both activities were more successful than doing neither. Tracking your spending, or any activity you’re motivated to change, is key to successfully shifting your life habits. Journaling about the things you want to change, in addition to tracking them, can help you look more deeply and gently at yourself. Through your journal you can learn what questions you need to be asking, and then turn to your data for the answers. J.D.’s note: I’m a huge advocate of using data-tracking to change habits. This method helped me diagnose (and recover from) compulsive spending. And I’m using this same technique right now to lose weight. I record everything I eat and every exercise I do in an effort to document my habits. This makes it easy to see when I’m going off course. As a result, I’ve lost fifteen pounds this year, including five in the past month. Photo by ansik . — Related Articles at Get Rich Slowly: Wesabe: a Web-Based Personal Finance Tool Ask the Readers: How Do You Manage Your Money? Your Credit Report Card Plan a Weekend of Bargain-Hunting with GarageMaps Green Sherpa: An Online Cash-Flow Management Tool

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Living The Examined Life: Personal Data Collection is a Powerful Tool for Change

Busting the Myths: Why Coupons Are a Valuable Part of Your Financial Arsenal

LivingCheaply — Mon, 17 May 2010 10:00:38 +0000

J.D. is on vacation in Alaska. This is a guest post from Tara Kuczykowski , who is introducing the basics of couponing to a new generation of coupon clippers through her money-saving blog, Deal-Seeking Mom . Tara is teaching readers across the U.S. how to stretch their budgets in order to make room for occasional splurges. Living the good life while spending less is possible with just a little effort! I was a deal seeker long before I ever became a mom. Why? Well, it began as a fun hobby. Scoring designer clothing at 90% off retail was just plain satisfying, and finding freebies in the mailbox always brightened my day. But that all changed in 2002 when I found myself jobless and 7-1/2 months pregnant with my first child. My husband was a first year pipefitters’ apprentice earning about $9 an hour, and my high-paying job was our bread and butter. We managed for a few months on my severance and unemployment, but when we found out I was pregnant again only three months after our first boy was born, we knew that finding a job was not in the cards and that drastic measures were called for. This was when I discovered the Grocery Game . I wish I could say it immediately transformed our finances, but I made every rookie mistake in the book. I didn’t truly understand how to use coupons, and I wound up purchasing only the cheapest items from the stores I shopped at. I was every coupon myth/misconception/excuse embodied in one. Perhaps you’re under many of the same false impressions: Myth: Using coupons screams to the world that I’m broke. Reality: At first I was a little embarrassed to hand over that huge stack of coupons at the checkout, but I quickly leaned there’s no reason to be ashamed of using coupons! On the contrary, coupon users are savvy shoppers looking to stretch their budgets. In fact, here’s an interesting fact: Consumers in the under-$25,000-per-year income bracket are the least likely to use coupons. The average coupon user is between the ages of 25-34 and earns between $25,000 and $100,000 per year. Myth: I can’t find coupons for the items I purchase. Reality: Unless you never need to purchase deodorant, toothbrushes, toothpaste, shampoo, soap, coffee, frozen veggies, yogurt, and on and on, I assure you that you can find a coupon for your purchase. And if you think finding these coupons is difficult, you’re wrong. I challenge you to flip through any Sunday newspaper coupon insert or do a quick printable coupon search and tell me that you don’t find at least a few coupons for products that you use regularly. Myth: You can’t be brand loyal and save money. Reality: I am very brand loyal in some cases. It’s true that throwing brand loyalty out the window may garner you bigger savings in the long run, but you can remain brand loyal and still save significantly. The key is to learn how to stockpile your favorite brands . When you can pair a coupon with a rock bottom price, buy enough to last you until the next big deals rolls around. This is when buying multiple Sunday papers really pays off, but if you need additional coupons, you might also consider purchasing them from a coupon clipping service . J.D.’s note: I’m a recent convert to stockpiling , though I only do it for select items that I really really love. I haven’t managed to combine coupons with stockpiling yet, though. Myth: Coupons cause you to buy things you might not purchase otherwise. Reality: This was the biggest mistake I made starting out, but I quickly learned to be very deliberate in my purchases. That’s not to say that I never make purchases that I might not have otherwise, but that doesn’t directly translate into spending more money overall. Coupons are a fantastic way to try new products or brands at ultra low prices. They’re also a useful tool for helping others in need. Often you can purchase toiletries for free or even better than free by pairing a coupon with a loyalty program. Perhaps you don’t need these items yourself, but you could consider donating them to a church or shelter to bless those in need. Myth: Buying generic is always cheaper. Reality: If you have an immediate need for a product, store brands can certainly be cheaper . However, one of the key principles of saving with coupons is based on not only buying products when you need them, but on purchasing them when you can get them at the lowest price by pairing a coupon and sale. Name brands are almost always cheaper than their generic counterparts at some point, so by using the “buy ahead” principle, you can stock up on your favorite brands for much less than generic products. Myth: I can save more shopping at warehouse clubs. Reality: Shopping warehouse clubs definitely plays a role in my grocery budget, but I utilize our warehouse trips to stock up on meats, baking products, and occasionally produce. Buying these items in bulk saves our family money; however, many of the other prepackaged items can be found for much less per unit by using the buy ahead principle I mentioned previously. Plus warehouse clubs are inherently set up to entice consumers into picking up items on the spur of the moment, so unless you shop very carefully according to a list, chances are you may walk out having spent significantly more than you intended. Myth: Clipping and organizing coupons is time consuming and not worth the effort. Reality: It’s true that the amount saved with coupons may directly correlate with the amount of preparation done before a shopping trip; however, the time-to-savings ratio just might surprise you. Chances are there’s a blog that covers the coupon matchups for your favorite store out there, so all you have to do is prep your coupons and list. Clipping, filing, and preparing a shopping list may take you about an hour a week, but that hour of your time could net you a 50, 60, even 70% or more savings on your grocery bill. That’s like giving yourself an instant raise each week! And when you consider that it’s a task you could easily do while watching your favorite TV show, well, I’d say it’s time well spent. Though it took a little effort, over the years I learned how to maximize my coupon usage. We’ve been through even tougher times since 2002, but through it all, coupons have remained a key tool in reducing our monthly budget. Do we need to use coupons these days? Perhaps not — there’s enough wiggle room in our finances that it’s not a must. So why do we still use them? Simply because it frees up extra cash for things that we want. We now have no consumer debt outside of our mortgage, and we’ve built a healthy emergency fund. We can take family vacations. We can pay cash for a new car . While I can’t attribute all of this solely to coupons — financial discipline and careful budgeting are obviously important factors as well — they definitely have a place in our money-saving arsenal. — Related Articles at Get Rich Slowly: The Science Fiction of Coupons? links for 2007-03-14 Salary Secrets and Myths Daily Roundup: Money Myths, Going Organic, and DIY Halloween Calendar links for 2006-11-19

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Busting the Myths: Why Coupons Are a Valuable Part of Your Financial Arsenal

Grow Your Savings by Paying in Full

jos — Tue, 11 May 2010 10:00:24 +0000

This post is from GRS staff writer April Dykman . In the past six months, I’ve spent more money on personal development than I have in my entire life. I’ve also spent considerable amounts on laptops and on a holistic wellness program. Now that I’m somewhere in the third stage of personal finance, I see the value in investing, and I’m not just talking about the stock market. What I started to notice was how having my finances in order was creating more savings. In just six months, I’ve saved more than $1,250 on the costs of goods and services because I was able to pay the total amount upfront. No interest There are a few ways that paying in cash (or with a credit card paid off in full) can save money that astute GRS readers can easily identify. For one thing, paying in cash means no interest. The higher the interest rate, the more you pay. Credit cards also present the possibility of late fees and other charges if you don’t pay the balance every month. Negotiation power I haven’t actually used the bargaining power of cash myself, but I read about it in researching this article and feel it’s important to mention. (I’m awful at negotiating . It’s something I’m trying to learn.) Basically, if you are dealing with someone who is in a position to negotiate price, you can get a better deal by offering to pay in cash. For small businesses, cash is cheaper, faster, and a sure bet. No personal checks to cash (that could bounce) and no credit card fees. The transaction is completed on the spot. Contrary to popular belief, one time that cash is not king is negotiating for an automobile. In fact, mentioning your ability to pay in cash may mean you’ll pay more . Car dealers make more money when you finance through them. If you announce your intention to pay in cash, they’ll be less likely to lower the price. Agree on a price and keep your payment method to yourself until you’re in the finance office. The lesson here is to consider the business and the person with the bargaining power. Is it in their best interest that they receive cash? If so, it never hurts to try to negotiate. I say that to you, the readers, as well as to myself! Forgoing payment plans This is the method that saved me the most money in the last several months. A quick rundown: In November, I enrolled in a yoga teacher training program. I could pay the total amount upfront, or I could elect a monthly payment plan. At the end of the training, the monthly plan would cost $500 more than paying in full. In January, I joined Ramit Sethi’s Earn 1K program. Earn 1K had a similar structure, where paying in full was less expensive in the long run than monthly payments. Last month, I started going to a new wellness center to address shoulder and back pain, and the start-up program was 15 percent less if paid in full. When I added up the savings, I started to see how savings begets savings. When you have a handle on your finances, there are many instances where you can pay less . I imagine that wealthy people, or at least those who were taught good money habits at an early age, would probably laugh at my little revelation, finding it hilariously obvious. Oh well, better late than never, right? This may not be for you I think this concept, while useful, also deserves some words of caution. A few guidelines on the tactic of paying in full: If you are still paying off debt, paying in full may not be appropriate just yet. If you can only pay the full amount using a credit card that you can’t pay in full, this is definitely not appropriate for you. And it doesn’t even count as paying in full. Only pay in full if you know for a fact that you will use the product or service. For example, if you never stick to an exercise plan, think twice about buying a full year of personal training sessions. Start smaller to establish good habits. If you do commit to a year of training sessions (or anything else), make sure there’s a money-back guarantee or loopholes if your situation changes. In the yoga program, if I had to quit, I’d be refunded the percentage of the course I didn’t attend. Earn 1K offered a money-back guarantee. Terms should be fair to both buyer and seller. Feel free to add more guidelines in the comments if I’ve left anything out, and if you have an example to share, share it! J.D.’s note: Yes, yes, a thousand times yes! I’ve noticed this myself, and it’s one of the best parts of being out of debt. Plus, when you have control of your finances, you’re able to take advantage of unexpected deals and opportunities . — Related Articles at Get Rich Slowly: Don’t Just Save Your Quarters — Save Your Dollars, Too! Start Late, Finish Rich Daily Links: Knob and Tube Edition Daily Links: End-of-the-Year Edition Get Rich Slowly Advertising Policy

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Grow Your Savings by Paying in Full

The One-Year Wardrobe Project

jos — Sat, 08 May 2010 14:11:01 +0000

About a year ago, at the advice of GRS readers, I started an experiment. I took all of the shirts and sweaters from my clothes closet and moved them into our spare room. Whenever I needed something to wear, I checked the clothes closet first. If what I needed wasn’t there (as was often the case at first), I went to the spare room to find it. After I’d worn a shirt or sweater once, it was allowed to return to its home in the main clothes closet. The results of this experiment probably won’t be very surprising. After a couple of weeks during which I was reclaiming my favorite shirts, most of the rest remained unused. For an entire year. On Tuesday, I gritted my teeth, grabbed the 37 shirts and sweaters still left in the spare room, and took them to a local thrift store. Some of the things I donated had never been worn (or had been worn just a couple of times). It hurt to part with those clothes. I probably spent more than $750 to purchase them (remember, I buy a lot of clothes at thrift stores), so in a way it felt like I was throwing away $750. But it occurred to me that’s the wrong way to look at it. I’m not throwing that money away now . I threw away that $750 years ago when I bought the clothes I wasn’t ever going to wear. (Plus, I’ve managed to get rid of a bunch of Stuff, which was the whole point of this project in the first place.) Over the past few weeks, I’ve bought a handful of new shirts to fill some gaps in my wardrobe. But I’ve made a vow to myself: I never want to buy clothes compulsively again. It used to be I’d go into Costco or Goodwill or wherever, and if I saw a shirt or sweater I liked, I’d buy it — even if I didn’t have a need for it. Now, though, I want to apply my new-found financial discipline to my wardrobe. Instead of buying lots of cheap stuff, I’m going to allow myself to purchase nice stuff (I like the clothes at REI ), but only when I have a need for something. Caveat: I’m losing weight right now. If all goes according to plan, I will have lost 50 pounds by the end of the year. There’s no way I’m going to pay full price for an entirely new wardrobe. As needed, I’ll build the foundation of my new skinnier wardrobe by shopping at thrift stores instead of paying full price at a department store. Now that this project is over, it’s made me think: I wonder if there’s a way to make this an ongoing thing. Is there a way for me to tag which clothes I’ve worn most recently, and which I haven’t? Maybe if I hang the freshly cleaned clothes at one end of the closet, then I’d know the clothes at the other end had gone the longest since being worn. In this way, I could be constantly getting rid of the items I no longer wear. I also think it might be interesting to apply this method to other parts of my life. What about my CD and DVD collections? My books? The garden tools that are spilling out of our shed? In my war on Stuff , I’m always looking for new paths to victory, and this method could be one. My guess is that of the things I own, probably 20% of the Stuff gets 80% of the use. While a part of me wants to be brave and simply pare down what I own to just the bare essentials , I haven’t reached that mental space yet. I’m too attached. But maybe I’ll get there in a few years. For now, I’m just happy to have trimmed my wardrobe down to a manageable size. — Related Articles at Get Rich Slowly: links for 2007-05-14 How to Stop Buying Clothes You Never Wear The Year-Long GRS Project: How Much Does a Garden Really Save? “Golden Boy is Slowly Dying” Great Clothing Reference Books

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The One-Year Wardrobe Project

Don’t Wait for a Discount — Ask for One

jos — Tue, 04 May 2010 10:00:19 +0000

This post is short and sweet and to the point. Folks, I cannot stress how important it is to check all of your accounts for possible savings at least once a year. This includes your bank accounts, your credit accounts, your utility accounts, and more. Basically, you should review every account that involves a financial relationship at least yearly. It’s easy to do this. Just call the customer service number and ask if there are any better deals than the one you currently have. You may have better results if you do a bit of research (on the web or in person) before you call, but it’s not strictly necessary. Taking one hour out of your year to do this can yield huge savings. What prompted me to write this? Well, my mother just got a new laptop computer with a wireless card. When I offered to set it up for her, I asked what she was paying for internet service. For dial-up internet and phone service, she was paying $79 a month. This seemed high to me. (I’m willing to be that she’s had the same plan since signing up for internet service over a decade ago.) “Do me a favor,” I said. “Call the phone company and ask what it would cost to get DSL.” “I don’t understand,” my mom said after she did some research. “They say that I can get voice mail, DSL, and phone service for $60 a month, but that’s less than I’m paying now.” That’s right: For $19 less per month than she’s paying now, my mother can get a faster internet connection and voice mail. That’s a savings of nearly $230 a year — and improved service — simply by asking. (Plus, they provided a wireless router for free!) But the phone company had no incentive to tell her this. They simply waited until she called to ask. Remember: Nobody cares more about your money than you do. If you don’t take steps to improve your financial situation, nobody else is going to do so either. In most cases, wealth isn’t about luck. Wealth is about taking charge of your money, telling others what you want instead of letting them tell you what you’re going to get. And it’s about taking care of the little stuff, like how much you’re paying for DSL and phone service. So, go out there and call the phone company and the cable company and your bank. Find out if there are any better deals waiting for you. Don’t wait for a discount — ask for one. — Related Articles at Get Rich Slowly: Fix Your Broken Appliance, Don’t Replace It Free Online Coupon Codes Save on Cell Phones with Employee and Student Discounts Three Reasons Most Budgets Don’t Work (and How To Fix Them) Don’t Buy Stuff You Cannot Afford

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Don’t Wait for a Discount — Ask for One

If You’re Going to Buy a Warranty, Shop Around

jos — Mon, 19 Apr 2010 10:00:52 +0000

This post is from GRS staff writer April Dykman . I’m writing this post on my brand new MacBook, which I just purchased yesterday. I can honestly say I’ve never been less excited to buy a computer. The reason for my ambivalence is that I already bought this laptop four months ago, replacing a seven-year-old “little iBook that could.” But two weeks ago a water bottle (that I thought was closed) toppled over, splashing water on the MacBook. At first, it seemed like I was in the clear. All systems were go. Later that day, however, the MacBook started randomly “typing” characters on its own, and after two failed reboots, it died. Rest in peace, MacBook. You were too young. Warranties and “protection” plans I had purchased additional coverage through the AppleCare Protection Plan, so I figured I could get it repaired easily enough. Unfortunately, I didn’t read the fine print. It turns out that while Apple was happy to fix the defective motherboard on my iBook four years ago, accidents such as water spills weren’t covered, and in fact, voided my warranty altogether. I got that sinking feeling in my stomach. Unwilling to put even a few hundred dollars into a machine that was no longer under warranty and could continue to have problems, I decided to bite the bullet and buy another laptop, hoping to sell the damaged one for parts. It took me a couple of weeks to suck it up and buy another one. I decided to go to Best Buy, mainly because it was on my way home. I asked for a MacBook and followed the salesman to the register to buy my second laptop in four months. He started to explain Best Buy’s extended warranty program, called Geek Squad Black Tie Protection, and when I asked about the difference between that and AppleCare, he said Geek Squad covers more, including accidents and repairing normal wear and tear. He had me at “accidents”. Why bother with a warranty? I typically pass on extended warranties . Laptops, however, are where I make an exception. According to an article in PC World , David Heim, Consumer Reports ‘ managing editor, agrees: We’ve refined our point of view over the years. For certain kinds of products it makes sense: if it’s expensive to buy, might be trouble-prone, and could be expensive to fix. In other words, a laptop. Laptops, by their nature, are prone to damage. We buy them so we can take them on trips, to Starbucks, or anywhere the day might take us. The more we pack them up and move them around, the more likely it is that an accident will occur. Added protection makes sense, but as I found, all warranties are not the same. The AppleCare plan All Apple computers come with a one-year limited warranty and 90 days of complimentary telephone technical support. For $249 AppleCare extends that to three years (from purchase date, so service overlaps with the one-year warranty). I was happy with the customer service I received from AppleCare, which I used twice with the iBook. The AppleCare plan includes the following for laptops: Direct access to Apple experts Global repair coverage Mail- or carry-in repair for portable computers The plan covers defects, but does not cover damage caused by “accident, abuse, neglect, misuse (including faulty installation, repair, or maintenance by anyone other than Apple), unauthorized modification, extreme environment (including extreme temperature or humidity), extreme physical or electrical stress or interference, fluctuation or surges of electrical power, lightning, static electricity, fire, acts of God or other external causes.” It also does not cover wear and tear or battery replacement, unless Apple determines the failure was due to a defect in materials or workmanship. The Geek Squad protection plan Geek Squad Black Tie Protection offers several plans; the three-year plan for the MacBook is $329. Like AppleCare, Geek Squad covers standard repairs, but you don’t get the phone-in access (something I’ve never used). During the first year after purchase, Geek Squad defers repairs to Apple, which offers the one-year limited warranty. But Geek Squad provides certain additional benefits, even during Apple’s warranty term, such as coverage for the following: Normal wear and tear. This includes defects in materials or workmanship and failures due to dust, internal heat, and humidity. Accidental damage from handling. From Geek Squad’s terms: “It happens sometimes. If you drop or spill on your laptop in the course of normal use, we’ll cover the cost of your repair.” Battery replacement. No lemon policy. If the product requires four qualified repairs, you receive a replacement. Power surge repair. Good maintenance rewards. If the protection plan is unused, you get double or triple Reward Zone program points on the original plan purchase price. (This only translates to about $20, though, provided program terms don’t change.) For me, this is was an easy decision to make. Had I known that a warranty existed that covered wear and tear and accidental damage, I would have bought it when I bought the first MacBook. It’s worth it to me to pay an additional $80 for peace of mind. So, readers, learn from my mistake. In most cases, I still believe extended warranties aren’t worth it . If you’re purchasing something with a high repair rate and do decide to buy a warranty, know that they vary in length and terms. Check with several retailers before you decide where to purchase, and read the fine print in each of their warranty terms and conditions so you can pick the product that works best for you. J.D.’s note: As I’ve written many times in the past, I typically pass on extended warranties, too. I prefer to self-insure with something like the warranty scam-buster account . That being said, I always buy extended warranties for laptops. In fact, I’m helping my mother buy a laptop this week, and as part of the process, I plan to bite the bullet and pay the money for the service plan. Am I being overly paranoid? Maybe. But this is one case where I feel like the insurance is worth it… — Related Articles at Get Rich Slowly: Reader Tip: The Warranty Scam Buster Account O, Cruel Fate, Why Do You Mock Me? Unwarranted: Why You Should Avoid Extended Warranties Preparing to Shop for a New Mattress links for 2007-02-27

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If You’re Going to Buy a Warranty, Shop Around

The Best Time to Buy Almost Everything

cheapo — Thu, 07 Jan 2010 10:00:22 +0000

This post is from GRS staff writer April Dykman . My mom has a sixth sense when it comes to bargain hunting. Where I’m thrilled to get 25 percent off and free shipping, she’s finding deals of 70 percent off and getting inside scoop from the salespeople, who probably have her on speed dial should a ginormous everything-must-go-or-we-torch-it clearance sale come along. Okay, so I’m exaggerating, but not by much. The point, however, is that the key to finding bargains is timing—off-season, end-of-season, new models bringing down prices on the old models. There’s a pattern and a perfect time to buy just about anything. When possible, plan your purchases by using the following list to score the best deals: House and home Real estate —March through August are active months for buying and selling, so a buyer looking for a deal will have better luck negotiating on an offer in autumn and winter. Flooring —Carpet and flooring goes on sale near the end of the year due to slow sales, though discounts are possible throughout the year from independent retailers. Furniture —January and July, when stores need to make room for new inventory. Gas grill —Like air conditioners, the best time to buy is during winter months, when demand for outdoor grills is low. Cookware —April and May (think graduation and wedding prime time) and October and November (holidays approaching). Linens —January “white sales” and the end of each season (i.e. as spring approaches, winter-colored linens will go on sale). It’s common to see linens (in all colors, not just white!) on sale for up to 60 percent off retail. Mattress —New mattresses arrive in stores in May, when you’ll find a good deal on the previous year’s models. Vacuum cleaner —June, when new models hit the floors, and end of winter. Hardware —Big sales occur around Father’s Day and between Thanksgiving and Christmas. Home appliances —New models arrive in September and October, when you’ll find good deals on last year’s models. Holiday weekends—Fourth of July, Labor Day, Columbus Day, Presidents Day—also are good bets for deals. If you’re willing to buy an appliance with a ding or a scratch, you can save hundreds. Air conditioner —Winter months, when demand is low. Flora Flowers —Tulips are less expensive in February, peonies in May. Flowers are at their best when in season . Shrubs, trees, etc. —Autumn is a good time to buy bulbs (store them according to directions on the packaging) and trees and shrubs (nurseries are trying to clear out inventory). Recreation Outdoor (general) —Swings, beach and pool toys, swimming gear, and other outdoor items go on sale in August, when retailers are trying to make room for fall and winter items. Outdoor gear (bicycles, for example) —February and March, when new models replace last year’s models. Boat —Boat shows, held from January through March, generally offer the best prices. Gym membership —Membership sales soar in January as everyone resolves to lose weight, but lag in spring and summer. You’ll find lower fees and waived enrollment fees to lure you to their treadmills. Movie tickets —Matinees are an established way to spend less at the theater (as is smuggling in your own M&Ms, not that I’d condone such behavior or ever do so myself…). A.M. Cinema (AMC Theaters) sells discounted tickets before noon from Friday to Sunday and on holidays. Broadway tickets —Find bargains hours before the show, or try the well-known TKTS booth in Times Square. Electronics Blu-ray player —Black Friday sales and after-Christmas sales offer some of the best deals. TV —Sales can be found throughout the year. Times to note include Black Friday, between Thanksgiving and Christmas, right after New Year’s Day, before the Super Bowl, and in May and June. New models hit stores in August and September, when you’ll find sales on new models and discounts on the previous year models. Cell phone —New customers get the best deals. For new phones, wait six months if you can. Search online for coupon codes, as well. Digital camera —The Consumer Electronics Show and Photo Marketing Association convention mean new models will arrive in stores. Shop in January and February for deals on last year’s models. Computer —Back-to-school season yields a few sales, but the best deals can be found when a technology is outdated and retailers want to get rid of the older models. Look for a few extras (free shipping, bundled accessories, etc.) around the holidays. Tip: In general, you’ll find a good deal when an electronic item is outdated. Wait until after technology shows like MacWorld and the International Consumer Electronics Show to see if your iWhatever will be discounted to make way for the next big thing. Auto New car —New models roll into the lot in fall, so shop in September for last year’s model. Shop on a weekday at the end of the month to get the undivided attention of a salesperson trying to make their monthly quota. Used car —Dealers increase their inventory in April to start the spring selling season. You’ll find a good selection and willing negotiators. Recreational vehicle —Dealers sometimes offer specials in winter, but generally buying an RV works like buying a car (see new cars). Gasoline —Fuel up on a weekday, early in the morning if gas prices are rising or in the evening if gas prices are going down (prices are usually changed between 10 a.m. and noon). Oil change —Look for early bird specials in your area. Tires and auto parts —During April (National Car Care Month) and October (Fall Car Care Month), you are likely to find buy-three-get-one-free deals on tires, free oil changes, and other checkups. Car wash —Early birds (before 8 or 9 a.m.) can often find deals at full-service car washes. Travel Airline tickets —For domestic nonholiday travel, look for the lowest fares 21 days from your departure. Fares are updated at 10 a.m., 12:30 p.m., and 8 p.m. on weekdays, and airlines file one update on Saturday and Sunday. Lowest fares are filed on Tuesdays, Wednesdays, and occasionally on Saturdays. Wednesday is generally the cheapest day to fly and Sunday the most expensive. (Exception: the Wednesday before Thanksgiving—the busiest travel day of the year.) For holiday travel, start looking in September to get a good price. Fares can change quickly, and much depends on the carrier and the market. Travel (general) —The off-season or shoulder-season for your destination will offer the most savings on lodging, recreation, transportation, etc. Food Groceries (supermarket) —On Sunday evenings, you’ll save money through store sales (typically run Wednesday through Thursday), and by shopping in the evening, you can save even more on items that must be sold by day’s end. If you clip coupons from the Sunday newspaper, you’ll enjoy additional savings. Coupons —While coupons are available throughout the year, the most coupons appear in the Sunday paper during November and December. The best deals on turkeys can be found two weeks before Thanksgiving to Christmas. In spring, you’ll find coupons on seasonal produce, ham, and frozen food (apparently March is National Frozen Food Month—who knew?). Summer coupons offer discounts on grilling items and ice cream. Autumn brings coupons on soup and other canned items. Groceries (farmers market) —Vendors often lower prices near closing to avoid having to pack up perishables and take them back to the farm. Champagne —With steep competition to be your New Year’s Eve bubbly, Champagne houses drop prices during the holidays. Clothing and accessories Clothing (general) —Got your heart set on something in particular? Shop on a Thursday evening six to eight weeks after the item arrived in the store. By Thursday, the weekend sales have started and the selection will still be good. Season-end clearance sales also offer up savings. Baby clothes —Shop during your pregnancy for end-of-season clearance items. If it’s springtime and you are due in winter, look for winter closeout sales now for infant clothing. Jewelry —Avoid the holidays, when you are most likely to pay full price. Weddings Wedding (general) —The off-season can mean big discounts. If you live in a cooler climate, you’ll find savings during the winter months. Hotter climates mean likely deals in summer months. Wedding dresses —After Thanksgiving and before Christmas. Boutiques are stocked with gowns for Christmas engagements, but it’s a slow sales period. Other Toys —October and November offer good bargains as retailers gear up for the holiday season. Wrapping paper —January, of course! I might not ever be as good as my mom at bargain hunting, but knowing when to shop might make me almost as good. If you’re one to make resolutions every new year, resolve to save money in 2010 by timing your purchases. Sources: Bankrate, Yahoo! Finance, Consumer Reports — Related Articles at Get Rich Slowly: No related posts

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The Best Time to Buy Almost Everything