Darwin's Finance » Saving Tips

How Much Could You Reduce Your Budget if You Get Laid Off?

Darwin — Mon, 01 Feb 2010 12:14:51 +0000

In this economy, even if you think your job is safe, you’ve gotta at least have in the back of your mind, “What are some immediate steps we could take to dramatically reduce our monthly expenditures in the event of a layoff?”. While many companies offer severance for several months, there’s no guarantee that you’ll land a new job with similar pay any time soon, or ever. And many are not so lucky to be granted severance when being shown the door – consultants, blue collar, fired for cause, and many more (US Severance Packages are the worst amongst western nations). When severance expires or that day comes where the pay stops cold, unemployment is unlikely to cover your old monthly income, but rather just a portion. That leaves a gap between current income and future income.

Bridging the Gap

In order to bridge the gap that occurs between current income and future income to avoid cannibalizing personal savings, retirement savings, having to leave your home, etc., the first order of action should be to take dramatic action from a discretionary spending standpoint. When considering our finances, I looked at various categories of spending that we could live without and how much we’d save per month by taking aggressive action:

Monthly Savings if Cutting Down to Bare Essentials:

Newspaper subscription $31 - We could totally do without. I justify its existence since I read occasionally and the coupons we receive each week more than offset subscription. But I could probably find replacement coupons with minimal effort on Coupons.com.

Coffee $50 – This is clearly a vice that I partake in because money isn’t tight right now. If I’m dragging at the office, occasionally I’ll grab a latte, so yes, I’m guilty of the “latte factor” and I admit it. However, on weekends and vacations I go without, so I take some solace in the notion that I’m not “addicted” and can quit if needed (do I sound like a recreational drug user?). I save money on the morning cup by making at home and bringing in – buying twice in a day would be overboard for me. Regardless, it would be easy to drop it if financial hardship occurred – especially the premium office purchase.

Phone/Internet/Cable $40 - While I already save major bucks on my Comcast Bill (44% negotiated down!) and get all kinds of free premium channels etc due to the specific negotiation tactics I employ if I were laid off, we could quickly drop several additional services I am still paying for in some way. The HD would go immediately. The DVR? Could probably do without – and cable could go down to the bare minimum. I could probably drop another $40 or so without the premium stuff.

Lunches – $60 I generally eat lunch at my desk after buying from the company caf. I spend about 6 bucks a day for a wrap and a drink or something. If I weren’t working, I obviously wouldn’t be buying lunch everyday. I could reasonably average out a lunch at $3 per day with larger prepared left-overs, salads, etc. So, with a spread of $3 per day, that’s about $15 per week or $60 per month that I’m spending above baseline.

Eating Out $120 While we wouldn’t turn into hermits and forgo society altogether, we would certainly eat out less than the already paltry 2 times or so a month. If it’s the 5 of us, we’re usually at a Friday’s or Friendly’s or something more affordable. On the rare occasion my wife and I get out alone, we usually go somewhere a little nicer and easily drop $60-$100 with tip.

Entertainment/Movies $250 – Little gym, piano lessons, Adventure Guides, YMCA Activities, etc – $250 – While these activities enrich our childrens’ lives (and ours), during a pinch period, we’d have to sacrifice some of these costly activities and find other free/cheaper ways to give them a little something different. I’m a big fan of spending our money on life experiences over material things kids tire of quickly, but for a period of several months to a year, this would also be a prudent area to focus on.

Dry Cleaning $40 - While I keep expenses down by wearing polo shirts instead of business shirts in the spring/summer/fall and yes, I’m guilty of the re-wear on the pants, dry-cleaning still adds up. However, in this scenario, no job=no dry cleaning. For the one-offs that aren’t work related, we have a working iron. We just don’t use it much now, but we could.

Vacation $200 – While we don’t vacation every month obviously, we do go on at least 2 vacations a year and at least one is usually a relatively pricey shore house or lake house we get at a discount from neighbors (which makes the value overwhelming since they’re beautiful houses and memorable vacations). However, in the event of a layoff, it’s totally understandable to drop it down to 1 less expensive vacation. Spreading a few grand across a monthly allocation, we could easily drop an equivalent $200 out.

Groceries $100 - We spend a ton of money on food. I don’t get it sometimes, but it’s with some coupons and timed shopping included. But with much organic, growing children, a wife that loves to cook crazy meals, and with us entertaining friends and family somewhat regularly, we spend several hundred dollars per month on food. We could easily chop $100 out of there by cutting some more corners and perhaps entertaining a bit less given the circumstances.

Gas $40 – Without a job to drive to daily, there would certainly be a lower gas expenditure.

Overall LifeStyle Adjustment $150 – Since I didn’t capture every possible category above, we could easily make some lifestyle changes if necessary – perhaps my wife doesn’t hit the Picture People for a portrait of the kids as often (albeit, she never does so without a steep coupon), we could do without the matching new holiday outfits for the boys, less toys, less mall, things that nickel and dime the budget each month that would be very easy to cut out if mandated.

Summary:

Total Budget Cut = $1081/Month

There are a few ways to look at this analysis. For the extremo-frugals out there, you’re probably thinking, “Well, you could go without all this stuff now. Just cut it out and stop living like a there’s no tomorrow!” On the other hand, there are those of you who would say even if laid off, you’d never do without some of life’s simple pleasures – after all, this is just a passing phase. From my standpoint, this was really just a first pass to give me a rigor level 1 assessment of what kind of burn rate we’ve have if that day did come. Would we need $3000 a month or live or $5000 a month? I mean, this can have a huge impact on what size my emergency fund should be, whether I’d have to consider eating into retirement funds, whether we could continue to pay the mortgage indefinitely, etc. With me at home, perhaps my wife could take up substitute teaching and tutoring since she was teaching before the kids as well. We have options – but it’s always good to know where you stand.

What’s Your Analysis Look Like?

25 Best Personal Finance, Investing & Career Posts of 2009

Darwin — Tue, 12 Jan 2010 13:00:27 +0000

After sharing the best posts from around the blogosphere in Personal Finance and Investing with yesterday’s Carnival of Personal Finance I realized I didn’t do a look-back at 2009 from Darwin’s Finance. In this list you’ll find thousands of dollars in money saving tips, career boosters, investing tricks and tax deduction ideas you may have never heard of. I’ve intentionally selected articles that are still relevant and useful, even if they’re a few months old.

Personal Finance

How to Get a 0% Down Loan Even in 2010 – Amazingly, in the midst of the most substantial housing collapse we’ve seen in our generation, there are still 0% down loans being offered to millions of Americans under a USDA rural loan program. The thing is, there’s nothing rural about many communities that qualify – which means you! Find out more about the program if you’re thinking of buying.

The ONLY way to get your FICO Credit Score for free – Aside from learning how to do this, most people don’t fully grasp the implications their credit score has on their everyday life – from loan rates to employer screening trouble, the FICO credit score is far-reaching and a critical component of a successful personal financial plan.

Net Present Value – It’s not just for MBAs – This article shows how I used NPV to choose between multiple mortgage choices and how you should always perform a simple NPV analysis when confronted with tough financial choices.

What Statistics Really Mean – When someone throws out a fancy statistic, they often either don’t know what they’re talking about or they’re intentionally manipulating you into believing in their agenda. Understand the tips, tricks and implications of statistics and how to apply these concepts to everyday life.

Don’t be a Slave to Energy Prices – Be indifferent. By hedging your energy prices. This article outlines several simple and low cost methods to hedge against rising oil, electric and natural gas prices. Large corporations do this to avoid catastrophic impact to their bottom line, why don’t you?

What Would Happen if the US Dollar Were Replaced? Of late, there has been serious talk of foreign governments getting out of the US Dollar as their reserve currency. Can you blame them? Such an unraveling could have serious implications for all Americans.

Family Money – Fairness and Considerations in Gifting and Estate Planning – This uncomfortable topic is one many families choose to ignore. Do so at your peril. Consider your transparency and equity in how you treat your family members. You’d want to be treated the same way, right?

9 Money Habits to Live by – Check out these basic methods to ensure financial success in your family’s budget. Do you relate to these habits?

Living Paycheck to Paycheck is Costing You Thousands – The hidden costs of not having excess cash on hand every month. Life Happens – and when it does, a hand to mouth financial lifestyle can put you further in the hole.

Puppy Love? Think Twice, That May be a $100,000 Dog Over its Life – I was personally blown away when I actually calculated what our dog Jack will eventually cost us over his lifetime. My wife and I went to college for less than Jack’s expenses over his lifetime. Please make sure you understand and calculate your costs before buying that cute puppy on an impulse buy.

How FSA Plan Account Contributions Can Save You Thousands – If you have a Flex Spending Account at your disposal and you’re not using it, you’re leaving thousands of dollars on the table. See all eligible expenses and how to take advantage of this tax deduction.

Start Investing Today: An Amazing Comparison of 25 vs 35 Year Old Starters – A picture can tell a thousand words. Well, this has words and pictures showing an amazing difference in outcomes if you start investing at 25 vs. 35…even if the 25 year old STOPS investing completely when they hit 35!

Investing

How Stock Options Work – They’re not as complex and costly as you may think. And they’re NOT just for speculation. Options can provide income and hedging in a conservative portfolio as well if used right.

How Covered Call Options Work – Understand how to generate income and smooth out market returns by selling covered calls.

3 Low-Cost Option Strategies for Stock Market Speculation – Using stock options to speculate on a biotech approval or pending court case that could wallop a small tech stock doesn’t have to be expensive. See how these low-cost methods allow you to profit over 1000% on event-driven trading days for under $100 invested.

Investment Club Aspirations? Consider This…While an investment club was a positive experience for me overall, there were significant cost, tax, governance and performance issues that we didn’t consider at the outset. Make sure you understand all the barriers before you embark on a partnership.

Leveraged ETFs are Evil – If you don’t understand daily rebalancing. Please read before you EVER consider buying a 2x or 3X return ETF.

Advanta 11% Yield Notes Sound Great, Right? Find out what to watch for in an investment that seems too good to be true – and what happens to investors that ignored the warning signs.

Structured Notes – How they Work and Why You Might Want One – What if you could attain guaranteed ranges of returns that are MUCH higher than the crappy savings and CD rates out there today? You can, with Structured Notes.

Wall Street Violated Nature’s Laws – A fun look back and how Wall Street violated the most basic laws of physics in their behavior and reaction to the financial crisis.

2009 Returns for Every Country – See what you missed by investing only in the US (or by avoiding stocks altogether in 2009). Some countries returned over 100% on the year, with a financial crisis along the way.

Every ETF on Earth (Over 800 Listed) – If you can think of it, there’s probably an ETF for it. Scan this list of 800 strong to see if there’s an ETF constructed for your strategy.

Want More on ETFs? Visit ETFBase (my latest project dedicated solely to ETFs)

Career

Project Managers – Tips and Tricks – If you’re a current or prospective project manager, check out these tips and practices I follow as a Project Manager.

What’s the Best College Degree for Today’s Economy? It’s no longer Business. See what the up and coming careers are in demand in this new economy.

Your Employee Stock Options Don’t Have to be Worthless – By executing option strategies against your underlying collateral, you can guarantee yourself a hefty return regardless of what happens to your company’s share price.

Make sure to stay tuned via email updates or RSS so you don’t miss similarly themed articles in 2010 and beyond!

It’s 2010! Get Off Your Butt and Do Something Quick and Easy to Improve Your Finances!

Darwin — Tue, 05 Jan 2010 13:10:47 +0000

Rather than write another long post on New Year’s Resolutions, how great my last year was and “yeah! pump it up in 2010″, here are 6 simple steps you can take in under and hour each to dramatically improve your financial situation. If you haven’t already completed/attempted these, why not make today the day?

Get Your Credit Score – Free. The benefits of having a strong credit score are enormous – from lower mortgage and credit card rates to ensuring you’re not booted during your next employer screening (low credit scores are viewed as a potential threat of corporate theft). You never know when you’re going to need it and as I highlighted here you can get your real FICO score for free within minutes. Knowing where you stand is the first step!
Substantially Reduce your Utility Costs – In this step-by-step chat session with Comcast, you can see the tactics and talking points I utilized to reduce my cable/phone/internet bill by 44% (over $1,000 per year!!!). You can do the same – with your sanitation company or your landlord or whoever. All it takes is some competition and some effort.
Optimize Your Savings Accounts – By idly sitting by earning 0.05% in a savings account, you’re leaving valuable money on the table. Why not spend a few minutes to at least establish an account with the best in class online savings companies to ensure you’re optimizing your interest payments?
Credit Card Rewards – The tally’s in and last year, we received a total of $810 in cash reward credit cards. By simply charging everything and paying it off at the end of the month with the best cards, it’s tax-free income for no effort. If you carry a balance, this shouldn’t be your priority, but rather, you should be focusing on a balance transfer card offering 0% Transfers like Slate^SM from Chase, or browse a full list of balance transfer credit cards, but keep this in mind for tackling the next phase of financial success once you’re credit card debt-free.
Dramatically Reduce Trading Costs – Aside from relying on index funds and ETFs instead of actively managed mutual funds, for the active trading I do, I rely on low-cost online brokers. This saves hundreds per year in useless commissions for the same exact service. If you feel you need the tools and existing positions in your current high cost account, just open a new one for future trades. Either way, you’ll notice a difference immediately! This stock options post includes reviews of the best deals and commissions online and there’s also a $100 signup bonus from OptionsXpress ongoing now. $100 today for simply signing up and starting!
Reduce Your Energy Costs – With some simple actions, you can easily save hundreds to thousands of dollars per year by either a) employing energy saving tips b) taking advantage of new government programs like Cash for Caulkers and Cash for Appliances c) hedging your energy prices yourself and d) Saving Money with Gas Efficiency Auto moves.

I could list 20, but then you might do zero. These are quick wins – simple and high impact.

Which of these did you do today? Come back and let us know and tell us your estimated savings!

How I Saved 44% on my Comcast Bill-Chat Transcript ($1104 per Year)

Darwin — Thu, 31 Dec 2009 20:46:34 +0000

The overriding theme of this post is to demonstrate that for ANY utility (Comcast Bill in my case) you pay where there is ANY competition in the area, you can likely employ some very simple techniques to achieve significant savings, leading to hundreds of dollars annually. In this case, we have a pretty intense Comcast vs. Verizon FIOS competition going on. While I had initially highlighted how I was saving $250 per year on my Comcast bill through some simple negotiations here by pitting Comcast vs Verizon FIOS, I was further inspired by 20somethingfinance.com via this post to try to attain a discount via chat instead of a phone call which I had previously used.

As you can see, each negotiating experience and outcome is different. Message? It sort of depends who you get and when you try. So, if you don’t get the deal you wanted, keep trying and don’t take no for an answer. But the bottom line is that if your initial bill is say, $160 you may very well walk away paying $50 less with some minimal effort.

For ease of use, I’ve included my transcript below and highlighted in red and green the key points of the negotiation to hit on all 3 services I use – phone, internet and cable/premium channels.

Comcast Rep>Hello — ME –_, Thank you for contacting Comcast Live Chat Support. My name is Comcast Rep. Please give me one moment to review your information.

Comcast Rep>How are you doing today?

– ME –_>Great, how bout yourself?

Comcast Rep>That’s good to hear. I’m fine, thank you.

Comcast Rep>I understand that you have a problem with your bill, I apologize for the inconvenience this has caused you. I will be glad to help you resolve this concern today, — ME –.

Comcast Rep>So I can help you better with your concern, may I have your account number, please.

– ME –_>sure, -xxxxxxxx–

Comcast Rep>Thank you, Please give me a moment to pull up your account.

Comcast Rep>While waiting, please allow me to take this oppurtunity to share with you one of the main features that you can get with Comcast which is our online site, Fancast.com. It offers full television episodes, full-length feature films, trailers and video clips to both Comcast subscribers and non-subscribers.I hope you will enjoy this feature with us .

Comcast Rep>So we can assure protection to your account, would you kindly provide me the last 4 of the account holder’s SSN.

– ME –_>-xxxxxxxx-

Comcast Rep>Thank you. May I have the exact concern that you have, — ME –?

– ME –_>Sure. I’m reaching out because the 6 months is up on the prior agreed promotions and I was advised to contact again when this occurs. My bill jumped up substantially.

– ME –_>I had previously considered switching over to FIOS given the attractive offers they have now that they’ve entered our neighborhood. The past few 6 month cycles, Comcast has discounted my bill in order to retain my business.

Comcast Rep>May I know when was the promotion ended?

– ME –_>from last month’s bill, it was to end 12/28/09.

Comcast Rep>I see. Please give me a moment to check on this.

– ME –_>sure

Comcast Rep>I apologize for the inconvenience, I see here that the bill that you are viewing will from 12/29 – 01/28. Comcast actually printed the bill in advance to avoid delinquent payment. That payment that is reflected on your bill will be the regular rate after your promotion will end on 12/28/09.

– ME –_>I’m not sure I follow. My last bill was much lower. In discussing this with Comcast in the past, each 6 months, I call and have a new promotion (whatever’s available at the time) applied to the account in order to bring the price well below the “regular rate”. I was assured during prior calls that this agreement would continue to be honored into the future if I agreed to stay on as a customer. Can you check out which promotions you’re running now that you could apply to bring the total bill back in line? Thanks

Comcast Rep>Please give me a moment to check on that.

– ME –_>sure

– ME –_>hello, still checking?

Comcast Rep>Yes I am still checking.

Comcast Rep>I apologize for the delay it will take me a few more moments to complete this process.

– ME –_>ok

– ME –_>Hi, this chat’s about 30 minutes now. may i ask what the delay is?

Comcast Rep>I am sorry for the inconvenience — ME –.

** [WIN #1] Comcast Rep>I see here that your promotion will end 12/28/09. I was able to look for a promotion for your cable service only. Digital Prefered of $39.99 monthly for 6 months.

– ME –_>OK, thanks, that helps on the cable side. My DVR had been 4.95 and I had promos on internet and phone as well. Could you kindly advise on which promos you can offer there as well? Thanks

Comcast Rep>I appreciate your patience; I am still working on this for you, please give me a few more time to assist you better.

– ME –_>OK, will hold. thanks for checking

Comcast Rep>Thank you for waiting, I am sorry for the delay. I was not able to look for a DVR promotion, all of the date codes that I checked have the same amount of $15.95.

– ME –_>Well, I guess since the preferred is $10 cheaper and DVR is $10 more expensive, then that’s a wash. We still have the premium channels to deal with then. They were all at $0 last bill – HBO, Showtime, Starz. Can you keep those at zero then? If so, then cable section stays the same.

Comcast Rep>I will try to look on your account if there are HBO, SHowtime and Starz promotion available. Please give me a moment to look for a good promotion for you.

Comcast Rep>I appreciate your patience; I am still working on this for you, please give me a few more time to assist you better.

– ME –_>OK, please try to expedite. This only took 5 minutes on the phone last time. Thanks

Comcast Rep>I was able to locate free promotions for HBO, Starz and Showtime for 3 months only.

– ME –_>OK, I guess I’ll go with that then; it’s pretty close to old bill then. Onto internet, a co-worker of mine has $19.99 for 6 months. Are you able to find that one?

Comcast Rep>With the Internet promotion — ME –, I need to transfer you to the Internet department since my tools are limited to cable service only.

– ME –_>I hope you’re kidding. last time, one person did everything.

Comcast Rep>I apologize for the inconvenience however I can only change the Cable service on your account. The Internet service department will be able to help locate promotions available for you.

– ME –_>Can you confirm for me the promos that will be applied to the bill? I will need a final bill amount when everything is settled. will the interne dept be able to tally it up? I also need phone. do they do both or that’s a third transfer?

– ME –_>hello?

Comcast Rep>Internet and phone department are in one department they will be able to give you the promotions.

– ME –_>Can you confirm the cable promos we agreed on and that they are now applied to my account?

Comcast Rep>For the cable service you can have Digital Preferred promotion of $39.99 for 6 months. Free HBO, starz and Showtime. Would you like me to process and update your service right now?

– ME –_>please do, thank you. will i be transferred direct to other dept or have a queue time again? thanks

Comcast Rep>Please give me a moment to process your request.

Comcast Rep>Please allow me to transfer you to a representative who is specialized in helping you with this request. I will be giving them your information and notate the things we did so they can assist you with your concern. May I ask you to hold while I do that?

– ME –_>ok

Comcast Rep>Please wait, while the problem is escalated to another analyst

analyst Comcast Rep2 has entered room

Comcast Rep2>Just give me a quick minute or two while I review your order information at my end. Please stay online. Thank you very much!

analyst Comcast Rep has left room

– ME –_>ok

Comcast Rep2>Thank you.

Comcast Rep2>I see here you have a price discrepancy issue.

Comcast Rep2>Can you tell me about this.

– ME –_>long story short (just spent 1 hr on chat with last employee), Comcast has provided me discounted service via promos for some time now since I had agreed to stay instead of switching to FIOS which moved into neighborhood and had offers. most of my neighbors have switched but i’ve remained w comcast due to reasonable cust service and pricing discounts. each 6 months, the promos expire and i call to get new ones to keep the price down. usually i call. this time i tried chat. Comcast Rep was able to handle the cable piece. can you handle promos for internet/phone then? i have a co worker getting 19.99 internet

Comcast Rep2>I can see here in your account that you are paying $143.84 per month for your service, is this correct?

Comcast Rep2>I can give that to you as well.

Comcast Rep2>So we can assure protection to your account, I will need you to provide me with the last 4 of your account holder’s SSN.

– ME –_>no, that doesn’t sound right. last bill with all taxes, etc was $132. total cable was 48.95. total internet was 33 and total phone was 33. can you please confirm which promos you have to decrease the phone/internet? thanks

Comcast Rep2>Are you still there?

Comcast Rep2>Thank you.

[***Partial Win#2] Comcast Rep2>I can lower down the internet rate to $19.99.

ME –_>OK, great. that solves the internet. could you advise on phone?

Comcast Rep2>We can only give one promotion at the same time — ME –.

Comcast Rep2>So for now, internet i what I can give you.

Comcast Rep2>That will make your bill 4120.

– ME –_>that’s not what’s been done in the past. are you certain there’s no opportunity for multiple?

Comcast Rep2>I mean $120.

Comcast Rep2>We can’t give multiple promotions though but allow me to double check that.

– ME –_>OK, thank you.

Comcast Rep2>Not a problem.

[***Final Win#2]Comcast Rep2>Here is what I did, I was able to give the phone service at $29.99 instead of $39.99.

– ME –_>that sounds great. thank you. could you kindly confirm where each service stands and a total for me then?

Comcast Rep2>Not a problem.

Comcast Rep2>Please give me one moment.

Comcast Rep2>Your phone service $29,99, internet $19.99, cable $39.99, DVR $15.95 and EMTA rent $5.

Comcast Rep2>That will sum up to $110.92.

Comcast Rep2> I have completed your request.

– ME –_>That’s great. Thanks for all your help. Could you tell me what my monthly bill should be now w taxes, surcharges, etc so I can pay correct amount? (my old bill has old pricing). Thanks much.

Comcast Rep2>You’re very much welcome.

Comcast Rep2>I do apologize but I don’t have the final bill with me including the taxes.

Comcast Rep2>What I have is the $110.92 bill for all your services.

…

In comparing the outcome of this negotiaton, I ended up with the following deal for the next 6 months (promotions expire and need to be renewed every 6 months):

$110 pre-tax/fees for all prior services
$116 with taxes/fees included (confirmed subsequently)
Prior 6 months negotiated bill had been $134 with taxes/fees
The standard price with NO discounts was $208 with taxes/fees
The new negotiated rate represents a 44% Discount from baseline and a Further 13% discount from my already-negotiated rate during the prior 6 month period.
In Dollar Terms, ($208-$116)*12 = $1104 saved per year.

What’s beautiful about this newer lower negotiated rate (down to $116 from prior $134 which was already a substantial discount) is that it sets a new baseline for each subsequent phone call. I’d be satisfied with the same or lower deal next time, but won’t settle for another $20 up (really just back to last 6 month bill). I can just claim “I’m paying $116 now and don’t want to pay more” and force them to find enough promotions to land and $116 or lower.

Surely, some will comment that the savings seem obscenely large because of the amount of services included. We happen to watch probably 2-3 shows monthly on each of the premium channels and frankly, if we actually had to pay for them, we’d survive by dropping them. But we obviously do need phone, internet and some basic cable. I also have an HDTV and our DVR is much more efficient than watching TV live (I despise commercials), so even excluding savings for the premium channels, we still realize a sizable savings over just basic services excluding HBO, Starz, Showtime. Any way you look at it we’re saving big bucks over not doing anything and just paying the bill. The message here isn’t the details – it’s the method. You need to find the most formidable competitor and pit them against your current provider.

As you can see, the chat session took longer than my prior phone calls, but the transcript is here in all its splendor for you to duplicate. For people who have the time and can multitask during a chat session and perform better in this medium rather than verbal haggling/negotiations, chat is a viable option at your disposal. If you feel comfortably haggling live with an operator, phone seems to go more quickly.

Since When Does “Clipping Coupons” Mean You’re Poor?

Darwin — Mon, 28 Dec 2009 13:10:10 +0000

In today’s economic environment, more and more people seem to be using – or at least talking about – coupons. While we’ve used them for years (I dutifully pull them out of the weekly circular in our newspaper and store them in a designated spot for the next shopping trip), apparently, now people are “admitting their dark secret” or citing their use in jest in a self-deprecating manner with quotes like “Heck, I’m gonna start using coupons at this rate”. While I’d heard this a couple times in various mediums, I saw it again in a DVRd mainstream show my wife and I watch (remember Happy Wife, Happy Life so cut me some slack, guys!) – Desperate Housewives. In the episode, one of the main characters lost her job while the husband was pursuing a college degree so neither of them were working. In a statement of desperation decrying their situation, she cried, “We’ve resorted to clipping coupons” and broke down crying.

What’s Up with the Portrayal of Coupons as Being Only for the Poor?

While this was just one more show, this type of attitude is portrayed commonly in pop media and it perplexes me. I could see how perhaps there’s a stigma associated with using food stamps which require specific hardship qualifications, but coupons? Why wouldn’t people use coupons? The only somewhat logical explanation I’ve come across is that for the extremely affluent, the time required to clip coupons and selectively shop is beneath their pay grade. I get that – if your assess hourly rate (however it is you value your personal time) is $500/hr and you’re going to save $30 for the 15 minutes it spends to clip coupons for the week, perhaps it’s not worth your time. For the vast majority of us, saving $30 for 15 minutes of time ($120/hr) is a pretty darn good use of time.

It’s Actually the Affluent that Use Coupons!

Contrary to the pop culture message that if you use coupons, you’re poor, a major study as recently as 2009 from Neilson demonstrated the following:

More affluent consumers ($70k+) are considered super heavy coupon users (39 percent compared to 35 percent for total U.S. households) and coupon enthusiasts (42 percent compared to 35 percent for total U.S. households.)
Those likely to be low or non-coupon users: low-income, 1-member households, male-only head of households, African-Americans and Hispanic consumers, residents in rural and struggling urban areas.
Just under one-third (32 percent) of all U.S. households didn’t use any coupons during the first half of 2009.
The recession drove heavier coupon usage as lighter coupon users in 2008 became heavier users in 2009.

Evidently, there’s a disconnect between perception and reality. The perception is that you should be embarrassed or ashamed to be using coupons. If you do feel this way around people you know, and you’re not incredibly wealthy, you may want to question the company you keep – because the data show that they’re probably using coupons themselves and judging you for actually doing something rational and intelligent. The reality is that those who are using coupons are likely well-off, not poor. Perhaps it should be the other way around and coupon-clippers should be questioning why others aren’t coupon-clippers, right?

If you don’t get a weekly circular or subscribe to a newspaper, there are plenty of good coupons to be had online these days. The most popular and user-friendly site I’ve come across is Coupons.com. You can print them for free use use them at tons of major retailers and for many major brands.

Energy Saving Tips from the Dept of Energy – Pretty Darn Good!

Darwin — Thu, 19 Nov 2009 14:55:24 +0000

When I was contemplating the steps we’re taking this year to save money on our energy bills, I thought this would be a quick post on top energy savings tips with high ROI. However, in checking out some other sources, I came across a wealth of information that I couldn’t help but share as well. For instance, I didn’t even know about this comprehensive manual the US Dept. of Energy puts out, but it’s full of useful stats and energy conservation tips. It’s probably the most useful thing I’ve seen out of our government in ages. They’re trying – especially now with this cash for caulkers program coming. Since I hadn’t heard of this manual before it’s a huge read, I figured I’d share a summary of my favorite high ROI energy saving tips.

Here’s a snapshot of where the typical American spends their money each year on energy:

Of course, depending on which region you live in and the type of housing you’re in, these levels will differ, but if you live in a “typical” area and house, you could reasonably expect to see expenditures like this. Using the 80/20 rule, perhaps you want to focus on the couple largest segments first.

Some tips from the manual:

Tips for Sealing Air Leaks

First, test your home for air tightness. On a windy day, carefully hold a lit incense stick or a smoke pen next to your windows, doors, electrical boxes, plumbing fixtures, electrical outlets, ceiling fixtures, attic hatches, and other locations where there is a possible air path to the outside. If the smoke stream travels horizontally, you have located an air leak that may need caulking, sealing, or weatherstripping.
Caulk and weatherstrip doors and windows that leak air.
Caulk and seal air leaks where plumbing, ducting, or electrical wiring penetrates through walls, floors, ceilings, and soffits over cabinets.
Install foam gaskets behind outlet and switch plates on walls.

During the heating season, keep the draperies and shades on your south-facing windows open during the day to allow the sunlight to enter your home and closed at night to reduce the chill you may feel from cold windows.
During the cooling season, keep the window coverings closed during the day to prevent solar gain.
Water usage/heating Install aerating, low-flow faucets and showerheads.

Be sure to buy ENERGY STAR qualified CFLs:

They will save you about $30 or more in electricity costs over each bulb’s lifetime.

Producing about 75% less heat, they are safer to operate and can cut home cooling costs.

Incredible! At a couple bucks each, the ROI on these bulbs is several hundred percent! Every bulb in your house that doesn’t use a dimmer (our kitchen lighting had trouble with these) should be CFL

Dishes – Scrape, don’t rinse, off large food pieces and bones. Soaking or prewashing is generally only recommended in cases (I can’t get my wife to agree to this, but it’s what I do – well, it’s easier than doing extra work too right?)

Programmable thermostats do cost $35 to $100, and professional installation can cost an additional $75 to $100, but homeowners can save about $180 a year with a properly set one, according to the Department of Energy.

Gasoline – There’s a section on gas savings that I’ve pretty much hit in this article HERE.

Energy audits are a great idea, and some utility companies will offer them for free. There are independent professionals out there, too, who can take a holistic approach to your entire structure and help you make it as energy efficient as possible.

Verizon FIOS is WAY more Expensive than you Think – Here’s Why

Darwin — Wed, 07 Oct 2009 01:39:17 +0000

I was snookered the other day by a Verizon FIOS flyer touting a $79 combo deal. After cutting through the facade, I realized that if I wanted a similar set of services with Verizon compared to my existing Comcast offerings, I’d be paying a hefty premium. Even in the face of “better service” from Verizon, I couldn’t justify making the switch. The switchover costs are probably much more expensive than you think – here’s why:

It started with the initial flyer with FIOS splashed all over it. I recalled being offered a $99 triple play from Verizon a few months ago. At that time, I had opted not to switch since the costs didn’t justify it, they couldn’t port my number, and I was able to easily save 44% on my Comcast Bill with a simple chat session . Well, when I saw $79, I figured, “Hey, they’re really looking to court new customers now, let me check this out!”. Well, the fine print actually read that this was ONLY for “FIOS TVand phone” – internet was extra. So, this deal was no better than prior offers – actually, worse. However, since I saw this as an opportune blog post, I let the customer service rep elaborate on just what it would cost to get an equivalent package.

Current Comcast Package:

Triple Play Bundle: Phone, Internet, cable
Phone and Internet are basic/standard
Cable – in addition to the typical several hundred channels, we have the HBO, Showtime and Starz packages. These come free based on the deal I worked out with Comcast when I threatened to leave for FIOS previously
HD Package/HD-DVR
No additional boxes needed, unlimited TVs (we have 3: kitchen, family room, master BR)

Comcast Final Cost Before Taxes: $110

Verizon Requirements to Duplicate My Current Comcast Package:

Phone/FIOS basic – cost $79.99
Additional for Internet – cost $40.00 (Full Triple Play Starter is $119.99)
HD DVR – cost 15.99
Box for Each and Every TV – cost $3.99 ea x 2 = $8 [note: many households have more than one TV]
Premium channel Package (equiv HBA, Show, Starz) – cost $25 [note: not everyone watches premium channels]
1 time Signup Fee – cost $49.99 *excluded from analysis as a one-time cost
Free gift card of some sort * also excluded from analysis as a one-time cost

Verizon Final Monthly Cost Before Taxes (excluding one-time fees/gift cards): $169

*Note that this was an introductory year offering only – I’ve heard that after the first year, Verizon jacks your rate by at least $10/month. It’s business and they’re viewed as the better game in town, why wouldn’t they? But, consider this as a future cost as well. Greater increases than your existing service provider who’s working harder to retain you.

*Verizon’s cost is net of taxes as well. Since they wouldn’t provide estimated taxes over the phone (they don’t want you to know your additional tax liability until you’re already a customer and recieve your first bill. It wouldn’t be rocket science to quote you what your neighbor’s bill says for equivalent offerings), I compared both on a pre-tax basis assuming the taxes are roughly equivalent between the two.

So, on an annual basis, you’re going to pay $59*12= $708 more for Verizon service over Comcast. Of course, I’m using a reduced Comcast cost basis, but as I outlined previously, anyone being offered both services in the same area should be able to utilize the same tactics I did to win an immediate 15-20% reduction in your bill since Comcast fears losing more customers to Verizon. I like to look at investments and expenses over multiyear periods, usually 5 or 10.

Conservatively, over a 5 year basis, you’re paying over $3500 more to use Verizon than Comcast.

What do you get?

Verizon claims their download speeds are faster. This isn’t really a big deal to me; we’re nowhere near watching all content through the internet yet (TVs aren’t going away any time soon) and I’m not a master internet pirate uploader. Frankly, I don’t think people surfing around, shopping here and there or doing a blog post would notice a performance difference between the two.
HD Quality – I’ve seen claims that FIOS offers a better HD picture than Comcast HD as well. Again, I haven’t noticed the difference between houses that have different services on similar HD TVs and I don’t waste away my weekends watching every football game played around the country – it’s just not that important to me. The HD quality through Comcast seems sufficient to me.
Comcast had greater On-Demand offerings at last check. Perhaps Verizon has improved recently, but that was my last data point when I last considered.

What are your thoughts? Did I miss anything in my analysis? Is it worth the extra money?