April 30, 2008

How to save on gas #2 - efficient cars

New vehicles on the market today can have MPG ratings of anywhere from 12 MPG for a large pickup truck all the way up to 48 MPG for a Toyota Prius. If you're a typical American driver then you log 12,000 miles on the road each year. At $3.25 per gallon that means the cost difference between that big truck and the Prius is $3,250 versus $812.50 per year. Thats a $2,437.50 potential annual savings difference.

I know that some of you have a need a 4WD pickup with V8 engine cause you work construction and you need to haul things. Or you may want a large SUV because you have 4 kids and you frequently haul them and their friends around town. So a Prius or similar smaller vehicle may be impractical for your needs. But you might want to challenge those thoughts to be sure you're making the right financial choice. Do you really use your pickup to haul stuff frequently or could you instead buy a car and occasionally rent a uhaul to haul items if needed or have things delivered? And does your family size really warrant a large vehicle? I'm sure some of us could live just fine with other vehicles and we don't necessarily need the biggest pickup or SUV. Look at it this way: What is more important, having more hauling capacity or saving $1000-2000 a year in gasoline?

Still, I'm sure many people with larger vehicles do have a practical need for them. But you can still save money on gas based on your choice of vehicle. If you have a need for a pickup then consider a 2WD over a 4WD. Most of us don't have any use for 4WD most of the time and 4WD vehicles get lower mileage. If you need to haul a lot of people then consider something like a hybrid SUV. The Toyota Highlander hybrid seats 7 and gets 27 MPG city and would save you $1156 a year in gas over a typical 15MPG SUV.

But I still realize larger vehicles are necessary for many of us. So I would at least recommend comparing vehicles within your class and look for better MPG. The governments Fueleconomy.gov site has a page to search for MPG by vehicle class. So you can go there and compare MPG among pickups or SUVs or family sedans. For example : 4 wheel drive trucks range from 12MPG to 17MPG city. Thats a $2294 to $3250 range or as much as $955 annual difference. Or if looking at family sedans the range is 15MPG up to 48MPG for the Prius. With an annual range of $812.5 to $2600 or annual difference of $1787.50.

Generally I wouldn't recommend buying a brand new car given the high depreciation within the first 1-2 years of vehicle ownership. Heres a page with a list of high MPG newer model used vehicles. Or if money is especially tight then I'd recommend looking for a decent '90's cars like a1995 Geo Metro 37MPG city / 44 highway or 1995 Honda Civic 35 city/41 highway.

Furthermore keep in mind that the amount you save on gas will benefit you every year that you own the vehicle. While we can't predict the future, its quite likely that gas prices will remain high in future years. Lets say you're comparing a Toyota Camry to a Toyota Prius and expect to keep the car for 5 years. The 2008 Camry CE retails for $18,570 and gets 25mpg average while the Prius retails for $21,100 and its mileage is 46 mpg. If you drive 12k miles and gas costs $3 then the Camry will cost $1440 a year in gas and the Prius would be $782. Thats a $658 annual savings per year or $3290 over 5 years. That more than make up for the cost $2,530 differential between the two models.

April 29, 2008

How to save some money on gas #1

The government website Fueleconomy.gov has a page on Gas Mileage tips

The first set of tips is : Driving more efficiently

They recommend you drive sensibly (avoid speeding, rapid acceleration and braking) which saves you 5-33% in gas. Other tips and their savings are:
Observe the speed limit - saves 7-23%
Remove excess weight - saves 1-2%
Plus you should also Avoid Excessive Idling, Use Cruise control and Use overdrive gears

If you do all of the above then thats a total of 13-58% savings.

Next they recommend that you :
Keeping your car in shape

Things you can do to keep your car in shape and the possible savings are:

Keep your car tuned : 4% savings
Check and replace air filters regularly : up to 10%
Keep tires inflated : up to 3%
Use recommended grade of motor oil : 1-2%
That adds up to 1 to 19%
If you drive efficiently and keep your car in shape then the total difference is 14-77% in gas savings!

Planning and Combining Trips is also encouraged.

Now I'm sure that most of us can't benefit the maximum % from most of these items. But some of us can probably stand to improve a few of these items.

A typical American drives 12,000 miles a year and their car gets 20 MPG. So if gasoline is $3.50 a gallon then typical Americans spend $2,100 a year on gas. (12000/20 * 3.5)

If you increased your MPG by just 10% then you'd lower that cost to $1,909 (12000/22 *3.5) and save yourself $191 per year on gas.

April 25, 2008

PaperbackSwap and cheaper alternatives

I've seen a bit about PaperBackSwap.com lately. Its a nice idea for sure. Using the service individuals can trade books with other individuals and just pay the cost of postage. There's no fee for the site involved. The website keeps track of it and gives you a credit for shipping a book to someone which you can use to request a book from someone else. They have over 2 million books available from members to trade. Overall its a pretty nice idea. BUT postage costs in the $1.50 $2.25 range to mail a book. So if you add this in then you're basically trading 1 book for 1 book + $2. Due to the postage costs I believe this isn't a particularly frugal option. There are a lot of ways to get books cheaper.

Here are some ideas for getting used books cheaply..

Use the local library and buy at library sales

The library is a great resource for books. The biggest advantage the library has of course is that the books are free to borrow. Of course you can only borrow books for a limited time, though you might be able to extend the deadline. If you're not good about returning books on time it can also cost you late fees.

Libraries or organizations that support the local library may have a book sale of either library discards, general used books or both. These can be great bargains for books with lots of selection and low prices. You can often get books for $0.50 to $1 at these sales and they may have deals like stuffing a paper sack full of books for $5. Try looking at the site Book Sale Finder to locate book sales near you. These sales aren't frequent though and are often only held annually. My fiancée and I visited such a library book sale this past weekend and bought about 20 books for $20.50 and about $7 gas money or $1.37 per book plus we had fun doing so.

Buy bulk lot of books on eBay

Go to the eBay category for books and then search for your favorite author and the keyword 'lot' for example if you like Stephen King then search for "stephen king lot" or if you have a genre of writing you enjoy you can tray a search for that topic name. Like if you enjoy romance books then you can do a search for 'romance lot'. Once you get the search results then sort them by 'Time: ending soonest". This generally works best for the more popular authors or genres and some books are more or less expensive on eBay depending on availability and popularity. I tried this for Stephen King as an example and I came up with an auction of 6 books going for $0.99 and $8.95 shipping which comes out to $1.66 per book. Keep in mind when you're looking on eBay you should check out the sellers feedback rating and add in the shipping and handling fees to the costs.

Trade and buy at used book stores

Used book stores will often have a trade system where you can trade in your used books for credit or a 2-for-1 trade system. So for example at my local used book store they sell their books for 1/2 cover price + $0.25. They give you 1/2 cover value in trade towards books for your trade ins. So if a book originally cost $8 I could buy it there for $4.25. Or I could trade in an $8 book and get half the value in credit and pay $2.25 additional. So for new books that retail for $8 I'd be looking at 1 book + $2.25 to get a used book, which is about the same as the PaperbackSwap site. But if you look at slightly older books that retailed for $5-7 then you come out cheaper. I could trade a $5 used book in and pay $1.50 to get a used $5 book. Buying at used book stores generally works out better if buying a book with a lower original retail price.

Try the local Thrift store

The local thrift store will probably have some books. Prices vary a lot but you might find some $0.50 or $1.00 books.

Last but not least, don't forget to keep your eye open for books at Yard sales. You can often find some cheap books for sale at yard, garage or estate sales.

There are pros and cons to shopping any of these methods. You should be able to find cheap books at all of these. The selection of books and convenience may or may not meet your needs. While in general I don't think Paperbackswap is the cheapest method of book shopping, I do see it has a lot of selection and convenience. I just urge people to keep their eyes open to the shipping cost involved and consider the other options out there.

April 24, 2008

"Playing" the market on Updown.com

The website UpDown.com is an online site that simulates trading in the stock market. They give you $1 million in pretend money to trade with. Then if you do better than the S&P 500 in your trades or post stock analysis articles you have a chance to make real money. Its a fun site with a novel idea.

Personally I started an account just for fun. Its helping to convince me that I should not be trading in individual stocks. After about a month's trading my stock picks have lost -1.8% and the S&P500 is up +3.49%. So I'm underperforming the standard by 5%. Not good.

My personal history of trading in individual stocks is not very good. I haven't done a lot of real trading but what I've done hasn't done very well. Also about 10 years ago I setup pretend stock trades in a few stocks just to watch them and see how well they would do. They didn't do very well either. The stocks I picked were Altria, Dupont, Exxon and Chrysler/Daimler. Exxon has done very well in the past 10 years and has basically tripled in that time. But my other picks didn't fare well at all and have more or less remained flat.

I'd recommend trying out UPdown if you are interested in stock trading. Its a fun site to get some practice with stocks and test yourself plus there's zero risk involved and you even have a chance to make real money playing on the site.

April 23, 2008

Tax Freedom Day & My tax rate is 32%

Free Money Finance points out that today, April 23rd, is 'Tax Freedom Day" the day in which they figure your year to date income has paid off your taxes.

The way I figure it my personal Tax Freedom Day is just about today also.

I just figured my total tax rate out as 32% of my gross income.
The break out for me is:
18% federal
7.2% state
5.4% social security
1.3% medicare

Note that some of my income is not on the W2 so I don't pay out social security and medicare on all of it. Normally they tax all your W2 reported wages at the standard 6.2% for social security and 1.45% for medicare.

If you think our taxes are bad then compare them to other countries: Tax rates around the world & List of countries by tax revenue as percentage of GDP

April 22, 2008

60% off deal at Restaurant.com until April 24th

There is currently a promotion at Restaurant.com. They are offering 60% off their normal prices for their $25 certificates or dinner of the months. So you can get a $25 dining certificate for just $4! Or you can get their Dinner of the month club for 3,6 or 12 months for 60% off. A 6 month gift costs $24 with the discount. So for the 6 month deal that's 6 x $25 gift certificates for $24. Plus you get a $25 gift certificate as a bonus when you give a dining gift.

I've used these gift certificates before one time at a local steak house and it worked fine. I just bought myself the 6 month dinner of the month club with this promotion for $24. I figure I'll save $151 over the next 6 months.

Before you buy check out the Restaurant.com site and make sure that there are good restaurants in your area that work with these gift certificates. I only know one restaurant I'd go to in my area that take the certificates. Also pay attention to the fine print on the certificates usage. The $25 certificates might require a $50 meal purchase so you're spending over $25 yourself and it probably won't work for alcohol purchases.

Use the discount code FLAVOR when buying.

60% off Gift Certificates at Restaurant.com. $25.00 Gift Certificates for $4.00 with code FLAVOR.

Now thru April 24th, 60% off Dinner of the Month Club purchase at Restaurant.com. Use code FLAVOR!

The 60% off deal only lasts till April 24th. After that the $25 certificates are $10 which is still a pretty good buy. In the interest of disclosure: I do make a commission for the links above.

For more ways to save at restaurants see my previous series:

April 21, 2008

Why you're paying more at the grocery store & frugality in teens

Skimming today's Seattle Times headlines I found a couple interesting articles related to personal finance:

Why you're paying more at the grocery store

Food prices went up 4% in 2007 and are expected to go up 4.5% in 2008. The article discusses the situation and offers some explanations why.

In vogue with teens: frugality

The article discusses how cuts in jobs for teens is leading to the teens cutting back on spending and turning to frugality:

"The souring job market and rising costs of the usual teenage indulgences — a slice of pizza, a drive to the mall, the hottest new jeans — are causing teens to do something they rarely do: be thrifty. ...
It's even becoming cool to be frugal."

April 18, 2008

Amazon giving a $50 rebate for HD DVD buyers

I just received an email from Amazon saying that they are giving a $50 refund for people who bought HD DVD players in a certain time period. Apparently this is slightly old news. But I just found out today when I received the email. Heres a quote from the mail:

"You are receiving this e-mail due to your purchase of an HD DVD player from Amazon.com before February 23, 2008.
As you may know, manufacture of HD DVD players ceased February 23, 2008, and major studios in the U.S. have ceased production of HD DVDs. In recognition of this development, Amazon.com is providing all customers who purchased qualifying HD DVD players a credit for $50 off any products sold by Amazon.com for each HD DVD player unit purchased from us prior to February 23, 2008, up to a limit of 10 per customer, or a maximum credit of $500 per customer."
They then give you a rebate code to use on your next purchase. It looks like the same thing as a gift certificate code. The email has some more fine print details but you get the general idea from the quoted section.

Circuit City offered a $50 credit. Bestbuy then did also. Its nice to see Amazon following suit.

April 14, 2008

Is pet insurance worth buying?

Yesterday Free Money Finance had an article on the cost of pets. That lead me on a tangent thought about pet insurance.

I have been considering buying pet insurance for my cat. I know that vet bills can be pretty expensive if theres a serious injury or illness. I've shopped around and found I could get a basic insurance policy for about $120 a year. So I've been thinking of doing it. My logic being that I didn't want the risk of my cat getting a serious problem and being faced with a $5k-10k vet bill.

But I ran across this article from Consumer Reports titled Is Pet Insurance Worth the Price? They concluded that pet insurance is not indeed worth the price. Read the article yourself for the full story, but the basic conclusion is that pet health care will not cost you as much as the insurance in general. One big point they make is that the insurance policies have deductibles, coinsurance and maximums so overall they don't really pay you out that much.

There's two pet insurance providers I've seen: VPI Pet Insurance and Pets Health.

I've gotten a quote on the VPI and the rate for my 6 year old cat is $128 a year for their basic plan. A 7 year old dog would run $198 a year. They have a $50 deductible and then pay 90% up to their maximum. VPI's benefits summary lists the maximums paid out. VPI has an example of benefits paid for a claim with the standard plan. The vet invoice total is $1451 and the insurance only pays $755. If you look through the benefits summary the maximums there are not all that high considering how much procedures can cost.

Pets Health basic plan is described as:
The Basic Plan covers treatment and medication for injury and illness.
The Basic Plan has a maximum benefit of $8,000.00 per year, with a $1,500.00 per incident limit.
The Basic Plan includes a FREE Lost Pet Recovery Service Tag.
Coverage starts at $11.58 for cats and $16.61 for dogs.

I've thought about getting insurance as a safe guard against an expensive bill. But overall it looks to me like the insurance companies don't cover that much of the cost and have some low maximum limits. Looks to me like Consumer Reports got it right that pet insurance is NOT worth the cost.

Saving at restaurants #4 - general frugality

I've discussed a few general ways that you can save at restaurants in the past 3 posts. Today I'm going to talk about simply cutting costs by basic cost conscious and frugality.

  • Skip the extras : appetizers, beverages and deserts. When you eat out you can easily pile up the charges with extras like appetizers, drinks and deserts. Appetizers are usually $5-10, drinks can run a few dollars each and deserts are a few dollars more. Alcohol beverages can be especially expensive particularly if you have more than one drink. You either just have water or cut costs with a lower cost beverage like coffee or soda instead of a pricey cocktail. Deserts are optional. Skipping the extras can really add up. If I were to go to my favorite nice restaurant and have dinner for two we could spend $8 on an appetizer, $12 on drinks and $12 on desert in addition to $40 on entrees. Thats $72 before tip or $86 with a 20% tip. If we cut out the appetizer, skipped the desert and had water instead of cocktails then we'd spend just $40 or $48 with a tip. Thats about 44% difference in the total bill!
  • Pick a cheaper meal. You can of course save money by eating cheaper meals. A nice chicken dinner is usually going to run you a lot less than a filet mignon steak. Or if you want to be more creative you might save money by having a large salad instead of an entrée or maybe an appetizer plus a bowl of soup.
  • Share a desert. Rather than ordering two deserts simply share a desert. In my experience deserts run $3-8 so sharing a desert will save you that much off your bill.
  • Go to cheaper restaurants. Ok this tip is virtually common sense. If you eat out at expensive places all the time then you'll spend a lot more. Keep the costs of the restaurants you go to in mind and compare cost to quality. If theres two Chinese places of relatively equal quality and one is $1 a meal more on average then save that $1 by going to the cheaper one.
  • Take advantage of happy hour. Many restaurants have bars and lounges with a happy hour special or they may simply offer happy hour in their entire establishment. You can get some really great deals during happy hour so shop around. Of course happy hour may be at the wrong time for you to eat out.
  • Share a large meal. There is an Italian restaurant near me that serves you enough food for 2-3 people. So you can easily share a meal there and still walk away full. Restaurants may have a small fee to cover sharing meals but its generally much less than another entrée. But you do have to both want to eat the same meal so this can be tricky.
  • Take home left overs. Taking home left overs won't save you money off the cost of your restaurant bill but it will save you a little grocery money.
  • Share meals with children. If you have a family then ordering full meals for everyone can really add up, even if you use a childrens menu. Instead you might consider simply sharing meals with your children.
  • Find restaurants where kids eat free. Many restaurants offer free meals for children. The website http://www.kidseatfree.com/ has lists for reference.
  • Eat out lunch instead of dinner. Usually lunch menus are cheaper than dinner yet offer the same meals. So if you want to eat out for a special occasion then consider going out for lunch on a Saturday or Sunday afternoon instead of dinner.
Some of these will work for you and some will not. I don't do them all myself. But the more you do then the more you can cut costs.

You can still have a nice experience dining out and save money while doing so.

April 11, 2008

Saving at restaurants #3 - using gift cards

In the previous posts I talked about saving money at restaurants by taking advantage of discount programs and email clubs. Another good way to save money at restaurants is by looking for discounts on gift cards.

Buy cards at a discount

  • Using Restaurant.com gift certificates can save you a decent amount of money. They have offers like buying a $25 gift certificate for just $10. I used this at a local steak house we enjoy and it worked fine. This is a simple and easy way to save $15 off a nice dinner out. If we go out for steak monthly and use these gift certificates then I can save myself an additional $180 a year. The site is pretty easy to use, first search for restaurants in your area. I found 27 within 10 miles of my house including 2 that we eat at normally. Then just buy a certificate online and print it out to use when you dine out.
  • Citydeals website is an online retailer that sells gift cards at a discount rate. Their cards are mostly 10% off. But they seem to sell out on cards.
  • Buy direct from the restaurant. For example it seems Red Robin has a deal every fall to get $5 extra when you buy a $25 gift card.
  • You can also sometimes find discount gift certificates for sale at stores. For example Costco has been selling two $50 gift cards for $80 like this offer for McCormick and Schmicks they have right now. That's 20% off! I've also seen them selling similar card sets usable at Stanfords and some other restaurants. If you search the Costco website for 'gift certificate' you can find a few more similar offers.

Buy cards second hand
  • The site Gift Cards Again has second hand gift cards for sale at 6-7% discount.
  • eBay has a gift certificate category where individuals will sell their unwanted gift certificates & cards. The cards vary in price of course but typically they seem to go for 5-20% below face value. But you can find some great deals if you are lucky. I bought two $20 off coupons for McCormick and Schmick's for just $6.5 saving me $33.5 over 2 meals.
  • The Plastic Jungle site sells cards too generally at a 5-10% discount.
  • Card Avenue also has cards for sale
If using gift certificates keep in mind that there can be requirements. And also make sure to be aware of any expiration date. For example using the Restaurant.com $25 certificate at my steak house requires a minimum $50 bill and they expire in a year.

April 10, 2008

Saving at restaurants #2- birthday & email club discounts

This week I've been talking about how I spend a lot of money on dining out and I'm discussing ways that I might cut my restaurant expenses. This is the 2nd part in a series on saving money at restaurants.

In my previous post on restaurant discount programs I mentioned that the McCormick and Scmicks restaurant club gave a free meal for your birthday. There are a lot of restaurant chains out there that offer free meals or bonuses for your birthday. Many of them have email clubs that you can sign up for. They send you a news letter via email and then on your birthday you get a free meal or free dessert or similar. Other restaurants have email clubs that send you bonus coupons or discount offers in general not specific to your birthday.

I compiled a list of birthday deals and email newsletters from various large restaurant chains. I haven't used hardly any of these myself but I'm pretty sure they are all pretty straight forward and legit. You might also check into your favorite restaurants if they are local and/or not listed here to see if they have any offers like this. I'm sure many other restaurants have special offers for your birthday just for asking and with no need to sign up for email.

Birthday deals

Black Angus gives you a free steak dinner for your birthday and a free desert just for joining their club.
Red Robin has an e-club which gets you a free burger for your birthday and when you sign up they send you a $3 coupon.
Old Country Buffet offers a 'birthday coupon', an 'anniversary coupon' for your wedding anniversary plus you get a free buffet meal just for joining and they send you other discount offers.
Qdoba Mexican grill offers a 'special gift' for your birthday and free chips & salsa just for signing up.
Red Lobster has a club that offers a 'birthday gift' as well as other offers.
Bonanza/Ponderosa Steakhouse has a 'special offer' for your birthday and other offers.
For kids only, Old Spaghetti Factory's kids club offers a free kids meal to children during the week of their birthday. They also send out special offers.
Chuck E Cheese has a club that gives kids 20 free tokens on their birthday plus they send special offers and coupons.

Of course you can't really go out to eat at 6 different restaurants all on your birthday. But you could pick your favorite option among this list as your birthday meal. Also most of these offers don't have to be used exactly on your birthday and are good for a number of days around your your birthday. So you might have a meal at one restaurant on your birthday and save another offer with a longer usage period for a week later or something.

In addition to birthday deals there are a lot of restaurants that have email clubs/newsletters that say they will send you special offers.

Special offer / Coupon deals
Bennigans has an e-club that gives you coupon deals.
Buffalo Wild Wings has an email club with deals / coupons.
Chili's restaurant has an email club advertises exclusive offers
Denny's has a breakfast club with offers and exclusive promotions
Claim Jumper has a club and they say they'll send out gift card promotions plus exclusive offers
Dairy Queen's Blizzard fanclub gets you 2-for-1 blizzard for joining and other offers.
Dave and Busters rewards club offers $10 of free play, discount offers and 10% off gameplay.
Romanos Macaroni Grill has a 'Mac pack' club that gives you a free appetizer for joining.
Olive Garden has an email newsletter with offers
Steak and Ale has a 'preferred guest list' email newsletter that sends you "monthly specials, news and more".
TGIFridays has an e-club with special offers and a free appetizer for signing up.
AppleBees and PF Changs both have an email newsletter but they don't say much about special offers, though I'd assume they'd send you something.

Many of these clubs ask for you birthday so I'm guessing they might also send you a birthday coupon but I can not say for sure.

If you are going to sign up for email newsletters then I'd recommend using an alternative email address. If you send all these newsletters to your normal address you may find yourself swamped with newsletters. But if you create an email specifically for offers such as this then you can direct the email there and it won't clutter your normal email.

(Note, most of the links above are going to a site fishbowl.com. Fishbowl is a company that provides the online service to these restaurants. )

April 8, 2008

Saving at restaurants #1- discount programs

In my last post I discussed how I spend a lot on eating out. I've decided I should look for some ways to cut my restaurant bills. One way I already discussed would be to bring sack lunches to work. I'm going to do a few posts on the topic and discuss methods for saving at restaurants.

Today I'll discuss various discount programs that can save you money when eating out.

You've probably heard of the Entertaiment Coupon books. These are big fat books full of coupons for local restaurants and attractions. They are often sold as a fund raiser. You can buy one for most areas online at their site for just $15. They typically have hundreds of restaurants with discount coupons. I skimmed through the listing for my area and found one chain of Mexican restaurants I like here that has 2-for-1 lunch or dinner coupons for up to $9 off. If I bought one of those for $15 and then used it once a month to save $9 for a dinner out then I could save $93 a year. A lot of the restaurants in the Entertainment books are very reasonably priced and they even have coupons for fast food joints too.

Make reservations online via the OpenTable.com site. They have a rewards program that gives you free dining certificates for using their service. They usually give 100 points per reservation made and you can redeem 2000 points for a $20 certificate. So if you used it once a week you'd get about $50 in rewards a year. Its free to join. The selection of restaurants is mostly the high end places.

You can join a discount club like Passport Unlimited. They give you your second entrée complementary with dinner at the member restaurants. I happen to have a club membership free from my employer and my fiancé has one she got as a door prize. I've heard of people getting them free from 3rd parties as promotional items too. But if you don't have one or know a way to get one then you can buy an individual regional membership for $75-90 a year. Depending where you dine a second free entrée is going to save you $10-25 a meal so it won't take long for the savings to add up. If you dine out once a month and spend $20 per entrée then you'd save $240 a year with a free membership or $150 a year after membership fee.

One discount club I already use is the McCormick and Schmick's Preferred Guest Membership Program. Heres how it works for me. When you dine at any of their restaurants they give you 1 point per dollar spent just like many typical rewards programs. You can then use those rewards for free food. If you get 1000 points you can get a $100 dinner certificate. That's about 10% back on your spending. Another nice bonus is they will send you a certificate for a dinner every year for your birthday, and if I recall right that is valued at $35. They do have a $25 fee to enroll but you get a $25 coupon when you sign up so that's a wash. If nothing else its worth signing up to get that free dinner once a year for your birthday. I love McCormicks and we eat out there fairly frequently so for me joining their club is saving me 10% on dinner. If we eat there monthly and spend $100 a pop then this can total of average of $120 in rewards and $35 for birthday for a total of $155 a year savings that I'm already taking advantage of. Keep in mind that McCormicks is a relatively expensive dining option so I would not recommend them in general for people with tight finances. But even if money is tight you could however sign up just for the birthday $35 gift certificate to have an annual treat out at a nice restaurant you couldn't afford otherwise.

There are undoubtedly more rewards or discount club programs out there.

Spending a lot on eating out

I looked at my credit card balance* just now and it was a bit high. There were a couple medical items that aren't typical but that still didn't account for the higher total. I counted up the bills for eating out and they are nearly $900. Yes that's a lot of money and definitely not frugal. Let me explain..

Eating out is one of my main financial indulgences. I don't spend much money on frivolous things overall. Other than eating out I do have a cable bill and Netflix for entertainment. But I'm frugal in general and I spend less than I make. I save a good 20-30% of my gross income every year. My personal view is that we should be happy with spending money on things we value rather than being too much of a penny pincher and someone who takes being frugal to the extreme. So I choose to spend money on eating out because its something I enjoy and I'm still responsible with my finances in general. If I was living paycheck to paycheck, or I wasn't saving anything or I had large outstanding credit card debt then I would have to cut back on the frivolous expenses and stop eating out.

Even though I do value eating out and consider it an OK expense I still think I can cut back some. I eat lunch at work every day of the week. This costs me about $5 a day on average. Our café is actually pretty good and the food is worth the price. But that comes out to around $100 a month that I'm spending on lunch. I could make a pretty good lunch at home for about $2.5 I'm sure. So bagging my lunch would save me $50 a month or $600 a year.

That $600 a year is quite a lot of money. Do I enjoy eating lunch in the café that much more than a bagged lunch enough to justify spending $600 a month? Probably not no. If I did really enjoy eating lunch out then I'd spend the money. But in this case I think I've found an area where I can fairly easily reduce my spending.

I also spend a lot of money eating out for dinner and breakfast. Of the total $900 I spent in the past month a full $800 of it was for dinner and breakfast. That includes both myself and my fiancé so its about $400 per person for a month. We spent about $600 on dinners and $200 on breakfasts. We both enjoy eating out very much and I wouldn't really want to stop doing it. However I can look for ways to save money eating out. There are discount programs and coupons to look for and take advantage of. In coming posts I'll discuss some of those.

*note I do pay off the credit card bill every month

April 7, 2008

Printing Digital photos at home versus paying a service

I did a little research a bit ago into the costs of printing digital photos. I have two printers at home. One is a fairly old HP model that prints photos OK but is out of ink and the other is a newer Lexmark all-in-one scanner/copier/printer that has ink but prints photos poorly. So I'm faced with the choice of buying a new printer, buying more ink for the very old HP and maintaining ink in 2 printers or finding an alternative to printing photos from home.

I looked at a few online services and compared their prices:

6c for 4x6
$4 ship
20 photos = $5.20 total cost ($0.26 each)
100 photos = $10.00 ( $0.10 each)
8c for 4x6
89c for 1-10 ... 71-100 for $4.29 shipping
20 = $3.09 ($0.15 each)
100 = $12.29 ($0.12 each)
Snapfish (by HP)
9c for 4x6
$0.99 + $0.49 / 10 prints shipping
20 = $3.77 ($0.188 each)
100 = $14.89 ($0.14 each)
12c for 4x6
1-5 for .99, 6-15 for $1.48, 16-25 for 1.97, +10 over 25 for +0.49 shipping
20 = $4.37 ($0.21 each)
100 = $17.89 ($0.17 each)

A lot of these services will advertise costs of 6 to 12 cents per photo but don't forget the cost of shipping!

So that's a range of $0.10 to $0.26 per 4x6 photo for the online services. You get a lower cost per photo by ordering 100 photos at once due to spreading the shipping costs over more photos.

By comparison I also checked out the costs of printing photos at home by buying paper and printer ink.

Here's reference to some data I found:
Photo paper 8x11, 100 sheets costs $12 ($0.04 ea)
Photo ink cartridge was $10 each or 3 for $30
photo yields about 300 per cartridge:
300 pages, $30 (0.10 ea)
INK + paper = 0.10 + 0.04 = $0.14 ea
75xl: 145 4x6's per cartridge, $30 or $0.20 ea

A couple options for paper/ink costs came out at $0.14 or 0.20 per 4x6 photo.

So depending on what options you chose you could spend more or less in either using online services versus printing at home.

I don't see a clear choice here myself based on just price between online service or home printing So I think the choice will really come down to individual preferences based on other features of either option.

There are pros and cons to each option. Printing at home has more convenience in some ways for sure but you also have to own a printer, buy paper and ink supplies. Printing via a service is less immediate and and convenient but you don't have to worry about supplies and should get professional quality prints.

My father who is retired and not very computer savvy recently got some prints done at a local grocery store via their self service machine. He spent closer to $0.30 per print but it was quick and easy for him and he didn't have to bother trying to figure out the computer at home. So even this is a practical option for some individuals.

I think I'll try an online print service and see how well it works.

Note I am not endorsing any of the services above, I have not tested them myself. For reference here are some independent reviews of online photo service I mention above.
Snapfish: http://www.viewpoints.com/Snapfish-reviews
Walgreens: http://www.viewpoints.com/Walgreens--21176-reviews

April 4, 2008

Some tips on getting the most from rebates

Flexo over at Consumerism Commentary has an article about tracking his cell phone rebate . Plus he links to an older article about rebate scams. I would have to personally agree that rebates are often virtually a scam. Rebates are intentionally setup the way they by companies knowing that a large % of customers will never send back the forms and among those that do the companies can be extra picky about following the rules or they'll deny the rebate.

The rebate scams article also links to this CNN/Money article 5 Tips : Getting the most out of rebates For all the details you can read the full article, but the 5 tips are: 1. know the policy, 2. follow the rules, 3. watch your deadlines, 4. track it online and 5. be the squeaky wheel. And those are all good tips for sure. Under the tip for tracking your rebates online they link to the site http://www.myrebates.com/ which has online tracking links and is a service itself where you can setup an account to track your own rebates. I haven't tried it myself but it looks like a real handy resource for rebates.

The #1 tip that they took for granted is to send in the form. Way too often people simply neglect to send in their rebate forms and end up missing out on the money. So first make sure you send in the form!

My own main tip is to keep a copy of the rebate form and receipts for your records. You can either make a photo copy or do what I do and scan the forms and store them electronically on your computer. Scanning has the added bonus of being free compared to the $.05 or $.10 you spend on copies.

I sent in a rebate for a Maxtor harddrive years ago and got back a letter saying I'd been denied. Thankfully I had kept a copy of the rebate form and receipts and I sent Maxtor the copy and they then eventually sent me my money.

April 3, 2008

Buying a timeshare is not a good idea

I'm sure the title of this one seems like common knowledge to some of us, but for others they might not realize exactly why. Timeshares are partial ownership of a vacation property. Timeshares are usually resort condo or hotel style vacation properties. They have a reputation as being sold with high pressure sales tactics. Typically the companies selling the timeshares will offer couples a free vacation to the destination if you promise to attend a 'short' sales presentation. Then when they get you in the door of the sales presentation they switch into high pressure mode, fill your head full of fuzzy financial claims, half truths or outright lies and they won't take no for an answer.

Here is an article from the Las Vegas Review Journal about timeshares titled: Shared Frustration. They cover the topic pretty well there, but I wanted to discuss a couple things in more detail and go over an example.

Appreciation - Timeshares do NOT appreciate, they will instead depreciate. When they sell a timeshare they will claim that it will appreciate in the future. Its real estate right so shouldn't it appreciate? No. First of all you are buying usually 1/50th of a share of the property and the purchase price is grossly inflated above the real value of the property. Second the fees, hassle and negative reputation for timeshares make them a poor resale item. The fact that timeshares depreciate is easily shown by comparing what they cost new versus what they sell for used. The LV Review article cites a couple timeshare buyers paying $16,500 and $27,000 for 1 bed and 2 bed units respectively for timeshares in Las Vegas. The real estate page on eBay has timeshare listings and numerous sites such as Redweek.com and BuyMyTimesharenow have listings for used timeshares. The unit that sold for $16,500 new can be bought used for $1,800 or $2,500. eBay has even cheaper deals on various timeshares selling for next to nothing to just a few hundred dollars.

Fees - Timeshares come with hefty annual fees. Typically these fees seem to range in the neighborhood of $350-700 a year. If you want to trade your timeshare with other locations then joining an organization such as RCI to do so will cost $99 a year in membership fees.

Say you were to buy one of the 1 bedroom timeshares for $16,500 and then pay the annual fees of approx. $450. If you were to finance that $16,500 at 7% over 30 years then your loan payments would be about $1300 a year. That's a total cost of $1750 a year for 1 week accommodations or $250 a night over 7 nights. You can get a pretty nice hotel room in Vegas for $1750 a week.

Even if you got a timeshare used for free with relatively cheap fees its still not really worth it. Even the cheapest fees are still $350 a year and that's enough to pay for a reasonable 2-3 star hotel for a week in Vegas.

One of the really poor things about timeshares is that they are banking on the fact that people won't use them every year. But you're still paying those fees every year. Think about it, how likely are you to go on vacation for a full week every single year? Some folks this might be a safe bet but a lot of other people its not. Plus what happens if you have a major change in your life such as divorce or change in career that cuts down vacation time? Another consideration is that timeshares are generally in a fixed location. So if you don't want to go to that same spot every year then you're going to have to try and trade your week in your location for someone Else's week in another location. Threes a good chance you won't be able to find the time and location that you want in a trade.

No matter how I look at it, buying a timeshare is not a good idea.

April 1, 2008

Why spending $700 on a HD TIVO is a good idea

I have owned a Tivo for over 5 years now and greatly enjoy the convenience of a DVR and I also like the extra features that Tivo brand has. But recently I switched over to HD cable service and got the Comcast HD DVR box. I chose to get the Comcast DVR because it supports HD and my Tivo is a standard Tivo series 2 with no HDTV support. But now I'm having to pay Comcast $13 a month for the HD DVR box.

With my Tivo I had originally purchased the lifetime subscription they offered for around $250 and I think I spent $200-250 for the Tivo box itself. So I had spent about $500 on my Tivo2 and had no monthly fee. So I've had Tivo service for about 5 years and avoided the Tivo monthly fees all that time. By spending that $250 five years ago for the lifetime subscription option I've saved myself $750 in monthly fees. I could sell the Tivo2 box with lifetime subscription for $150+ on eBay now . That puts me about $600 ahead versus not having bought the lifetime subscription. SO I made out very well with the lifetime subscription on my Tivo2.

Today I received an email from Tivo offering a Tivo HD model with lifetime subscription for $700. So I looked at what it would cost me to keep renting the Comcast HD DVR versus buying the TivoHD box. If I simply depreciated the value of the TivoHD 100% over its life of use then I'd break even on the purchase of the TivoHD in about 4 years 10 months versus paying $12 a month to Comcast. But the TivoHD box will retain some of its value so I could resell it in future years. In a period of 3 years I'd pay $432 in fees to Comcast. Or if I bought the TivoHD it would cost me $700 and I should be able to resell it for $250-350 giving me a total cost of $350-450. Comcast monthly fees for 4 years would run me $576. If I bought the TivoHD now for $700 I could sell it in 4 years for $150-250 and my total cost for that option would be $450-550. If I used the Tivo for 5 or more years it would gradually depreciate but not as fast as Comcast fees would cost. (I should note that I'm ignoring inflation or opportunity cost of my money just for simplicity sake)

Bottom line: I figure if you addin resale value of the TivoHD then the break even point of buying a TivoHD at $700 versus renting a Comcat DVR for $12/month is around 3.5 years.

I have high confidence that I'll be using a DVR of some sort for that 3.5 years. The monthly fee might fluctuate over time or I might switch to another provider but its also highly likely that I'll be paying $12 a month fees for a rented DVR. So buying the TivoHD with lifetime subscription would be financially better choice than renting a DVR.

I fully realize that doing without a DVR and canceling my subscription to cable would save me even more money. But cable TV and a DVR is one of my pleasures that I consider very much worth the cost.

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