16% Got a Free Hat!

There is a great article over at truthaboutcredit.org about the traps credit card companies set out for students. One of the most interesting bits was the success of some of the traps with a free* T-shirt topping the list. They probably would have had to go naked otherwise, so they had to sign up.

The larger point of the article is marketing and business practices of the credit card companies toward students as well as the university's role in the matter. I could attempt to summarize their work, but really, just hit the link and read it for yourselves. They also have additional resources on the right, including a PDF of the full report and one of the major findings.

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Thanks Again

Another month of blogging, and I'm just as honored and humbled by our numbers as with last month's.

  • 1200 visits
  • 1969 pageviews

What's more surprising, is the 1:55 average time on site means that some of you are actually reading the posts. As our admittedly odd way of saying "thanks", below is a small tribute to the areas with our largest readership.

  1. We're big in Eureka Springs! Last year we spent some time in ES, AR and had a great time, though the mountainous, winding roads do take some getting used to. None the less, beautiful scenery, great people - a good time was had by all.
  2. NYC. Yes, New York City came in second to Eureka Springs. Deal with it. It's been 5 years since we last visited NYC, and we're always looking for an excuse to go back. After returning from our last trip, we saw scenes from Law & Order shot in places we had just been. Kinda cool, but probably commonplace to those who live there.
  3. Someone in Byron Center, MI loves us, and we love you too. Next time we're in Grand Rapids, maybe we can meet up at the Beltline Bar for some of their Mexican Poutine and talk frugal.
  4. The last time we were in Houston, TX was for a Dave Ramsey LIVE! event. Dead serious. Reliant Area was not terribly comfortable, but Dave was great as always.

Odd that the top four locations are all places we've been. Creepy that all of this data is readily available via Google Analytics. Other locations to note for the past month: Washington, Bell Gardens, Harrisburg, Chicago, and Prince Albert. If your city didn't make the list then you obviously aren't reading enough. Visit and visit often.

Thanks Again

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Middle-Class To Food Bank - In Two Months. Now What?

Maybe CNN is a little late to the party, but they're apparently just figuring out that Americans are terrible with money. Ok, maybe not all Americans, but a lot of Americans are living just like Patricia Guerrero was - on the edge, financially. The front-page headline reads, "From $70K to food bank, one family's struggle". It does get your attention.

Though many of us live comfortably on a steady income, how far are any of us from the food bank? How many steps are we from the street? If you lost your job, where would you be financially?

Once upon a time, we were not unlike Patricia, in that we had little to no savings. Had one of us become unemployed things would have become quite tough. It was after we bought a house, had a baby, and found ourselves with over $40k in consumer debt that we discovered Dave Ramsey. 3 months later, before I was even on-board with the program, I did lose my job. BAM! Income cut in half.

Then what? Financial ruin? No, but it was closer than we would have like. We were on a budget, and that is what got us through. The budget was very tight. The budget helped us prioritize our money to be sure we had food on the table and a roof over our heads. The budget is where we found the money to survive. Without it, we could have been just like Patricia. Needless to say, I got on-board pretty quick. The proof is, how would you say, in the pudding.
But that wasn't it. We corrected our financial behaviors and cleaned up our finances. We were determined to never be in that position again. We took care of business.

Patricia is going through a whirlwind right now, and isn't sure which way is up. It's understandable. And she's been dealt some big blows in life. But now, more than ever, those two kids need her to take care of business. Living off of the system is not taking care of business. No body is going to help her through this more so than herself.
  • Its great that she signed up for unemployment benefits, but that is not a solution. She needs a job - or two - now.
  • She needs to be on a budget - yesterday - if she's not already. With a reduced income, its more important than ever to have a plan at the beginning of the month.
  • She needs to haul this estranged husband to court and get the child support she is due.
  • She needs to get out of this house that is crippling her financially and rent something cheap until she is back on her feet.
  • It's ok to cry and go through the emotions of the situation, but it's time to take control. It's time to take care of business. The pity party is over.
And that's just the beginning. Get out of debt, build up an emergency fund.... Somebody, please, put this family through FPU.

If you lost your job, where would you be financially?

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1% Back. Is This Attractive?

This is something that continues to baffle me. Why do people work themselves up into a froth over getting 1% back from a credit card? I'm not a fan of credit cards to begin with, but how is this such a selling point? Now I know that some cards 'sweeten' the deal by offering 2% or 3% at the grocery store, or 5% at the gas station, nail salons, and petting zoos, or whatever. This just isn't a temptation, and trust me, I love getting something for free. But this isn't free.

For one, you've already sold your soul to the credit card company. Proverbs 22:7 says the borrower is slave to the lender. There's no question as to what role you are filling here. Maybe you don't identify yourself as a Christian, but if you do, you may want to peruse Proverbs. There's some good stuff in there. Also, what is 1%, really? If you spent $100 at the grocery store, your 1% back is a whopping $1. One dollar. Approximately how long do you think it takes you to overspend by $1? At the grocery store? It takes no time at all. A $3 frozen pizza or a $4 frozen pizza? DONE. $5 frozen pizza? EEEk! How about $1000 at the electronics store? That would yield a kick-back of $10. Of the zillion ways to overspend at the electronics store, consider DVD movies, grossly overpriced cables, and extended service plans. That $10 didn't make it anywhere near the door. And by overspend, I don't mean necessarily spending money you don't have. Just spending more than you planned, or more than you needed to spend. That's what a reward does by nature. It encourages you to do more of what you just got rewarded for doing. In this case you were rewarded for spending money. Is that a behavior that you really need some encouragement on? "The more you spend, the more you earn". Earn!?! Don't even. You didn't earn anything.

No, the credit card companies and banks don't force anyone to use their products. Yes, it is possible to use credit cards responsibly and I've actually seen it done. But lenders don't make money off of responsible usage. Or not as much off of responsible usage - there is the ever-present transaction fee as well as the occasional annual fee. They make more money off of spending more and spending more often. Maybe thats why their commercials feature those behaviors to extremes. Maybe thats why their industry spends billions annually on these ad campaigns. Its no wonder that our society has bought into their lies of what "life takes" and what you should "never leave home without". If they have to spend so much to convince you to use their product, then doesn't that seem like a red flag? It works though. Year after year, I've watched the total amount owed on credit cards in America steadily climb from ~$600 billion to todays total of just shy of $1 trillion. What do you suppose the financing charge is on $1 trillion? Bet they're picking up beaucoup points and rewards!

So here's one to add to the "Full Disclosure" list: I've never had a credit card. Not as an account holder. Not as an authorized user. None. Ever. So I've never experienced the thrill of rewards card shopping nor the thrill of credit card debt first hand. Check out the guy in the picture above. He just made a phone call and got some point or something. He sure looks thrilled. Maybe I missed out. My wife had a few (now long gone and shredded), but never carried a balance in ~8 years as a card holder. Her main card of choice was a Discover card - rewards, cash back, you know the drill. During our married life, we used the rewards mostly for gifts - lobster-grams, fruit baskets... Really personal, I know. I'm sure our extended family felt the love. Since shredding the ol' Discover card, we've taken to making as many gifts as possible. Not only have our hand-crafts gone over well as gifts, but we've also done pretty well selling them as a side business. It's that difference between, "I got you something" and, "I get you and I got you a gift". But back to the rewards, there was a time when the majority of our spending for the month was on the card, thus 'earning' more kick-backs. But from the outset of going credit-free, we have yet to miss the kick-backs and rewards and crap.

And what if you do carry a balance? Right? So many scenarios and hypothetical assume that you pay the bill in full, every single month, forever. For the entire rewards argument to be true, you must first assume the best-case-scenario - zero balance, never late for any reason. No payroll mishaps, no direct-deposit miscues, no auto-bill-pay snafus, no network outages, no rogue reps in the billing department posting your check on the next day's business since they benefit from your misfortune. The entire tangled web must function correctly. And that doesn't even take you into account. On vacation, out-of-town on business, visiting the family in Hicksville (internet access = ZERO), blah, blah, blah blah, blah.... Any number of things could cause this most dreaded of situations to arise besides simply not having the money to pay the bill - by your own negligence or not. So then what? Even those who use credit cards will tell you that rewards card benefits pale in comparison to interest and late fees.

Risk > Reward.

So help me out here. Why? What is the draw? Do rewards draw you in like a moth to a light? Do you think you are winning because of your rewards/cash back/free hat? Do you carry or have you ever carried a balance?

**UPDATE** Welcome Carnival of Personal Finance readers! To find out more about us, click here. Check out our latest personal finance articles here. Thanks for reading!

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I'm Thinking of Getting a Credit Card

If you've been following along here, you'll know that this is kind of a big deal. See, I've never had a credit card. Never. Ever.

As a freshman in college, I always thought that I would screw it up, so I thought I would start with a debit card, and see how that went. Then if i could handle my money, look into a credit card. Well, money management doesn't just magically happen. And managing a checking account probably requires balancing a checkbook or reconciling the account in some way shape of fashion. As you can imagine, it went pretty stinko, and I never even applied for a credit card.

Fast forward to post graduation. We got married, got an apartment, had a baby.... My wife had a credit card that we/she used - I was never an authorized user, but she bought stuff for us, so technically, we used it. She handled the bills, and with her very strict self-control, we never carried a balance.

Enter Dave Ramsey. We had 2 car payments, a mortgage, and a student loan - but, baby, we were getting CASH BACK! And REWARDS! Awesome right?! Nah. Just normal really. We drank the debt-freedom Kool-Aid, shredded the cards and never looked back.

Today, we are debt-free, single-income, no credit cards, and loving it! But for the first time in my life, my work requires a fair amount of travel. Up until now, the corporate credit cards were just personal cards that were company 'sponsored', so you were responsible for the bill, but then the company would reimburse you. Not terribly attractive. This year, they have switched to a new card and expense reporting system that is backed by the company. You mean I don't have to front my travel expenses for a multi-billion dollar global company?! Crazy.

So for the first time in my life, I am seriously considering getting a credit card - sort of. My wife is on board as it will make our finances much easier to manage with no more need for a travel fund and buffer. My co-workers say that the new system works great. But I hesitate. I almost hate to get one since I've gone so long without one already and really have no desire to have one. I'm probably crazy since it's not for personal use.

What I can't seem to find any info on, is if this would even show up on my credit report. Anyone know? My credit report is clean, and my score, which I couldn't care less about, is quite respectable. I'm not sure if it would even be considered "mine" as it's the company's card that I use. It's really more of a matter of principle. (This will drive a lot of PF bloggers crazy.) It would actually prefer for the card not to show up on my credit.

Anyone have experience with a system like this? Pros/Cons?

If there are fraudulent charges, who deals with it? Me or my employer?

Should I do it?

I'm tempted to e-mail Dave Ramsey for an opinion, but I don't have access to all three hours of his show anymore. Anyone heard that question answered by him before?

**UPDATE** I've acquired more info on our specific program, though it was not terribly easy to find. It just wouldn't be a true credit card if the pertinent info were easy to find. Here are the highpoints:
  • The card works just like a personal credit card; however, the card has no impact on the cardholders’ personal credit history
  • Although the card lists an individual's name, the card is actually issued to the Corporation
  • The amount due on the card is paid directly by Accounts Payable
  • The cardholder makes no payment (ITS FREE MONEY!!! just kidding)
  • Billing errors and disputes are the responsibility of the cardholder
  • it is for BUSINESS USE ONLY. Use of this card outside of the standard course of business is strictly forbidden.
  • It is mandatory that the cardholder retain an original sales receipt for each purchase that identifies any state sales tax
  • Must not use a personal credit card for business related expenses

**UPDATE UPDATE** Welcome Carnival of Personal Finance readers! To find out more about us, click here. Check out our latest personal finance articles here. Thanks for reading!

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"How Are You Going To Pay For This Baby, Ma'am?"

As I've mentioned before, I have quite the disdain for our crummy healthcare system in America as well as my own "consumer driven" health plan. Ever get that feeling that Dwight K. Schrute is hard at work in your HR department? Me too. Since they chose the new company health plan, apparently some of my fellow employees have had some trouble adjusting to the new method. In 2006 and years prior, we had a more typical health insurance plan - co-pays and premiums, premiums and co-pays. The kind we've all come to know and love. New for 2007 were the "consumer driven" health plans, that put more of the control and responsibility in the hands of the consumer. The main difference was that with the old method, you payed and payed and payed, little by little. With the new plans, you could end up with some large bills, and need to pay a sizable chunk of cash without realizing it. Well anyways, I thought I'd share our not-so recent experience with our OB/GYN's office.

We were maybe 4 or 5 months into our pregnancy. Though we didn't have many options, we were happy with the OB/GYN office we had found. Great doctors, friendly staff, good location, plus a few magazines for men in the waiting room. All in all, we were quite pleased. That is until the phone calls started.

It was the doctor's office calling, specifically, the billing department. But why were they calling? Their billing structure is to bill you for the standard delivery + anything extra AFTER the baby is born. Prior to that, things like check-ups, tests, bloodwork and ultra sounds would get billed to our insurance account. Our bills, small thus far, were paid. Why were they calling to harass my wife about our bill? They said that they wanted to set up a payment plan, and start billing us now, dividing out the standard delivery fee into monthly payments based on the time remaining before our due date. How about.... No. This was your plan - one big bill at the end of $3,000+ - not ours. Now you want to change midstream? No thanks. We'll manage just fine.

My wife politely declined, and called me - giving me the earful that they were due. She was mostly just put off by their inference that we would not be able to pay the bill despite knowing 9 months ahead of time the approx amount due and when. We pay our bills, our credit report is clean, and they have always gotten their money in-full and on-time. "Maybe it was a mistake", I offered in an effort to bring the tension down. Maybe it was. Maybe not.

The following week, two more calls. Both times she declined and hung up, growing more furious with each one. I couldn't blame her. Their implications were rude and unfounded, at least from our point of view. Far too often, miscommunication like this stems from simply not telling the whole story and explaining oneself. Why can't people just be honest? And up-front? If you are going to change the terms of an agreement - midstream - don't you think I'd like to know why and expect a reasonable answer? (Can you tell that I am not a credit card holder?) Another week, another call. This time we got some answers.

As it turns out, for the first time in the history of the practice (decades old), they were having to send bills to collections. What?! And all of the accounts in collections share something in common with us - my employer (and thus, my health insurance plan). Ah-ha. In years prior, the insurance company picked up varying amounts of the big delivery and hospital bills and the insured only owed a small, manageable fraction. Now, even families who had been through this process before were caught off guard by the large lump sum payments that they owed after delivery. As a result, the OB/GYN's office was pro-actively calling clients with our same insurance policy generously offering to set up this payment plan to reduce their risk of non-payment later on.

We finally had our explanation. Our answer was still a firm, "NO", followed by, "Stop calling us about this. We already have the money set aside. You'll get paid, after the doctor performs the procedure."

Universal Health Care looks better and better all the time.

**UPDATE** Welcome Carnival of Money Stories readers! To find out more about us, click here. Check out our latest articles here. Thanks for reading!

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NtJS Mailbag - Mr Credit Card

I got an email today. Congratulations, right? Anyways, it was from a fellow PF blogger - one Mr Credit Card. He was asking me to take part in a survey he is conducting with other PF bloggers on their credit cards. First thought: Have you seen my blog? His email is below.

Mr Credit Card here. I am conducting a survey among personal finance, investment
bloggers about their credit cards and would appreciate if you would participate
in this survey. I would compile the results and publish it in my blog

FYI - I will not reveal your individual answers.

His questions and my answers along with some thoughts below.

What's the harm, right? He wasn't asking for account numbers, and was not asking me to reset my password, so I kept going. I checked out his blog, Ask Mr Credit Card and his corresponding non-blog site. First thought: Wow, so complicated. Now that's not intended to knock Mr CC or his site. I agree with him - the world of credit cards is so incredibly complicated, that consumers do need help 'navigating'. We just differ in how to 'help' consumers. While he has chosen to draw lines between good and bad and calculated the rewards and kick-backs from various card programs, I have chosen to simply say, "No thank you."

While Mr CC so graciously offered to keep my answers confidential, I have chosen to publish them. I chose to do this, not to undermine his efforts or tip his hand, but rather in the spirit of full disclosure.

Mr. CC-

Thanks for including me on your survey. I would be happy
to participate. See answers below in blue.

1. How many credit cards do you have? Zero, zip, zilch, none

2. Which are the credit cards you have (please be specific about the actual cards - eg Amex blue cash or Chase Freedom)? See previous answer.

3. Do you have any credit card debt and if yes, how much? None - We're Debt Free, baby!

4. What is the apr you are paying? N/A - Only a fool would pay for the privilege to spend money.

5. What is your average FICO score? 730-ish, maybe higher. But I really couldn't care less. I only know that much from when we bought our house last year.

6. Have you got any credit cards solely for balance transfer? Nope. Didn't fall for that one either.

7. If yes - which card? N/A

8. Do you charge your utilities, cable bills and internet bills etc to your credit card? No, that would be silly. We pay for our utilities with money.

9. Is your credit card bills set up such that it is automatically paid every month? No, I would never let those blood suckers have access to my accounts.

10. Do you use your credit cards at gas stations and supermarkets? No, I have enough free hats and t-shirts.

11. Which is your favorite credit card? (be specific, not visa or mastercard as an answer pls) My favorites would be all the dozens of cards that we shredded while teaching Financial Peace University. Those are great!

12. Which is your favorite credit card issuer? (banks, not visa or mastercard) None, they are all scum. Do people really have "favorite credit card issuers"??? That's kinda sad.

13. When did you get your first credit card? What was the card? I've never had one, but thanks for asking. My wife, on the other hand, had a Discover Card as her first.
Since then, we've 'Discovered' FREEDOM.

Interesting questions. Sorry, but I doubt that my answers
are what you are looking for, they are however, 100% true.

I hope it didn't come off too snarky, but when you ask these kind of questions.... Seriously, "favorite credit card issuer"?!

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How To: Celebrate Being Debt-Free

What? Hug your spouse. Crack open a cold one. Do I really need a 'how to' on this?

Why not?

First - and this is the hard part - you need to become debt-free. Even if you still have a mortgage, pay off the consumer debt. You can still do a happy dance as you are already ahead of the majority of Americans. We did it and we couldn't be happier. It was almost 2 years ago that we broke free from the slavery of consumer debt, and that it itself was nearly a two-year battle. We fought and struggled and sacrificed. In the end, we had payed off over forty thousand dollars - mostly from two cars and a student loan. Since then, we've gone through steps 3, 4 and 5, and moved on to our 15-yr fixed-rate mortgage. Baby step 6 is technically next - pay off the house early. As a single income home, that may take some time, but not impossible. I say 'technically next' because we are having to revisit 3, 4, and 5.

  • Baby Step 3 [Fully Funded Emergency Fund] - Every time life takes a swipe at us, the emergency fund takes a hit and we have to go back and replenish.
  • Baby Step 4 [Retirement Investing] - We've had some issues getting my wife's old 401k rolled over properly over the past year, but it looks like we have things settled finally. May need an Investment Committee meeting to make sure all of this is set the way we want it now, especially with my wife at home.
  • Baby Step 5 [Kids' College Savings] - As I've mentioned before, we have a new little one, and we need to get her college savings going now.
Kinda frustrating, but hey, that life! Still, Baby step 2 or Baby step 6, you've earned the right to celebrate. Do it in style. Here are some fun ideas:
  • Vacation - You're scraped and sacrificed for how long? Months? Years? Treat yourself and kick back for a week. 7-day cruise, all-inclusive resort, la-z-boy and a stack of movies? Find what fits your liking and your budget - just because we're out of debt doesn't mean we trash the budget. Have fun, reap the rewards, and pay for it in cash! But really, vacation? Kind of a no-brainer.
  • Spend a car payment - on you! Or you and your spouse. What were you paying out each and every month for a car or two? $200? $300? $500? The average car payment in North America is $376 over far too many months. So now that you aren't shelling that payment out anymore, that money becomes disposable. Ok, so you may want to 'dispose' that money into a Roth IRA. But before you do, why not enjoy one of those payments? How nice of an evening can you have on $350? Pretty darn nice. There is room in there for a sitter, a show, and a really nice dinner. Maybe you'd rather have a Wii. How would you spend a car payment on you?
  • Credit card shredding party - How about this for an invitation:
    We've freed ourselves from the bondage of debt. Join us for an evening of friends, fun and shredding our credit cards! Thats right, they're going down. Ready to take the plunge too? Bring yours and we'll explain.
    A great way to celebrate with friends and do a little evangelizing at the same time.
  • Be weird - Dave fans know that this is a good thing. Sometimes it's fun to show your weirdness. The point isn't to be showy, but to remind your self of your accomplishment and inform others. Think of it as 'outreach'. Shegazelle has dreams of a customized license plate - NO PYMNT. That would look great on my 8 year old truck! You have to wonder what one of those guys driving a $45,000 brand new pickup truck thinks about a plate like that. J.D. over at Get Rich Slowly plans to quit his day job and blog full-time. Everyday when he rolls out of bed and 'goes to work' in his PJs (or whatever he does in the morning), he'll remember how he afforded himself that luxury - Debt Freedom. Weird!
  • Call in on 'Debt-Free Friday' - Another one for Dave Ramsey fans. If you are unfamiliar, every Friday on the Dave Ramsey show (radio and TV), listeners/viewers are invited to call into the show, tell their story, and scream, "I'M DEBT FREEEEEEE!". Maybe it sounds silly, but maybe you haven't been in their position. Some folks go a step further like Ana from Debt Free Revolution, who plans to drive to Financial Peace Plaza, watch the radio show from the lobby and call in from Dave's own lobby! Looks like they also have quite the evening planed as well. Congrats again, Ana! I'll be sure to listen that day.
  • Mortgage burning party - The holy grail. You did it. You paid off the house and now you want to celebrate in a way just as nutty as the accomplishment. Mortgage. Burning. Party. Fire up that BBQ grill - we're having steak tonight. And afterwards, the mortgage goes on the grill. Now I don't recommend you burn your actual mortgage. That may come in handy down the road, and with something this important, it's best to have all of the proper documentation. But with a little magic from Kinkos, you can produce a reasonable facsimile there of that will easily accommodate said 'mortgage' burning. Now that's fun, and a great opportunity for your friends/family/neighbors to ask, "Hey, how'd you do that?". As well as a great opportunity for you to help guide them in the right direction. Max from maxgrace.com even has some videos for inspiration.
Anyone have debt-freedom plans to share? How would you like to celebrate your release from servitude?

**UPDATE** Welcome Carnival of Personal Finance readers! To find out more about us, click here. Check out our latest personal finance articles here. Thanks for reading!

**UPDATE UPDATE** Welcome Carnival of Debt Reduction readers! To find out more about us, click here. Check out our latest articles here. Thanks for reading!

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The Buck Stops Here

Frugality is always a hot topic around the personal finance blogosphere. "87 Frugal Finance Tips", "Frugal Meals for Frugal Folks", "I'm More Frugal Than You, Na-Na Na-Boo-Boo". (yes, those are fictitious articles) And thats great - Don't get me wrong. I enjoy frugality as much as the next PF blogger. But where does frugality end and reality begin? Frugality can easily cross the line into cheap if not kept in check with quality and value. Where do you draw the line in your frugality?

Seeds of frugality are often planted during childhood by watching what Mom and Dad are doing. Refusing to use the A/C or furnace before crossing a date or temperature threshold. Ordering a meal, but drinking the free water instead of spending a money on beer or pop. Once you hit college age and get out of the house, it's your first real opportunity to 'experiment' with frugality. You stumble across things like cheap cheese. "I'll save 80 cents and buy the generic cheese," you think, "Mom would be proud". Except Mom knew better. That 80 cent savings was really $1.10 down the drain since the "cheese" tasted more like corn, and not in a good way. After my "corn-cheese" experience, I learned that a line in the sand must be drawn. Generic was not inherently bad, but required discretion.

  • Food - We buy a lot of generic/store brand food. These seem to be better than they used to be, and are offering a lot more variety. Some stores even offer store brand organics, but we still look for USDA certification. Some things we won't compromise on: Meats, ice cream, cheese, pop, and OJ. For those items we have found our threshold to be above average.
  • Technology - I don't buy into the 'planned obsolescence', 'disposable' technology crap. In my opinion, sub-par electronics just aren't worth the headaches, and constant "why won't it work". Usually, if we're spending more than $20 on some electronic bits, then we're going to get something that we'll be happy with. Some times when I will buy the cheap tech stuff: cables, cables, cables.
  • Education - Once we relocated last year, we had a few choices for education. We could be like many people and send our kids to the public school that we were funding via local taxes. Not a bad option financially speaking, but that school system leaves a lot to be desired. We could pay for them to go to our parish's parochial school. Not cheap by any means, but an excellent education. Or we could go ultra frugal and home-school. We have nothing against home-schooling. We have several good friends who do it. But it's a bit of a stretch for us. Where did we end up? Parochial.
So there's three examples. Where do you draw the line? What trade off's will you make / not make in the name of frugality?

***UPDATE*** Welcome FoF readers! Please take a few minutes to check out some of our other frugal living articles. If you are new here, find out more about Not the Jet Set here.

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Now Featuring: Subscriptions

Like what you see here at Not the Jet Set? Want more? All the time? As soon as we post? We are now featuring RSS and email subscriptions via Feedburner. To join this elite club of personal financiers, go to the "Subscribe" sidebar on the right and select your preferred method of subscription - RSS or email.

Go ahead. Try it. I dare you.

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I Declare

Too funny to resist. Michael's concept of money is hilarious. I've seen this episode twice, but it wasn't until I watched this clip that I realized he is cutting up his credit cards when Oscar comes in. Even a broken clock is right at least two times a day.

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We're Trying Something New

Please bare with us.I'm putting my l33t haxoring skills to the test and attempting to clean up the blog a bit. These long winded posts were getting a bit out of hand and cluttering up the page.
Did this work?

I'm not sure if I like it yet. What do you think?

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The HDTV Challenge - Update 1

It's been a while since I posted an update on this project. Sadly, there is little progress to report.

We are still committed to sticking to our plan. The waiting is the hardest part, but patience is a virtue and learning to delay pleasure is one sign of maturity. In the meantime, prices are continuing to fall, and technology is continuing to improve. No worries here. When the time is right, it will all come together.

We are a few dollars closer than we were in January, though nothing significant. The secondary market moves like molasses here during the winter months. We have been toying with the idea of 'Basement Sale' as it is far to cold for a garage sale. We'll let you know if that materializes, and how we come out. It's definitely one of my wife's better ideas, we just have to find the time to put it together and sort out enough stuff to justify it.

The biggest news is really the fact that we are waiting, despite two separate influxes of cash that would have easily put us over the top.

  • First was Christmas. We had told our parents about our grand plan and one of them decided to help us out a bit. They had hinted at it a bit before hand, so we knew they were up to something. When my wife opened the Christmas card and saw the check, she indicated how helpful that would be with all of our upcoming doctor bills. She was 8-1/2 months pregnant at the time, and knew that based on our insurance, we would have a few thousand in medical bills in the coming months. The parents were a bit let down, but that's looking to be a better and better decision all the time. And you just don't argue with a woman when she's that pregnant.
  • Second was our tax refund. With the crazy year we had in 2007 - moving, new job, one income instead of two - we ended up with a sizable refund. On the way home from the CPA, it was easy to contemplate how to divvy the spoils. Later, reality hit. With baby in hand, we are still looking down the barrel of some sizable medical bills on the horizon. It may come out to be much less than expected, but we'd rather have the money in the bank, than hanging on the wall in the living room. In the meantime, we're adjusting my W4 so that we don't have this dilemma next year.
  • Last is the potential income of the 'economic stimulus' package. We should be seeing ~$1500 from Uncle Sam come this May. I say potential and should because, well, I don't exactly have the check in hand yet. And we really don't want to count on money we don't have. We've filed our taxes, which is the only thing eligible families and individuals need to do to get in line for their government hand out. More waiting in store for us.

Who knows? Maybe, come May, our outlook will be more positive. All of this money we haven't spent on consumer electronic goodness could total over $3,000. Will we finally spend it on a TV? Nah. More than likely it will go to a new well and other slightly more necessary home improvement projects. Come May, I would hope to have several more items sold and have gained the TV money the old fashioned way - patiently earning it.

Maybe not the exciting, celebratory update you were hoping for. But this is the way it is.

New to this site? Read the original HDTV Challenge post here.

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How To: Get a Deal - Episode 1


I'll elaborate, but the short of it is - it works, baby.

We were all geared up to purchase and install a mountain of insulation into our attic. We had done the research, we knew what we wanted and how we were going to do it. We even had some help lined up for two weekends out to help with the install. Now we just had to buy the stuff.

Based on our research, we chose to go with blown-in cellulose insulation. Environmentally friendly, cost effective, and easy to install. Question was, how much is the blower going to cost to rent? We had budgeted $700 from our house repair fund for this project, but by no means wanted to spend all of it. That weekend, along with the Sunday paper, comes a Menard's sale flier. The type insulation we wanted, Cocoon branded, was marked down to $5.40 per bag + a free blower rental. I called to inquire. Turns out that the blower rental was free for four hours. Standard charges applied after that. Ug. I had no idea how long this was going to take, but 4 hours seemed pretty optimistic for a bunch of amatures.

On top of that, I was estimating needing around 80 bags of this insulation to get the desired R-value. That was going to cost $432. Not bad. What killed the deal was the fact that the nearest Menard's was 20 miles away. How many trips would it take to get all of the insulation and the blower home, plus the trip to return the blower? Ug Ug.

Fire up the computer, its time to comparison shop. We have a Lowe's and a Home Depot in town, one of these guys should be competitive, right? Lowe's had the exact same product online, but for $6.24 per bag. Home Depot's website was, as usual, little to no help as they typically only list items they are willing to ship to you. But they have to stock insulation, right? Time to hit the bricks and get us a DEAL.

Lowes' price of $6.24 was going to equate to just under $500 + whatever the blower rental would be. I strolled down to the building materials and found the insulation. They cellulose, but it was a different brand, yet the same price. Still it was worth asking. I made my way to the service desk. They examined the Menard's flier and paged a stocker to price check the insulation. While we were awaiting his response, she informed me that the two items would have to be exactly the same - make, model, and size - to be eligible for price matching. The stocker's answer came back. No deal. Different brand. Same size, same product, different brand. I pressed that they had this brand on their website, and could they give me the discount if I ordered online. The answer was a flat, "No." Clearly they did not need my business that day.

I made the half-mile trek to Home Depot. Would my luck be different here? Once again, I made a bee-line to the building materials. There, past the roofing materials and behind the lumber was a big beautiful pile of Cocoon brand cellulose insulation. I double check my sales flier. A perfect match! Price: $6.44 - even more than Lowe's! Off to the service desk.

Now, you should know that doing this is not easy for me. I tend to be quiet, more reserved. I'm not a big 'wheeler dealer' and in general, I would just assume not interact with people in general. But I was going to do this. That day, I was going to get a deal. Somebody was going to earn my business.

At the service desk I, once again, made my request. "I was wanting to buy some of this insulation, but I saw that Menard's had it cheaper, can you help me with that?" She examined the flier, and responded, "You mean our 'Meet or Beat' price guarantee?". I had never heard of this program, but responded affirmatively. She went to an office in the back, assumingly checking with her supervisor. She came back.... $4.14 per bag. DEAL!

I was a little bit beside myself as we started placing the order for will call. Then I remembered the other part of the equation - the blower. "One other thing here. This ad says that you get a free blower rental with purchase. Can you match that also?" She paused, her face wrinkled as it seemed that this did not compute. She consulted with the same superviser, who was walking by us, which was met with another puzzled look. Was this somehow unheard of? Sure we'll price match products, but equipment rental prices? Thats crazy! It was a tense few seconds. The lady helping me then replied, "I don't know how we can match this, since it's already free for 24 hours."


I wanted to burst out laughing! Yes! Yes! Where do I sign?! Let me out of here with my receipt before you change your minds! I maintained my composure and let them know that would work just fine. A few minutes more and the deal was done. In the end, it took 3 trips to haul it all home, but only because two loads consisted of tall palates. Those were two s-l-o-w trips that would have been crazy to attempt for 20 miles. The whole project cost us $310 and a full day of labor. While unloading the bundles of insulation, I saw where some of them had price tags on them reading $7.24. Seven dollars and twenty-four cents EACH! This made the next 8 hours of back-breaking labor somehow tollerable. Maybe it was because it looked like insulation shooting out the end of that hose, and not dollar bills.

Why did I do this? Why did I insist on getting a deal? It wasn't a matter of not having the money. As I stated, we were setting $700 aside for this one - more than double what it cost in the end. It's a matter of not wanting to part with all of it just because some retailer decided that this week, this product will cost X amount. Why spend money that you don't have to? Why play their game and pay their price without question? A fool and his money are soon parted, and that is one role I am not willing to fill.

So if you want a deal, if you want to spend a little less on a purchase - ASK! Ask if the pizza place will accept competitor's coupons. Ask if they can do a little better on the price of that TV you've been pining over. What are they going to do? Say, "No"?

***UPDATE*** Welcome FoF readers! Please take a few minutes to check out some of our other frugal living articles. If you are new here, find out more about Not the Jet Set here.

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A Personal Finance Publishing Hat Trick

This week we have a publishing trifecta - three articles on three different carnivals/festivals in one week. A real accomplishment, or just showing where my free time went last week? You be the judge.

As always, thanks for reading, and don't forget to bookmark us!

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Have We Learned Nothing?

I know that we are weird. We watch the news, and not just for the weather and sports. We have no credit cards, no debt other than the house. We rarely eat fast food. By American standards, we are weird. We know it, and we're ok with it. So help us with this one, because the wife and I are really having trouble with this. Have people heard about this 'mortgage meltdown' thing? Are people aware of the 'credit crunch' and what caused all of this mess? Have we seen the mistakes of others played out in the national media and learned from it? We've watched this coming for years.

The foolishness of home builders - overbuilding, over-inflating prices, then suckering people in with ARM mortgages. The foolishness of home buyers - putting nothing down and thinking that it was a good thing. The severe debt of the middle class - growing and growing year after year, spending more and more with little to no savings. The banks and lenders throwing all intelligence out the window and creating this sub-prime mess. People bought it hook, line, and sinker. And now they are sunk. Foreclosures are through the roof. Bankruptcies higher than during the Great Depression; completely undaunted by the new bankruptcy laws. As this was gathering steam a few years ago, we discovered Dave Ramsey.

My wife got us started on Dave's plan, got me on-board, and kept us on track. Together, we got our lives in order and our finances under control. Eventually we got out of debt. But even more important than that, we stopped doing 'dumb with money'. We opened our eyes to all of the dumb ways we mishandle our money in this society. We questioned financial products and services rather than signing up after a slick sales pitch. Thus, the current 'credit crunch' has not affected us. But we are aware of it. We thank God that we did what we did, when we did it. And we know that could have easily been us in that mess.

So, it absolutely baffles us that anyone, anywhere in this country would be doing what I am about to describe. Some friends are buying a house. Ok, good for them. My wife is talking to our friend on what happens to be the day before the closing. If you've bought before, then you know, at this point in the game, that you are committed - you're buying the house, for all it's qualities and in spite of its defects. You know what you are getting, and you probably have some plans for it. Well, they have plans alright - spend spend spend spend spend.

Our friend starts talking about how the house has wallpaper on every wall, which is coming down and giving way to paint. Pricey and time consuming, but not a bad move. The carpet is coming out, though nothing is technically wrong with it, and will be replaced and perpetuated into the basement as well. I haven't seen this carpet, but seems like something I'd have cleaned and tough it out for a bit. Moving on, our friend describes how all of the furniture in they are using now will go in the basement along with their current TV. Nothing wrong with any of it, but new house = new stuff. The furniture has been bought, and there is one of those fancy flat-screen TVs that they have their eye on. I'm not sure how she kept it together, but my jaw would have been on the ground. The real kicker came when our friend made reference to the fact that putting nothing down on the house would help enable them to do all of this. My wife was polite enough to not press for more details, but it's not tough to imagine:
  • New Furniture - no payments, no interest till whenever
  • New Carpet - on payments
  • New TV - no interest if you use your 'Whatever' card
  • New Paint - on credit card
  • Mortgage - ARM
Now that list is ALL speculation, but totally fits the rest of the behavior. We sincerely hope and pray that this is not the case, but we're not holding our breath. Maybe (and I certainly hope this is not the case) you don't see the issue here. It's very likely that during this year, these first-time home owners will get their clock cleaned by unexpected or unplanned expenses. Home inspections are a must, and they had one done. But what about all those things that inspectors do not inspect? A/C units. Water softeners. Mold problems. Or those little needs that come up. Appliances, a lawn mower. Are they aware of the increased living expenses in utilities, insurance, and taxes alone?

People argue that credit cards are "great for emergencies". Really? So besides the stress and financial hit, you're going to add debt to the list? So once they've maxed the cards out on everything they bought but didn't need to and items they didn't plan for, what happens when the the furnace goes stinko and the roof starts leaking right after the property tax bill comes in? Where's your precious plastic card then? I know what happens, as no sales pitch is complete today without mention of their financing plan.

Don't get me wrong. There are a lot of people who are able to avoid debt in spite of frequent credit card use. They are usually the ones who just can't understand how someone racks up tens of thousands of dollars in debt. This is how - or at least one way. A couple wrong turns, no plan, and living emergency to emergency, debt payment to debt payment.

This country has lived and died on debt for decades. No-one looking at this situation from a 1000-ft view (like we are) would sign up for this. But debt in small chunks is easier to justify. Another example of this same behavior can be seen in a childhood obesity TV commercial (can't seem to find right now!). It shows a time-lapse of a family's day, focusing on a young boy and the food his parents put in front of him. "It's just a donut", it starts. "It's just a donut and some pop. It's just a donut, some pop and some chips." The commercial ends with the father bring home fast food for the family. And we wonder why our kids are fat and developing diabetes. Translate that junk food into debt.
It's just a car loan. Its just a car loan and some credit card debt. Its just a car loan, credit card debt, a home equity loan, some medical debt, and my financed furniture. Oh! And my old student loan - almost forgot about that.
That is a recipe for massive debt. If we all don't take something away from this mortgage meltdown mess, then who is to say that this won't happen again?

***UPDATE*** Welcome CoPF readers! Please take a few minutes to check out some of our other personal finance articles. If you are new here, find out more about Not the Jet Set here.

***UPDATE UPDATE*** Welcome CoMS readers! Please take a few minutes to check out some of our latest articles. If you are new here, find out more about Not the Jet Set here.

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