not the jet set

4/11/2008

How To: Water Your Garden For Free

Spring is here! It sure feels nice outside, and I'm pretty sure that was the sun I saw the other day. April showers will surely bring May flowers, but what if those same April showers could stay with you for more of the hot, dry summer? Every year there are more and more areas forcing homeowners to stop watering their lawns due to water shortages. Even with out shortages, you may be reluctant to water your lawn and garden simply due to the cost of city water. A few years ago, we were introduced to the concept of rainwater harvesting. The general concept is to collect rain water, from storms large or small, to be stored and used during periods of drought. "Yeah, that sounds great, but how?"

It's far easier than you think. First, a few basics.

This may sound like just another 'hippie/tree-hugger', 'green living' solution with questionable ability to deliver on investment. Well, consider this: For ever 1000 sq. ft. of catchment surface, you can collect ~600 gallons of water for every inch of rainfall. How many gallons per year of rainwater are you missing out on as they rush through your downspouts and aimlessly back into the ground? How many times have you had 5 days of rain per week for a month straight, just to follow it up with 3 months of drought?

To begin collecting, you first need a catchment surface. Don't worry - you likely already have one. It's usually called your roof. Most roofing materials are acceptable, though if you are planning to drink your rainwater, you may want to do a bit more research as some roofing materials are less than ideal. Enamel coated metal roofing is typically best. Asphalt/composite shingles (what most people have) will work, but you'll have to deal with all of the gravel that washes off of the shingles.

While you may have a roof, you may not have rain gutters. These are also quite important. Without them, you are going to have a very difficult time collecting the water running off of your roof. If your gutters are intact and functioning, then read on.

Now we just need a place to store the water. You don't need gigantic plastic vats or underground cisterns to pull this off, though those can be pretty sweet. The simplest way is to use plastic drums. These are typically between 50 and 60 gallons each, about waist high, and easy for a DIYer to handle (when empty that is). Drums made of food-grade plastic and in great condition are easier to find than you may think. Some places sell them - new or used. Used can run you $30-50. Typically you can find someone who works at a warehouse, bottling plant, or factory where these are used and discarded daily. Put your feelers out, and keep your eyes open. Likely these will just require a couple rinses of warm, soapy water to have them prepped for rainwater. With a few modifications - opening in the top, valve at the bottom, and overflow provision- you'll be ready for rain.

That will give you a very basic system. A few things to keep in mind:

Mosquitoes love standing water. No matter how small the opening, they will get in and turn it into a breeding ground. Home improvement stores sell non-toxic tablets to help with this. Even still, fiberglass window screening and silicone caulking are your friends.
Water + sun light = algae. This is not a good thing as it will clog up your spigot. With water collection being the whole purpose of the barrels, light is the only other variable to remove. The easy fix is to paint your barrels or just be sure they are opaque to begin with.
1 gallon of water equals 8.33 lbs. So your 50 gallons of cloud juice would tip the scales at 416 and one half pounds. Once it has water in it, you will not be moving it. So choose your location carefully. Also be sure to place it on a solid base - cinder blocks work well. Be sure they are solid and level. The last thing you want is for one of these to fall on someone or something.
This is a gravity feed. That is unless you've sprung for a pump, which I doubt. Hooking a hose up to your tank's spigot may not do much good unless the end of the hose is lower than the water level in the tank. Even then, we found a garden hose to be ineffective, other than for draining it without making a mess next to the barrel. Be sure you have enough room to fit a watering can or bucket under the spigot.

Barrels specifically made for rainwater collection can be purchased from various retailers. These will run you anywhere from $80 to $200. For us, this was not only about stewardship of natural resources, but plain ol' frugality as well. No deal on the pre-made barrels. We built our own and it really wasn't that tough. It helps to do several at once as you will quickly get the hang of the process. Though it is probably best to do just one for your first as you will likely learn a lot and may want to do something different going forward. We have a DIY rain barrel design that we will be posting next week - complete with materials list, tools list, design tips, system modifications, and drawings. Be sure to check back for it. At our previous house, we started with 2 barrels, but later added 4 more giving us a storage capacity of 300 gallons. With a catchment surface of ~2000 sq. ft., and 300 gallons of storage, our barrels were filled from just a 1/4" of rain. We were quite successful with our system and learned a lot from the experience.

We have lots more to share on this topic, ~~so be sure to check back next week for our follow up post. This seems to be plenty to digest for now.~~ The barrel building tutorial is live! See it here.

***UPDATE*** Welcome Festival of Frugality 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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4/10/2008

The Diaper Spreadsheet

So we've had some requests for more info on our cloth vs. disposable diaper spreadsheet. We admittedly did not quite do it justice in the cloth diapering post as it was quite long as is. Want to know more? Here's all the juicy details:

Cloth Features:

Auto sub and grand totals for money spent on cloth, money recouped on cloth, and the net gain/loss. The lists are broken down by diaper sizes with subtotals for each. And yes, you can profit if you score materials for free or make diapers yourself.
There are plenty of columns to keep track of all of the pertinent info: quantities, date purchased, date sold, prices, + a column for details on each product.

Disposables Features:

Auto sub and grand totals for money spent on disposable diapers, wipes, diaper genie refills as well as the net loss. These are broken down by size to correspond with the cloth section. And no, we know of no way to profit from using disposable diapers.
The only info you need to input is the number of days your baby was in this size and the average number of diapers per day. Average diapers per day may sound a bit weird, but a newborn on breast milk, for instance, will go through at least a diaper every two hours - 12-14 diapers per day.
Other info like cost of disposable products, and the amount needed are included in the formulas so you don't have to guess at how many newborn diapers fit in single diaper genie refill. We already looked it up and included it. Its 180.

Overall Features:

This is an 'open source' document in the sense that you are free to edit it as needed. Think our prices on disposable diapers is too high? Edit it. Think you can cram more than 180 newborn diapers in a diaper genie refill? Go for it, but I don't recommend it. Need an extra column for something we didn't think of? Add it in. If these edits are done right, as with any coding, it should have no affect on the rest of the document and not screw up the formulas.
The column headers are frozen so that you can still see them as you scroll through the document.
Grand totals for number of days in diapers, number of months in diapers, cost per day (cloth and disposables), cost per month (cloth and disposables) - hand for those of you on a monthly budget.
Grand-grand totals for total money saved by cloth diapering and the total number of disposable diapers you've kept out of the landfill.

Might just be worth 99 cents.

Best of all, you can have all this info saved on your hard drive. It's not just an online calculator that you use once or twice and can't save. It is a comprehensive ledger, that you own.

Like our spreadsheet? You can buy it for ~~99cents (USD)~~! FREE

~~Clearly, we're not looking to get rich here, just recouping some of the time and effort put into it.~~

See our Download page to get the file.

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4/04/2008

What is: Debt-Snowflaking?

It was late last year when I ran across this post on the Consumerist. "The Best Personal Finance Ideas of The year". Could be interesting - but are they really new ideas? I was definitely pulled in when I saw that the top pick was the concept of the debt-snowflake. So what is debt-snowflaking?

Chris Walters, from the Consumerist, summarized it as "the act of finding lots of little ways to supplement your standard income, so that you can add mass to your "debt snowball" to make it more effective." That sounded awfully familiar, but I thought it would be worth a read to get a better feel for the concept.

The I've Paid For This Twice Already blog is credited with popularizing the concept and even offers a primer on the topic. Its a simple concept and a good one. Not so sure about the "new" part.

Nearly four years ago, we were introduced to Dave Ramsey and his personal finance advice. We got on the ball, on a plan, and almost two years ago, we completed our debt-snowball. We read Dave's books, listened to his radio show as often as we could, attended a Live! event, and even taught FPU for a while. It was pretty safe to say that we were in-tune with his message and engaged in his method. Those unfamiliar with Dave are quick to associate him with the debt-snowball, or paying off debt, or cutting up credit cards in dramatic fashion. Those are all correct, but that is only a small part of the picture. If you don't read the books or take the class or listen to the radio show - a lot - then you are missing quite a bit.

I had mostly forgot about snowflaking until March of this year, when I started seeing more about it. More and more people blogging about snowflaking. The Austin-American Statesman even picked up on it. Then I find that paidtwice has even spun it of into it's own site. People are getting excited about snowflaking and some are actually doing it. It's a pretty cool thing when you can have a positive affect on someone else's financial future.

To paidtwice's credit, she is admittedly unfamiliar with a lot of Dave's teachings and have not read his books. Thats ok. But, Gazelle Intensity, one of Dave's terms, is not a "role play". It's a mindset. It is a way of life. On Dave's plan, it becomes your modus operandi when you are getting out of debt. Gather Little By Little has it right - the gazelle is not about speed, but rather direction. Running 100 mph in the wrong direction will not get you to your goal. The other part of the phrase, Intensity, can best be summed up when Dave talks about it in reference to.... the debt-snowball. You'll hear stuff like, "Get an extra job, or three." "Put the dog on ebay." "Sell so much stuff, the kids think they're next." His take on the debt-snowball is usually accurately represented as listing your debts smallest to largest and paying minimum payments on all but the smallest. But the part people often forget - or just don't know about - is the most important. You attack the smallest debt with gazelle intensity. You scrape together every dollar you can get your hands on and throw it at that smallest debt until you knock it out. Sound familiar?

They did at least give it a fun name in 'snowflaking'. But really - who cares what you call it? What is really important is that people are doing this. I'll give kudos to paidtwice, as she has found a way to get people excited about paying off debt and has been quite successful in getting the message out. Dave Ramsey often admits, "I didn't invent this stuff, I just found a good way to package it."

**Update** Welcome Carnival Of Money Stories readers! Learn more about us here, and be sure to check out our latest posts.

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4/02/2008

A Dirty, Frugal Job - Cloth Diapering

Diapering. Nobody enjoys it. Every parent dreams of that day when they get the last kid potty trained and can close the door on this part of their lives. My baby diapering days started long before I was a parent. In college, I held a part-time job with a local daycare. For the most part, my job was to play with kids. Not bad, eh? I got paid for it too. Occasionally, I worked in the infant room. If I wasn't feeding babies, or rocking babies, I was changing diapers. So when our own baby arrived, a few years later, I was a lot less freaked out by baby poo than most new parents.

We, like normal Americans, chose disposable diapers for our first child. It went ok. Most brands couldn't stop 'blow-outs' aside from a local store brand (go figure). They don't really breathe that well, so baby had lots of diaper rash and irritation. Probably the worst part was running out of them from time to time. Usually at the worst times - very late at night, in small towns with no shopping.... We usually did OK on cost by doubling up on store coupons and manufacturer's coupons to get a decent price and buy several boxes at a time. But when you need them, you need them, and deals were not always possible. Actually disposing of them was also a pain. We had a Diaper Genie, which we now hate with a passion. By the time you filled that thing up, the diapers reeked and so did the baby's room. On top of that, there was the fact that we were adding all of this to the local landfill twice a week. We were normal.

As you should know by now, we are no longer normal. We are weird. With our second child on the way, and my wife, now a stay-at-home-mom, began investigating cloth diapering. Now people typically cringe when you mention diapering in general, but I've seen even the most seasoned diapering vet be grossed out by the mere mention of cloth diapering. "Really, you're going to do that?" How bad could it be? With the promise of money savings, a healthier baby and less impact on the environment, we decided to find out.

My wife found lots of great information, surprise surprise, on the Internet. Sites like DiaperSwappers (DS) and DiaperPin (DP) were very informative. On the DS forums she was able to ask questions and do research before actually buying any diapers. It was a great way to see what worked for others and what didn't. She also found out that you can save a ton of money by using cloth OR you could easily break the bank using cloth. DP has reviews of both diapering products and diapering online stores. They also have lots of great how-to information on cloth diapering as well a helpful definition page.

By our experience, the three best ways to save money when diapering are the following:

Sew your own. There are some great patterns for diapers on the web. You can get some free ones but they usually have mixed reviews. My wifes favorite (and most diaper sew-ers also) is by VeryBaby. It doesn't take any special material to make diapers if you don't want it to. Really all you need is some elastic, hook/loop (Velcro to those not of the sewing persuasion), and and a small amount of cotton fabric. If you go with used 100% cotton tees (can usually get for free from thrift stores if you ask) it will cost you maybe a dollar per diaper plus your time. It really doesn't take any special talent to sew them. Lots of moms learn to sew by sewing diapers so don't think that this is only for the advanced seamstress.
Buy/Sell used. You can buy everything used - even diapers. It really is not as gross and unsanitary as it sounds. A lot of times they have never been used or only a few times. Even if they have been used used they will be sanitary if you wash them properly before using them. Inversely, when your child out grows a size, you can sell the diapers to recoup some of the upfront cost. More on the details of this below. DS is a great place to buy and sell cloth diapers.
Prefolds/flats. This is what most people think of when they think cloth. These are what first come to mind for most people because this is what your mom or grandma did. If you really want to have brand new, never touched anyones tush cloth, this is the way to go and still stay on a tight budget. They are much cheaper then the newer styles and still work great. But don't worry about hurting your child with a diaper pin. You can just use a snappi instead! Oh how diapering has evolved...

Yeah, but is it really that frugal? Well, yes. We've successfully made it through the newborn size cycle - Bought, used, and resold. Initially when you start buying these things, you have to ask, "Is there really a cost advantage here? Or is this some like other "green living" concepts that save the environment, but sacrifice your pocket book?". Well, I was skeptical too. Some of these fitted diapers were costing $14 new - $12 for a used one! At first, this did not look very frugal. At second glance, we had the potential to recoup 85% of that upfront cost. Not bad. I was very interested to see how this would come out. So like any good PF bloggers, we made a spreadsheet. Enter inner geek. What we came up with was a very useful document, that with a little user input would calculate all the pertinent info for cloth vs. disposables. We factored in not only the diapers themselves, but the wipes and storage products as well. But how did we come out?

Like I said, we've been through one cycle, and with this spreadsheet, we have more to offer here than just our opinion on the subject - we have real data. Our initial investment was $149.55. As we transitioned diaper sizes, we began selling off what of that we did not need. Certain things like cloth wipes (yes, our wipes are cloth as well) and wet bags (used

for temporarily storing the dirty diapers, both at home and away), we would still be able to use and did not need to be sold off. As we were doing that, we knew the information that we needed to estimate what our disposable diaper costs would have been - number of days in this size and average diapers per day. After a few days of selling, packaging and shipping, all of the newborn cloth diapers were gone. We were very impressed at how fast they sold as well as the prices they fetched. So what was the outcome?

Cloth initial investment = $149.55
Cloth investment recouped = $102.81
Net cost of cloth diapers = $46.74
Estimated cost of disposables = $245.47
Money saved by cloth diapering = $198.73

So, for less than $50 we were able to diaper our newborn - nearly $200 less than it would have cost us to diaper the baby for the same amount of time in disposables. Thats all over the course of 48 days.

There are lots of different options for diapers. We couldn't find a good excuse for us not to go with cloth. The advantages far outweigh disadvantages. In fact, diapering is not so bad any more, our baby's room doesn't smell and we've not seen one diaper rash! Even our baby's doctor was saying how she notices that the babies she sees who use cloth rarely have rashes and are in better health than those in disposables. She openly admits that she believes it's the cloth diapers and that a lot of infant skin problems are due to the harsh chemicals that are now found in disposables. When she has kids... she's using cloth.

Below are some helpful links to get you started:

General
Very Baby
Diaper Swappers

Cloth Diapering How To /FAQs - Everything You Need To Know to Cloth Diaper Your Baby
Soft Cloth Bunz
Diaper Pin
The Diaper Hyena

Diaper chemicals
Diaper Drama 3 at the Diaper Pin

Diaper rashes
Diaper Drama 2 at the Diaper Pin

Cloth savings articles
Diaper Drama 1 at the Diaper Pin
Tips at the Diaper Hyena

Cloth savings calculators
Calculator at the Diaper Pin

Prefold/flat folding tutorial
Diaper folding at the Diaper Hyena

Like our spreadsheet? You can buy it for 99cents (USD)!
**UPDATE** See this post for more details on all the formulaic goodness.

We're going low tech for this.

Use the purchasing options on the right - RME or PayPal.
Drop us an email at jetsetnotthe at gmail.com with "Diaper Spreadsheet" in the subject line. We'll reply with the spreadsheet.

Clearly, we're not looking to get rich here, just recouping some of the time and effort put into it.

***UPDATE*** Welcome Festival of Frugality 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.

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

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3/28/2008

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.

Campus Credit Card Trap Report

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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.

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.
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.
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.
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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3/27/2008

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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3/25/2008

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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3/18/2008

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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