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October 2004

It Never Hurts to Ask

This article was written by in Saving. 4 comments.

Or more accurately, it never hurts to call and threaten cancellation of a service.

I called my cable television company today to get rid of HBO, since I never watch it. I only had it because at one point, it was cheaper for me to have it than not to have it*. That promotion ended, and every so often I’d call up asking if they had any new promotions to lower my price.

Well, today when I said I was getting rid of HBO, they said there’s a new promotion where they can offer me the same service and cut about $40 off the price of the monthly bill. Once again, it would be cheaper for me to have HBO than to have cable without HBO. So I signed up for the new 12 month promotion.

* Okay, I admit I used to watch the HBO program Real Sex On Demand with my girlfriend at the time once in a while.

Since July 2003, I have been paying my rent with my credit card. I do this because it allows me to “float” for about 20 days and, more importantly, because I get a one percent discount on all credit card purchases. As of next month, they are discontinuing the allowance of credit card payments. I don’t believe they take personal checks either.

This is a big, national corporation, not some dude who rents out his apartments. I don’t understand why they are trying to make things more difficult for their tenants.

I can understand not taking checks. Perhaps they are hit with too many bounces. But with a credit card, they get the money right away. It becomes the credit card company’s responsibility to track down payments and make money off interest rates and late fees from those people who carry balances month to month and pay bills late.

I want convenience. I want to pay rent via credit card online. It’s not too much to ask.

Jeanne Sahadi takes the simple question, “How do you define ‘living within your means?’” and turns it into some kind of poorly-dubbed martial arts movie or strange game show (if you judge by the title of the article). Nevertheless, I agree her with her analysis of the above phrase:

Ideally, I’d define living within your means as spending less than you earn, saving some of your income and having no debt. The exception being debt that lets you build net worth, such as buying a home, getting a degree or making a home improvement that builds equity.

The author outlines an example expense analysis of a $75,000 income household living with its means.

Taxes: $1,238
Housing: $1,562
Household Exp.: $1,655
Insurance: $ 402
Car Loans: $ 400
Transportation $ 100
Retirement Savings: $ 500
College Savings: $ 300

Figuring those numbers as a percentage to the total income, I am definitely paying too much in some areas. Take, for example, transportation. If a household with an income of $75,000 should only be paying $100 for parking, gas, and tolls, then I’m way “ahead” of the game. I spend about $250 on transportation a month just for work alone, including tolls and gas. The $250 doesn’t figure gass and tolls when traveling to visit friends or volunteering on weekends. That’s more than double the example, a household earning almost twice my salary.

Simple solution: I need a better paying, closer job.

Short-Term Savings

This article was written by in Saving. 2 comments.

The Motley Fool on the importance of short-term savings.

Having an easily accessible cash stash can prove to be one of the most important parts of your saving and investing strategy. Maintaining the liquidity of the equivalent of six-to-twelve months of your expenses means that if you run into an emergency, you don’t have to sell stock (incurring tax) or dip into retirement funds (incurring tax and/or withdrawal fees) in order to CYA.

Certificates of Deposit (CDs) usually give you good rates on your savings while maintaining liquidity. If you have to withdraw funds from your CDs before they mature you may be hit with a penalty, but depending on the CD you choose, the interest gaines will still be higher than what you might yield on a regular savings account.

Right now, I don’t have six months worth of expenses saved up in cash, although I used to. Once I have about $5,000 to put to the side for an emergency fund, I plan on laddering CDs with different terms of maturity.

This is how that works: Suppose there are five levels of maturity, one year, two years, three years, four years and five years. The longer the term, the higher interest yield. To ladder the CDs, I would spend $1,000 on each type.

At the end of the first year, the first CD will mature. I’ll take that $1,000 plus interest and buy a five-year CD. That CD will now expire at the end of year 6. At the end of each year, another CD will expire, and with that money I will purchase another five-year CD.

When I’m ready to start this, I’ll go with ING Direct because they offer great interest rates and I already have my savings account with them.

I may consider starting sooner with less than $5,000. It would be a good idea to start getting those rates, even if it is on a smaller amount of money.

Fast Forward and Get Rich?

by Luke Landes

Scott Burns from MSN Money preaches the benefits of TiVo. In this article he claims that a TiVo device pays for itself in the value of your time saved after 12.5 hours for the $100 price to buy the device and after an additional 6.5 hours for each monthly fee of $13. His assumption is ... Continue reading this article…

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Give Me More Money, Boss

by Luke Landes

How to ask your boss for more. You may notice many of my links come from CNN/Money. It’s their fault for being good. In any case, this article presents raise-negotiating tips to help persuade your tight, wimpy, intimidating, and/or passive-aggressive boss to give you that money you deserve. Here are some of my own—Flexo’s tips ... Continue reading this article…

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Financial Update – October

by Luke Landes

Below you’ll see the charts for the month. I still have one paycheck left to receive, so that should add to the month’s tally, but since I’ve done the last few months on the 23rd, I didn’t want to break that habit just yet. I guess it would make more sense to do this count ... Continue reading this article…

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Not-So-Good Realization

by Luke Landes

Remember when I was happy to realize I would be receiving three paychecks in December? I miscalculated. However, I will be receiving three paychecks this month, with the third one coming in next Friday. It’s a good thing, too, since I’ve been feeling financially strained lately. It would have been nice to have that “surprise” ... Continue reading this article…

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Salary Increase Disparity

by Luke Landes

News item from CNN/Money: CEO pay rose, worker wages fell. The disparity not only makes it tougher for workers to make ends meet, analysts said, but also threatens the overall health of the economy, which depends on consumer spending for two-thirds of its strength. Costs of the basic living necessities, like food and gas for ... Continue reading this article…

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My Name is Flexo, and I Approved This Message

by Luke Landes

Last week, I received the following email. I have changed the name of the firm for the safety of the author: Flexo- I enjoy reading the posts on your blog ‘Consumerism Commentary’. It is a well put together site. I was reading a post on 9/29 about your brokerage recently charging you an annual fee. ... Continue reading this article…

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Good Realization

by Luke Landes

I looked at the calendar this weekend and realized that I have three paychecks coming to me in both October and December. That will definitely help ease my money issues since I budget for two paychecks monthly.

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Auto Insurance – Yikes!

by Luke Landes

When I had my 1997 Honda Civic, and with an excess of points from my “wild and crazy” days that I’m waiting to drop off my record, my auto insurance premium was already high. I don’t have the policy in front of me, but it was around $3,400 per year. In June, I purchased a ... Continue reading this article…

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Don’t Stop Thinking About Tomorrow

by Luke Landes

Gerri Willis at CNN warns readers that they should not stop investing in a 401(k) just because the market is doing poorly (like it has over the third quarter of this year). Her five points are don’t disengage, resist the makeover urge, pick winners, don’t fear bonds (though I’m fine without them as I’ve investing ... Continue reading this article…

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