There are a lot of things in the world I know nothing about. Not knowing about something can be very expensive. Allow me to illustrate…
The brake light came on in our car a couple of weeks ago, and we started looking around at different places we could have them checked. We were a bit confused, because just a month earlier, when the car had been in for a yearly inspection, the tech told us that the brakes “passed with flying colors”. The funny thing is, two months earlier a different tech at the same shop had told us to change them soon, since we only had about 10% left on the pad.
Needless to say, I was perplexed. It just so happens that the brakes on our car are one of the things I knew nothing about.
After calling around and comparing prices, we found out that we were looking at about $150 more than we were expecting. I was hesitantly thinking about taking it to one shop when I decided to call my father-in-law. He’s very handy and knows quite a bit about cars. He offered to take a look at the car when we were up at his house over the weekend.
He pulled off the tires, and was able not only to teach me how to tell if the brakes were wearing out, but how to change and care for them. I also learned about rotating tires and how to tell if the shop really rotated them like they told us they did (and they didn’t!)
This simple trip saved us about $200 this weekend, and will save us much more in the future. I feel comfortable changing the brakes on the car, and I also know quite a bit more about how it works and how to maintain it.
There are some of you who are reading this right now who could probably change the brakes on your car in your sleep. But what happens when your computer needs to be repaired, or your daughter needs braces, or you need to find a yoga class on Monday nights?
Far too often we trust what we’re told by companies and what we see in advertisements and think it’s our only option. Just like I learned to be proactive about my finances, I learned that I can do more than just blindly take the car to the shop down the road and get ripped off. It’s a simple and obvious lesson, but one that I think more people could learn from.
We each have a built-in network of advisors – family, friends, co-workers – who are experts in areas we are not. Their insights and advice can not only help us learn, but save money as well. Learning to turn to these people is something that isn’t always natural, but can be very beneficial. These people are often more than willing to share their advice and knowledge, and will do so because they want to help you.
What are some of the ways you use the people around you to learn and save money?
Before I got married, I was never really vocal about problems I had with companies. If the food I ordered at a restaurant was the wrong order, I usually wouldn’t say anything. If I had extra fees in my checking account at the end of the month, I’d chalk it up to coincidence and think it wouldn’t happen again. I didn’t like asking people for things I didn’t know for sure were mine.
After my wife and I married, and we became 100% responsible for our bills, somewhere inside me an internal light switch flipped on. Maybe it was because the money paying for these products and services was mine, or maybe I just got fed up with getting jerked around, but I started to find that there were a lot of things I could do to get rid of a fee, fix a problem, or simply lower my bill.
1. Ask productive questions. Don’t ask yes or no questions when you’re on the phone; find new ways to express what you want. Saying things like:
- “I’d really appreciate it if you could do…”
- “What can we do about…?”
- “Please remove this fee/change this thing.”
- “I’m considering switching services, what can you do to help me stay with (company)?”
It’s so easy, especially over the phone, to say no. Don’t give them that chance.
2. Be direct. Sometimes it can be intimidating to call someone and tell them you think they made a mistake or that you need something to change. I think this is the main reason I originally hated calling. However, I had a great experience with a company that helped me to realize it’s better to ask and be told no than to not ask at all.
My wife and I are involved in a start-up company and have been making more and more phone calls. Two months ago, we realized early on that we were going to run out of minutes on our cell phone plan, and we wanted to change our plan and buy more minutes. When I called, I told the person on the other end of the phone exactly what was going on. The customer service rep told me that I wouldn’t be able to change our plan until the end of the month, but that she could give us each 900 free bonus minutes. This saved us, as paying for minutes over our monthly amount would have been killer.
If you find you start running into problems when you’re asking for what you need, find something you can use as leverage. One of the best things (if it’s true) is your long history as a customer of the company. If you’ve done a good job of paying your bills on time and haven’t caused any major problems, they’ll be more likely to want to help you out. Be persistent and don’t let a simple ‘no’ deter you.
3. Know the situation. Paying attention to bills, letters from the companies you work with and deals offered by other companies can help you when negotiating. Because of the high cost of customer acquisition, many companies will be willing to cut you a deal to keep you as a loyal customer. It’s also much harder to dispute a fee you received a letter about two weeks earlier.
Make sure to keep track of who you talk to, when you talked to them, and exactly what they told you. This information will be very useful if you have to call in about the same situation again. Sometimes companies make honest mistakes, and usually they’re happy to change them.
4. Be realistic. Don’t chew out the person on the other end of the phone. They didn’t cause your problem. Even though fees or a company mistake might have you frustrated, yelling at the customer service rep makes them want to help you even less.
Having worked in customer service before, I can say that I worked so much harder to help people who were frustrated but reasonable, rather than the people who just called and yelled into the phone.
In today’s economy, there are few things that aren’t negotiable in some way. Doing some research and then making a phone call could save you quite a bit of money. Don’t let these huge companies jerk you around. It might be easier to just sit tight and pay the fees you don’t understand and eat the food you didn’t order, but it sure is cheaper to do something about it.
How about you? Has there been a time when you’ve been able to get a problem solved or a fee reversed?
Almost everyone has an story about the annoyance of overdraft fees.
We all had cause to rejoice after reading Smithee’s recent post about banks backing off of overdraft fees. However, banks, being the business that they are, are already scheming for new ways to wring money out of us.
An AP article on a local news site about new ‘business ideas’ banks are considering caught my attention. Obviously, banks exist to make money, and the quickly-fading overdraft fees are an easy source of income for these businesses. The AP article I read highlighted the fact that now that some banks are becoming more lenient and allowing for a bit more wiggle-room when it comes to overdrafts, they might be trying to stick it to you in other ways.
Banks may begin adding fees or minimum balances to checking accounts, or may charge for other services they offer. One way banks may look to make the best of this situation is to offer a variety of new products, all very similar but with different fees and charges built in.
Interestingly enough, the recent credit card legislation may have paved the way for new regulations on debit cards, as well.
The days of automatically enrolling every customer in overdraft protection may be at an end.
“Such changes could help offset the steep losses banks face as they overhaul their overdraft programs, which have come under intensifying scrutiny in the past year. Critics say automatic enrollment in overdraft programs, which has become an industry standard, is deceptive because most people assume they can only spend money they have when using debit cards.”
While banks will begin placing a whole new emphasis on attracting new customers and driving them to their more ‘lucrative’ products, it’s important to monitor your accounts and statements carefully over the next few months to be aware of any new charges or requirements placed on your accounts.
Being aware will help you save money and will avoid any of those annoying fees.
Source: Where Will Banks Make Up Lost Overdraft Fees?
When I was younger, my family and I would make the annual back-to-school pilgrimage to the outlet malls located in a city about 20 minutes from where we lived. As kids, we were always excited to go, because we knew the deals would make it much easier to persuade our parents to let us get the things we wanted.
A recent visit to some other malls had me shaking my head in disbelief. Had I imagined those deals of 15 years ago, or are outlet ‘discounts’ just not what they used to be any more?
A recent MSN Money article highlights the shock I experienced, and documents how the tide has turned in the outlet store industry. Here are a few things that I thought were good to keep in mind:
1. Beware the “Outlet State of Mind”
Just because something is on sale at an outlet store doesn’t mean it’s a good deal. Many consumers are automatically trained to think something is a good buy if their getting it for less than the regular price. I remember comparing prices at one particular outlet store to their regular retail outlet in the mall and found the prices to be almost the same, even though the outlet prices were advertised as “20-30% off”.
The prices were discounted at the outlet store, but they were discounted off of higher prices than the items usually sold for.
Consider this excerpt from the article:
“It’s not the asking price that gets us to spend, researchers believe, but the amount “saved.”
MRIs of shoppers’ brains have shown that spending triggers discomfort. Discounting helps alleviate that, Shell says, “so we associate more with the money we saved than the money we spent.”
Outlet malls exploit shoppers’ discount cravings by setting artificially high reference prices, then marking them down. At one jewelry store, for example, Shell examined a necklace with an asking price of more than $3,000 and a discount price of $800. Its actual value: about $300.”
2. Are you buying an “outlet model”?
Some stores actually create and produce merchandise exclusively for their outlet stores. In the past outlet stores sold slightly damaged or disfigured merchandise, but now you’ll find entirely different styles in some stores.
Of course, there’s nothing wrong with buying a product produced for an outlet store, but there may be quality differences you aren’t aware of.
3. Don’t let the trip convince you to spend.
Outlet malls are purposely located off the beaten path, because the sunk cost in the travel usually motivates people to spend. The author of the article tells of convincing her husband to buy some jeans, saying “Well, we drove all this way, we might as well get something.”
Plan ahead, and know when you’re going and see if you can make the trip worth your while in other ways. We always stopped by a waterfall that was on the way to the store, and went as a family to have “bonding time.”
4. Don’t “Graze”
Just like shopping at the grocery store without a list is a great way to spend more than you planned, heading to buy clothes, luggage, shoes or other outlet items without some planning can be costly as well.
You don’t need a item-by-item list, but having a general idea of what you’re looking for can help guide you. Heading to the outlet stores ‘just to see what’s there’ can be painful for your wallet.
Outlet stores are still a great place to head when looking for a great deal. Being aware of the ‘context’ of the prices and the products you are purchasing will help you be a smart shopper and find those great deals that outlets are known for.
What are some of your outlet store tricks for getting the most for your money?
Source: Are Outlet Malls for Suckers?
The recession has forced almost everyone to make a change in one way or another. For one Atlanta couple, their wedding has turned into more than they had anticipated.
Vanessa Caldwell and Cole Parker are getting married on Nov. 11, and needed a way to cover their expenses. They decided to turn to their friends and family for help.
Caldwell started a website, www.dollarforawedding.com, soliciting donations to help pay for the event. The couple’s wedding announcement even has a Paypal link to allow guests to donate directly. So far, the couple has received enough donations to cover $750 of their $2,000 budget.
The couple also has deals with the florist and the photographer, allowing them to advertise at the wedding, in exchange for no charge for the pictures and flowers.
The idea was born out of necessity. As business owners, the couple puts every spare penny they have into growing their small business, leaving them without much in the way of spending money. The recession forced them to cut back, and they needed help paying for everything.
Some who visit the couple’s website or are aware of their plan aren’t sure how to react. Some view the request for donations as an ‘admission’ price charged to guests, or as just plain tacky. Others see no problem with lending a helping hand.
Part of me sees this as an interesting idea, but I would feel obligated to pay if I was planning on attending. I wouldn’t want to show up and eat the food and listen to the music if they’d asked for help and I hadn’t paid. I understand wanting to give some ‘direction’ to those who might give you a gift, but isn’t that what a wedding registry is for?
Is asking guests for financial help a one-time thing, or will we see more of this in the future? How would you feel if a friend or family asked for a donation instead of a gift?
Source: PayPal Wedding Invite Irks Some Guests
If you’re a frequent reader of this (or any other personal finance blog) you’re familiar with credit scores and credit reports, and the advice to check them often.
These resources detail your financial history and provide a measure of your supposed financial risk. They’re also useful tools to determine the safety of your identity. However, when was the last time you checked your ID Score?
MyIDScore.com is a new company that offers what they call, “a new way to quickly assess your risk of identity theft.”
Your ID Score is:
A statistical score that’s based on technology currently used by leading communications, financial services, retail companies, healthcare providers, government agencies, and consumers to assess your risk of identity theft. These companies use ID Analytics’ scoring technology to ensure that fraudsters do not apply for goods and services in an innocent consumer’s name.
Basically, your ID Score will give you an overall picture of the security of your identity, just as your credit score gives you an overall picture of the state of your finances. Monitoring every single part of your identity that gets tossed around is a big job, and MyIDScore.com wants to help.
The interesting thing is, even though you’ve probably never heard of ID Analytics, you’ve almost certainly had your data analyzed by them, notes an MSNBC.com article:
ID Analytics is not exactly a household name. That’s because most of us never deal with the company directly. But if you’ve purchased a wireless phone, have a credit card or applied for a retail charge card, there’s a good chance the company analyzed the information on your application.
How does it work?
After providing your personal information, ID Score utilizes information provided by retailers, governmental bodies, financial service providers, healthcare companies, communication providers and other companies to determine how you can protect your identity.
What about privacy?
Obviously, if you’re providing all of your personal information, MyIDScore.com will have access to quite a bit of what goes on in your life. By doing this, it’ll be easier to monitor what goes on in your life, but you won’t be the only one doing it. The site does take privacy very seriously, and you can choose how your information is used.
Is it worth it?
Monitoring your identity is becoming more and more of priority, especially since the ways in which someone can access your personal information are increasing exponentially. IDScore may be the right fit for some people, and it seems to be an extremely useful and powerful tool.
Am I going to use it? Probably not right now (knock on wood). I’m comfortable with the “old school” methods I’m using to protect my identity for the time being. I can see myself considering IDScore.com in the future, however.
It’s good to know that there are tools out there that can help you keep your identity safe. Many people would benefit from a product like this, and I’d recommend it to anyone who is even moderately worried about their identity.
After we got married, my wife and I combined our finances. We moved most of our money from a local brick and mortar bank to a bank that we primarily access online and over the phone.
This arrangement has worked out well for us, but it does mean some accounts that were previously utilized many times a week have now lain dormant for quite a while. We’re not really too worried about the checking and savings account, but we do keep a close eye on the credit card from that bank.
The card is important to us because not only is it the largest line of credit we have available to us (we rent, have no student loans and no car loan), but it’s also been open the longest – it has a major affect on my wife’s credit score.
With the recent increase in banks closing customers’ cards, we started to worry that our card would mysteriously one day disappear, since we don’t use it very much.
According to this recent article from the Wall Street Journal, while ’surprise’ card cancelations are on the rise, there are risk factors and other things you can be aware of that might help you keep that card in your wallet.
From the article:
“An issuer can cancel a credit-card account without notice when …
* A customer hasn’t used the card in more than a year.
* A customer has defaulted or is delinquent on the account.
An issuer can cancel an account and send written notice within 30 days after the cancellation when a reassessment deems the cardholder too risky.”
In fact, your bank doesn’t even have to notify you about the account closure if your account is closed based on inactivity, default, or late payments. Many people find out about the cancelation only after their card is turned away at a store or restaurant.
So what can we do to keep our cards and avoid damage to our credit scores?
- Pay attention: Double check your bills to make sure you’re not late or in default. Monitor your credit report to make sure it’s accurate, and do all you can to fix any problems.
- Use your card: We use our card for the occasional entertainment expense. Interesting enough, despite hardly using the card over the past few months, our credit limit was increased, helping us our with our credit score. Having a set plan for a card (a small recurring bill or a determined budget category) will help keep the card active.
- Diversify: After reading the article, I realized that even if we do everything we can to keep that card active, we’d really be hurting if it was ever closed. We need another option that will reduce the overall impact of a card closure on our score. Granted, the impact won’t be as bad for someone with a mortgage or student loans, but when a credit card is the only credit you’ve had time to get, it could be a whopper.
I’m much more comfortable now that I know we’re working to keep the card open. I now know that we need to diversify to decrease the impact that each source of credit has on our credit score. Knowing what’s going on with your cards can help preserve your hard financial work and can prevent surprises at the check out stand as well.
Source: Wall Street Journal, Credit-Card Companies Can Cancel Cards Without Customer Knowledge, Aug. 12, 2009.
My wife and I enjoy our apartment, but we’re preparing for the day when we can make the jump to a house. We could use the extra space, and we’re ready to get away from some of the ticky-tack regulations and rules that landlords love to use.
Financially, however, our preparation is lacking. It isn’t because we’re not trying, but we’ve decided that we’d like to have a sizable down payment and know exactly what we’re getting into. We haven’t had much debt in our marriage so far, and so in some ways, we’re reluctant to dive in.
For this reason, buying a foreclosed home is something that has been very interesting to us. I was first sucked in by hearing radio commercials announcing homes for sale for just $12,000 or $22,000. I naïvely thought, “wow – $12,000? We can swing that. We’ll be in a house in no time!”
Turns out, such was not the case. While properties going for those prices are available, most foreclosed homes can be found going for between 20-40% off the value of the home, according to AOL Money. While this isn’t rock bottom, it’s still quite a bit more affordable than a full-priced home.
According to the same AOL Money article, there are five tips that can make buying a foreclosure a realistic choice for many potential home buyers.
1. Find a property. The article recommends checking two sites: Foreclosure.com and RealtyTrac. Both charge a fee, but they each list thousands of properties. The best places to look are areas that are places that have a high grouping of “distressed properties.” Doing a bit of research about the local economic situation can help as well – you’ll obviously have better luck in areas with more foreclosures.
2. Skip the auctions. At an auction you’re usually buying a home without seeing it first. Before you make any serious offers on a property you’ll want a full inspection, and that’s hard to do with properties that are auctioned off by a court. You may also be responsible for back taxes on the property, something that might not be disclosed during the action. The best thing to do is to wait for the bank to put the home back on the market. They’ll usually pay off any taxes or debts, and fix the home up a bit to attract potential buyers. This is a much safer way to buy.
3. Know local home values. As the article states: “Just because a home is being sold b the bank, doesn’t necessarily mean it’s a bargain.” If you find a property your interested in, use a site like zillow.com to compare values of the homes around it to make sure that you’re not getting ripped off.
4. Get Financed Before You Shop. Apparently many banks won’t make a loan for you to buy a ‘distressed property,’ so it’s a good idea to get pre-approved for a mortgage before you start seriously shopping for home. Other banks base their loan on the condition of the property, so to avoid any problems, get your financing set up first.
5. Get an Inspection. I’ve already mentioned this earlier, but an inspection is key. You want to know as much as possible about a house, and paying for a professional inspection is worth it. Homes in foreclosure can be hiding serious problems, since the previous owner probably didn’t have money to make major repairs, or even perform routine maintenance.
With an inspection you’ll know not only the condition of the home, but what kind of repairs are needed and how much you can expect to pay for them.
While we’re still a while from seriously shopping for a home, we’re planning on checking out foreclosures for sure. Any money we can save on a home would be a leg up financially, and put us that much closer to being debt free again.
What thoughts or experiences do you have with buying a foreclosed property?
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