This is the first part of an open-ended series about major decisions that require consideration from a financial angle. The important point to note is that the financial angle is only one of many aspects that should be considered, and this fact is often ignored in some writing circles. This part pertains to purchasing a car.

When writing about personal finance, there is an expectation to center discussions around money. For example, when a personal finance writer tackles the decision to purchase a car, arguments are usually for slightly used rather than new (to save the inherent depreciation “expense” associated with driving the car off the lot), buying rather than leasing, Kelley Blue Book’s used car values, and all operating expenses (figured conveniently in Edmunds.com’s useful True Cost to Own ratings).

Personal finance writers infrequently take other, less measurable factors into account. Aspects like “fun” and “prestige” do not often rank high on writers’ list of factors effecting a decision in which money plays a large role. In fact, these human desires are sometimes ridiculed or seen as obstacles to overcome. After all, a car is simply a tool to help you move from point A to point B in a fast and safe manner. Perhaps it is the automobile industry that has convinced us that there is more to driving than a mode of transportation. Otherwise, why pay more than the cost of the car that finds the right balance between safety and affordability?

I could write a list of ten financial things a purchaser should consider before buying a car. In fact, here is that list.

1. Consider not buying a car if you already have one.
2. Consider buying a slightly used car rather than buying a new car or leasing any car.
3. Consider selecting the base model rather than one with the extra features.
4. Buy the car with the lowest True Cost to Own.
5. Get a CarFax report so you won’t be in for any maintenance surprises.
6. Negotiate the final price before discussing trade-ins or financing.
7. Research your choices for their reliability in reputable, independent sources.
8. Read the contract or agreement before you sign.
9. Don’t get the dealer’s extended warranty.
10. Don’t take on debt.

While those suggestions will help you spend no more than absolutely necessary, they are rules to be broken. I’ve broken several of them with my most recent purchase (a 2004 Honda Civic when it was new). Even though I new I could have saved some money immediately by buying a lightly used vehicle, I didn’t. I expected to be a heavy driver and I wanted as much reliability as possible for as long as possible, so for me, a new car was a better option. I also took a low-interest loan to pay for the car. I was prepared to pay cash but a very low interest rate was offered to me, so I was able to let my savings earn more interest while paying off the loan.

Consider this. New Jersey residents take an average of 32.4 minutes to get to work each day. That adds up to almost 12 full days of non-stop driving each year. That’s a lot of time to spend in one environment. I have no problem whatsoever with someone who wants to make the time spent traveling as enjoyable as possible. That enjoyment may come at a cost.

Buying a car is just one example—and not even the best example—of how major purchasing decisions can, and often should, take more than just the “bottom line” into account.

As I shared with you a few weeks ago, I choose to pay more for my electricity. And in 2007, 71 percent of my total grocery budget went to support local agriculture and small businesses.

Each year, I buy a harvest share at a local community supported agriculture farm. I promise to start waxing poetic about my fabulous fruits and veggies once they start pouring in around mid-May. But for now, my topic of discussion is the act of deliberately choosing certain sources and providers for my purchases.

Sometimes I spend more, sometimes less, but I always try to spend consciously. And this concept is at the very root of ethical consumerism.

Wikipedia defines ethical consumerism as:

...buying things that are made ethically. Generally, this means without harm to or exploitation of humans, animals or the natural environment.

I find this to be a somewhat narrow definition, really, as ethics are a highly personal matter. While I may believe in supporting local agriculture and channeling my grocery budget away from factory and agribusiness farms, someone else may want the Coca-Cola company to take over the market and choose to channel all his spending towards their products.

I prefer to look at it instead as conscious spending. Whatever my interests, when I look over my budget and spending, I want it to reflect my personal moral criteria. There are two main ways to accomplish this goal: paying for products and services you believe in, and avoiding those you don’t.

Positive Buying – This is the term used for what I call “voting with your dollars,” channeling your spending towards recycled or fair trade goods, local organic farms, woman- or minority-owned businesses, cruelty-free products, etcetera. Essentially, you are investing your monies in a business you believe in, helping to ensure its success.

The United Kingdom has a relatively active ethical consumist movement, and even a magazine dedicated to the topic, Ethical Consumer. The publication rates companies according to an “ethiscore” which is meant to assess the environmental, human/animal rights, and political impact of each company, the idea being that consumers can then choose to support companies with the lowest negative impact.

Moral Boycott – The other side of this is the avoidance of companies whose practices you do not support. Ethical Consumer has a large list of these as well, including:

• Adidas, for its use of kangaroo skin in footwear
• ChevronTexaco, for dumping toxic waste in the Amazon
• Starbucks, for failing to support fair trade practices

If you watched Blood Diamond and then decided never to purchase diamond jewelry, you are practicing moral boycott.

Why Bother? – Well, sometimes it works. The primary law of consumerism, if you buy it, they will sell it, comes into play when these purchasing behaviors are witnessed on a larger scale. Wal-Mart starts selling organic products. Sweatshops close, while fair trade coffee shops open. There’s been talk that specific purchasing behaviors only serve to create niche markets, but these markets are growing.

Just this month, BusinessWire reported that:

The organic food segment dominates overall organics spending with sales in excess of US$20 billion in Europe and US$17 billion in the US alone. Food products are also increasingly being tagged as organic. In 2007 15.1% of new food product launches tracked by Productscan were tagged as organic, compared to 7.3% in 2002.

As the ethical movement has grown, a number of companies have tried to position themselves as green, some with more success than others. Going forward it is imperative that businesses create a clear plan of how to re-adjust to meet consumer demand or risk being left behind.

While some companies merely posture (a tactic termed “greenwashing”), many companies are reacting to public demand and pursuing more socially responsible and environmentally sound business practices.

Conscious buying alone may always not achieve what you’re looking for. If environmental impact is what concerns you, tossing a household full of products into a landfill won’t offset all your new, green purchases. Buying consciously while buying only what you need is the key.

Does your spending reflect your beliefs?

About the author: This article was written by Emily Starbuck Gerson whose personal mission is to help people learn about credit and debt. She writes for the blog, Taking Charge (read her posts here).

I love cookies. They’re one of my favorite things to eat, and everyone who knows me knows this. I avoid fried food so I rarely eat fast food, but when I do, I tend to go to Whataburger because they have large, fresh, gooey chocolate chip cookies. The thing is, the last several times I’ve gone, regardless of location, they’ve been out. McDonald’s recently started offering similar large, gooey chocolate cookies of equal goodness, which are even cheaper, and they’re never out. Even though salads is the only actual food I’ll eat there, it’s become my new fast-food cookie stop.

But the other night I got a craving for a Whataburger grilled chicken sandwich. I considered going elsewhere, but I remembered the cookies, and my decision was made. Upon entering the drive-thru, I was told they were out of chocolate chip cookies (they had macadamia, but those don’t do much for me).

I was not thrilled. I was even less thrilled when I got home to find that my sandwich was fried chicken, not grilled chicken as I’d ordered. I was so hungry, I ate it anyway.

I sat at home eating the order I didn’t order, thinking about how annoyed I was that Whataburger never seems to have the cookies anymore, and that the woman who took my order looked exhausted and messed it up. I normally never complain to a restaurant unless anything is vastly unsatisfactory, but I decided it was time to open my mouth. I went to the Whataburger Web site and found an area where you could make a complaint or comment. I was able to pick from a list which store I visited, and I explained my discontent, though I assumed nothing would come of it.

The next day I received a call from the general manager of the Whataburger I had visited. She was extremely kind and apologetic. I told her I could forgive the wrong order since it happens everywhere from time to time, though I was annoyed that the cookies were my favorite part of Whataburger, but never seemed to be available anymore. She said she’s been trying to get her staff to always have cookies ready, but she would make a more concerted effort because all menu items should be available at all times. Being my push-over self, I apologized for complaining, but she said she was actually glad I did, and appreciates the feedback. She told me she’d be sending me coupons in the mail.

Sure enough, yesterday I checked the mail, and there it was. An envelope with a handwritten note from her, apologizing again and asking me to accept the coupons. She included two coupons for a free burger and a handwritten note on her business card for me to get two free cookies. Those made up for the price of my incorrect order and then some.

The moral of the story? If you receive unsatisfactory service somewhere and feel like your money has been wasted, do something about it. Be a bold consumer and lodge a complaint. I told my co-worker I was writing this, and she cited a similar example, when she received a box of food that was supposed to have six items in it, but only had five. She complained to the company and was sent a new, full box of six. Don’t take this the wrong way—I don’t want people to use this strategy to try to get free items when they aren’t deserved. That’s hurting businesses unfairly. But if you feel it is truly warranted, don’t be afraid to complain—you will likely be rewarded for your efforts.

If you enjoyed this article, please visit Emily Gerson’s blog for more tips and thoughts about credit, debt, and identity protection. We would appreciate your comments and reactions, so if you would like to contribute to the discussion, add your comment below.

I asked a few weeks back whether any of you had changed your spending behaviors based on our current recession. Some of you had cut back, while others underscored the importance of always living frugally, so no recession-time cutbacks are necessary.

I, too, choose to live frugally. But sometimes, I also choose to pay more.

In fact, on Halloween Day 2006, I officially made the decision to pay more for my electricity. 1.3 cents per kilowatt hour more, in fact, which generally means an extra $11 to $16 per month for me, based on recent history.

Clean Power Choice
On that date, I signed up with New Wind Energy, which offers nationwide green energy programs. They participate in the NJ Clean Power Choice program, where these charges are directly added to my monthly utility bill.

It’s a set-it-and-forget-it approach to green power, allowing me to support my chosen provider without the installation or hassle of new lines, etc. New Wind Energy is just one of lots of providers available throughout the country, which allowed me to choose the type(s) of power I desired.

I filled out a basic form, and about a month later I was being charged the difference in power cost, paying the delivery fees to my local utility while my supply payment is redirected to support wind power. The electricity I buy is supplied to the grid, even though it isn’t technically going straight to my house. My favorite analogy here is of adding clean water to a a bathtub of dirty water. The water’s not going to become crystal clear right away, but it will gradually become cleaner.

My money helps to build more wind turbines, the most cost-effective renewable energy technology in the world. You can read more about wind energy here, but one of the biggest benefits is the reduction of greenhouse gases, as wind power creates no emissions. The more of this type of power coming into the grid, the better, and I’m happy to help tip the balance.

Renewable Energy Certificates
The Clean Power Choice Program is somewhat more straightforward than RECs (renewable energy certificates), another option for greening your power. There’s a lot to discuss about RECs, but they work much like carbon offsets—you’re purchasing your equivalent electricity usage in green power. Even if your state offers no power choice programs, you can still go online and buy your allottment of RECs.

Wikipedia provides some great background on RECs:

Because nuclear and fossil fuel power are subsidized and their full costs are not built into the price charged, they are cheaper than most renewable sources. The wholesale price for electricity is determined by non-renewable sources and is often less than the cost of producing it through cleaner renewable methods. This is due partially to government subsidies for the nonrenewable energy industry, and partially to a market structure that does not fully capture all social and environmental costs associated with conventional electricity generation (like air pollution, costs to maintain the military in oil-rich parts of the world, disposal costs for nuclear waste, health impacts of dirty generation, etc.) A REC represents an additional payment for producing power from renewable resources, allowing the producer to generate and sell electricity at the local market price and thus enabling more clean renewable energy to be made.

Going Solar
I had been actively pursuing solar panel installation for my house, but the contractor explained I’d have to cut down a giant 50-year-old tree I adore, plus the cost, while well-subsidized, still was nearly $20,000. That’s a lot for a little ranch house like mine, plus I don’t plan to live here for more than another 5 years, so it may not pay to do it. A system only goes about 15 years before needing repairs, another consideration. I am hoping that further subsidies for solar installation will become available in the future and will see what I can do on that front as well.

My Choice
Faced with all of these options, I took the easy route to clean energy for my home with the Clean Power Choice program, and I’ve never regretted it, even as fuel and utility costs continue to rise.

But why? Simply said, I believe that my power as a consumer is one of the strongest powers I have, possibly more impactful than the US voting process, though of course I still plan to exercise my right to vote.

But with my dollars, I’m voting every day, sanctioning the business practices of the companies my money supports, regardless of my intentions. I’ve been this way for a long time, but only recently learned the name for my particular condition: ethical consumerism. (More on that in a future entry.)

For most of my young life, bargains were paramount, and I continually made choices based on the best price or best customer experience. Now I see my purchasing power as directly shaping the world in which I live, and I’m making very different choices.

I am well aware that the environmental impact of our present fuel consumption is a humongous spectre, of such massive scale that it seems impossible to combat it. I’ll confess that I do have a relatively apocalyptic vision of our planet’s future. However dismal the outlook may seem, I’m a person of action, and over the last few years, I’ve seen the scales start to tip in positive ways from an aggregate of what are really minor lifestyle changes. It’s encouraging.

I willingly pay more for electricity so that I can be using and contributing to the kind of power I believe in: clean, green power.

I pay more as an investment, so that over time these technologies will become better and more affordable. In fact, according to a recent article in BusinessWeek, it’s happening already.

So I pack a few lunches a month to cover the extra expense. To me, it’s worth it.

Green Power Provider Locator [EPA.gov]
Wind Energy Basics [National Renewable Energy Laboratory]
Clean Energy: It’s Getting Affordable [BusinessWeek]

Image Credit: Phault

I’m not a fan of rebates, particularly the kind of rebate for which you must pay full price for a product up front with the promise of cash back if you remember to mail in your receipt and a portion of the product’s packaging in time. I’m not a fan because I’m generally unorganized, at least historically.

I’m not a fan also because many people are like me. Rebates are great marketing tools, convincing customers that they are getting a better deal. The company offering a rebate on a product gets the benefit of advertising a lower price as well as the benefit of charging all customers full price. They are well aware that many customers will not jump through all the hoops necessary—or even just remember to do so—to receive cash back. By the time this cash arrives for the lucky customers, the price of the product has been lowered.

As of January, I had the same cell phone for almost three years. I had completed the terms of my latest two-year contract with Verizon Wireless and was delaying the purchase of a new phone for as long as possible.

My biggest problem—a complaint shared by my girlfriend—is the phone’s battery couldn’t hold a full charge after three years. When using a Bluetooth headset, the battery drains in less than an hour. I could have simply purchased a new battery for the phone, but I decided to take the opportunity to pick a new phone that would offer me helpful features e-mail, mobile web, and a functional keyboard. I decided on the BlackBerry 8830, and I’m very satisfied with the purchase.

The current price is $399 with a 2-year contract, minus a $100 online discount (or just $299 in the stores). Additionally, whether purchasing in the store or online, Verizon is also offering a $100 rebate. This is the same offer that was presented to me a few months ago when I was shopping for my new phone. Somehow, and I’m not quite sure how, I managed to convince the salesperson to give me another $100 off. Perhaps because I spent a lot of time in the store and they probably just wanted to get rid of me, they sold me the phone for $199 with eligibility for the $100 rebate.

True to form, I almost missed the deadline to send in my rebate form, receipt, and serial number cut from the box. Here’s the problem. When you take the phone home, you have fourteen days to make sure the phone works properly before returning it. This prevents you from destroying the packaging and sending in the rebate right away (though I imagine some people do, anyway). The box get put away and the rebate is forgotten.

Almost. As March came to a close, I realized I was approaching the deadline for mailing my rebate form and qualifying for my $100 back. I managed to submit the materials in the nick of time. It’s entirely possible that they would extend the deadline, but it’s not with $100 to find out.

As I mentioned before, I’m not very trusting when it comes to rebates. Many times, rebate offers are simply scams. First, the customer must jump through hoops, second, materials are often “lost in the mail,” and third, loopholes which allow the company to reject rebate requests are frequent. Verizon Wireless seems to have a better approach to the process. According to the Verizon Wireless Rebate Center, my rebate paperwork was received yesterday, and I qualify.

The website doesn’t tell me when I will be receiving my rebate, but if I can believe the salesperson (would this qualify me as naive?), I should receive my check within two weeks.

If you have an HD DVD player and fear it will be collecting dust in your entertainment center, you have an option to turn the hardware into $50. Best Buy is accepting returns for any HD DVD product in return for store credit. You would receive up to $50 in store credit for the player and a few dollars for each HD DVD title you return through the Best Buy Trade-In Center.

You can even return HD DVD hardware and titles not purchased at Best Buy, but you’ll still receive a Best Buy gift card in return.

Additionally, Best Buy is automatically sending a $50 gift card to those who purchased HD DVD players at their stores. As long as your purchase is on the store’s records, you will receive this gift card in addition to any credits you would receive if you decide to trade in the player.

That’s actually not a bad deal. It’s rare that “early adopters” are afforded this courtesy.

Will you be trading in your HD DVD player? Or will you be keeping the device for the existing HD DVD titles and the player’s upconverting features for standard DVDs? Or will you be laughing at all of us poor souls who thought the lower price and better features would win consumers over in comparison with Blu-Ray’s larger storage capacity?

(Thankfully I hedged my bets and managed to find myself with a Blu-Ray player as well.)

Best Buy HD DVD Action Center

In 2007, the price of milk at the grocery store increased 12%. Spending on milk accounts for 12% of the “average” American household grocery budget, so this was a significant increase.

This year, the agriculture industry is predicting that milk prices will level out or even decrease thanks to an increase in supply. However, some analysts believe that any reduction in wholesale prices may not find its way to the grocery shelves.

I’m not an “average” American household. I purchase food for myself only. Not only that, I’m lactose intolerant, so I only use small amounts of milk in cooking, and I never drink the stuff.

I buy Lactaid brand 2% reduced fat milk, usually one quart per month. Today’s retail price at my grocery store for this brand is $4.19 for a half gallon. This is compared with the Tuscan Farms brand of milk (including lactose) at $2.69 for a half-gallon.

My milk is more expensive, but I don’t buy much of it. That limits my exposure to last year’s price increase.

Did you feel pain in the wallet last year as a result of increased milk prices and did you cut back on your milk purchases?

Image credit: fiskfisk
Holy cow! Consumers get a milk break [CNN Money]

The author of the Debt Sucks blog explains his recent predicament with Comcast. When I received my first bill from Comcast many years ago, I faced the same situation. My first bill was much higher—almost twice as much—as the monthly rate I originally agreed to. Here’s what Debt Sucks has to say:

The other day, I received my first bill from Comcast, and immediately became infuriated when I opened it up. You would, too, if you were expecting a bill in the 30s or 40s and find it’s $83.31! I turn it over and there, at the top, is listed a previous balance of $57.46. How the heck can I have a previous balance!?... [The customer service representative] finally explained to me that I was being charged for two months of service—the one I already used, and the one following.

This policy—billing for future service each month, except for the first bill which includes a catch-up charge—is never explained when you initially sign up.

Frank Eliason, from the “Comcast Executive Offices,” frequently responds to postings on blogs and forums across the internet criticizing or thanking Comcast. He showed up at the Debt Sucks blog to leave a comment:

We are in the process of redesigning our statement to better explained the first month cost. We could have also done a better job of explaining this during our initial interaction.

Comcast has recently purchased my cable television and internet provider, Patriot Media. Recently, I received a letter to warn me that I should expect to see the branding switch over to Comcast soon. The letter also mentioned that billing dates will be adjusted. If they are adjusted into the future, then I would expect a larger bill that my monthly charge. If my billing date changes from the 13th to the 20th, my next bill would include service for March 13 through April 20 rather than March 13 through April 12.

This was not explained in the letter, it is the assumption I am making. I can also assume, if the cycle date is pushed later, that other people will see a higher bill this month or next month and they will not be happy.