Does It Feel Like We’re Stuck In Neutral?

When it comes to personal finances, every so often I take a look at things over the long term.  For as much progress as our family has made paying down debt, contributing 10% of my income to retirement, and the like, from a personal finance perspective it often feels like we’re stuck in neutral.

Here are a few examples of how it seems like we’re spinning our wheels:

  •  Income level stagnant – I’ve heard it said so many times “I’m happy to just have a job” that few complain about not getting raises.  I was lucky enough to avoid a salary cut during the recent recession, but haven’t had an effective raise in years.  After more than tripling my salary from when I first started in the workforce in 1996 to 2005, this is frustrating (even though I *am* happy to have a job)
  • Stock market – It seems that the stock market has been stuck in neutral for over a decade.  Levels have risen and fallen a lot during that time, but aren’t the Dow and S&P pretty close to their trading levels from ten years ago?
  • Housing levels – OK, so everybody knows the housing market sucks but how bad is it?  Let’s put it this way, I bought a condo in 1999.  It went up in value over the years, but when I sold it in 2007, it had already started going down in value, and I sold it at 2005 levels, which I was bummed about.  Even though I don’t live there anymore, I still track what’s going on, and I’m pretty sure now it wouldn’t even sell for what I paid for it.  That’s pretty typical around here anyways.  So, in other words, housing values are below 1999 values.

I’m still fighting the good fight and keeping my chin up, but every once in a while, it seems like the one-step-forward two-steps-back adage.

The sucky part for me is that most of these ‘neutral’ indicators have happened during the prime of my working career, and the same probably holds true for those around my age (mid-30s).  In the past, this is where many people would get established financially, but now it seems we can barely keep up from the month before.  This could have long lasting repercussions as the effects of this personal finance neutrality will certainly impact us for the rest of our lives.

*sigh*

Why I Love Wide Open West Cable And Internet

I’ve been a Wide Open West (WOW) customer for quite a few years.  Long story short, I was with Comcast and had a service issue.  They took five days to come out and repair it, after which it went out again less than 24 hours later.  When I called it back in, they said it would be another five days.

I decided to call WOW and they had someone at my house the next day and I’ve never looked back!

I have always been impressed with WOW.  I’ve heard so many horror stories over the years since I’ve left Comcast that I’ve never once regretted my decision.

Here’s a few of the ways that WOW has impressed me over the years:

Read moreWhy I Love Wide Open West Cable And Internet

Staying Organized Can Save You Money

There’s no getting around it.

Being disorganized will cost you money.  At least it cost me money.

One of the areas that had gotten a little out of control since we moved in was the area where I stored our paint and paint supplies.  I had a shelving unit in the basement that was designated for such purpose, but even after we moved in and re-painted most of the house, the ‘stuff’ never seemed to go back on in any organized fashion.

Combine that with the fact that when we moved in 2007, the painting stuff was not organized all that well to begin with. Add to that painting most of the house before the move, painting a couple of rooms in 2008 that didn’t get done, painting the door and shutters in 2008 at a different time, painting the deck and the nursery (at different times) in 2009, and trying to repair and re-paint some walls in the bathroom this year, and it got out of hand.

The area of floor space that I was using in addition to the shelf space was probably two and a half times that of the actual shelf space.

Not good.

Read moreStaying Organized Can Save You Money

Book Review: The Spenders Guide To Becoming A Millionaire

I had the opportunity to read The Spenders Guide To Becoming A Millionaire by Ilona Dolinska-Reiser.

Ilona is a native of Poland (I’m of Polish descent so this was of immediate interest to me), and came to America as a young woman with nothing more than $10 and her suitcase. In the roughly twenty years since, she has accumulated a net worth of $1.2 million and shared her story in the book.

I enjoyed the book and thought it was a fun read. The book is divided into chapters, each with it’s own set of financial lesson. The book is very narrative with the author not only going through the main financial points, but discussing how she learned these lessons and how she applied them to her life. Along the way, she is very candid about some of the mis-steps she took along the way, and how she was able to learn from them.

Read moreBook Review: The Spenders Guide To Becoming A Millionaire

Categories Fun

Price Increases Bum Me Out

I hate when prices go up, especially for a product or service that you love.

With Baby Beagle (no longer really a baby anymore, but I haven’t found a catchy term I like just yet to switch to) rocking out the whole ‘growing’ thing in his first year, we took the opportunity to get pictures taken at regular intervals during his first year, namely every three months.

The three month photo shoot was at a storefront place that processed what seemed like 50 sessions per hour.  It was very rushed, very generic, and my wife was not impressed.  The photos turned out great but she just wasn’t ‘feeling’ it.

She asked some other mommies she knew, and got a recommendation of a lady that does photo shoots out of her home as a side business.  We decided to give them a try, so we went for Baby Beagle’s six month photos (and also has some family Christmas photos taken).

Long story short, we loved them!

Read morePrice Increases Bum Me Out

Homeowners, Are You Treading Water?

It seems that all you read about in the news these days is homeowners who are ‘underwater’ on their mortgage, meaning that they owe more than what the house is worth.

I feel bad for those people, of course, but I think that there’s a large group of people that are not getting attention.

No, I’m not talking about those that I would call, for lack of a better term, treading water.

The definition for treading water would be simple. You have equity in your home, but really you don’t.

How’s that possible, you say?  Glad you asked.

I would look at it very simply.  If you are ‘near’ the line where you have equity (anywhere between 0-8%), chances are you’re treading water.

Read moreHomeowners, Are You Treading Water?

Changes To Flexible Spending Accounts On the Horizon

A few months ago, the health care reform discussion was all the rage and dominated most news stories that were centered around politics.

Now that it’s been passed, I think people have moved on.  Most political discussions I hear of now seem to focus either on the upcoming elections or the government’s (lack of) response to the oil spill.

However, I thought it was noteworthy to go back to health care and point out a couple of pretty major changes to those that use flexible spending accounts to save money on health care related costs.

A flexible spending account, for those who may not be familiar, allows you to set aside pre-tax dollars that can then be spent on reimbursable health care costs, including co-pays, non-covered costs, prescriptions, and other items.  This essentially gives you a ‘discount’ equivalent to your marginal tax rate on health care costs.

Read moreChanges To Flexible Spending Accounts On the Horizon

Using Annual Passes To Save Money

A couple of months ago, I wrote about how we were considering an annual membership to the zoo.

Now that a couple of months have passed, I thought it would be wise to follow up, summarize what we chose, and outline how our strategy will hopefully save us some money.

The Zoo

The Detroit Zoo is ranked as one of the best zoos in the country.  Over the past twenty years or so, they have undertaken a huge effort to make displays more ‘natural’ so that animals, while in enclosed areas, are in more of a natural setting that would mimic the ‘wild’ that they might be in if they weren’t in captivity.

It’s a fun place and it’s within a short driving distance of our home.  We had gone a couple of times in years past, but only purchased day passes.  This year, we thought with Baby Beagle getting old enough to where he really enjoys being out, that an annual pass might be a good idea.

The twelve month pass (good from the day you purchase it until 364 days later) is $69 for a family.  This includes my wife and I, as well as any children we have under the age of 18. It also includes parking costs.

The day pass breakdown is as follows: Each adult is $11, children under two (i.e. Baby Beagle) are free.  Parking is $5 per car.

So, a day trip would cost $27.  In order to re-coup the $69, we would have to go three times in the course of twelve month.

We’ve already gone twice in two weeks, so all we need is one more usage and everything after that is gravy!  Plus, I believe that some or all of it is considered a taxable donation, so we may be able to write some of this off on our taxes.  I’ll have to check with our tax guy next spring.

No brainer!

Read moreUsing Annual Passes To Save Money

It’s That Time Of Every Two Years Again

It’s been two years since my wife and I got new cell phones, and it’s getting to be that time where we will start looking at new phones and plans.

We’ve been with Sprint for a long time.  That actually worked out nice when we got married.  Before that, I was on Sprint with an individual plan and she was under her parent’s family plan.  My parents are also on Sprint, so it’s nice because whenever we want to talk to our families, we are always in network.

For the most part, the service and equipment have been reliable.  In other words, we have no reason to move away from Sprint.

We will, probably, look at new phones.  My wife’s phone has been acting a little flaky as of late, with some occasional reboots, volume issues, and it also seems to have a taste for power cords, as two power cords have been rendered incapable of providing a charge to the phone in the couple of years we’ve had our phones.

At the moment, neither of us have the ability to browse the Internet on our phones.  I’ve resisted because I figure it’s one more way for people to get a hold of me, and I tend to be a recluse at times.  My wife has been pushing more and more for getting a phone and data plan that would support Internet browsing, so I’ve been looking into the idea.

Browsing through the phones, it looks like they have some pretty good deals where the out-of-pocket charges would be to spend no more than $100 out of pocket to get new phones.

I’ve been browsing through the options, and adding a data plan to our phones seems like it wouldn’t be too expensive, either.  Sprint does have family plans that include everything, but comparing that to a la carte pricing, I think we’re better off with a la carte.  If we added data to both of our lines, it would be an extra $15 per month.  However, we get a 19% discount because the company I work for has an arrangement with Sprint, so this would be closer to $12 per month per line.  We could also lower the text messaging plan that we have, which could save between $4-8 per month total.  This would make the ‘additional’ charge work out to about $16 per month.

I’m not convinced that there’s a value in this but having information available at the touch of a button would be nice, plus it would reduce our need and consumption on our cable internet lines.

A couple of years ago, we got a coupon in the mail that essentially gave us a free month of service for renewing.  I’m keeping my fingers crossed that something like that shows up again.  Getting a free month would allow us to bank the money and essentially pay for the first five or six months of the ‘upgrade costs’.  That would be awesome, but I’m not holding my breath.

Either way, it should be interesting and I’ll keep you up to date on what direction we go and what the pricing is.

Do You Select Credit Or Debit?

Yahoo Finance recently discussed the dangers of using a debit card, pointing out that the best alternative may be to select credit if given the option.

Here are some of the reasons that they listed:

  1. Loss limits – Credit cards and debit cards both limit you to $50 of personal obligation in fradulent situations, but you have a much shorter window (2 days) to report this with debit or you’ll start to be on the hook for more.
  2. Pay now / reimburse later – Because debit takes the money from your account immediately, it won’t be there during the time that your fraud claim is being investigated, which could lead to big issues for people who don’t have a cushion or get their accounts cleaned out.
  3. Merchant disputes – Same goes here, you already paid for the item that you are now having a problem with.  With credit, you aren’t on the hook for the money during the dispute process, whereas the merchant has your money during the dispute timeframe if you select debit.
  4. Phantom charges – Some places (like hotels) will put a hold on additional money at the time of purchase.  While they eventually ‘disappear’ once the transaction settles, this could lead to problems if you have a low balance and inadvertently cost you overdraft fees or bounced check fees.
  5. Overdrafts – There’s been a direct correlation to the number of overdraft transactions and the use of debit card transactions.  One, apparently, begets the other.
  6. Skimming-  If someone gets a hold of your account number, your bank account can be cleaned out before you or the bank notices the activity.  The chances of this are a lot lower in credit card transactions.

We always use the ‘credit’ option when we use our debit card.  I’ve noticed that more and more merchants seem to be trying to subtly lead customers to using the debit option by removing the Credit/Debit choice on the pinpad devices, and instead defaulting to the ‘Enter Your PIN’ screen which would make it a debit card purchase.

The dirty little secret here is that merchants pay less to the banks when you use the debit option versus when you select credit, so it makes sense that they want you to use debit.  However, the way I look at it, they’ve already factored the costs of the credit transactions into the cost of their goods or services, and it’s not like they’re going to pass along some of the ‘savings’ along to you that they’d see if you select debit.  It goes right in their pocket.

The bottom line is that consumers take the biggest risk when they select debit, and it’s not a risk I’m often willing to take.  About the only times I ever select debit are when I’m at Costco (they don’t accept ‘credit’) or in the rare event that I want cash back and can save a trip to the ATM, and usually I’ll kill two birds with one stone and just get the cash at Costco.

This article raised some good points, but we were already in the ‘use credit’ boat.  Do you agree or is there any reason where you prefer to use debit?