Ending '08 With A Small Bang

So I finally called my phone company to remove the voicemail ($6) and maintenance ($7.50) services that I discussed in the Every Penny Counts post. When the customer service rep asked how she could help me, I told her that I was interested in reducing my monthly bill but not at the expense of upgrading or getting additional services to bundle. To my surprise she said "okay, let me see what I can do." She then rattles off the following:

• We can reduce your local service from $35 to $26;
• We can reduce your unlimited long distance from $21.99 to $9;
• Your voicemail is $6, we can reduce that to, $0 (yes, zero);
• The maintenance plan is $7.50 but that will increase to $9.99 if you choose to keep it (the increase is due to the additional coverage of the DSL modem);
• The DSL you have is $32.95 and we can reduce that to $27.95 (my company pays for my DSL so this doesn't impact my monthly budget, however the $5 savings is still welcomed)

The total phone savings per month is $30.50, $5 for my company and $25.50 for me! I was calling to reduce my services and save $13.50 but I get to keep all of the services and save $25.50 instead! How awesome.

Feeling pretty good about my conversation with the phone company, I called Directv to see if my luck would continue and guess what, they offered me a $10 per month price reduction, plus free premium channels for 6 months. My guess is that either the recession or cable is creating some customer reductions for them and they are trying to hold onto those of us who remain. Whatever the reason, I'm happy to be a beneficiary of their generosity;-).

In total, there will be an additional $35.50 added back to my monthly budget for 2009. The $35.50 monthly will yield an annual savings of $426, which will be used as extra principal payments on my mortgage. Paying the additional $426 in principal payments will save me approximately $1,400 in interest payments. Woo Hoo!

Regifting - Yea or Nay?

Now that the holidays are coming to an end and all of the presents are unwrapped, I thought it would be a good time to chat about regifting. Let's get straight to the question, is regifting acceptable or not? Do you regift? Would you be offended if someone regifted or returned a gift you gave to them? I am very curious to hear your opinion.

Personally I think regifting is okay. In my opinion, once you give someone a gift it is their gift to do whatever they please with it. If you give someone a gift with stipulations or expectations on how they are going to use it, is it really a gift? Again, I'm just posing the question here, realizing that there is no universal "right" answer, but rather a right answer for each person.

A few reasons why I may regift, return, donate, or even sell a gift given to me are:

1. I don't like it. Maybe it's a piece of clothing, jewelry, bath and body goods in a fragrance that is unappealing to me, etc.
2. I cannot use it. I had an aunt give me a butter dish one year, and I was 16 years old! Are you kidding me?!
3. It's something I have already. A very good friend (who actually reads this blog) gave me a mini cocktail bar set for my birthday one year. Well I had one already, a pretty nice one too. Unfortunately since I already have one, the one that she gave to me as a gift will most likely be at the spring garage sale in a few months. Sorry friend, you know I love you;-).
4. I don't want it. Yep, sometimes this happens. It's not that I don't like it per-se, or that I can't use it, or even that I have something similar, I just may not like it. A good example here is an I-Pod that I regifted. I'm so not quite the techie person and I already have a smart phone (i.e. Palm Treo). I just can't take the thought of carrying around 2 and 3 pieces of electronic equipment throughout the day. LOL.

My disdain for clutter will not allow me to keep things hanging around the house just because it was a gift. I believe in finding a use for things. Luckily for me I don't have to regift or return gifts given to me often. Those whom I'm blessed to receive gifts from generally do a good job of picking items that they know I'll enjoy. However, once the gift is given to me, I take full ownership of it; I have complete autonomy to do whatever I want to with it because that's the definition of a gift to me. If regifting is not in your code of etiquette, is there a statue of limitations when the ban is lifted? I shared the following story with Abby at I Pick Up Pennies, she too blogged about regifting.

I have an aunt who wanted to help me purchase odds and ends when I moved into my first apartment after college. Since I lived with her for a couple of months, I knew that she had many boxes of unused dishes in the closet of her spare bedroom (from places like K-mart and Wal-mart). Because her heart is generally bigger than her purse, and there was no talking her out of getting me some household items, I suggested that she just give me a box of unused dishes out of the closet. Her response was "Oh no, I can't do that. Those dishes were given to me as wedding gifts." (It's important to note here that I did not know those dishes were wedding gifts because it had been 5 years since she got married. I would have never suggested them had I known they were wedding gifts). She got married in our small hometown so there was no such thing as a wedding registry. From the looks of the unopened boxes, it seems that everyone must have given her dishes and towels. Well my dear aunt went on and purchased me some dishes anyway. As of today, she's been married 14 years and has moved 3 times ... and those dishes are still in the closet of her spare bedroom.

Financial Nuggets - 5

I hope everyone had a wonderful Christmas holiday. I spent this entire week under the weather so my plans were rearranged. Nonetheless I have so much to be thankful for and even though I was a little ill, I had an opportunity to rest and take it easy. This week's financial nugget comes from fellow PF blogger Sharon Rose.

Slow progress is better than no progress!

Whatever progress you've made in 2008, remain encouraged and continue pressing towards the achievement of your financial goals.

CVS Here I Come

Did you know that you could get some great deals at CVS? Personal financial bloggers all over the blogosphere have posted about such deals. When my blog friend JPKittie over at Won't Go Down Without A Fight wrote a post on Sunday on how she purchased $115 worth of items for only $1.71 out of pocket, I had to inquire! JPKittie led me to Thrifty Mama's CVS 101 post, which spells out in great detail how to use the CVS Extra Care program.

I went to CVS today to get some Vick's Vapor rub (old school I know) and decided to get an Extra Care card as well. When I got my receipt, the cashier began explaining to me how the program works and all the many ways that I can accumulate bucks. At the bottom of my receipt was a $2 extra bucks coupon (apparently this was the amount of extra bucks that I received for the specific items I purchased.). Wow, so now I have a $2 credit the next time I go to CVS. Actually I may go tomorrow because they are having a sale on all Crest ProHealth products ($2.99). If I go and buy a tube of toothpaste then I can use my $2.00 extra bucks, plus a $1.00 coupon in the local paper and get the product for free (well, I'll have to pay the taxes but that's it). Oh but wait, not only will I get the toothpaste for "free" but I will also get another $2.00 extra bucks coupon because that's one of the promotions this week. How about that ... CVS will give me $2.00 to purchase toothpaste that I would normally purchase anyway.

If I've thoroughly confused you, check out the CVS 101 post.

Hey, this may be the catalyst I need to get me into couponing. Although I think it is a great idea, I've never been one to really use them. If these are the type of savings that I have been passing up, then I need to get on the bandwagon.

Is there anything else I'm missing out on?

The Cost of a Common Cold

Generally I am not a person who gets sick, not even a common cold. I can go years without a single sniffle. The one caveat is when I'm moving a thousand miles a minute, not taking any time to rest. When I am continuously on the go, juggling 25 things at one time, trying to get 30 hours out of 1 day, my body will begin to break down and demand that it gets some rest. Seeing as though I completely ignored all of the warnings, my body decided that it needed a break Saturday night. It started with a slightly irritated throat and by Sunday morning it was a full blown runny nose, scratchy throat and heavy onset of fatigue. Since tea was the only thing I had readily available I had to send a friend to pick up some additional items.

Emergen-C: $12.99 (yikes!)
Tylenol Cold PM: $7.49
Robitussin DM: $7.49
Taxes: $1.96
Total Damage: $29.93

So where does this unexpected $29.93 fit in my budget? It's covered by my HSA contributions. My HSA account comes with a debit card so I use this card whenever I incur any medical expenses.

I'm off to my umpteenth nap of the day. Hopefully I can sleep through the night tonight.

Financial Nuggets - 4

He who gets into debt is a servant to his creditor.
~Proverbs 22:7(b)

The waste of money cures itself, for soon there is no more to waste.
~M.W. Harrison

Defining Diversification

If you've managed to read any financial news in the US in the last 72 hours, then you have no doubt read about Bernard Madoff's $50 billion ponzi scheme! How many times have we heard the #1 financial principle "don't put all of your eggs in one basket" or to sum it up in one word "diversify?"

Many wealthy individuals, charitable trusts, family trusts, and other entities lost a substantial if not all of their wealth by investing with Mr. Madoff's company. (http://www.usatoday.com/money/industries/brokerage/2008-12-15-madoff-scam-ponzi_N.htm). Each time something like this happens (think Enron), we are reminded that our investments should be diversified. I used to think that diversification meant that you should not have a substantial amount of your investments in single stocks. I thought that if I had several well diversified mutual funds (i.e. industry specific, international, growth, balanced, etc) that I was properly mitigating my risk. Thanks to Mr. Madoff, I am beginning to redefine my thoughts on being diversified.

Currently 90% of my savings is in the stock market one way or another (401K, Roth IRA & Money Market Fund). Suddenly I'm not feeling so diversified, I mean all of my money is in the stock market one way or another. I know that I may be diversified within the stock market, but still, all of my eggs are in one basket. Being a woman of action, I am now on a quest to reallocate some eggs into other baskets...what baskets...that's the homework.

Are all of your eggs in one basket? How do you define diversification?

Let the Payoff Begin!

It's official, operation payoff mortgage has begun! I'm mailing my first extra principal payment today. Having goals work to my advantage because they tend to create a healthy discipline and drive in me. Generally I'm a goal keeper so once I get started, I stay the course until it's achieved ... assuming the goal still makes sense.

Do you set and keep goals?

Financial Nuggets - 3

We must all suffer from one of two pains: the pain of discipline or the pain of regret. Discipline weighs ounces - regret weighs tons.
~Jim Rohn

Budgeting is people telling their money where to go instead of asking where it went.
~John C. Maxwell

Thoughts or comments?

Paper or Plastic?

"Studies show that we spend more using plastic rather than cash." Have you ever heard that statement? I have and each time the point remains the same but the statistics change (i.e. 18% more, 32% more, etc). The primary explanation is that there is no immediate emotional connection with using plastic like there is with cash. Honestly I'm not sure if the statistics are accurate or even true because I know people who swear they spend more using cash and I know others who swear they spend more on plastic?

As for me, it really depends on what I'm buying and where I'm shopping. At the grocery store I absolutely, positively must use cash if I'm going to stay on budget. Every single dag-blastic time I use my debit card, I over spend. The other sore area for me is restaurant eating. Hmm, are seeing a theme here? Food apparently gets me into trouble (hey, what can I say, a girl loves to eat:-). I cannot think of any other area where I have to be that adamant about using cash. Actually most of my transactions are either online bill pay or cash. I do use my debit card but I primarily use cash. Over the years I have become more disciplined with my spending. Excluding the aforementioned exceptions , I do pretty good either way, paper or plastic.

How about you? Do you tend to spend more when you use plastic versus cash?

Every Penny Counts

I'm a "paperless" kind of girl. I don't like clutter and I detest junk. If I can get an electronic copy of something, by all means, please deliver it to me that way. Most of my bills are sent to me electronically or I get an e-mail letting my know that my invoice is ready for viewing. On Saturday I guess I was bored or something because I decided to look at the details of my AT&T bill. Now my phone bill does not change materially each month, it may fluctuate a couple of cents or maybe even a dollar but it's pretty much the same. Turns out my boredom was not in vein because these two items caught my attention:

$6.00 - voicemail service
$7.50 - inside maintenance plan

It's been a very long time since I reviewed my phone bill with this much attention (can you say 5 years). Let's do the math, $6 + $7.50 = $13.50 per month * 60 months = $810!

That is enough money to pay an additional 6.5 months of principal payments* on my mortgage. Guess who's about to get a call from me? You got it, AT&T. Oh, did I mention that I have an answering machine at home? Yeah, it's electronic and connected to my cordless phone. It's been "off" since I had the phone.

*I have a 30 year mortgage which equals 360 payments. When I say extra payments, I mean extra principal payment. If you look an amortization schedule, you will see that each total payment is comprised of interest and principal. For example:

Monthly Total Payment = $1,000
1. Jan: Interest $900 ....... Principal $100
2. Feb: Interest $897 ....... Principal $103
3. Mar: Interest $890 ...... Principal $110
4. Apr: Interest $883 ....... Principal $117
so on and so forth until you get to payment # 360.

If I paid $1,000 for December's mortgage plus an additional $323, then I have paid 3 extra principal payments (Jan - Mar). When I send in my $1,000 payment in January, I've moved 3 months down the amortization table to April or payment #4, and have saved myself $2,687 worth of interest (add Jan - Mar's interest). My payment made in January will be broken up as $883 to interest and $117 to principal.

Think of it this way, the amortization table tells you how much you paid to borrow the related principal amount. Taking #1 above, essentially the bank is charging me $900 to borrow $100. For February, the bank is charging $897 to borrow $103. When you prepay principal, you do not pay the related interest. Ah ha!

Budget Buster!

Sighing....

I did it again! I went to the grocery store (1) without a list and (2) without cash. Guess what happened? I busted my budget wide open. My grocery budget is $50 a week and whenever I violate those two rules, I lose. After years of trying to control my tendency to overspend at the grocery store, you would think I would do what I know works for me but noooo, I'm still going around in circles.

I went into the grocery store to get 2 ingredients to make some chicken tortilla soup, 2 ingredients! By the time I checked-out, I had a cart loaded with stuff and a tab of $117.32!! Talking about budget buster. There is no justification, this is nothing more than bad habits not going down without a fight.

How do I handle senseless budget busters...I take it out of my blow money! Yep, I blew it so oh well. On a positive note, I won't have to go grocery shopping next week so I'll sort of "add" that $50 back to what I overspent. However, let us not get it twisted, it is not a good habit to spend money before you have it.

Do you have any categories in your budget that tend to run amuck without careful and focused attention?

Financial Nuggets - 2

The purpose of a budget is to help your money to grow. It is to assist you to have your necessities, and to the extent possible, your other desires. It is to enable you to obtain your most cherished desires by defending them from your casual wishes. Like a bright light in a dark cave, your budget shows up the leaks in your money and enables you to stop them and control your expenses for definite and gratifying purposes.

~Author George S. Clason...The Richest Man in Babylon

***The book was written in the 1920's so the above quote was revised for modern language (i.e thy to your, thee to you, etc).

Any thoughts or comments?

Recession Proof

Surprise, Surprise, Surprise, the country is in a recession. Oh and get this, the country has been in a recession since December 2007. Hmm, I wonder why they waited 12 months to finally admit the state of this economy. Are you surprised? I'm not.

Several people have asked me my thoughts on the recession. It’s simple; I have chosen to opt out. That’s right, I am opting out of the recession … as in not participating. Regardless if the country is in a bull market or a bear market, the choice is always available to most of us rather or not we experience a personal recession. The last time I was in a personal recession was during the last bull market, go figure! Consequently, I learned that it’s not wise to leave my finances up to chance, the government, an employer, or even a well-meaning financial advisor. I am the CEO and CFO of Me, Inc.; it is my responsibility to actively manage my business (even if I solicit the help of others).

A few tips to avoiding a personal recession:

1. You are the boss so take control. Organize your finances, create a monthly budget, and commit to keeping it.

2. Pay off debt, especially credit cards! Period.

3. Increase your financial knowledge and practice what you learn. The rate of return on this action item is infinite.

4. Make temporary sacrifices (for example, when gas prices were ridiculously high, I switched from Dove soap to Tone and from Charmin tissue to Scott (extra soft of course:-). These were proactive, temporary changes to help accommodate the increase in my gasoline budget.

5. If applicable and necessary, increase your income.

• Obtain a new job or get an additional job


• Sell something – garage sales, eBay, craigslist, etc


• Provide a service – pet sit, cater, decorate, personal shopper, ghostwriter, baby sit, clean homes, etc.

6. Start today! It's never too late.

Are you actively managing your Me, Inc? Do you have any tips to share?