Free Money Finance

Wasted Money

Here's a piece from Money that says Americans paid $15 billion in overdraft fees last year. The details:

In 2016, U.S. consumers paid a total of $15 billion in fees for bouncing checks or overdrafting -- which is when a customer tries to make a purchase without enough money in their account to cover the transaction -- according to new data released by the Consumer Financial Protection Bureau.

He also pointed out that the average amount of money consumers overdraft by is about $24 -- but that banks often charge fees of around $34 for each overdraft incident.

I don't know why I'm surprised at stuff like this any longer.

You'd think that after all these years of blogging that I'd have it ingrained how poor Americans are at money management and nothing would shock me.

Then something like this comes along.

$15 billion in WASTED MONEY. That's what this is saying. People spent money they didn't have and ended up not only paying the original bill but actually paid $15 BILLION more.

Ugh. When will these bad decisions end????

How To Protect Your Credit Score From Medical Collections

The following post is from FMF contributor Josh Erickson.

It is painful to discover yet another medical bill when you check you mail, but it's even more painful when you discover how much all those unpaid medical bills are hurting your credit score. Your formerly good credit score could drop by as much as 100 points, all because of medical collections that show up on your report. Here's some information about how medical debt can negatively impact your credit score.

It Causes Lasting Damage

Generally it isn't the hospitals or doctors that report the debt to the credit reporting agencies, it's the debt collector that they turn unpaid bills over to for collection. Once the collection agency reports them, the damage to your credit can be significant. The score should improve over time, assuming that no additional negative information is added to your report, however collection accounts will continue to appear on your report for 7 years and 180 days from the date the original delinquency occurred. This is true of both unpaid and paid accounts.

Isn't Medical Debt In Collections Ignored For Credit Scores?

There actually isn't one, single type of credit score, there are several. While it's true that the newest version of the widely-known FICO score, referred to as FICO 9, ignores any paid collections that appear in you report and places less weight on medical collection accounts, it's not as widely used as other FICO scores yet. The same is true of VantageScore 3.0, which also ignores paid accounts.

The majority of lenders still use credit score versions that do not provide any allowance for medical collections. Because if this, you should go on the assumption that any negative accounts that are included in your credit report will be viewed negatively is you apply for employment, insurance, or credit.

The True Impact Of Medical Debt

The impact of medical debt on American credit scores is much more significant than you might think. According to a report issued by Consumer Financial Protection Bureau in 2014, over half of all reported debt on credit reports is related to unpaid medical bills. In a survey conducted by Credit.com, 1 in 10 people who review their credit reports will discover a collection account that they were previously unaware of.

This fact alone makes it extremely important for you to review your credit report every year, and to monitor your scores daily. It's kind of like a checkup to protect your credit health. Credit.com provides free credit report snapshots and two free credit scores every year.

Ways To Maintain Healthy Credit

It's vital that you do what you can to protect your credit from medical debt. Here are some common-sense steps that you can take:

1. Make yourself more aware of the medical debts that you owe. People often don't even know what they owe in medical debts. In fact, many don't even know that they owe medical debt at all, frequently because they don't understand how co-pays and deductibles work. Make sure you follow up with your insurance company and health care provider after receiving care, to verify if you owe a balance. Don't assume that everything will be taken care of by your insurance.

Also noteworthy is the fact that in 2015, 31 state attorneys reached an agreement with the three largest credit reporting agencies that they would not report any medical debt until after 180 days after the debt was incurred. This change was intended to allow people, such as yourself, the opportunity to resolve medical bills with insurance companies and health care providers.

2. Review the Explanation of Benefits that your insurance provider supplied to you, and contact both the insurance provider and your health care provider if the bill isn't promptly taken care of.

3. Request an itemized bill from your health care provider. This way you'll be able to verify the charges and it'll provide you an opportunity to negotiate payment terms with the medical billing company.

4. If a collection agency contacts you regarding a medical bill, negotiate with them. Ask if they'll refrain from reporting the bill is you pay it right away, assuming that the debt is legitimate. Some will agree not to report the debt in exchange for quick payment.

Remember, it's usually not helpful for your credit scores for a collection account to be updated as paid, unless your lender is one of the few that are using one of the newer credit score variations. It's always best to get the item removed, if possible. Some agencies are willing to make concessions in this area, others won't.

There are a couple of things that you can do if you feel that the situation is highly unfair to you, for example if you never received a bill from the health care provider. The first is to appeal to the Consumer Financial Protection Bureau by filing a complaint. The other is that you can contact the health care provider and request that they pull the debt back from collections so that you can make payment directly to them. If they agree to do this, the account is usually no longer reported.

If a collection agency contacts you in an attempt to collect a bill that you don't believe that you legitimately owe, then the Fair Debt Collection Practices Act gives you the right to dispute the debt with the collection agency and to ask that they validate the debt. The Act also gives you the right to dispute it with the credit reporting agencies that the debt was reported to.

Do You Tip Carhops?

Here's an interesting question that's bound to get people in an uproar. :)

Dave Ramsey asks whether or not you should tip your carhop.

Until the end of last year, my answer would have been, "I don't go to any places that have carhops." We didn't have any restaurants in Michigan (at least convenient to us) that used them.

Then we moved to Oklahoma and there's a Sonic every three blocks. If you don't know what a Sonic is, some of you may remember the old A&W stands where you ordered from your car and someone comes out with your order.

So, do you tip that person?

Here's what Dave's site has to say on the issue:

One highly informal online poll showed that more than half of the people who go to Sonic don’t tip their carhop. Around 25% said they tip the carhop a buck or two, and less than 5% said they tip 10–20% like at normal restaurants.

One former Sonic carhop responded to the poll saying that they generally don’t expect tips but welcome them when they’re given.

Also, one supervisor at a Sonic Drive-In said on Reddit that all of his carhops make minimum wage and do receive tips more often than not.

The comments seem to have some conflicting information to the above, but the question remains.

Personally, I have wondered about this myself. And as someone said in the comments on Dave's site, they should think about including a tip option when you pay by credit card (which I believe you are required to do -- at least I do on their credit card reader by the menu.) If I'm paying by credit card, tipping by cash is a hassle. In fact, I may not even have cash with me!

So I currently do not tip carhops, but am wondering if I should.

What do you think? What do you do?

Tipping is Out of Control

Here's a piece from Fox that says 27% of people have tipped flight attendants. Oh yeah, believe it. Tipping flight attendants.

But this isn't the worst part. Check out this quote:

So how much should you tip a flight attendant? Hobica says he’s heard of people tipping anywhere between $50 and $100. Additionally, some airlines are offering coupons to their frequent fliers that they then give to flight attendants to reward exemplary service.

Let me start by saying that I am mostly in favor of tipping in both generally accepted places (like restaurants) as well as some that could be considered "borderline" (like hair stylist and hotel housekeeping.) We then supplement these with extra gifts at Christmas for the postman, newspaper delivery boy, and so forth.

I say this so you know that I'm not some miser and am not anti-tipping. But flight attendants? Really?

Does anyone else think this is a case of suggested tipping gone wild or am I completely off base on this one? Perhaps in addition to flight attendants we should tip hotel desk staff, movie ushers, grocery store cashiers, bank attendants, and the like.

And even if you think flight attendants should get a tip, I can't honestly believe that anyone would expect others to tip them $50 to $100. Unless I'm totally missing it somehow...

Let me know your thoughts in the comments below. 

Millionaires Buy New Cars

Recently I read this interesting piece from Dr. Thomas Stanley, the author of The Millionaire Next Door.

In it he makes the following comments:

In Table 4-1, Motor Vehicles of Millionaires: Model Year in The Millionaire Next Door, I mentioned that nearly 1 in 4 millionaires (23.5%) owns the latest model year vehicle.  Some readers interpreted this as meaning that the balance, more than 75%, of the millionaire next doors drive used vehicles.  This is not the case.  Most of the respondents who owned vehicles which are 2, 3 . . . 6 or more years old purchased them as new.

In fact, for every one millionaire that is used vehicle prone there are two who tend to buy new vehicles.

I think the information above is much different than what the average person believes The Millionaire Next Door says and is contrary to what many FMF readers think is a preferred way to buy a car. In fact, I often get questions as to why I buy new cars when it's a "bad financial move". I get it so often that I wrote Why I Buy New Cars so I have a place to point people when they ask.

That post lists several reasons I like new cars, but the main one is the last point:

If for no other reason, think of it this way: it's one of the ways that I choose to spend/enjoy my hard-earned money. We often talk about saving money simply for the sake of it versus saving it so you can enjoy some of it. If it seems incomprehensible to you that anyone would buy a new car, think of it as my "enjoyment" purchase. ;-)

In short, to me buying new cars is one of the rewards for being frugal in other areas.

And it looks like I'm not the only one who takes this view. Most millionaires do as well.

Your Take: Food in Theaters

Here's a conversation we haven't had in a while, but is always sure to create a heated conversation. Perfect stuff for a blog. :)

A few years ago I asked if it was ethical to sneak food/drink into a movie theater. There was feedback from a theater employee who said it was ok, but when I emailed my local theater, they said it was not allowed. And comments from readers were certainly mixed.

I had pretty much forgotten the debate until I recently saw this piece in my local paper asking the same question. So since I have a good amount of new readers since the last time we discussed the topic, I thought I'd ask again:

Is it OK to bring food to the movies? (Even if the theater says you shouldn't?)

I've already detailed why I don't see that many movies in theaters any way and since I wrote that post, things have gotten worse. Prices are higher than ever, movie goers seem ruder than ever (TURN OFF YOUR PHONES, PEOPLE!), and theaters seem much less "special" than they used to be. Besides, with the advent of big-screen TVs, cable, Red Box, etc., there are very few movies these days that I feel I HAVE to see on a movie-sized screen.

Many of you are probably the same. But let's forget that issue for now. The question is, when you DO go to the theater, do you think it's ok to bring/sneak in your own food, candy, drinks, etc. into the theater even though the theater forbids it (which most do)?

Let the fun begin...

"Stuff" All Over the Place

Moneyland details a new study that basically says Americans have a bunch of "stuff" cramming their homes (FYI, this doesn't include items they have in storage units either -- which we know is significant, $17 billion a year in fees for those of you who are interested.) But at least it's making these people happy, right? Wrong! Check out this quote:

We’ve all heard about how money and possessions can’t buy happiness. The UCLA researchers say accumulating bigger piles of stuff may in fact decrease happiness and increase stress. Moms frequently used phrases such as “mess,” “not fun” and “very chaotic” to describe their homes, where toys, clothes, trinkets and food overflowed into garages, closets and attics. “It’s difficult to find time to sort, organize and manage these possessions,” said Graesch. “Thus, our excess becomes a visible sign of unaccomplished work that constantly challenges our deeply engrained notions of tidy homes and elicits substantial stress.”

Essentially, we’re paying good money to clutter our homes, raise our stress levels and increase our frustration.

I have several thoughts on this issue:

• After several years writing this blog it's clear to me that the average American has little to no self-control when it comes to buying/spending. On average (not everyone, mind you), we buy, buy, buy and accumulate stuff, stuff, stuff. Most of it we don't need and much of it we don't really want. Is it any surprise that after 40 years of living this way we find it hard to retire on time and with enough money?


• It costs money to have stuff too. I remember one of our kids' favorite radio shows years ago had a program whose message was "the more you have, the more you have to have to take care of the things you have." How true! If you have a car, think of the things you have to have, do, and spend on to keep it running. Now imagine two cars. Three cars. Several computers. All your yard equipment. Electronics. And on and on. Stuff makes more stuff and stuff costs money!


• Having lots of stuff makes life a lot more crowded too. I know we really enjoy the "space" when we clean out our stuff.


• I consider our family to be on the lower end of the "collecting stuff" spectrum and even we have a big problem. Here's just one example of it: we have a pantry off our kitchen that is the size of a nice walk-in closet in a decent master bedroom. It has plenty of shelves in it too -- shelves that hold food, supplies, school materials, files, soccer referee equipment, sporting equipment, and on and on. My wife and I recently spent a couple days (maybe 10 hours between us) looking over everything in the pantry (FYI, food only accounted for maybe 20% of the space at most.) We took enough stuff out of it to give away or sell that, when combined with rearranging the items left over, we cleared out 1/3 of the overall space! It was amazing!


• And that's just the pantry! Add to this the garage (oh, don't get me started here!), the finished basement, the storage areas (two in the basement), the kids' rooms (we just relieved my son of a ton of clothes he never wears), and the closets. We have stuff all over the place! And I think we're doing much better than average (based on what friends have in their homes).


• At the end of the winter and summer seasons we generally go through all our clothes and give away or sell what we didn't use that season, so our clothes are probably in the best shape on the non-stuff scale. But everything else just seems to be multiplying.


• If this is the case (or worse) for the average American, just think of all the money we have sitting around in our homes. If you have a lot of stuff and need cash, then sell what you have -- turn your junk into cash! Of course it then becomes someone else's junk, but that's a different story.


• Heaven forbid if you have a long-term storage unit (I understand them for short-term periods like a student moving or for storing unusual items like a boat) full of everyday stuff. Sell the stuff and not only make some money but save yourself the monthly rental fee on the unit!


• If you don't want to sell the junk (or can't because no one would buy it), you can always donate it to the Salvation Army, Goodwill, and the like. You're rid of the stuff, you get a tax write-off, and you help out a charity. Very nice trifecta!

How about you? Do you have stuff that you don't want/need? Come on, be honest! :)

The Best Way to Pay for What You Buy

The following is an excerpt from Securing Your Financial Future: Complete Personal Finance for Beginners courtesy of Rowman & Littlefield Publishers. All Rights Reserved.

In previous chapters we’ve talked about how to control your spending through budgeting and the importance of spending your money wisely by becoming a smart, well-informed consumer. But the one spending angle that we haven’t talked about yet is this: once you’ve decided to buy something, how do you pay? I mean this in the simplest, most literal sense: you’ve decided to buy something, the seller wants their money, and you’re willing to exchange money for whatever it is that they are selling—now what? Most of the time you have a choice, and the usual suspects are currency (bills and coins), check, debit card, or credit card. Does it matter which one you pick? Are there smart ways and not-so-smart ways to pay? Or does it simply not matter, since it all ends up coming out of your pocket in the end, one way or another?

Well, it does matter! This is a multiple-choice question that you’ll face dozens if not hundreds of times a year, and many thousands of times over the course of your financial life. As you might suspect, if there is one best way to pay for what you buy, then you should always use it, every time you have a choice. Well, there is one best way, and here is your rule:

Always use a credit card to pay, but never use credit.

What? Isn’t “using a credit card but not using credit” an oxymoron, like “jumbo shrimp” or “awfully nice”? No, it’s not—and here’s why: when you pay your monthly credit card bill, in full, before the balance is due, then you aren’t charged any interest. So your strategy is to use a credit card but to pay the monthly balance each and every month without fail. If you do this, then using a credit card is perfectly safe and offers some critical advantages over all the other ways that you can pay. (It’s even better if you arrange to have your complete credit card balance paid each month automatically; just be sure to examine every transaction during your budget cycle for fraudulent or inaccurate charges.) But if you don’t pay the monthly balance in full, on time, each and every month, then credit cards are extremely dangerous to your financial health. Because this point is so vitally important, I am going to restate the rule in a little bit longer form so that when you look back to refer to the rule, you won’t forget it:

Always use a credit card to pay; but always pay the monthly balance, in full, on time, each and every month, without fail.

To understand why credit cards are the best choice in the first place, let’s first summarize the problems with the other three choices. Currency is a bad choice, as you already learned in the budgeting chapter, because it leaves no trail and makes the compare and learn steps of the budget cycle a nightmare. Checks are better, but there can be a significant time lag between when you write the check and when the recipient cashes it, and this also complicates the budget cycle. In addition, checks are slow and inconvenient at the point of purchase.

Before we go on, let’s make sure that you understand the difference between debit cards and credit cards: if you don’t, that’s okay—lots of people don’t—and these cards are virtually identical to the naked eye. A debit card allows you to spend the money in your checking account, but not any more than that. Debit cards are like checks in this way; if you try to spend more than you have in your checking account, either the transaction will be declined or you’ll be charged an overdraft fee. But a credit card is different: it allows you to spend any amount of money up to your preauthorized credit limit, whether you currently have that much in your account or not. Each month, you are billed for the balance. If you pay the balance in full, you aren’t charged any interest, and then you go on to the next month. If you pay only part of the balance, then you are charged interest on the unpaid portion—usually at an extremely high rate. That’s where the danger comes in!

So back to our comparisons: debit cards are great for convenience, but they have two disadvantages. First, they are subject to something called blocks: when you make certain purchases such as buying gas, paying for a hotel room, or renting a car, transactions are often recorded for a much higher amount than you actually spent. A few days later, the high charges are reversed and the actual ones substituted in, but in the meantime the block could cause you an overdraft problem. The second problem with debit cards is that they don’t help you with your credit score.

But credit cards solve all these problems, and that’s why they are the best choice. They are convenient at the point of purchase, and the budgeting cycle is a breeze because all of your transactions are conveniently summarized each month, online, in easily downloadable form. There are no timing differences to deal with, and no blocks. Best of all, responsibly using credit cards improves your credit score. And you already know what responsibly means—paying off the balance in full, each and every month, no matter what your right brain says. Using a credit card is like driving a car—safe and indispensable if you know what you are doing, and very dangerous if you don’t.

While using credit cards without using credit is the best strategy for you eventually, it may not be the best strategy immediately. There are two reasons for this. First, you may not be able to qualify for a credit card yet (or the credit cards that you do qualify for don’t meet our criteria, which we’ll cover in the next section). Second, you may not yet have enough experience with controlling your spending through budgeting to trust yourself with a credit card. If either of these applies to you, then you can use a debit card as your interim strategy. Think of your debit card like training wheels when learning to ride a bike. As soon as you can qualify for a good credit card and you feel confident in your spending control skills, then switch over. Finally, if you’re having trouble qualifying for a card because you don’t have enough financial history, there is a special kind of card called a secured credit card that can be another excellent intermediate step—check it out.

What are the Accepted Limits of Free Refills?

I was recently traveling and stopped in McDonald's for a quick drink. While there, I saw this sign on their soda machine (it's not 100% word-for-word, but most of it is as it was -- I went out to the car and wrote it down as soon as I left to try and capture it all):

Sorry, free refills limited to duration of visit

(in smaller type) No cups brought in from outside are eligible for free refill

I'm not positive what each of these means. Let's take them one at a time:

• I'm guessing that "free refills limited to duration of visit" means that you have to buy a cup on this specific visit in order to get a soda and get it refilled for free. But here's a gray area: what if I fill it up a couple times while I am eating. Then I'm done eating and I want to fill it up once more before I leave (to take with me.) Is this allowed? Or am I not able to do this because the duration of my visit has ended?


• The "no smaller cups" line seems pretty clear -- but who does this? Who brings in a cup with them and fills it up from McDonald's without repaying? You'd be surprised. Remember this guy? He's probably the reason line two exists.

I'm not a big soda drinker these days, so this doesn't matter much to me. But for those of you who are as well as others who may be interested in the ethical side of the sign note above, what's your take on what is and isn't allowed when it comes to "free refills"?

Are All-Inclusive Resorts a Good Deal?

US News lists the financial benefits of all-inclusive resorts as follows:

• People don't like to pay for every little thing.
• People can relax more if they've prepaid.
• All-inclusive resorts are made for budgeters.
• You can avoid tipping confusion.

When we were on our cruise, several of our fellow passengers said they preferred all-inclusive resorts to cruising. They liked picking one spot/island and staying there versus the life on the ship (though they got to see more islands that way.)

We have never done an all-inclusive vacation, but are considering one for next year. But before we get too far down the road, I thought I'd ask FMF readers your take on the pros and cons of all-inclusive resorts.

Are all-inclusive resorts better than simply "going it on your own" (picking a location and booking your hotel/condo, excursions, meals, etc. yourself) ? Why or why not?

I'm interested in both the financial side of things (all-inclusives seem like they would be more expensive, especially since we don't drink, but they have less nickel-and-diming) to the non-financial issues (like all-inclusives offering better security but potentially being too restrictive.)

Have You Ever Purchased a Status Symbol Item?

Here's an interesting question:

Have you ever purchased a high-end/status symbol item -- something that was way too expensive for simply the utility it provided, but it offered something extra and intangible, like conveyed something about you that made you feel it was worthwhile?

Let me explain what I mean. Here are a few examples:

• A luxury car (like BMW, Lexus, etc.) when we all know there are much less expensive cars that can get you from point A to point B just as well as these.


• Top-of-the-line clothing when we all know that a suit or a dress can cover your body as adequately as many designer items.


• A wonderful, very cool watch like this Breitling Men's Black Watch for $4k when we all know you can get a decent watch for $20.

It was this last one that got my "I-gotta-have-it" juices flowing.

It started when we were watching the show "How Do They Do It", a program that details how all sorts of products are made (speed boats to soccer shoes to wallpaper and on and on). It's a fascinating show to me since it gives the real behind-the-scenes details on how many items are manufactured. My kids love it too and since it teaches while it entertains, it's a win-win all the way around.

Anyway, we were watching a segment on Breitling watches. Here's the segment we saw:

All I knew about Breitling watches prior to watching this was that John Travolta liked them. Other than that, I never knew I "needed" one. Until I saw that show, that is.

Ok, I have never really needed a watch like that. But I did want one. Why? It was so COOL! And well-built! And it said, "This guy is a high-roller." ;-)

Ok, that feeling didn't last that long (maybe a couple hours) and I never really considered getting such a watch. After all, where would I wear it? I'd be afraid I'd chip it or something. Besides, the last watch I bought cost me $20 (and is also a business expense since I got it for use as a soccer referee) and is totally disposable. If it breaks, I'll just get a new one.

I'm not a real status-seeker buyer. The closest I come to purchasing any item simply because of its name is that I like certain Nike athletic products. Not because I'm an elite athlete, but simply because I like the way they feel. Oh yeah, and the fact that some of my favorite athletes wear them. :-) Anyway, a few shirts here and there are hardly equivalent to a $4k watch.

How about you? Have you ever bought something very expensive in part simply because it was a status symbol?

Suggested Tips on Receipt

My wife and I went out to dinner a couple weeks ago. After a nice meal I received the bill ($17.21 for a good Mexican dinner) and handed the waiter my credit card. He returned with the card and the customary charge receipts (one to sign and one to keep as my copy.)

I marked down the tip, added it to the price, and signed the restaurant's copy. Then I copied the info on my copy, put it on my money clip (for later recording), and we left.

A few days later when I was putting the charge into Quicken, I noticed something on the receipt that I had never seen before. Just under the spot where you write in the total amount was a line that read as follows:

15% = $2.58   18% = $3.09   $20% = $3.44

So they were suggesting tip amounts. Interesting.

As I said, I had never seen this before so it intrigued me. Perhaps it's been going on for quite some time and I simply never noticed. I'll look for it more in the future. But for now I wanted to ask if any of you have seen similar things on your credit card forms. I'd like to know how widespread it is.

I generally make a tip by taking 10% of the meal's cost (rounded up to the nearest number ending in "0" -- makes it easier to find the halfway mark next), then add another 50% of that (so I know how much 15% of it is.) Then I round that to the nearest dollar amount -- either up or down based on service. In most cases, I round up. If the service is horrendous, I round down. So in this case, here's what I went through:

• 10% of $17.21 is $1.72
• Round up to $1.80
• 50% of $1.80 is $0.90
• $1.80 + $0.90 = $2.70
• Round up to nearest dollar = $3.00

So I gave a $3.00 tip which, in this case, is just shy of 18%.

I know, it's kinda quirky, but it works for me. ;-)

Update on Our Shopping List, February 2012

It's been awhile since I've given an update on our shopping list, so I thought I'd bring you all up to speed in this post. Here's what we've accomplished in the past several months as well as our plans for the next few months:

• Vacations -- We completed our Caribbean cruise in January (details coming soon). It wasn't the most frugal trip, but it was a blast. Next on this front is planning out summer (trips to see family) and fall 2012 trips (potentially a trip to Chicago during Christmas season).


• Furniture -- Still need a couple recliners or a second couch for the living room and perhaps a desk for my daughter's room. This is the item that we just can't seem to get past.


• Bed -- It's time for a new bed for us. I hate bed shopping more than I hate doing taxes. But I'm (grudgingly) putting it on the list.


• Snowblower -- Old/smaller one was given to a neighbor who needed it. New/bigger one has a nice place in our now-cleaned-out garage.


• Landscaping -- Completed "phase 2" last summer which included some rock as well as plantings around the house. We also had our yard professionally sprayed since what I was doing wasn't fighting off the weeds. We'll be planning for "phase 3" soon which looks like it could include the removal of some dead trees from our property (and replacement plantings).


• Attic insulation -- Really want to do this in 2012, but it may take a backseat financially to the landscaping.


• Tablet -- Thinking of getting an iPad or other tablet as a laptop replacement when I travel.


• Repair -- Had repair work done below our fireplace. Next we're considering getting an updated fireplace unit (old one is 20 years old) but am not sure what we'll do.


• Car -- My wife's car is now eight years old and my son is close to driving age. Does anyone see a "transition car and new car purchase" in our future? ;-)

I think that's it, but as you can see, the list is kind of a moving target as we decide we don't need certain things and do need others.

How about you? What major purchases do you have planned for the rest of 2012?

Why I See Very Few Movies in Theaters

This piece got me to thinking, especially these quotes:

“I generally pay to see a movie with my kids once a year because the price is so high. I took all three children to see a matinee movie in September and it cost $36. That's a lot of money for one afternoon. Last year, all five of us attended a matinee showing in 3D and it was $60! There is a vast array of things we could do with that amount of money as a family that would be more fun and exciting”.

“Seeing a movie isn't the experience it used to be. Movie theaters tend to be so sterile and bland that paying that kind of money just for a matinee isn't worth it for our family. In fact, I can count on two fingers the number of times we have gone to the movies as a whole family (my husband included). It just ends up being a lot of money for a very short experience.”

Here are my comments on the above:

• I know what they mean. If tickets are $8 each, four people blow $32 just to see a movie. That's pretty pricey. And don't get me started on the cost of popcorn and candy (not that I buy any at theaters, but I'm just sayin...)


• What's the benefit anyway? The only ones I see are: 1) you get to see the movie as it comes out, 2) it's on a screen bigger than anything else you'll see it on, and 3) it's a "fun" event for going out. Did I miss anything?


• The rest of the movie experience is a hassle IMO. You have to go somewhere, deal with crowds (we've had some bad experiences with people in theaters the past couple of years -- can people just stay off their phones??????), can't pause the movie for a bathroom/food break, can't watch it reclining (on your couch), etc.


• With the speed DVDs come out these days, the cost of them, and the size of TVs (many people have pretty good-sized televisions these days), isn't it a better "deal" to buy the DVD and watch it at home? Better yet, how about renting it through Red Box for $1?


• Anyone have cable and a DVR? If so, you can record tons of movies on all sorts of channels and watch them when you want. Granted, they aren't just released movies, but there are so many good movies on TV that I wanted to see at the theaters and didn't that I have a long list of potential movies to see. You're probably the same. And you can find almost any movie on TV these days.


• I'll see one or two movies a year at a theater (I have to see Batman as soon as it comes out) but that's about it. Generally there are much better ways to spend my entertainment dollars.

How about you? Do you see a lot of movies in theaters? Why or why not?

Seven Ways to Make the Most of Gift Cards

If you're like me, you both gave and received several gift cards as gifts for the holidays. That's why I was interested to read MSN Money's post with seven tips for making the most of gift cards. Their suggestions:

• Mark your calendar (so fess don't eat away at the card's value)
• Know the different types of gift cards (cards good at one retailer versus those good at all places that take credit cards)
• Pair your gift card with a coupon
• Don't buy just because you have a gift card
• Share a 'heads-up' with e-gift cards
• Yes, Virginia, there are gift card thieves
• Keep it fun

A few comments on these and on gift cards in general:

• I try to use gift cards we get as soon as possible. I don't like managing a lot of them from random places (which can be the case when you get them as gifts -- versus buying them yourself for your own use to get a credit card rebate).


• I almost exclusively use gift cards that are for one retailer. I don't like the fees associated with the other cards.


• We use a coupon a LOT with gift cards. It's the reason we rarely use an entire Macy's gift card in a year.


• Gift cards are great re-gifting options -- if you don't like the place and know a friend will.


• You can always sell the gift card or donate it to charity if you don't like it. I've never done the former but have done the latter (with a local charity where you can actually hand the card to a person).


• I wish there was some way to simply convert gift cards to cash (at full retail value.) I guess there is, it's called "giving cash and not gift cards." ;-)

Anyone out there have some good tips for managing/using gift cards? If so, please share your thoughts with the rest of us in the comments below.

An Impulse Buy Is Never A Good Buy

The following is a guest post from Lynn Truong at Wise Bread.

There are a lot of ways to save money in all aspects of our lives. Whether it's groceries (buy generic, buy in season), around the home (insulate, use energy-efficient-whatever), or anything else you have to purchase (buy used, double coupons, reward credit cards), there are always a list of tips to cut those costs and save money.

But usually those aren't the things that got people into a financial mess in the first place. Those are great tips for people who are living a frugal lifestyle and want to improve on what they're already doing well. The thing that gets people in trouble are the impulse buys.

Impulse buys come in a variety of forms. I'm not talking about buying that trashy magazine every week while standing in line for $4.95 when you could subscribe and get it for $1. I'm talking about clicking through to a "big sale" from a newsletter or ad. I'm talking about "window shopping" and seeing a pair of boots you have to have. I'm talking about seeing your neighbor bring home the biggest and latest 3D TV and you jumping online to see if you can afford one too. This also happens when you go car shopping and are sold on extra bells and whistles, house hunting and convinced to bid on a slightly bigger and pricier home, wedding planning and allowed to go over budget in every line item because...it's your special day.

When you give into an impulse buy, you are sacrificing your long term goals. You are taking money that you had reserved for the future (because you weren't planning to spend that money any time soon), and spending it on a momentary (and fleeting) desire. A "deal" is no justification to spend the money. It's never a good deal if you hadn't planned on spending that in the first place. It's never a good deal when you hadn't given yourself the opportunity to consider whether you need it, decide on the appropriate budget for it, and prepare for the cash outflow.

Not surprisingly, the biggest deterrent to impulse spending is simply time. If you can insert some time between the impulse and the buying, you will most likely lose interest. Here are some ways to do that.

1. Create an obstacle to your payment method.

Freeze your credit card in a block of ice. Put it in a hard to reach place (I once had a piggy bank that required a screwdriver to open). Switch to using cash instead of credit cards. And never keep your payment info stored in your online accounts, so that you can just click "buy" without even getting a credit card from your wallet!

2. Make yourself do a chore you hate first.

Vacuum every room in the house. Get on the treadmill for 30 minutes. Clean the refrigerator. If you have to jump through a few hoops in order to buy this thing, you may find that it's really not worth the effort. If it's not worth the effort, it's definitely not worth the unplanned cash outlay.

3. Run a timer.

The sale will still be there in an hour. Make yourself wait a specific amount of time. Don't leave the page up on the computer. Close it. Set the timer. Do something else. You probably won't even remember what those boots look like when the timer goes off. Remember, you weren't thinking about them just 20 minutes ago. 20 minutes later, you'll easily forget about them, too.

4. Justify it in writing.

Keep an impulse buy notebook. Write down the item and cost, and why you should buy this thing right now (or why it's okay to break your established budget by spending more on it than you had anticipated). Explain in detail how it's going to make your life better and why what you currently have (or what the lower cost version) can't satisfy your need. Then, read through the last five impulse buy pages and ask yourself is those purchases were worth it.

It's hard to fight that impulse. It's a very strong emotion and we hate delayed gratification. But practice creates habit and over time, the impulse buy will become less alluring and before you know it, it won't even occur to you to buy something so spontaneously.

Do You Regift?

Now that we all have been barraged with the annual trading of presents, including some we probably don't like, I think it's the perfect time to talk about regifting. Smart Money has an interview with Daniel Post-Senning, great-great grandson of etiquette maven Emily Post. They ask him about regifting -- and if it's appropriate. Here's his response:

Within the Post family there were absolute battles over this. Not on handmade or personal items.

I found it interesting that there were strong opinions on both sides of the issue within the Post family.

Personally, I'm fine with regifting -- on both presents I get as well as items I give. I agree that handmade or personal items won't usually work (though they may in some cases.) The key to me is whether or not the recipient would want the gift. If so, it's ok to give it. If not, find something else.

That said, we don't do a lot of regifting because we get few presents these days that we don't like. But we would regift if the conditions were right -- we have nothing against the practice.

How about you? Do you regift or not?

Are You Giving Gift Cards This Year?

Smart Money has some interesting facts on gift cards being given as holiday presents. Here's the piece I found especially compelling:

Nearly 80% of consumers plan to buy at least one gift card this year, reports the National Retail Federation.

Wow! 80%! I would have guessed 50% tops!!!

We certainly use gift cards as gifts (and earn 6% cash back when we buy them) as a major part of our gift-giving. We give cards that we KNOW people will use (since we know them well and where they shop) or cards that everyone can use (like for superstores where you can buy either general merchandise or food). Here's who gets gift cards on our list (and where they get it):

• My dad -- He loves Menard's.


• In-laws -- Walmart. (BTW, I heard a funny joke the other day at church. What's the difference between in-laws and outlaws? Outlaws are wanted.) ;-)


• Postman -- Meijer.


• Paperboy -- Meijer.


• Head of non-profit I work with -- Meijer.


• Kids -- Can't say, they read this blog sometimes. ;-)


• Me -- Logan's (get $10 extra with purchase of $25 gift card).

In the past we've also given gift cards to Costco or a gas station, but not this year.

How about you? Are you part of the 80% giving gift cards this year or part of the 20% refusing to do so?

Dress Nicely When You Fly if You Want Extra Perks

A few years ago I suggested that you dress down when you go to negotiate for a purchase with the thought being if you didn't look like you had a million dollars you would pay less for the item. Then a few years after that I posted that maybe dressing up is a better option (since people tend to judge a book by its cover.) On each of those posts we had commenters suggesting dressing up or down was the better idea, so I'm not the only one who can't make up my mind on this issue. ;-)

What brought the topic back to mind was this piece that says you should dress up when you fly if you want to receive preferred treatment. Their thoughts:

Everything else being equal (same frequent flyer status, etc.) when a flight is oversold in economy and the airline needs to upgrade someone, are they going to choose the passenger in the tank top or the one wearing the nice dress or suit? You know the answer. (Of course, it doesn't hurt to be extra nice to any staff you should encounter.)

The author goes on to cite all sorts of examples that seems to make the above an accurate statement -- that if you dress nicely you'll get better treatment when traveling.

I HATE to dress up when I travel since it's not as comfortable as wearing something casual. That said, because I often am traveling for work, I'm often dressed fairly nicely. I don't really notice a difference in how I'm treated from one outfit to another. However, I do think there is some credence to what the author is saying. If all else is equal (which it hardly ever is), I think BOTH being nice and dressing nicely can help you get preferred treatment when flying. In fact, being nice alone can often get you preferred treatment in many different situations.

What do you think -- is there something to this -- or is the author way off base?

Five Reasons to Pay in Cash

Sound Mind Investing lists five reasons to pay in cash as follows:

• Using cash rather than credit helps keep spending under control. Making a purchase with cash causes a twinge of emotional pain. Handing over a credit card (or even a debit card) doesn't.


• Fewer impulse purchases.


• No interest payments.


• Privacy.


• Helping out local business. Customers who use cash help [small businesses] keep [their] operating costs down.

Here's my take on these:

• If you can't keep your spending under control, you should not be using a credit card. And you probably shouldn't be using cash either. Let your spouse do the shopping instead.


• I agree that you will probably have fewer impulse purchases with cash (simply because it's less convenient.) So what. The author assumes that "impulse purchases" equals "bad/wasted/poor purchases." I don't agree with this. Certainly impulse purchases can be bad choices, but all purchases can be bad choices. It all comes down to self-control for me. If you can control yourself, use a credit card. If not, let someone else do your shopping.


• If you EVER pay any interest on a credit card, you should NOT be using one. I've used cards for almost 25 years now and have never had an interest charge.


• I don't think the privacy issue is a big one with credit cards, but I can see how some people think it's an issue. I'm usually pretty wary though, so if I think something is ok, then most others probably do too.


• If you want to help a local business, then simply shop there as much as you can. Yes, paying in cash helps a bit, but an extra visit or two a month will help way more.

Look, I don't have anything against paying in cash. If that's what floats your boat, go for it. But personally I prefer credit cards -- primarily for the convenience and safety. Who wants to carry around $500 when doing their Christmas shopping? Not me. Who wants to run back home because they need an extra $10 to buy a gift they wanted but they ran out of cash since they didn't want to carry $500? Not me. And who pays online with cash? Not me. (In fact, can you even pay with cash at Amazon? If you can, I'm sure it's a hassle.)

And then there are the cash back rewards of using a credit card, but I won't go there. Even if there were no rewards, I think I would use a credit card simply for the convenience. Of course I do use "cash", but when I do it's usually with my debit card (which the author doesn't like either.)

Which do you prefer -- cash or credit?

Save 35% on You Need a Budget

Just a note to let you all know that today (and today only from what I understand) there is a 35% discount on the You Need a Budget (YNAB) budgeting software. I don't use YNAB but I know that many FMF readers do (and they like it.) So I thought I'd mention the sale since some of you may want to pick it up -- and 35% off is a decent deal.

If you'd like to get the discount, go here.

How Much are You Planning to Spend on Yourself This Holiday Season?

I think we are all aware that the more you're out shopping the more you're likely to spend. This includes holiday shopping, of course. You're in more stores, looking at more things, and you're going to buy more -- even more than what you had originally planned.

A key part of this "extra buying" is seeing (and then purchasing) stuff that's not for anyone on your list, but is simply for you.

I'll admit that I usually pick up a few (several?) items in the course of doing my Christmas shopping. I'm out looking for things to check off my list (for others), see something I want/like at a good price, and snap it up. Nothing wrong with that, right?

Well, it appears that I'm not alone in this habit. People not only spend plenty of money on themselves while holiday shopping, but they're planning to spend more this year than last. Here's what CNN Money says about the situation:

Holiday shoppers say they plan to spend an average of $704.18 on gifts and other seasonal items this year, down slightly from last year's $718.98. Most of that money will go toward gifts for family, with the average person expected to shell out $403.26 on presents for kids, parents and other loved ones.

Many shoppers, however, also plan to put themselves near the top of their Christmas lists. About 60% of those surveyed said they plan to take advantage of seasonal sales and discounts to make purchases for themselves during the holidays. The average person plans to spend approximately $130.43 on non-gift purchases for themselves or a family member, up from $112.20 in 2010.

A few thoughts:

• We spend roughly $800 or so on Christmas presents every year, so it looks like we're close to the average.


• We do take advantage of seasonal sales when shopping. We buy wrapping paper, ribbons, etc. at discounted prices (for the next year) as well as items that are used as loss leaders by retailers (I got some anti-virus software last November for a STEAL at Staples.)


• I don't think I spend as much as $112, but I could. And if it meant that I'd get something I would normally pay $50 for and buy it for $15, why not? In the case of the anti-virus software, I bought it but didn't activate it until a few months later -- when my last version expired. Saved myself a good amount of money.


• I wonder if there's less buying for yourself when people shop online. When I buy through the web, I usually know what I'm looking for, find it, and buy it. There's much less chance that I'll simply "run into" something I "need."

How about you? Do you buy things for yourself when you go out holiday shopping?

Seven Holiday Shopping Mistakes

The December issue of Consumer Reports lists the following holiday shopping mistakes to avoid:

• Going over budget
• Fighting the crowds
• Taking on too much debt
• Paying for a warranty
• Forgetting to haggle
• Relying on gift cards
• Overlooking return limits

Here's what I do on these:

• We have a budget for Christmas gifts, but it's rather flexible. So if we spend a couple hundred extra dollars, it won't be a problem.


• I HATE crowds, so I do a few things to fight them. First, I do more and more of my shopping online each year. Amazon is my site of choice since I can bundle products from many different categories. Second, in past years, I've taken a day off work and done almost all my shopping on one single day (when fewer people are in stores). And finally, I shop on weekday nights if I have to -- and avoid weekend shopping like the plague.


• We save in advance for all of our purchases, so taking on too much debt is never an issue. We pay for our purchases with either credit cards or gift cards purchased with credit cards, then pay off all the credit cards when they are due.


• The last time I paid for a warranty was a ba-zillion years ago. The last time I needed a warranty was before that. One warranty tip: Costco adds an extra year onto the manufacturer's warranty on electronics purchases (we got our last TV and computer there.)


• I forget to haggle during the holidays. It's because most of the stuff I buy is on sale/discount anyway, so I guess I don't think of it. Plus, time is money and who really has the time to wait for a clerk to check with his manager back-and-forth? Not me.


• I know many people hate gift cards (and I've had my own battle with them -- and still have some cards I received last year.) That's why I give gift cards that I KNOW the person will use (for example, a Menard's gift card is my go-to choice for my hard-to-buy-for dad) or ones that have the broadest appeal (like Meijer or Walmart) where the recipient can use them to buy almost anything. IMO, it's when you get a gift card for a specialty store you rarely visit that's the major issue.


• I save all receipts and keep them for a month or so after Christmas -- longer on big-ticket items. I've never had a problem using this system.

How about you? Do you have any tips for making the most of holiday shopping?

Black Friday Myths

The following is a guest post from Andrea Woroch.

The hype surrounding Black Friday seems to get bigger every year, especially as advertising for the shopping holiday continues to creep. Shoppers are being inundated with Black Friday deals, and it’s easy to let the dream of amazing savings overshadow rational purchasing behavior. Hence the mile-long queue in front of Best Buy at 3am.

While there are some great discounts to be had the day after Thanksgiving, there are many myths surrounding this sleep-depraving holiday which you should note before setting your alarm.

1. Black Friday features the lowest prices of the year.

Not exactly. While some products will not see lower prices after Black Friday, door-buster items like name-brand TVs are actually cheaper in December, when retailers begin selling New Year’s models. Toys and winter apparel are also priced at their lowest post-holidays, according to FreeShipping.org’s Best Time to Buy Guide.

2. Black Friday deals are best in-store.

Why else would people camp out on a dirty curb at sub-freezing temperatures? Many of the door-buster items advertised are in limited quantity, say only five per store, and are considered "loss leaders" -- the products a store is willing to loose money on in order to lure customers from their cozy beds and get them in to buy more expensive products. The fact is, Black Friday deals are available online and don't require you to step foot outside to take advantage of the offer. Last year, Macy’s offered the popular KitchenAid mixer for $179.99 online, and Best Buy offered its door-busters online Thanksgiving Day. 

3. Black Friday sales are starting earlier than ever and that means more deals to be had!

Major merchants like Walmart recently announced an earlier jump than ever on Black Friday with doors expected to open at midnight following Thanksgiving dinner. Though a shopping spree may wake a shopper from their turkey comma, the advertised early sales are simply a marketing and pr stunt to get attention and create a sense of urgency among consumers.

4. Black Friday is the most lucrative holiday shopping event.

Cyber Monday takes the cake on this one, actually, becoming the first day in history to eclipse the $1 billion level in 2010. In fact, Free Shipping Day surpassed Black Friday’s sales by $300 million in 2010, and is slotted to go head-to-head with Cyber Monday this year. The free shipping holiday happens on Friday, Dec. 16 this year and expects over 2,000 merchants to participate.

5. Black Friday deals are only offered on Black Friday.

Amazon will once again manage Black Friday Week, where deals are available from Monday, Nov. 21 through Friday, Nov. 25. Though the retailer has yet to announce its 2011 Black Friday schedule, Walmart offered online-only deals on Thanksgiving Day last year.

6. Black Friday is the best day of the year to shop.

While this year’s metrics remain to be seen, Black Friday isn’t always the best day of the year to shop. In addition to Cyber Monday and Free Shipping Day, the Saturday before Christmas is often the busiest shopping day of the year as consumers frantically grab last-minute gifts. With retailers offering spruced up price matching programs (for instance, Sears guarantees to meet competitor's lower price along with an additional 10-percent off) along with other value-driven promotions, savvy shoppers who do their homework can score door-busting deals throughout the season.

Five Ways to Give Gifts People Want

Anyone else out there get frustrated trying to find holiday gifts for someone who "has everything" or "doesn't want anything"? Me too. So you end up buying something that's probably not a great gift -- but you hope that it's at least "good". Ugh.

So what do you do about it? Here are some suggestions:

1. Ask for lists. Each year we have our kids write out lists detailing what they want for Christmas. They understand that these lists are guides for us and that we aren't guaranteeing they'll get only things from the list. They also understand that they won't get everything on the list (of course.) We even tell them that we will be spending the same amount on each of them and ask if they prefer a smaller number of gifts with higher than average value each or a larger number of gifts with smaller than average value each. (My son takes the former and my daughter the latter.) Anyway, we then know that we're buying them something they want because it's on their list.

2. Shop for others. Last year my wife and I did the shopping for our kids' gifts for both sets of grandparents. They gave us a budget, we bought the gifts, we wrapped the gifts, and we delivered the gifts. They saved the time and effort (plus postage) and were sure the kids got what they wanted (because, again, we had lists from our kids.) I think we'll do the same thing this year since it worked out so well.

3. Buy your own gifts. I know I am a difficult person to buy for. I have almost everything I need, I don't want much, and when I do want something I'm very picky about it. So it's often a losing proposition to buy me something. That's why many of my gifts (from my wife to me) are purchased by me. I get what I want, buy on sale (or use coupons), and save her a ton of effort. Sure, I don't get "surprised" when I unwrap the gifts (yes, we wrap them), but at my age surprises are over-rated. ;-)

4. Use gift cards. For people who are hard to buy for (like my dad -- I know he likes Menard's, though), those you don't know anything about (postman, newspaper lady, etc.), and/or those who are far away (saves postage and having to wrap a gift/box), gift cards are often the perfect solution (assuming you know the sorts of places they like to shop.) They seem to become a bigger part of our Christmas budget every year. And earning 6% cash back on buying them is a nice bonus too.

5. Give money. Yes, cash can be crass, but cash is also king. And if it's too "boring" or "tacky" to give cash or a check, you can be creative by giving gold dollar coins instead. These are always a hit. We put them in a creative package that's also a gift: a wooden "treasure box" filled with sand or small piggy bank -- both of which can be purchased on sale at Hobby Lobby stores many times throughout the year -- make these gifts extra special and fun.

How about you? What do you do to make sure those you give gifts to get what they want/need?

12 Things We Buy in a Bad Economy

Moneyland lists 12 things we buy in a bad economy as follows:

• Romance Novels
• Donuts
• Nail Polish
• Halloween Costumes
• Fast Food
• Lottery Tickets
• Generic Drugs
• Chocolate
• Vegetable Seeds
• Condoms
• Yoga
• Pets

And here's what they say specifically about pets (it's just too crazy for me to pass up):

This year, we’re expected to spend more than $50 billion on our pets, which would be a record. According to the American Pet Products Association, pet spending has increased every year since 2001, and only once by less than 5%. Oh, and we’re planning on spending $300 million just to dress them up for Halloween.

Yeah, right. $300M so Fido can wear a carrot costume. Ugh.

Anyway, that's a pretty interesting list, isn't it? I don't buy most of those products, but here's where I stand on the ones that I do:

• Donuts -- I must say I have been to Krispy Kreme more this year than last. However "more" is three trips this year versus one last year.


• Fast food -- About the same. We buy most of ours when we're out refereeing soccer and need a quick bite or on the road for a long trip and want a short stop.


• Generic Drugs -- We buy generic drugs whenever we can -- good or bad economy.


• Chocolate -- Ditto for chocolate...

How about you? Are you buying more of this stuff lately? Do you think this list is even valid?

Are Car Dealerships This Scary?

Here's a comment a reader left on my post titled The Pros and Cons of Car Dealership Service Departments:

As someone who used to work at a dealership and was paid commission on the total shop billing, I can tell you that dealers make huge money off of their shops. It was a regular thing for us to get a car for transmission work as an example, the mechanic would spend less than an hour on the job throwing 90% of the new parts straight into the trash, and bill the customer for an 8 hour day. Honest mechanics would see the cash that the crooked guys were making and they would quickly decide to be crooked themselves. The service manager of course pushes for all of this to inflate their own paycheck. The dealership of course depends on the heavy billing to pay their sky high overhead and profit. Having worked for Chevy, Honda, and Lexus I can tell you it is pretty much common practice everywhere.

I don't know if this is true or not, but if it is it makes me never want to go into an auto dealership ever again.

Anyone else have inside information/experience with dealerships? Can you verify or refute what's being said in the comment above?

Taking a Private Boat Vacation

A few weeks ago my kids and I were watching House Hunters on Vacation when the family had the normal choice of which of three places to stay in for a week. Only one of the choices was non-traditional. Instead of a house it was a large yacht -- complete with its own crew (two people, I believe). We all immediately said how cool the ship was and that we would pick it if the choice was ours. So we were happy when the family selected it as well.

Given that experience, I was interested to read Smart Money's take on private boat vacations. The basic idea is that people rent boats -- either with or without a crew -- and spend their vacations on them instead of in a hotel.

I actually considered this option as I've looked at our Caribbean vacation. It might be something we do one day, but I think the cruise will work better for now. Why? Because the "renting a ship" idea is:

• More expensive


• Limits what you can do (you have fewer choices of non-boating activities)


• Won't get to as many of the islands we'd like to see

That said, there are a lot of pros to renting your own boat (and crew -- I wouldn't rent just the boat since I know little about boating) such as flexibility to go where you want when you want, a week on the water (CLOSE to the water -- not like on a cruise liner), and so forth. In addition, with the poor economy Smart Money says that boat operators are more willing to negotiate, making this a more reasonable option price-wise.

Has anyone ever taken a boat vacation (or looked at doing so)? What did/didn't you like about it? Any tips for the rest of us?

Is Your Wallet Too Fat?

Smart Money laments the size of Americans' wallets with the following comments:

Here, on the posterior of many an American professional, lies one of the more unexpected twists in the evolution of personal finance. At a time when people seem increasingly reliant on their smartphones for all manner of interactions with the world, that oldest of handheld devices -- the wallet -- has remained a surprisingly enduring accessory. Indeed, for some people, the wallet is not only not disappearing, it's getting fatter -- with many Americans now hauling around so much stuff in their pockets that their billfolds have become, in the apt phrasing of one longtime lugger, "roving file cabinets." Even wallet makers, who have been pushing slimmer models for years, seem flummoxed by the trend: That plump bifold behemoth "is still our best seller," says a spokesperson for Wilsons Leather, one of the nation's oldest wallet specialists.

They offer some ideas on what to carry and not carry -- so you don't have to worry about carrying around a file cabinet the rest of your life. :-)

I last told what I carry in my wallet when I detailed my credit card strategy. Since then, things have changed a bit. Here's an update on my wallet status:

• I got a new "money clip" from Walmart. It's a small, fake leather, bi-fold card holder with a money clip on the outside.


• In the clip I carry cash (on the outside), my driver's license (in a see-through slot), my debit card (part of the high-yield account plan at my credit union -- I'll give you an update on how that's going in the next month or so.)


• Four credit cards fit in as well. These are all the slots I need to easily manage my new credit card strategy.


• My money clip is small enough that I can carry it in my left, front pants pocket.

No filing cabinet for me, though what I currently carry is a bit bigger than what I used to carry because I now have two extra cards -- a debit card and a new credit card.

So, as they say, what's in your wallet?

What Do You Spend on Home Entertainment?

I'm entering my third year of "dancing with the devil", also known as "buying cable service from Comcast." I'll detail my dealings with them in a future post, but before I do, I wanted to ask you all the following:

What do you spend (per month) on home entertainment?

I'd like to know what cable (Comcast, Time Warner, etc.), movie (Net Flix, Blockbuster, Red Box), web service, etc. you use to watch shows/movies at home, how much you pay per month, and what services you get (HD, how many channels, etc.) -- or if you do none of this at all (or have an alternative strategy.)

I want to compare myself to the average FMF reader and see where my spending is versus yours. So if you'd let me know what you do and how much it costs, I'd appreciate it. (FYI, I'll be using this information for my upcoming Comcast update.)

Five Bills Not to Automate

Yahoo lists five bills not to automate as follows:

• Mobile Phone Bills
• Insurance Payments
• Utilities
• Gym Memberships
• Cable Bills

Here's what I do with these:

• Mobile Phone Bills - My phone is paid for by my company, so there's no bill for me to handle.


• Insurance Payments - Do people really put these on auto-pay? I never even considered it.


• Utilities - I do pay for utilities with auto-pay. Their reasoning is that if you do this you'll miss looking at details of your bill and could miss some problems. I still get the bills electronically and look them over each month, so there's really no issue IMO.


• Gym Memberships - I have a membership at my local pool and they don't take credit cards or any sort of auto-pay, so it's not an issue.


• Cable Bills - I can't imagine a scenario in which I would give Comcast access to my credit card or bank account except maybe temporary insanity or coma. Their bills are wrong a good amount of time and dealing with them is tough as it is -- imagine if they simply sucked money out of my account in advance and I somehow had to fight to get it back. I'm guessing that would be a losing cause.

In short, I only auto-pay with companies that I trust. Everyone else gets paid one at a time as the bills are due.

How about you?

Update on Our Shopping List, July 2011

Here's an update on where the shopping list I posted in January currently stands:

• Vacations -- We've been to see family once so far and have another trip planned in August. We've decided against the smaller vacations (the kids are getting five days with my parents in the Wisconsin Dells though) and will focus more on our Caribbean trip in January. I found a travel agent recommended by a frugal friend who cruises twice a year or so, so I think we're in good hands.


• Furniture -- We bought a new table for our "school room" and got blinds for my daughter's room. Still need a couple recliners or a second couch for the living room and perhaps a desk for my daughter's room.


• Windows -- I think we're putting this one on the back burner.


• Snowblower -- I found a place for the big snowblower and we'll be keeping it. Now the small one looks to be on the "give away" list.


• Landscaping -- We have received bids for "phase 2" (did phase 1 last year) and will be going ahead with the changes soon.


• Television -- We're not using the basement TV much, so we really don't need a new one there.


• Outside lights -- Decided that our old ones are fine -- and that the Michigan winters would quickly kill the shine on any new ones anyway. So why bother?


• Attic insulation -- Not sure this is going to happen.


• Monitor -- Got a new, larger monitor for the main computer most of the family uses.


• Tablet -- Thinking of getting an iPad or other tablet, but not sure which one is "best." Waiting for the dust to settle in the tablet wars before I decide.


• Repair -- We need repair work done below our fireplace where water got in and rotted some wood. Also have considered getting an updated fireplace unit (old one is 20 years old) but am not sure what we'll do.

I think that's it, but as you can see, the list is kind of a moving target as we decide we don't need certain things and do need others.

How about you? What major purchases do you have planned for the rest of 2011?

7 Things Car Dealers Want You to Buy

Yahoo lists seven things car dealers want you to buy. It's a list of things dealers try to add-on to the purchase of new cars (once you've decided on the car), then an evaluation of each to determine whether it's a good deal or not. Here's their list:

• Fabric Protection. VERDICT: Skip. A cheaper way to protect your interior: buy Scotch-Guard for around $5.


• Extended Warranty. VERDICT: Consider ... at a later date.


• VIN Etching. VERDICT: Skip. "You can probably get it done yourself for around $25."


• Gap Insurance. VERDICT: Consider


• Paint Protection. VERDICT: Skip


• Credit Insurance. VERDICT: Skip


• Driver-Installed Alarm Service. VERDICT: Skip (unless you store valuables in your trunk)

Here's what I get out of this article: skip all the add-ons they try to sell you once you've decided you want the car. Why? Because you either don't need them or you can get them cheaper elsewhere. Pretty simple advice IMO.

As for the two items above that they say "consider" I say:

• Buy a highly-rated, reliable car (Consumer Reports) that should last a long time without major repairs and you shouldn't need the extended warranty.


• Buy a car for CASH and you won't even have to think of gap insurance.

This last time I bought a car (nine months ago), the dealer didn't try to add anything on. I think I had pushed him so low on price so often that he was worn out and simply wanted to get the deal done. ;-)

But when I bought my Forester eight years ago, I came in to pick up the car and the guy tried to add everything -- rust proofing, "ad fees" (dealerships pay them to advertise -- like I want to pay for being advertised to -- he said they allocate a fee to every car sold, I said, "not mine."), fabric protection, and on and on. I paid the price we agreed on, added nothing, and took my car.

Anyone else ever have a dealer try to add-on items to a car you've decided to buy?

Shopping for a Cruise

I've written previously that I'm thinking of taking our family on a Caribbean cruise this winter to get out of the tundra the world calls "Michigan". I thought I'd give you all an update on my recent progress. (By the way, it seems very strange to be planning a cruise to get awy from the cold when it's 90 degrees and muggy outside today.)

I started by talking to a friend who is both a regular cruiser (he and his wife have been on about 20 cruises the past ten years or so) as well as frugal minded (he and I often share money saving tips and I know we both have the same "no debt" philosophy.) He gave me lots if great advice and answered all my questions about the differences in one cruise line and another, what type of cabins to get, how to travel, and many more.

He also shared the name of his local travel agent with me. His deal with her is that he'll identify a cruise and then search for the best price he can get. If she can match that, he books with her. If not, he books elsewhere. I decided to do the same and started out by doing my research.

Once I identified the cruise I wanted (where it went, what cruise line, the date, the cabin we wanted, etc. -- BTW, I'll give the details of the cruise in a later post), I looked at several places online for prices. Sites I considered were Cruises.com, Priceline, Kayak, Travelocity, Expedia, American Express, the cruiseline's own site, and Costco. Here's what I found (by the way, all fees, taxes, etc. were included in all these offers):

• Many of the sites had the exact same prices (to the penny.) These included Priceline, Kayak, Expedia, American Express, and the cruiseline's site. They all had a $100 onboard credit as well (except the cruiseline's own site, which only had $50), so they were all truly equal.


• Cruises.com was $20 cheaper than all the ones above and it appeared that they MIGHT have a $250 onboard credit available. I say "might" because it wasn't clear (many of the sites seem to make it purposefully cloudy what the deal is exactly to, IMO, make it more difficult to compare prices.)


• Travelocity didn't have the date available that I wanted, but the next closest date with the same line was a couple hundred dollars more expensive.


• Costco was almost $300 cheaper than Cruises.com plus had a $100 onboard credit. I think we have a winner. (BTW, I had asked my cruiser friend if he had ever used Costco, and he replied that he hadn't since he wasn't a member there.)

With this information in hand, I called the travel agent. Her prices were the same as the first group noted above. She was surprised, as was I, and said she should be able to get the best price as an agent. She told me she'd call the cruiseline directly and see what their explanation was. She called me back 10 minutes later saying she couldn't touch the Costco deal and the explanation simply was that they had probably done a group deal and/or could accept a lower margin -- thus they had lower prices. So she thanked me for calling her but said I had a better deal.

As a next step, I went to CruiseCompete.com and opened an account. The site is designed to have travel agents compete and bid for your business, so you can get the lowest price. I filled out a request for bids, putting in what I'd already received from Costco and asking anyone if they could beat it. I got five responses. Four were higher prices than Costco (so much for reading my guidelines) and one was just spot on (higher price but higher onboard credit.) They also noted not to book elsewhere until I had called them, indicating that perhaps they could do even better. That was two days ago and as of this time, I'm not sure if I'll call them or not. After all, I know/trust Costco and I don't know this agency at all (though they seem highly rated by the site.) Is it worth the risk for $100 or so in savings?

I also have a bit of legwork left to do. I need to call American Express and see if my TrueEarnings card gets me free travel insurance (I heard Amex has this on all their cards). I also caught wind of an extra bonus when you pay for a cruise with an Amex card, so I need to get to the bottom of this too.

For now I wanted to share my progress as well as ask for your thoughts/comments -- is there anything I'm missing or should consider before I take the plunge and book?

Loving My New Cell Phone

CNN Money lists three must-have gadgets. I have two of the three (I don't have a tablet computer yet), but it's the last one I want to focus on for this post. Here are Money's thoughts on the fact that we all "must" have a smartphone and the one they recommend:

HTC Thunderbolt (Android; $249 with two-year Verizon contract) "It isn't cheap, but because it's 4G, you won't need to upgrade for quite a while. And the Verizon network and Android operating system will just keep getting better."

Before I go on, let me say that I don't agree that we all "must" have a smartphone. But if you get one for free (like I did), why not, right?

Now, here's my story regarding the HTC Thunderbolt.

My last phone was a Blackberry 8700, AKA the "old" Blackberry. And when I say "old", I mean it. This was the Blackberry with the wheel-on-the-side navigation -- not a ball in the center or the mouse-pad-like curser mover. Nope, the wheel on the side. Think way "back in the day" and you'll remember it.

My Blackberry was cutting edge technology when I got it -- which was something like five years ago. And I loved it. But over time phones changed a lot. I stuck with my model because it worked and did what I needed (or what I thought I needed -- I didn't really know what was possible). But it started to go the last few months (the wheel would stick) and after a few repairs it wasn't getting much better. But I was determined to stick with the old faithful since I don't like change that much (which is funny since in the last few months I've gotten a new phone, a new work computer, a new home computer, and a new car.)

Then I went on a business trip with my boss and he was making fun of my phone (our phones are provided by the company at no cost to us.) He said I should definitely consider getting a new one. So I decided to take the plunge.

But which phone to get? The one thing that was set was our carrier. Our company has a plan with Verizon, so the phone would come from them. But after that, there were a world of options. Should I get another Blackberry, an iPhone, or something else?

I started thinking about what I really needed a phone for (surprisingly, making phone calls was near the bottom of the list. I use my phone much more for email, task management, and calendar functions.) I also did some research to see what a phone could do (what I wanted it to do) that wasn't even an option for my Blackberry -- like web surfing and the like. Man, I found that things in the phone world had changed a lot since 2006. :-)

Once I had my list, I still had many phones to choose from. So to help me narrow the field, I went to the most knowledgeable source I could think of: my 14-year-old son. The kid doesn't have a phone of his own, but somehow knows all the pros and cons of the various phones out there. He even knew a lot about the HTC Thunderbolt and it had only been out a week or so!

Eventually, I went with the Thunderbolt. After a month or so of break-in time (for me to get used to how the phone works), I can now say that I LOVE it! In particular, the screen is amazing and makes surfing the web -- for business information, to check the weather, to see how my favorite soccer team is doing, or to make sure my blog is up and running -- particularly pleasing. Sure, there are drawbacks (it's a battery hog and needs charging much more frequently than my Blackberry), but those are quite manageable given how I use the phone. And I haven't even come close to making the most of what the phone does and what apps (I only have a handful so far) can be used to improve my life, so there's plenty of upside.

In the end, there's not much personal finance in this post, but since Money mentioned the phone, I thought some of you might be interested in my story about it. Also, if you have any money-related apps (or non-money-related for that matter) that you think are especially good, please recommend them below. I'm anxious to find some useful ways to make the most of my phone.

7 Tips for Using a Credit Card Outside of the US

The following is a guest post by Craig Ford who shares money saving vacation tips at Help Me Travel Cheap.

Lots of Americans get into the habit of buying everything with credit cards, so when it comes time for vacation, it is only natural that they are going to take their credit cards with them. 

However, before taking your plastic on your vacation outside of the US, here are a few facts you should know.

1.  Your credit card may charge an extra foreign currency exchange fee. 

How much?  Well, that depends on the credit card.  There are some that don’t charge anything (i.e. Capital One and several Chase cards).  Otherwise, a common fee is 3% for Visa and MasterCard.  American Express typically charges 2.7%, though they do have a few cards that don’t charge anything.

Just be sure you check the credit cards in your wallet and use the card that doesn’t have a fee. 

2.  Tell the credit card company about your vacation.

No, don’t tell them all the sights you plan to see and how excited you are.  Tell them the dates you’ll be gone and your destinations for those dates.  Some credit card companies will freeze your account immediately if there is a charge overseas.  This is especially true if you never travel outside of the US.  However, after you pre-notify them, they are less likely to put a hold on your account.

3.  Get your credit card PIN number.

In the US when you use a credit card, you are almost always given the option of using the card as a signature based transaction.  That means you sign for your purchase.  However, in some countries overseas, you’ll be at a location that requires a PIN based transaction.  Save yourself the hassle and the awkwardness by learning your PIN before you go.  Simply contact the credit card issuer, and they’ll give you the number or help you set one up.

4.  Not everyone accepts credit.

Your credit card should never be your sole source of funds on vacation.  There are many rural vacation destinations where your credit card won’t be useful for anything other than scraping the grime off your hotel window. 

5.  Different credit card brands have different levels of acceptance world wide.

In my experience, Visa and MasterCard have the best acceptance rate world wide.  If you use a different credit card brand, you’ll want to be prepared with a backup card or cash to cover situations where credit is not accepted.

6.  Keep credit card details in a separate place.

You’ll notice that your credit card has two phone numbers on the back.  The first is a toll free number to call in the US.  The second is a number for calling overseas.  Personally, I don’t like to carry written records, so I use a secure file on my computer (RoboForm notes) to keep a backup of my card information with the overseas contact number.  This way, if a card is ever lost or stolen, you’ll easily be able to contact the card issuer. 

If you have Skype, you can call a US based 1-800 number; otherwise you’ll have a difficult time reaching the toll free number.

7.  Avoid paying in US dollars.

Certain hotels and other popular tourist destinations may publish a price in the local currency and one in the US dollar rate.  The problem is that that US dollar rate is typically offered at a higher exchange rate then you’ll get with your credit cards.  To make matters worse, sometimes you can still pay a foreign currency exchange fee if you use the card overseas – even if you charge in US dollars. 

Credit cards are a safe and secure way to spend money on a vacation overseas.  Now you can be sure you’re properly informed before getting on the plane. 

Are there any other tips you think need mentioning?

Crazy Money, Stupid Money

The following is an excerpt (Chapter 1) from Money Makes Me Crazy! A Prescription for Money Sanity.

Has this ever happened to you? Things are going great then out of nowhere you realize that you are going to run out of money before you run out of month? When you check your bank balance you wonder where all your money went. And when you try to remember what you bought you don’t have a clue. Or, over a weekend when you have nothing better to do you decide to inventory of all the things you own. And at some point when you are knee deep in all your stuff you figure out that your money priorities might need to be adjusted. If this is you, has ever been you, or you know some like this—read on. You might find out why money, at times makes you crazy and sometimes stupid.

Everyone I know has a money story—crazy purchase, lost opportunity, paying too much for something, and so forth. Myself, I've had a conflicted relationship with money for as long as I can remember. My love-hate relationship with money exists because I am human. And we humans aren't very good with money — sorry. As hard as I try, my emotional, irrational brain keeps getting in the way of my thinking, rational brain. That's why I have a house that is too big, a car that cost too much, and a garage full of stuff I don't need but can't seem to part with. I have squandered both time and money in pursuit of happiness — money makes me crazy.

Since you’re human, I bet you are a lot like me. I suspect you have a list of dubious money choices you'd like to do over. Think about this for a few seconds. Have you ever bought anything on impulse? Do you always make a list before you shop? How's your budget going? Is your retirement plan on track? Are you always rational with your money? Does everyone you know feel and think about money the way you do? If not, why not? Here's the deal. I assume you are reading this book because you aren't always happy with your money decisions. Could my money affirmation be your money affirmation? Money makes everyone nuts from time to time. That's a given. What is important is how you deal with it.

I've been working with people and money all of my life. In the chapters that follow, I'm going to share with you my observations and best practices about people and money in order to help you get your arms around how you think and feel about money. If you believe everything you see and hear about money — from your brother-in-law to the “talking heads” on cable television — making good money decisions is easy. All you need is the right product, service, and/or technique and you can do it — all by yourself. I wish it were so easy. If it were, everyone would be rich and you would not have to read this book. Just look around. Lots of people, from every walk of life, don't seem to get it when it comes to money. “Normal” seems to be having money issues and not the other way around. Why? Because we all face four significant money challenges:

1. We are human. Our human nature gets in the way of making good money decisions.
2. We don't understand how money choices are made or how our unique money temperament influences our money choices.
3. We believe the common wisdom that we are rational decision-makers with our money and that all we have to do to be successful is select, own, and manage the right products and services.
4. The rules of money have changed. The rules that may have worked for your parents or grandparents might not work for you.

So why do you need another personal finance book? Good question. There are thousands of books out there—too many. Here’s a secret I learned a few years ago. All of the books, web sites, and “expert” advice on personal finance will do you no good until you first know how you think and feel about money. Money sanity is about behavior. If you want to manage your money well you must manage your spending behavior and know how you make your money choices.

Unfortunately, most of the personal finance information and guidance I’ve seen seems to use a “one-size-fits-all” approach. It’s good stuff, but it’s presented like it’s the Holy Grail. The challenge for you is to figure out if the recommended approach is suited to your money temperament. If it isn’t, you just get frustrated. For example, how many books and articles have you read about budgeting? They all say about the same thing. Set some goals. Live within your means. Track you income and expenses... This is all well and good, if you are wired to do the detailed work necessary to collect the data and build your budget. If you don’t like collecting and entering data, you aren’t going to do this drill for very long. Your temperament trumps whatever you want to do. That’s why you are really good at collecting data for a few days. Then you miss a few days, the drill get tedious, and soon you drop the whole program — you have to love human nature. Some people are wired to do this (a lot of them are in the financial services industry), but not everyone. The question is, “Are you?”

Down in the trenches where we spend our money, we know money decisions are emotional and that we all should be more rational with our money. We try hard to do the right thing, but it’s so difficult and the consequences of bad choices can be catastrophic. We also know that the “cookie-cutter approach” to money doesn’t always work, and at times it makes things more complicated. Here’s the bad news – managing money is difficult. But there is good news — it’s not impossible.

In the chapters that follow I want to help you look at managing money from a different perspective. I want you to see money through your eyes based on what you feel and think about money. I want to help you better understand your unique relationship with money – your individual money values and temperament. I want to help you improve your money knowledge. This will then help you develop your unique money strategy and action plan based on your money values and temperament. It's that simple. Your prescription for money sanity is to know yourself and manage your money behavior.

Managing money well is important. The challenge is to make a good decision with the available information you have, based on your situation. Unfortunately, life happens; you do sometimes get it wrong and you seldom get a "do over." We all know managing money is hard work — at least emotionally. However, it is not rocket science. It all comes down to four simple things:

1. Time. You don't have as much time as you think, and once it is gone you can't get it back. You have to manage your time wisely. Time gives you leverage and can make you money.
2. Money. You do need money to make money. You have more money than you think. You have to make choices. You need to really look at what is important about money to you. This is an allocation problem – where to spend your scarce dollars. The good news is, there are lots of ways to get money if you put your mind to it. Always invest in yourself first.
3. Rate of Return. This is simply all the financial products and services in the financial markets that "pay" you as either an owner or a lender. Here’s the critical point: as an individual you can only select how you want to be paid (the financial products you want to own or lend). The market determines how much you get paid. The key is to own the right mix of stuff and not chase the rate of return.
4. Behavior. Wealth and financial success are all about your behavior. Manage your behavior and you can control your money destiny. Financial success is not about financial products and services. Financial success is about knowing and accepting how you feel and think about money and having a strategy and plan that works for you.

Of the four, behavior is the most critical element of financial success. Since behavior is so important to your success, you need a place where you can observe and study money behavior. I assume you aren't a behavioral economist with a research facility and library, so we'll have to make do with what you have locally in order to study money behavior. The best place in the world to do this is your local mall. This is where money behavior all comes together. And it’s great fun to just watch.

The Mall

Here is a scenario to help you understand the feeling-thinking tug-of-war that is going on inside your head every time you have to make a choice with your money. You are the prime character in this story. Play along. It will give you a window to peer into your spending brain. We’ll come back to your mall throughout the book to help identify and explain money behavior.

This quick trip to “The Mall” happens daily all over the country. The location and players are different, but the behaviors are on-target. Role-play as you read the passage. Try to focus on the spending behavior. Ask yourself if you have ever had a similar shopping experience or know someone who has.

Suppose a friend you ride to work with asks if you mind stopping by The Mall on the way home from work to look at a new line of high-end shoes that are on sale at “The Big Expensive Department Store.” You know your friend has an important presentation later in the week. A new pair of shoes sounds like a good idea to you. You agree, but only if it is a quick “in and out” trip. You do not need anything and wanted to save your money for a big concert later in the month.

You arrive at The Mall at about 5:30. The Mall is an upscale development serving mostly professionals who work in the area. Parking is a mess due to construction. Therefore, you have to park at the other end of the building from The Department Store. You both agree that this will be a quick trip and head off for the entrance.

Upon entering, a delightful man greets you and informs you that today is “Construction Madness Sale Day.” He gives you and your friend a scratch-off coupon good only for today. You perk up and get a little excited about the prospect of saving some money on some good stuff. You scratch off your coupon and learn that you have “won” a 25 percent discount on all purchases. Your friend’s discount is only 15 percent – you smile and clutch the coupon. Even though you had not planned to buy anything, you keep the coupon because you never know what you might find “on sale.”

The two of you look at each other, high-five, and head to The Department Store – way at the other end of the mall. Immediately you sense the quality and “class” of The Mall. Everything seems “right”: the colors, the light, the noise level, the music, and the smells. Everyone you see looks successful and prosperous.

Along the way, you stop at a number of stores. You remember that you are saving for the concert and you do not buy anything (only looking and taking mental notes). The two of you finally reach The Department Store (your friend is not as self-disciplined as you and bought a “few” great finds on the way) and head to the shoe department.

You leave your friend and begin exploring The Mall. You have not spent any money but you keep thinking about your coupon and hate to walk away from the discount. You could give the coupon to your friend, but, “It’s mine.” The very nice greeter gave it to you, not your friend.

You again remind yourself that you are not there to buy – you are only looking. Then out of the corner of your eye, you see something special. A brand new, limited edition, super-shiny, first-person-you-know-to-own, state-of-the-art “THING.” (This is all about you. What does the “THING” mean to you?) You simply have to own one. Score: Mall 1, You 0.

You have been hearing great things about the “THING” for months. The advance material from the website raved about how great the “THING” is. All the expert reviews were awesome. Just wait until your friends see the “THING.” In addition, with your discount coupon you will save a bundle.

You give the clerk your credit card and the coupon. She congratulates you for your purchase. You are now one of the first to own “one.” You think to yourself how smart you are to buy the “THING” now, with the coupon. You think to yourself how much you are saving on shipping and that you will not have to wait for delivery. Life is good!

You rejoin your friend – who has bought two pairs of shoes and a suit (of course, they were on “Sale”). You share your story about buying the “THING” and receive accolades for the wisdom of your purchase. You both agree that you were smart to shop The Mall. You could not have “saved” as much somewhere else.

You and your friend decide to head back to the car. It is now 7:00 and you are hungry, so you stop at the food court for dinner. This affords you time to read the “THING” quick-start manual and ogle over your purchases. You also take the opportunity to text a few friends to tell them about your good fortune. They all agree that you are having a good day. After dinner, you pick up a few small things – a 25 percent coupon is a terrible thing to waste – and head home.

At the end of the month, you receive your credit-card statement. You notice that the interest rate is higher than last month and the balance is dangerously high. Upon examination, you realize that you paid a premium for the “THING.” In fact, when you look at your receipt you realize that you received a 25 percent discount from the store’s premium mark-up. If you had waited, you could have paid less online. You feel bad, but you think to yourself that regardless of the price, you have a first-run, limited edition “THING.” Not many people can say that. Of course, that has to be worth something.

You break out the calculator and do a little math. Between the “THING,” dinner, and a few extra purchases, you have busted your budget. You also realize you cannot afford to go to the concert – at least with this credit card. You look at the “THING” and sigh, “Now everyone has one.” However, good fortune again shines your way. You remember that you qualify for a zero interest rate on a new credit card if you make a balance transfer. You smile and say to yourself, “Sweet! I can go to the concert after all.”

Does this ring a bell with you? Can you place yourself, or someone you know, in the story? The scenario could unfold just about anywhere money choices are made — super market, website, golf shop, bank, college admissions office, financial advisor’s office, and so on. In the next chapter we’ll take a closer look at your trip to The Mall. For now, keep this in mind:

• Money success is between the ears.
• Know yourself first to better manage your money.
• The future is managing money behavior, not money products and services.
• At the end of the day, you will be held accountable for your money behavior.
• Good money outcomes require good money behavior.
• The Money Behavior System™, presented later in the book, is the new model for behavioral money management.

Action Steps

Ask yourself, or better yet, write down your answer to each of the following questions:

1. Why does money make you crazy?
2. What was your best spending decision? Why?
3. What was your worst spending decision? Why?
4. What is one word that best captures how you feel about money?
5. What is one word that best captures how you think about money?
6. How do you make your major money decisions?
7. Does money keep you up at night? Why?
8. What would it take to give you peace of mind in your chosen life style?
9. Are you pessimistic about your financial future? Why?
10. Are you optimistic about your financial future? Why?

What Americans Need

The book The 10 Commandments of Money: Survive and Thrive in the New Economy lists items Americans in 2009 felt they "needed" as follows (along with the percentage that felt this way and the change since 2006):

• Car -- 88% needed, down 3%
• Landline phone -- 68% needed (not asked in 2006)
• Clothes dryer -- 66% needed, down 17%
• Home air-conditioning -- 54% needed, down 16%
• TV set -- 52% needed, down 12%
• Home computer -- 50%, down 1%
• Cell phone -- 49%, even
• Microwave -- 47% needed, down 21%
• High-speed internet -- 31% needed, up 2%
• Cable or satellite TV -- 23% needed, down 10%
• Dishwasher -- 21% needed, down 14%
• Flat-screen TV -- 8% needed, up 3%
• iPod -- 4% needed, up 1%

And for those of you who want to know the details, the respondents were asked this question: "Do you pretty much think of this as a necessity or pretty much think of this as a luxury you could do without?"

Some thoughts from me on these results:

• Notice how many things are way down in being viewed as a necessity? Hmmm, I wonder what happened between 2006 and 2009 that made people change their minds so dramatically.
• Personally, our family owns at least one of all of the items above -- more than one in many cases (cars, TVs, home computers, cell phones, iPods). I don't consider them "needs" (more on that in a bit) but they certainly do make life more comfortable.
• Of these, here are the ones I consider true "needs" for our family: car, clothes dryer, and either home or cell phone. Yes, you could argue that we could make it without these as well, and we probably could. But life would be so impractical without them that they are near-needs IMO.
• Seems funny to me that they left out items that could have placed relatively high on this list: refrigerator, oven/stove, DVD player. Perhaps the first two were assumed to be needs by everyone (as were "toilet" and "home heating system" I'd guess) and the last isn't that important (through it could be in the 20-30% range.)

So what do you think of the list? And are they any items not here that you think should be?

What Attire Works Best When Buying?

The Mint Blog lists five secret weapons for better customer service. One of their tips recommends how you should dress in order to get better service as follows:

Face it, people do judge a book by its cover. When you walk into a store in cut-offs and flip-flops, you won’t be treated the same as if you were wearing a three-piece suit. I’m not suggesting you should dress up to go shopping; only that you should be careful about dressing down.

Now their post is about customer service, but the quote above seems more gears to buying things (they say "go shopping".) Which leads me to this question: do you think it's better to dress up when you go shopping?

There are two main schools of thought as I see it:

• Yes, you should dress up. People respect those who are well-dressed and you'll probably be able to get a better deal/terms/offer if you are dressed well.
• No, you should not dress up. People who are dressed up appear to have more money, so the store will be less inclined to give you a deal. If you look like you can barely afford something, they are more likely to come down on price.

Do you think either of these is true or is somewhere in the middle better? Or perhaps it depends what you're shopping for or where you are shopping?

Personally, I hardly ever dress up when shopping (I'm usually in sweats/jeans or shorts.) I'm not sure how it impacts my ability to negotiate, but I sure am more comfortable that way. ;-)

What's your take on the issue?

What's an Appropriate Tip for Poor Service?

The Bucks Blog discusses the issue of tipping when service is bad (like from a waiter, a hairdresser, etc.) They asked Peter Post, an etiquette expert at the Emily Post Institute, what his thoughts were on the situation. The summary:

According to Mr. Post, the time to show your disappointment with bad service is not when you’re giving a tip. Instead, you should complain before. “The time to complain about it is the time when the service is poor,” he said.

The tip, Mr. Post said, is part of what makes a waiter’s income livable and is often shared by many people.

So, for instance, if you are at a restaurant and service is slow, or the waiter or kitchen messes up your order, Mr. Post recommends talking to the offending person and the manager and expressing your dissatisfaction. Often, you’ll even get a free meal or at least a discount as consolation, much more than you would save by cutting the tip.

In other words, he's saying that there's no reason to ever cut the tip -- that it's part of the person's wage. You should look for compensation in other ways, like a discounted or free meal, but don't cut down on the tip.

My take is a bit different. The reason I'm tipping is for good service (or at least decent service -- I don't expect service employees to be superstars, but I do expect them to be at least competent.) When they fall below this standard, they get less of a tip. If they completely blow it, they get no tip.

We were at a buffet restaurant during the Christmas season and a lady came up and introduced herself as our "waitress" (it's a misnomer since we paid for our food when we arrived, got our drinks at the start, and got up and selected our own food.) Basically, her job was to simply stop by once in awhile and clean off the used plates (customers were supposed to get new ones on each trip to the buffet) and refill our drinks (there was no way for us to do this ourselves.) We had been to this restaurant a few times before and always had what I would call "good" service. In those cases we had left a 10% to 15% tip upon leaving.

This trip was different. The lady stopped by maybe once. Our table piled up with dishes. We couldn't even find her to ask for her to clear the table. By the end of the meal, I felt like I was eating over a full dishwasher with the door open. It was gross.

As we left, I was prepared to leave $1 to show my dissatisfaction with the service. My wife (the kinder of us two) said, "It's Christmas", so I left another $2 and we departed.

In addition, we do not tip our garbage guys at Christmas because they spend the year attempting to see how far into our driveway they can throw our recycling bins (they are supposed to drop them where they pick them up). And they do this at 6 am in the morning. So it's nice to hear the clanging of plastic on cement a few yards from my bedroom window early every Friday morning. Ok, it's not really that bad. But I would not classify them as providing even "decent" service. In addition, they are part of a big trash collection corporation so 1) I assume they are paid well compared to other garbage collectors and 2) I assume that complaining won't help the situation (we have a hard enough time getting our bill right.) So they get no tip.

I'm sure there will be a lively discussion on this one, so let's get to it. Do you tip less for poor service? If so, how much less? If not, why not (and do you do something else instead -- as Mr. Post suggests)?

Our 2011 Shopping List

Last year I laid out some of the major purchases we were considering, then updated our progress throughout the year. It was an interesting way to track our progress and see if what we thought we'd buy was what we actually bought. So I thought I'd do the same this year. Here goes:

• Vacations -- In addition to our annual trips (2) to see family, I could see us going on three vacations/trips. First, we're thinking of going to a "resort" in upper Michigan (indoor waterpark inside, skiing outside) sometime in February or March to celebrate my wife's birthday. Next, I think we'd all like to go back to Chicago this fall. We had such a blast there last year. Finally, we're considering a trip to Hawaii or some other warm location during winter next year.
• Furniture -- We still need a new table for our "school room", a couple recliners for the living room (unless we decide to keep the second couch), and perhaps a desk for my daughter's room.
• Windows -- We had the glass replaced in four windows last year -- and we have a couple more that need the same work done.
• Snowblower -- The one I bought last year is too big and unwieldy. I'm thinking of giving it to a local non-profit and buying a smaller one on sale late this spring.
• Landscaping -- Phase 1 was last year, phase 2 is this year. We still need a plant in the front yard, some work done to the French drain in the back, and some plants added along the side of the house. The major stuff was done last year, so now we're just making minor adjustments.
• Television -- I'm thinking of upgrading our old (15 years or so) TV in the basement that we use for video games. The screen is too small and for the prices of TVs these days, why not get a much better one?
• Outside lights -- Our outside lights are old and look terrible. In addition, I'd like them to be motion-sensitive for security reasons. I can see an upgrade coming this summer.
• Attic insulation -- Been on my list for a few years. Time to make it happen.

How about you? What's on your shopping list for 2011?

Did Your Health Insurance Rates Go Up?

As we discussed different options for spending the drop in Social Security taxes this year, an interesting thing happened. I got comments like this:

Well let's see. My health insurance just went up by $115 a month for the same plan as last year thanks to ObamaCare. So I guess that will cover that for this year and then I need to go finding a mysterious $200 as my health insurance increases the following year.

And this:

Our health care premiums skyrocketed so we will see exactly none of the Social Security cut actually come through in my paycheck.

And this:

For us I doubt it will be of any significance. Our insurance premiums when up by about $40/month. Not horrible, but its an increase that will minimize the impact for us. Anything left will roll over to savings.

And this:

My "extra income" was eaten by a raise in health insurance premiums.

Hmmmmm. Appears that there's a trend here.

My own health insurance premiums went up by $80 per month thanks to the cheapest option our company could find raising their rates by 25%. And they told us there could be more of the same next year. Ouch.

Wasn't the new health care bill supposed to LOWER the costs of medical care? Or did I somehow mistakenly just make that up?

Anyway, it's $960 in expenses that I didn't have last year...not good.

So, did your health insurance rates go up? If so, by how much?

Do You Get a Gas Receipt?

Here's an interesting question for today:

When you get gas and pay by credit card, you usually have the option to get a receipt or not. Do you get one? Why or why not?

Personally, I get a receipt because I like to know where my credit card charges stand at all times. Every couple of days or so I put any charges I have into Quicken and I know exactly what I owe.

I thought most people asked for a receipt until my brother-in-law told me he NEVER gets one -- he simply waits to get his credit card statement and the charges are listed there.

So, what do you do -- and why?

How Much Is Your Smart Phone Data Plan Really Costing You?

The following is a guest post from Jacob at My Personal Finance Journey.

Recently, I took a trip to the lovely land of Verizon Wireless.

I embarked on this journey due to the fact that my family's chocolate lab, Portia, had chewed up my cell phone the day before, after it accidentally fell out of my pocket. Poor phone!

Needless to say - I was desperately in need of a new phone.

Before I elaborate further on the story, one thing you should know about me is that one of the things that I feel is unnecessary in my life is a smart phone (i.e. a phone with internet, chat, Facebook, etc capability). I am a big fan of regular phone calls and text messaging, but I realize that with my personality, I would be way too addicted to a smart phone if I got it. Just think - a PF blogger having 24/7 access to their email and blog. My friends would never let me hear the end of it!

Nevertheless, when I entered the store, I was amazed at how numerous the options for smart phones were (Droid, HTC, Blackberry, Palm - just to name a few that I saw). In fact, the options were so numerous that upon checking out, I inquired with the clerk as to if she could give me an estimate of the percentage of people that come in using smart phones.

She mentioned that definitely more than half of people are using them currently. This definitely wasn't very surprising, considering how common it is to see people using their smart phones in public.

However, this got me thinking - just how much is having a smart phone / data internet plan costing consumers in the immediate and long term? Let's take a look, shall we?

Smart Phone Data Plan Cost Analysis

According to Verizon's website, an unlimited data plan (what I hear from my friends that most people choose) costs $30 per month on top of the regular phone/calling charges. That's a whopping $360 per year!

In order to make this analysis more applicable to real life, let's consider that our imaginary friend, Jim, is a tech-savvy 25 year old. He's in the generation that grew up when social networking was becoming popular. He lives and breathes Facebook, Digg, Twitter - the works!

We'll then consider two competing scenarios.

• Scenario 1 - Jim pays the $30 per month every year from now until he retires at age 65.
• Scenario 2 - Jim instead saves the $30 per month every year, and invests the savings in a Total Market index mutual fund. His savings in this fund will be assumed to earn 10% per year in interest.

Results

• In Scenario 1, the total cost of Jim's data plan is $14,760.00. Quite astounding if you ask me!
• In Scenario 2, not only does Jim avoid this ~$15k expenditure, but his savings accumulate to $175,626.65 as a result of the miracle of compound interest.

Note: for the specific calculations performed to obtain these numbers, please see the Google Docs spreadsheet below at the link below. Simply save a copy to your computer to allow for editing the file.

Google Docs Spreadsheet - Long Term Cost Analysis of Smart Phone Data Plan

Conclusion

The final step in this analysis is to try to make some sense out of these numbers. Clearly, $14,760 is a significant sum of money to be spending over the years for a data plan. Furthermore, if compound interest is added in to the mix, the magnitude of the savings amounts to something along the lines of a down-payment on a person's house during his/her retirement years.

While for me personally, having a smart phone data plan isn't worth it, I think it is up to everyone to determine individually whether having a data plan provides enough value in your life. I know that for some of my friends, their smart phone is a "part" of their life - something they wouldn't want to do without.

The key is to know how much it is truly costing you, and to make your respective decision from there.

So, I leave you with a final question - Is it worth it to you? Share your thoughts by commenting below!

Buyer Beware—Are You Really Getting a Good Deal?

The following is a guest post from the author of Power Spending: Getting More For Less (Volume 1).

A lot of us have ventured online to do some shopping. Naturally, we want to know that the site we are shopping on is safe. That explains why I shop at Amazon. I trust that the products are good, the service is reliable and my personal information will be kept safe.

When you go to the Amazon website you do have the option of buying directly from Amazon or you can buy from a seller that has products listed on the site. Generally, the sellers are ranked by price— lowest to highest for each item. Quite often the price is lower than Amazon’s. The items are listed as new or used (including the condition of the item) and there is a seller rating based on previous buyers’ feedback. You take all these factors into consideration before you make your buying selection.

If you purchase from a seller you will pay Amazon but the seller ships the item directly to you. Amazon acts as a consignment store for these sellers. You feel confident that you are buying on a safe site, you have recourse through Amazon if there is a problem and you have some input on the buyer’s rating (up to 5 stars) as you can leave feedback on the item you purchased and the service that you received. However, when you buy from these sellers are you really getting a good deal?

Let me explain. My oldest son is a collector—mainly CDs. He has a never ending list of music that he wants to buy and he’s always on the lookout for a deal. He’s also very particular about the condition of anything he buys. He carefully examines any merchandise he receives to make sure that it is in the advertised condition he was promised. To tell you the truth, the rest of the family think he is a little obsessive.

Anyway, last week he ordered and received a DVD in the mail from an Amazon seller. Upon close scrutiny, he discovered that it was a fake—a very convincing copy of the actual product. He didn’t even have to open the plastic wrap and of course is not going to keep it. He contacted Amazon. He was told to contact the seller. He did but there was no response, so back to Amazon. He’ll get his money back but it’s a very frustrating and time consuming process.

This is not an isolated case. Actually, it’s happened to our family before—and looking at some of the feedback on the website there have been other cases of the same thing. Here are some comments left as feedback for just one of the sellers on Amazon (each paragraph is a separate comment):

Disc#1 Last 5 mins.(or so) of episode freezes and we don't see the
ending. Disc#2 Only 1st episode on disc is viewable, last three
episodes are unviewable!

WARNING! DO NOT USE THIS SELLER. My product was an obvious BOOTLEG. I
paid good money, and was SCREWED by this seller. Do NOT under any
circumstances BUY ANYTHING from ----. They will not even
reply to your email when you COMPLAIN to them about the USELESS
garbage that they have shipped to you. WARNING! DO NOT USE THIS
SELLER.

COUNTERFEIT! A very good counterfeit but a counterfeit nonetheless.
The real House Season 5 DVD set is the same as the other seasons, slim
plastic DVD cases inside a sleeve box. This seller sent me a
three-part fold up case with a cardboard back using the images from
the real thing. Return service was fine, got my money back, but avoid
this seller at all costs. Commercial piracy really hurts.

Arrived fairly quickly, seems to be in good condition...however the
disc freezes at one point in the movie every time I play it. Otherwise,
satisfactory."

I am very disappointed. I bought a DVD from them for $49 and it turned
out to be a copied version and not the original. I even found the DVD
cover image on Google with the exact same code bar. I will not
purchase from them again.

Beware of seller! They sold me a counterfeit, albeit a very good one. I
tried contacting them and they haven't replied. I should have read
their customer feedback before I ordered the item because this is not
the first time they have sold another customer a counterfeit DVD.

Despite these comments that reveal that the seller is dealing in fake merchandise, he still has a rating of 91%.

Whose fault is it that sellers are getting away with selling illegal copies of CDs and DVDs on Amazon? Certainly, if Amazon was aware that a seller was selling illegal copyrighted items they would be at fault. We trust them and expect that they are providing trustworthy sellers on their site. However, if we, the buyers, don’t let Amazon know about these sellers then we are to blame. Amazon is counting on us to reflect the quality of the product and service by our feedback.

So what is the problem? Are we just so worried about getting a good price that we are willing to accept fake and illegal products? Are we just oblivious to the fact that the merchandise is fake? Maybe we just can’t be bothered.

I say that we make Amazon and other online sites a safer place to shop. Let’s protect ourselves and others from these fraudulent products. It takes a little effort and some time but we can do it! Here are some suggestions:

1) You know what they say…if it’s too good to be true, it probably is. You are looking for the best price but if the asking price is really out of line with other products of similar quality, this may be a warning sign that the item is fake.

2) Read the feedback before placing an order. You may decide that it’s not worth the risk.

3) It’s important to check the item over when you receive it—before you leave your feedback.
4) Once you examine the item if it looks suspicious email the seller. If the seller offers to refund your money and tells you to keep your purchase, there’s a good chance your suspicions are correct and the item is a fake. The seller doesn’t want you to make a stink about it. It would be tempting to just let it go but this only keeps the criminals in business. 

5) Report the crime to Amazon and warn other people by giving negative feedback.

6) When you find good, reliable and honest sellers then support them with future purchases—even if their prices aren’t the lowest.

Remember—only you can prevent crime! Do your part to make sure that you and others really are getting a good deal.

Latest Update on Our Shopping List

Those of you who have been reading FMF regularly know that I've had a shopping list of things I've wanted to buy the past year and a half or so. Every so often I give you all an update on the list (here's the last one). Since we're approaching the end of the year, I thought it would be a good time to let you know how I'm doing. Here goes:

• Car -- Got one (love it, BTW!!!) And for those of you wondering, here's why I buy new cars.  
• Vacation -- We did travel to Chicago in September for what turned out to be a great three-day trip. Next on the agenda: Hawaii towards the end of 2011 (at least that is my thinking as of now).
• Laptop -- Got a great one at Costco. The size I wanted, faster than I wanted, more hard drive than I wanted, extra warranty (Costco added an extra year for free), at a killer price. It was through an email special and I haven't seen anything close to it since (I got it in October) at Costco or anywhere else.
• Furniture -- This one is still dragging. Have I mentioned how much I hate furniture shopping?
• Glass replaced in two windows -- Done (and the windows were re-stained too.) Now looking at replacing the glass in a third window (much cheaper than buying a whole new window).

That's it. Believe it or not, we got everything else on our list completed (landscaping, new front door, lawn mower, television, snowblower, furnace.) It's been a long haul but then again, it has been 18 months since I made the list. ;-)

Perhaps I'll start a new one for 2011. Hmmmmmmm...what do I need....

How to Give Gifts People Want

Now that the holiday gift-giving is over for most of us, I want to call attention to this piece that lists five reasons to change the way we give gifts. In particular, I want to focus on ideas #1 and #2:

1. Nobody Knows What You Need More Than You. How many times have you had to fake liking a gift? It's painful, but we do it. That piece-of-junk kitchen appliance or ugly sweater ends up never getting used. Then you have to live with the guilt knowing that your loved one spent $50 on it for you, and you never used it. When they come over, you leave it out in the open so it appears that you have been using it after all. Kind of sad. You have a chance to end that painful cycle.

2. Nobody Knows What Your Loved Ones Need More Than Them. This is #1 flipped around. Why spend all of the time running around the herd looking for something that you're not even sure someone will like? You're wasting your time and your money, and when your loved one opens up that gift, you know they are faking their joy. Again: painful.

Anyone else out there get frustrated this past month trying to find a gift for someone who "has everything" or "doesn't want anything"? Me too. So you end up buying something that's probably not a great gift -- but you hope that it's at least "good". Ugh.

So what do you do about it? Here are some suggestions:

1. Ask for lists. We had our kids write out lists near the end of November detailing what they wanted for Christmas. They understood that these were guides for us and that we weren't guaranteeing they'd get only things from the list. They also understood that they wouldn't get everything on the list (of course.) We even told them that we would be spending the same amount on each of them and asked if they preferred a smaller number of gifts with higher than average value each or a large number of gifts with smaller than average value each. My son took the former and my daughter the latter.

2. Shop for others. This year my wife and I did the shopping for our kids' gifts for both sets of grandparents. They gave us a budget, we bought the gifts, we wrapped the gifts, and we delivered the gifts. They saved the time and effort (plus postage) and were sure the kids got what they wanted (because, again, we had lists from our kids.) ;-)

3. Buy your own gifts. I know I am a difficult person to buy for. I have almost everything I need, I don't want much, and when I do want something I'm very picky about it. So it's often a losing proposition to buy me something. That's why many of my gifts (from my wife to me) were purchased by me. I got what I wanted, bought on sale (or used coupons), and saved her a ton of effort. Sure, I don't get "surprised" when I unwrap the gifts (yes, we wrap them), but at my age surprises are over-rated.

4. Use gift cards. For people who are hard to buy for (like my dad -- I know he likes Menard's, though), those you don't know anything about (postman, newspaper lady, etc.), and/or those who are far away (saves postage and having to wrap a gift/box), gift cards are often the perfect solution (assuming you know the sorts of places they like to shop.) They seem to become a bigger part of our Christmas budget every year.

5. Give money. Yes, cash can be crass, but cash is also king. And if it's too "boring" or "tacky" to give cash or a check, you can be creative by giving gold dollar coins instead. These are always a hit (we put them in a creative package that's also a gift: a wooden "treasure box" or small piggy bank -- both of which can be purchased on sale at Hobby Lobby stores many times throughout the year -- make these gifts extra special and fun.)

How about you? What do you do to make sure those you give gifts to get what they want/need?

How to Buy and Save on Eyeglasses

In its December issue, Consumer Reports offers some advice on buying eyeglasses. They start by listing three general findings from the research they did:

• A chain doesn't always equal cheap. Customers at LensCrafters and Pearle Vision paid more than those who shopped at an independent shop or doctor's office.
• For great selection, go indie. 83% of readers who got their glasses at an independent local optical boutique were highly satisfied with the variety of frames available.
• Some retailers were subpar. There eyewear chains -- Visionworks, America's Best Contacts & Eyeglasses, and JC Penney Optical -- stood out for below-average ratings in most purchase factors.

I actually went to JC Penney Optical a couple pairs of glasses ago and was quite satisfied with them.

Their piece then lists how to choose glasses as follows:

• Know who excels at what. The best place to shop depends in part on your needs and preferences.
• Spring for only what you need. Glasses come in a dizzying array of lens types and coatings, some of which you could end up shelling out for even if you don’t need them.
• Don’t be slave to brand names. The companies that make designer specs, such as Luxotica, Safilo, and Marcolin, also make high-quality nondesigner frames, some of which are similar to the designer versions (minus the fancy logo on the side). Those frames can have the same style for a fraction of the designer price.
• Look for coupons. One-third of readers who visited an optical chain used coupons to get a deal on their new glasses, and at chains as many as 62 percent of respondents had used one.

They then end their article by rating eyeglass chains. The top five on an overall reader score basis were:

• Costco Optical
• Independent local eyeglass shop
• Private doctor's office
• Kaiser Permanente
• Empire Vision Centers

And if you're shopping on price only, these four were the only ones to get the highest or second-highest rating on price:

• Costco Optical (highest rating)
• BJ's Optical (highest rating)
• Davis Vision (second-highest rating)
• Sam's Club (second-highest rating)

In short, independent shops and doctor's offices are the best on selection but bad on price. The places above are good on price but don't have as much selection.

I think my decision is made. I need new glasses and will look at Costco first. I was leaning in that direction anyway (my wife got her latest pair there) but these findings put me over the top.

How about you? Where do you shop for eyeglasses and why?

Toyotas Recommended Again by Consumer Reports

When I recently purchased my new Toyota Highlander, I was taking a bit of a leap of faith. At that time Consumer Reports had suspended its recommendations of several Toyota models (including the Highlander) over various issues. I assumed that this was temporary and while it did make me consider the issue and wonder if buying a Toyota was a good idea, obviously I got past that hurdle.

The December 2010 issue of Consumer Reports put to rest any lingering doubts I had as they reinstated their Toyota recommendations. And, as I knew would be the case, the Highlander makes out pretty well.

The magazine lists specific ratings about the Highlander in a couple different areas. On page 67 they list the predicted reliability ratings for midsized SUVs. The top six are as follows:

1. Toyota FJ Cruiser
2. Toyota Highlander (4-cyl.)
3. Toyota Highlander (V6) (recommended buy by CR)
4. Hyundai Santa Fe (recommended buy by CR)
5. Nissan Pathfinder
6. Toyota Highlander Hybrid (recommended buy by CR)

I have the Toyota Highlander V6 -- which has the highest predicted reliability rating for a vehicle recommended by Consumer Reports. (FYI, I also looked at the Honda Pilot. It came in 8th overall and 5th among CR recommended buys.)

Then on page 72, Consumer reports gives their overall midsized SUV ratings based on road-test scores. The top five (which are all CR recommended buys) are:

1. Kia Sorento
2. Toyota Highlander Limited (V6)
3. Hyundai Santa Fe Limited (V6)
4. Chevrolet Traverse LT
5. Nissan Murano SL

FYI, the Pilot was #9.

These ratings fit me to a T since I buy for overall value and reliability (plus fit of course -- I'm tall and need to make sure my head isn't hitting the roof). And I put a lot of stock in what CR says -- they've never let me down before -- so I'm happy that they have put Toyota (in general) and the Highlander (specifically) back into their ratings and that my vehicle performed so well.

BTW, I'm LOVING the car!!!! ;-)

Books that Make Great Gifts: FMF Readers' Edition

A couple weeks ago I Iisted books that I think make great gifts for your loved ones this holiday season. I asked readers to suggest the books they would add to my list. Here's what they came up with -- along with their thoughts and some notes from Amazon on each book:

• I have given Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century to many people. It seems to be able to reach out to a broader range of people.

Amazon summary: In an age of great economic uncertainty when everyone is concerned about money and how they spend what they have, this new edition of the bestselling Your Money or Your Life is an essential read. With updated resources, an easy-to-use index, and anecdotes and examples particularly relevant today-it tells you how to: get out of debt and develop savings, reorder material priorities and live well for less, resolve inner conflicts between values and lifestyle, save the planet while saving money, and much more. In Your Money or Your Life, Vicki Robin shows readers how to gain control of their money and finally begin to make a life, rather than just make a living.

• The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein. It provides realistic and useful advice for how to invest and save.

Amazon summary: William Bernstein's The Four Pillars of Investing gives investors the tools they need to construct top-returning portfolios­­without the help of a financial adviser. In a relaxed, nonthreatening style, Dr. Bernstein provides a distinctive blend of market history, investing theory, and behavioral finance, one designed to help every investor become more self-sufficient and make betterinformed investment decisions. The 4 Pillars of Investing explains how any investor can build a solid foundation for investing by focusing on four essential lessons, each building upon the other. Containing all of the tools needed to achieve investing success, without the help of a financial advisor, it presents: Practical investing advice based on fascinating history lessons from the market, exercises to determine risk tolerance as an investor, and an easy-to-understand explanation of risk and reward in the capital markets.

• Good list. I'd add Automatic Wealth: The Six Steps to Financial Independence by Michael Masterson. His advice on "multiple sources of income" proved life changing for me.

Amazon summary: The advice and concepts outlined in Automatic Wealth are best suited for those in their 30s-50s who recognize that their current job will never afford them true financial independence. Rather than encourage readers to quit their day jobs today and launch into a new scheme tomorrow, Masterson shows how to turn your skills and experience into significantly more money within seven to fifteen years. For those just getting by, he details how to get the biggest pay raises now and how to move into more lucrative ventures in the near future. For those with some savings, he offers specific advice on building equity and increasing net worth significantly and quickly. Since Masterson made his millions starting and developing small businesses, he encourages people to become entrepreneurs themselves and discusses which kinds of ventures to invest in and which ones to avoid. He also stresses the importance of developing multiple income streams, offering chapters on real estate, stocks and bonds, consulting, direct mail, and other opportunities.

• I Will Teach You To Be Rich by Ramit Sethi. I believe this book should be read by every freshman in high school. (Different comment) I'll second I Will Teach You To Be Rich - particularly for anyone under 30, although it'd be valuable to anyone.

Amazon summary: At last, for a generation that's materially ambitious yet financially clueless comes I Will Teach You To Be Rich, Ramit Sethi's 6-week personal finance program for 20-to-35-year-olds. A completely practical approach delivered with a nonjudgmental style that makes readers want to do what Sethi says, it is based around the four pillars of personal finance— banking, saving, budgeting, and investing—and the wealth-building ideas of personal entrepreneurship.

• The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey.

Amazon summary: The success stories speak for themselves in this book from money maestro Dave Ramsey. Instead of promising the normal dose of quick fixes, Ramsey offers a bold, no-nonsense approach to money matters, providing not only the how-to but also a grounded and uplifting hope for getting out of debt and achieving total financial health. Ramsey debunks the many myths of money (exposing the dangers of cash advance, rent-to-own, debt consolidation) and attacks the illusions and downright deceptions of the American dream, which encourages nothing but overspending and massive amounts of debt. "Don't even consider keeping up with the Joneses," Ramsey declares in his typically candid style. "They're broke!" The Total Money Makeover isn't theory. It works every single time. It works because it is simple. It works because it gets to the heart of the money problems: you.

• I gave the book The Elements of Investing by Charles Ellis and Burton Malkiel to my wife's cousin, who is a student in high school, earlier this year for her birthday. This book is geared towards the beginning investor and emphasizes saving and building wealth through passive investing. Because she is a high school student, I understand she may not heed the recommendations in the book at this time in her life. But I think there is great value in exposing young people to new ideas.

Amazon summary: A timeless, easy-to-read guide on life-long investment principles that can help any investor succeed. The Elements of Investing has a single-minded goal: to teach the principles of investing in the same pared-to-bone manner that Professor William Strunk Jr. once taught composition to students at Harvard, using his classic little book, The Elements of Style. With great daring, Ellis and Malkiel imagined their own Little Red Schoolhouse course in investing for every investor around the world-and then penned this book. The Elements of Investing hacks away at all the overtrading and over thinking so predominant in the hyperactive thought patterns of the average investor. Malkiel and Ellis offer investors a set of simple but powerful thoughts on how to challenge Mr. Market at his own game, and win by not losing. All the need-to-know rules and investment principles can be found here.

Any of these look good to you?