This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Thursday, May 28, 2009

Cash incentives for saving water

Posted by Matt

This post is targeted to my local readers; if you're not a customer of Tualatin Valley Water District, you can stop reading here or check with your own local water provider to see if they offer a similar program.

Tualatin Valley Water District has several rebate programs designed to provide additional incentives for their customers to reduce their water usage (assuming you haven't been swept up by the "green" wave already). I discovered that the lawn aeration that we were considering is encouraged by the water district because it allows you to use less water on your lawn. If you're not familiar with the process, aeration looks much like lawn mowing, except that the machine has a roller with cylindrical spikes on it to take plugs of soil out of the lawn. It is especially helpful for lawns with very hard-packed soil. This is something I did as a child with a pitchfork, and I'm glad to pay the $35 that our aerating service charges to do both the front and back lawns.

Of course, now I'll only end up paying $10 after the $25 rebate! We may also buy some hose bib timers to simplify watering; those have a rebate available also (as do rain sensors and pressure regulation service). If you don't have a lawn, you can also find rebates for efficient appliances and even toilets here. All any of the programs require are forms and receipts.

Saturday, May 23, 2009

Link: How to figure out the value of donations

Posted By Paul

I recently donated some old furniture and other items to a charity organization and I thought I would look into the possibility of taking a tax deduction on the donation.

I was immediately perplexed by what amount I should use for the various items. I vaguely remember what we paid for the items originally but I'm not sure what their fair price is now.

I did a little searching and found this great guide for the value of donated items. It's provided by the Salvation Army:

Salvation Army Donation Value Guide

I am going to try to keep track of all the various items we donate to charity and see how it affects my taxes this year.

Tuesday, May 19, 2009

PGE wants to send us all a check

Posted by Matt

Portland General Electric's latest newsletter just informed me that I may be eligible for a refund of money that I paid for the Trojan nuclear power plant. I don't really remember buying a power plant in the October 2000 to the September 2001 timeframe, but I'll take their word for it.
If you were a PGE customer during that time, visit http://www.trojanrefund.com/ to apply for a refund. You HAVE to apply to be eligible. It only took me about two minutes, and residential customers are expected to receive about $23 each.

Saturday, May 16, 2009

Article: 8 Things Parents Don't Need

Posted By Paul

As a new parent I was happy to run across this article listing things that you DON'T need as a new parent.

8 Things New Parents Don't Need

I especially liked the author listing the expensive burp cloths and how cloth diapers work just as well. In fact a friend of mine went to a baby shower where as a game they had each guest decorate a cloth diaper in permanent marker for the parents to use as a burp cloth. The parents use them for various baby related cleaning and it's cool to see the funny and creative designs that the guests put on them.

Also the fact that they mentioned the baby wipe warmer was excellent. I saw one listing for a baby wipe warmer that said something like:

"the baby wipe warmer saves you money by being able to use any type of wipe in it."

What saves you even more money is to not buy the warmer in the first place. I looked on Amazon and read customer reviews of warmers and several people swore that their baby didn't like cold wipes and that buying this device improved their life considerably. Our baby actually thinks the cold wipes are kind of ticklish and using the cold wipes will often turn his crying into laughing. I guess it goes to show that all babies are different.

Any other suggestions for things new parents SHOULDN'T buy, or at least shouldn't ASSUME they need?

Friday, May 15, 2009

Store Credit Cards: Know What You're Signing Up For

We have a guest post from Matt's wife Leah today. Enjoy!
-------------------------------------Posted by Leah

One of the major department stores (who shall remain nameless) recently hooked us with a “save 15% right now if you apply for a store credit card” offer. Normally we wouldn’t even consider it, but we were making a pretty large purchase and the savings totaled about $30, so my frugal nature won out and I convinced Matt to go for it.

There were several people waiting in line behind us, so I was feeling rushed during the application process. It was very quick, though, and only required a few taps on the buttons of the credit card swiper. Voila! We were approved in about one minute, and I walked out feeling pretty smug about my $30 in savings.

Fast forward to about a week later. We got a letter from the store thanking us for purchasing an additional plan that would help us pay off our balance should hard financial times strike. This plan would cost us $1.60 per $100 of our balance each month. That adds up to an extra 1.6%, added on to an already sky-high interest rate (Matt and I never carry a balance, so we don’t worry too much about interest rates on credit cards).

The letter stated that we could cancel this plan within the first 30 days and wouldn’t be assessed any charges. Of course I did this immediately, and filed a complaint with the company about this automatic enrollment. The representative informed me that I had agreed to this additional charge during my rushed application process, although I had no memory of doing so.

Ok, so it was my bad. I shouldn’t have applied for the card without reading all the small print, but what makes me mad is that the store knows that nobody is going to stand there, holding up the line, while they read through all the terms of use on that tiny screen. They also know that the majority of people, for various reasons, won’t get around to cancelling their membership in the plan within the first 30 days. I believe this is the store’s sneaky way of sticking it to the customer and squeezing that little bit extra out of us.

So what’s the moral of this story? Don’t apply for credit cards? No. Used wisely, credit cards have all sorts of benefits. Don’t apply for a store credit card while being rushed through a checkout line? Maybe…although most people don’t take the time to read the fine print even if they have the time. Be aware that this kind of stuff is happening, ask questions, and read your mail? Definitely!

Wednesday, May 13, 2009

E-cycling revisited

Posted by Matt

It's been nearly a year since my post about the costs of e-cycling, in which I complained about having to pay to recycle my computer monitor. For those of you in Oregon who decided to hold on to your monitors until now, I have good news!

I just read an announcement from my garbage service company that the Oregon Department of Environmental Quality implemented the Oregon E-cycles program in January with the intent of providing free recycling of computers (desktop and laptop), monitors and televisions.

Visit http:/www.oregonecycles.org to learn more about the program or to find local drop-off facilities. I was pleased to learn that my previous recycler of choice (Free Geek) is participating in the program and that all participants are required to follow environmentally sound management practices.

Now, if you've made it this far, I'll give you the full disclosure about the costs here. The recycling isn't really free, right? Someone has to pay for it, right? Electronics manufacturers who sell their products in Oregon have been funding the E-Cycles program (whether they like it or not) since 2007, which probably means that those costs were been passed on to YOU the consumer when you purchased these types of products. But considering that we're all paying for the program anyway, let's at least use it to our full advantage.

Tuesday, May 12, 2009

0% return?!?! - Update on Series I Savings Bonds

Posted by Paul

(for more detailed info on savings bonds see previous posts on savings bonds: Savings Bonds 8/27/07 and Savings Bonds Revisited 8/22/08)

Those of us who have purchased or who have been following the Series I savings bond got to see some history as the interest rate for a new Series I bond went to 0% for the first time since the I Bond was created over 10 years ago.

What happened? Well the quick summary is that the I bond return is tied to the inflation rate, and for the first time since the bond was created the inflation rate (which is published twice a year in November and May) was negative (specifically -2.78%). If you do the math, this means that the return rate of your bond is negative (even if you bought I bonds when their rate was highest back in 2000 the calculation results in a negative number). Luckily it is made clear that when the rate of the bond goes below 0 it just gets set to 0.

So what does this all mean? Well there is a whole article talking about it here:

Yikes! Series I Savings Bonds paying 0.0%

To summarize some specific points from the article:
"That means your money is still safe from inflation, but you’re getting the same return you’d get by burying it in a coffee can in the back yard."

The article managed to find a small silver lining in all this:
"If you do decide to dump your Series I bonds, you’re in luck. Normally, if you sell a bond less than five years after you bought it, you have to pay a penalty equal to three months interest. Since you’re getting no interest, you’ll owe no penalty."(Hooray?)

For me, I'm just going to hold onto my bonds and see what happens when the rates reset again in six months.

Saturday, May 9, 2009

What NOT To Skimp On

Posted By Paul

There seem to be two valid philosophies when it comes to being frugal:

"Save On Every Purchase"
The idea: when it's time to buy something, look for the cheapest option that will get the job done.

How it can go wrong: one time I wanted to buy a VCR and decided to buy the cheapest one that had the features I wanted. The result was that I got a VCR that worked so horribly that in a few months it was practically worthless. I decided to buy a VCR that was more than twice as much ($70 vs the original $30), but this one actually worked pretty well and has lasted quite a while without breaking.

"Every purchase should be viewed as the last one you'll ever buy"
The idea: if you are going to buy something, buy it with enough quality so that you will never have to replace it.

How it can go wrong: you end up buying something much nicer (and more expensive) than you need, or you end up buying something super nice that ends up becoming obsolete or useless quickly.

Being frugal is often a balancing act between these two ideas. Do you focus on purchasing quality or do you focus on saving money?

In this time where everyone is looking for ways to save money I decided to give some thought to things that you SHOULDN'T try to save money on.

Here are some of my ideas:

Things you use every day - if you're going to be using it every day, then buy some quality. If it's something that spends a lot of time in the attic or a back shelf, then skimp. For example, buy a good kitchen knife but buy a cheap fondue pot. On a personal note, my wife and I bought some cheaper kitchen knives several years ago. Now most of those knives are literally falling apart, and we're replacing them.

Things with lots of moving parts - this is my lesson from the VCR. If it has a lot of moving parts then if it's of low quality it will fall apart quickly. For me this includes things like power tools, and electric kitchen appliances.

One article I found sounded promising
Skimp Or Splurge

The article had a slideshow of 12 items they thought you should be sure to buy quality, which I thought was a pretty good list:

Men's suit
Men's Dress Shoes
Men's Overcoat
Women's Overcoat
Women's Little Black Dress
Women's Slacks
Cooking Pot
Cooking Skillet
Chef Knife

Any other suggestions out there?

Wednesday, May 6, 2009

What I Learned About Disability Insurance

Posted by Paul

One of the things that I looked into when I become a Dad was disability insurance. Of course coming into it I had no idea what the different "flavors" of DI were and how it was priced, or how much it all cost.

I feel like I learned a little as I went through the process so I thought I would take what I learned and share it.

First of all, DI is generally defined by four characteristics:

1) Elimination Period
This just means how long you have to be unable to work before they start paying. Common amounts are 30 days, 60 days, 90 days, 6 months and 1 year.

2) Payout Amount
This is how MUCH they pay you per month while you are disabled.

3) Maximum Benefit Period
This is how LONG they will pay you if you remain disabled for a long time. Common amounts are 1 yr, 2 yrs and so on (you can also get a benefit period that says they keep paying until you turn 65).

4) Whether or not your premium is locked.
Some policies lock in your premium and they can't change it as long as the policy is active, others are allowed to change it based on your career (like if you become a skydiving instructor they can change your premiums), stuff like that.

5) Your current state of health.
If you have serious health problems then the premium they offer you will almost certainly go up or the company may choose to not offer you coverage.

What I learned is that these factors can dramatically change the premium you pay.

Here are some examples:
Shorter elimination period = higher premium.
One policy I looked at had a 90 day elimination period with a premium of $58 a month but if you switch to a 60 day elimination period the premium jumps to $115.29.

Longer benefit period = higher premium.
It seemed like generally to go from a 2 year to a 5 year benefit period it means your premium would increase an additional 50%. (the same policy I looked at for $58 a month was for a 2 year benefit period, changing it to 5 years made the premium go to about $90 a month).

Higher payout amount = higher premium.
No surprise there.

The more locked in your premium = higher premium.
There was an added cost to having a premium that was locked in for as long as the policy is active, though in my experience the extra cost wasn't THAT much.

More health problems = higher premium or denial of coverage.
I don't know the specific formula for coverage based on health but I do know that if you apply for personal DI assume that they will require a check up where they check your blood pressure, weight, and take a blood and urine sample, and also inquire into your medical history.

So given this information, how much should you get?

Well the choice is really up to you. If you want you can certainly have no disability insurance, and assume that if something horrible happens to you then you will live off of social security (or just assume that you'll never be disabled). Insurance is based on the fear of what MIGHT happen so it becomes a tricky question of how much you want to pay for varying amounts of coverage.

One suggestion I do have is to look into the policies that you work offers. Sometimes they can be good and super affordable. Also if your state of health is bad to the point where you can't get personal DI then getting it through your work may be your ONLY option.

But before you automatically sign up for your work plan I would also suggest that you shop around and see your other options. For example at my work they offer DI for a price, but there was only one choice of coverage. The policy they offered had the longest benefit period (it gave you coverage up to age 65 if you become disabled) and even though the cost wasn't bad for the coverage you got it was still a pretty hefty monthly premium.
I decided to call an insurance company and see what kind of options I had (in fact I called the same company that handles the group plan for my work). I talked to an agent and got quotes on an individual policy with varying types of coverage and then I made the personal decision that I preferred a little less coverage for a lot less money.

My advice to people who are interested in DI is to first determine the cost of getting DI through work, and specifically noting the characteristics of the policy (or policies) that your work offers and the cost. Then call up an agent and find out the costs of policies for a greater spectrum of coverage and then make your decision.

Sunday, May 3, 2009

Link: Unemployment Data Across the Country

Posted By Paul

So this isn't EXACTLY information about being Frugal, but I did think the info was really interesting.

There has been a lot of discussion in the news about the unemployment rate. This link takes you to a tool Google set up to let you view and compare unemployment rate data. You can view the rate for the country as a whole or view it at a state or even county level.

Google unemployment data