A Little Splurge, but Great Customer Service

We decided to treat ourselves to Netflix, just the basic plan for $9.99. I'm justifying it by saying that the money is such a small amount that it won't be missed and I feel that we deserve some kind of treat due to our constant scrimping in other areas. Going to one movie per month would cost at least $20, with Netflix I figure we can see about 8 movies/month which comes out to $0.62/movie per person. I'm feeling guilty about getting the Netflix as you can see so I'm using this post as a confessional.

I also wanted to mention the excellent customer service I received from Netflix (inspired by Cathy at Chief Family Officer mentioning her experiences with customer service). When you sign up for Netflix you get a 14 day free trial. Well our 2nd movie received stopped playing halfway through. After I notified Netflix, they shipped out a replacement dvd before receiving the damaged one back which I thought that was pretty cool. I also emailed to ask if it was possible to have my free trial extended because of the damaged dvd, I was hoping for an extra day or two. They not only said okay, they gave me 10 extra days, so my 14-day free trial is now 24! Ask and ye shall receive, woo hoo!

Poverty Diet

The Poverty Diet is a list of basic food items that can be purchased cheaply so that you can redirect your funds to rent, utilities, etc.. It was originally created in 1998 and last updated in 2004 so the pricing may not be current. The chart shows what to buy, how much it should cost, why to buy it and how much to buy. This was a page I found awhile ago, I've forgotten where so if I found it on anyone's blog, my apologies for not crediting you.

Paying off Debt Can Hurt You?

I found an interesting article on MSN Money today explaining how paying off your debt can actually hurt you. I'm not going to advocate never paying off your debt, but it was an interesting read. I've copied the bullet points, to read the entire article go here.

• If a creditor has already charged off an account and sent it to collections, paying may not help your credit score and might hurt it.
  
• Arranging a payment plan or even inquiring about an old debt can restart the statute of limitations in some states, allowing creditors to sue you.
  
• Simply contacting a creditor about a past-due account can revive its interest in trying to collect, leading to harassment and hardball tactics.
  
• Unethical collection agencies may promise to upgrade how your debt appears on your credit report in exchange for payment -- then not follow through or make matters worse by making the debt seem more recent than it is.

Buy Nothing Day

As Black Friday approaches, I read today that the trend this year is for the major retailers to open at 5am the day after Thanksgiving. One store is opening at 1am and yet another is going to be open from 7-9pm ON THANKSGIVING ITSELF!!! I'm not going to name the retailers, they don't deserve the free publicity, but this is even affecting my family. My brother-in-law works at a Mall and he has to be at work super early on Friday so we are doing Thanksgiving lunch instead of dinner. I say just say no to Black Friday! Check out this site for Buy Nothing Day instead. And here is Wikipedia's entry on the traditional Thanksgiving celebration.

Oops

I was crunching numbers and we are definitely going over our food budget this month what with buying some extras for Thanksgiving and eating out 3 times so far. We need to discipline ourselves to not eat out, we've only been in this budget period 12 days, 3 times is toooo much eating out!!! On the bright side, I started taking the bus to work in the mornings which has really helped save on gas. We won't need to buy gas until this weekend which will be halfway through this months budget so I'm cautiously optimistic that I can cancel out any food overage with a surplus in the gas funds.

A Couple of Items

I received my Social Security statement today, full of doom and gloom it is: "In just 12 years, we will begin paying more in benefits than we collect in taxes. Without changes, by 2041 the Social Security Trust Fund will be exhausted....At that point , there will be enough money to pay only about 74 cents for each dollar of scheduled benefits."

And all of this was on the front page, once I read further I discovered that at my current earnings rate, at age 62 my monthly payment would be $1005. They arrive at this number by assuming I'll continue to work and make about the same as I did in 2003 or 2004. First off that dollar amount is depressing, it barely covers my rent. Secondly, it seems kind of rude to assume my earnings rate will stay the same. But the notice does go on to list several reasons why they can't provide my actual benefit amount. My question is then why bother estimating it at all? The last page is full of cheerful information on death, disability, survivors, and the disadvantages of early retirement. Can I get off this mailing list????

My second item is about taxes, which I know are necessary because they support infrastructure, government etc. I was on Bankrate's website and looked up tax rates for each state, I was surprised at how many different sales tax rates are out there. Ranging from 0 to 7%, there are 16 different state sales tax rates. The average rate for all 50 states plus DC was 4.83%, my state's actual rate was one of the higher ones at 6.5%, then when you add on your city taxes, I pay 8.8% sales tax in Seattle. UNLESS!!! If I am eating out, the tax rate jumps to 9.2%. This extra tax is to pay for our baseball stadium. Hotels, motels and restaurants get to charge a higher tax rate to help pay for the stadium. Because theoretically if you are staying at a hotel and eating out, then you must be in town for the sole reason of seeing a baseball game.

The moral of this post is, start saving for your retirement at birth if possible!!! And we should all move to South Dakota or Wyoming where the sales tax is only 4% and there is no state income tax.

Carnivals Are Up

Check out the Carnival of Personal Finance 23, this week's is hosted by Dawn of Frugal for Life. The Carnival of Debt Reduction is hosted by Jane Dough at Boston Gal's Open Wallet. The Carnival of Personal Finance has a ton of articles I haven't gotten through yet. At the Carnival of Debt Reduction, I enjoyed Personal Finance Advice's article on saving your daily coffee money instead of drinking it. Articles like these make me feel guilty everytime I have a latte...

The Budget

My budget period runs from the 10th of the month to the 9th because I get paid on the 10th and the 25th. The 10th paycheck is for most of the bills, the food and the gas. The 25th is for rent and car insurance. Of course this is all theoretical. I am currently using the Primer budget available from You Need a Budget (YNAB), once I have reached my savings goal, ($2500) I will definitely be graduating to the full-blown version of YNAB.

This month's budget is in the sidebar, what I like about YNAB is that it divides your savings goal over a time period that I can specify, right now its 12 months so my goal is $175/month. Then YNAB takes that $175 out and I have to allot my expenses from whats left. I like this approach since I don't miss what I'm not budgeting with. YNAB also keeps a running total of how much is left in your budget which I find helpful (of course it means I have to remember to input my daily expenses). One thing that I do differently than is suggested by YNAB, is the "available" box. YNAB suggest that you budget every cent so that there is nothing available. I suppose I could put those funds in the "personal" box, but I like to leave it as available so that it is apportioned separately and to help cover in case I go over in any other categories. My goal is to have funds left in the "available" box at the end of every budget month that I can apply as an extra debt payment every month.

So thats our budget, I'll try to post it each month and hopefully that little box that says "left to save" will get smaller and smaller every month.

How I reduced my grocery bill and my cholesterol

Our monthly food budget for 2 people and a cat is $200, however when we were shopping at Safeway we were constantly going over budget, we'd go to the store at least once a week and averaged between 80 & 100 a trip. I tried the coupon route, but coupons always seem to be for major brands and it was still cheaper to buy the store brand so I gave up couponing. Then I tried to buy only items that were on sale or had a really good club card deal, it didn't help. I don't do warehouse stores because I don't want to pay to join and my house doesn't have the storage for bulk items. So I switched grocery stores, since October I shop at Grocery Outlet. We are now spending between 60 & 90 per trip, but we are only going to the store every 2 weeks instead of every week because we are able to purchase more items because of the lower costs. Here are some examples of cost savings on items I buy every grocery trip:

Roma tomatos: $0.40/ea vs. Grocery Outlet $1.29/package of 8
Cherry tomatos: $3.99/16 oz, vs. Grocery Outlet $1.29 16oz and these were organic!
Green peppers: $1.29 vs. $0.50/ea
Red peppers: $1.99 vs. $0.50/ea
Eggs, medium: $1.55/dozen vs $1.59 18 count
Romaine lettuce: $1.29/each vs $2.99/bag of 3

This is the big one, the Grocery Outlet does not have a fresh meat department because they deal on closeouts and overstocks, if you want meat you have to buy the frozen kind. A 2.5 lb bag of frozen boneless, skinless chicken breasts: $11.99/bag at Safeway, Grocery Outlet is normally $6.99 but this week there was a special of $3.99/bag. I priced the fresh chicken at Safeway and the 2.5lb bag is $12.35.

I figure with the cost savings and shopping less often, I'm saving 30-50% on my monthly food bill. This has allowed me extra money for gas and the occasional trip to Wendys and will hopefully keep us from going over our food budget.

But what about the cholesterol you say? Well since I can only buy frozen meat at Grocery Outlet, I have so far only purchased fish and chicken. The frozen meat products are typically steaks and I am a little snobby about steaks, if I eat one I want a fresh one, so I haven't purchased or eaten any red meat since October ( I get chicken sandwiches at Wendys). Because of this, I am assuming that my cholesterol has gone down due to the lack of red meat.

I may be wishful thinking on the cholesterol, but the savings are an actual fact. Grocery Outlets may not be to everyone's taste, a lot of the brands I had never heard of but I'm having a great time being adventerous and saving money. If you have one in your neighborhood, I heartily recommend checking it out!

The Price of Keeping a Cat

I have a cat, Ferber, who is about 11 or 12 years old. On August 2nd this year, he decided to completely change my life by getting diagnosed with feline diabetes. For the rest of his life he has to have insulin shots twice daily and visits to the vet at least every 6 months for blood tests. After I got over the initial emotional shock, I was hit with the financial shock. Not having anticipated a sick cat, he had no health insurance (you can get it from Petco) and I had no savings and had to charge all of the vet bills. $933.93, this did not help my snowball. But I've now figured out a rough estimate of his yearly expenses and when I will need to pay them so that I am able to budget it in:

Special cat food $36/bag, lasts 3 months
Syringes $24.99 plus tax for 100, lasts 50 days
Insulin $65/bottle, lasts 6 months.

I don't know what the bi-annual check-ups will cost, but I've designated one of my savings accounts a Ferber savings account for unbudgeted expenses so that I won't have to use the credit card.

The point of this post is that when you are trying to build up an emergency fund, don't forget to include unexpected pet costs and if you can, get pet insurance before they become sick.

Helpful links:
Petco
Feline Diabetes website

My First Post

I've been reading other blogs for awhile now, and I've been inspired to start my own. I'm really getting into embracing the frugal lifestyle and want to take it as far as I can. I also want to track my debt reduction and I figured doing it publicly would be a motivation to get it done faster. My goal is to be entirely debt free in 30 months or less via the snowball method which I started last month:

My car loan I am not snowballing because it is a low interest rate, is a fixed payment amount, and will be paid off in November 2007, $5588.77 at 5.5%. Once it's paid off I'll either add that amount to the snowball, my ira or my savings but I've got 2 years to figure that one out.

As of 11/14/05
Capital One, 8.9% interest $2996.17
WSECU, 9.9% interest $2996.31
Bank of America, 6.9% interest $6244.20

Total is $12,236.68 , I am currently paying $459/month towards the snowball, I'll share my budget in a later post.

Wish me luck!