Things have a way of happening to my cell phone. It gets dropped, it gets hurled, it gets sat upon, it gets lost between the car seats, it breaks. Most recently, it was submerged in water. So it’s off to the Verizon store for (yet another) new one.

The first time my phone met with unfortunate events, an opportunitistic VZY sales weasel sold me on “phone insurance”. For $3.99 a month you could get a new phone for a $50 deductable if anything happened to your phone (even if it was your fault, as most of mine admitedly were). Then, about a year and a few months into another phone, a part on it wore out so that it could no longer be charged. I thought, well, let’s make this thing work for me and use the phone insurance…and the rip-off is revealed.

Paying the $50 deductable entitles you to a new phone of the exact make and model. As you know, cell phone models have a life of about 15 days before carriers are urging you to trade-up to the latest and greatest model. So the phone will invariably be out of stock and require a few weeks to order. My cell phone is my only phone. Can I be without it for two weeks? Not likely. But wait, it gets worse…in this case, the phone wasn’t even made anymore, so Verizon said, in some polite round-about way, you’re S-O-L. They offered to get me a new phone for free or cheap if I renewed my contract. Thanks, guys, you do that anyway, everday.
So if you’re even thinking about getting some kind of “insurance” for your cell phone, think again. As I have learned you can almost always get a new phone for next-to-nothing if you suck it up and renew your contract. Not fun, but in the end a better deal. As crappy as they are to deal with, in the Boston area Verizon seems to have the best repuation for coverage, and I have too many friends with Verizon not to take advantage of the free in-network calls etc. etc. I guess I just have to bend over and take it, once again, as I go to get yet another new phone.

Jun 20th, 2006 by David Weliver in Personal Finance
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A 401(k) vesting schedule is a common way for employers to provide an incentive for employees to stay on-board for more than a year or two. For the uninitiated, 401(k) vesting is when an employer makes a contribution on your behalf into a tax-deferred retirement account on a regular basis, but does not give you complete ownership of the money until you have meet certain requirements. While the money subject to 401(k) vesting earns interest the minute it is deposited, you may not be able to take all of that money with you if you quit before your employer’s allotted period of time. Read more…

Jun 2nd, 2006 by David Weliver in Investing, Personal Finance
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In the movie Boiler Room, Ben Affleck’s character spouts out that “Whoever said money doesn’t buy happiness doesn’t [expletive] have any.” Maybe, maybe not. But more than we often admit, money and psychology are inseparably fused.

For most, the act of spending money brings temporary gratification. The key to responsible spending is to avoid becoming “addicted” to this feeling. I’m not suggested everybody with a bit of credit card debt is a compulsive shopper, but I think we have all caved in a little to this universal human weakness.

In theory, the act of buying something should be a balance between the pleasure we get from owning something new and the “pain” we feel from parting with our money. But in the electronic age, the feeling of parting with money is no longer immediate. When you pay with a credit, or even a debit, card, the realization of spent money doesn’t come until the end of the month.

That’s why it’s a good idea to record every transaction, even when paying with plastic. Keeping a running total of your purchases will remind you of how much you’re spending, and create mental obstacles for your impulses that may want to spend more than you should. Why?

Throughout college my motto was “financial ignorance is bliss.” I charged and charged and just ignored my credit card balances each month – as long as I had enough to make the minimum, I didn’t care. But as soon as I began to look at the mounting debts on those statements, it became harder to spend. When I was thinking about my debt, I could be cheap. The only problem was I could easily put it all out of my mind days later.

As I now work to permanently change my habits, I still find it hard to read every statement carefully – after all, it’s not a pretty picture. But the more keenly aware I am of my monthly budget and my long-term goals – every day – the easier it gets to spend less.

On the flip side, I have known people so frugal that every penny they spent hurt. I am pretty sure I will never get to that point, nor do I want to get there. After all, if you can not enjoy something, why buy it at all?

Jun 2nd, 2006 by David Weliver in Budgeting, Frugal Living, Personal Finance
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Looking for ideas to get the most out of your weekend without spending a dime? Here are some ideas. A bit cheesy, but nevertheless a reminder that the best things in life really are free.

1. Drink icy cold water on a hot day
2. Watch the sunrise
3. Pick out cloud shapes
4. Call a loved one
5. Catch up with your best friend
6. Read a good (library) book
7. Play cards (not poker!)
8. Visit an animal shelter
9. Take a nap in the park
10. Park at the end of a runway and watch the planes take off
11. Volunteer
12. Sing along to the radio
13. Walk around a lake
14. Sleep under the stars
15. Sketch something, or just doodle
16. Write a letter
17. People watch
18. Play catch
19. Climb a mountain
20. Write a budget!

Jun 2nd, 2006 by David Weliver in Frugal Living
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As I mentioned in my living on $10 a day post, how much you spend on food can vary dramatically. Here are some of the ways I save on food without turning to ramen, beans and water, etc.

Use Your Freezer – Just because you can’t finish an entire loaf of bread by yourself before it starts sprouting green fuzz doesn’t mean you have to waste bread every week. Freeze half of each loaf you buy; a couple of slices defrost quickly in the microwave. Try toasting them if they get soggy.

Cook for the Week – Throwing together one course salads or casseroles can provide several dinners and lunches for one person. Investing a few dollars in some plastic containers will save you hundreds over time if you eat all your leftovers before buying more food.

Embrace Cheap Staples – Eggs and beans are good sources of protein that cost substantially less than meat. Build more meals around these staples.

Buy Produce Locally – It is tempting to sacrifice the quality of your diet to save a few bucks. True, processed foods tend to be cheaper than whole grains and vegetables, but the health consequences are scary. Whenever possible, shop for produce at local farmer’s markets or stands. Not only is the produce fresher, but you will save because you are eliminating the grocery store’s mark-ups.

Eat Ethnically – Many recipes from other parts of the world are tasty and filling yet inexpensive. Indian curry dishes, Asian stir fries, and Mexican burritos are great examples of satisfying dishes that won’t break the bank.

Do It Yourself – As a rule, the more you cook yourself, the more you can save. Pancakes, breads, and sauces are all examples of items to whip up and freeze for later consumption.

To take the most advantage of these tips, make sure “Don’t dine out, stupid!” is already your mantra and that you’re taking full advantage of coupons and other savings programs at your grocery store!

May 31st, 2006 by David Weliver in Frugal Living
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Think you could live with just ten dollars of disposable income per day? It sounds scary if you’re used to enjoying life, but it is not only possible, the ten dollar a day rule is practical, too.

You have heard the argument before, but it’s the little things that we purchase every day that add up and have potentially crippling long-term effects on our finances. That means the coffee, soda, candy, and cigarettes need to go. Some estimates argue that by giving up your daily coffee (or simply by making it at home) and investing $2 – $3 a day you can retire with an additional $25,000. Not too bad! But your caffiene fix is only the first place you can cut back.

Watch What You Eat

For most people eating out is the single biggest drain on disposabe income. And it’s not just fine dining that drains your wallet; daily pastries and sandwhiches can be a culprit. Aim for packing your breakfast and lunch and cooking at home as much as possible. When you do splurge on a nice meal, skip the appetizers and desert, limit your drinks, and get a doggie bag for the leftovers. Make both cooking and frugal dining a habit and you could save a couple thousand each year.

Spend Nothing Days

We take it for granted that because we have money in our pockets and because there are so many things for sale that spending money should just be a part of our daily lives, no questions asked. But little could be farther from the truth. Aside from weekly or monthly errands to get groceries, fill your gas tank, or replenish your medicine cabinet, why do you need to spend money? With a little planning it can be easy to designate one or more days of the week as “no spend days” and get in the habit of not parting with a single cent. If you set a daily spending limit (like ten dollars a day), no spend days are a necessity if you want to make larger purchases on the weekend, say.

Cool Off

Hanging onto your money is not easy. In fact, there are millions of people spending millions of dollars every day to persuade you to part with your money. Frightening, isn’t it? So the next time you are tempted to buy something that you know you don’t “need”, force yourself to wait three days and then come back. While you are waiting to buy, ask yourself three questions: 1. Can I afford this purchase now, without sacrificing more important needs and without paying interest? 2. What long term value will this item deliver? 3. Have I done my homework (ie, am I getting the best product of its kind at the best available value?

May 30th, 2006 by David Weliver in Budgeting, Frugal Living
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Nobody can get out of debt without the right debt management plan. Pick a plan that is too aggressive and you may not be able to keep up; go with a “too affordable” plan and you won’t get out of debt as fast as you should. One the flip side, if you are too aggressive with your debt management plan and put too much money to debt each month you may not have enough left over for necessities or emergency expenses. That can lead to new charges on your credit cards, negating your hard work. Read more…

May 30th, 2006 by David Weliver in Budgeting, Debt Help, Personal Finance
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The surest way to sound personal finance in your twenties is to learn how to manage your money before you need to. And if you’re a parent, you can help your children become wealthy even if you’re not.

Although this site is mostly dedicated to readers in their twenties looking to better manage their finances, I believe it is never to early to begin a child’s financial education, and it’s a topic I want to touch on as often as possible. The following are some points that can go a long way in helping your kids get off on the right foot financially.

Allowances Aren’t Enough – Whatever age you decide to start giving your child an allowance, be sure that it comes with your two cents on smart spending. If junior is blowing the allowance on candy each week, insist that a portion of the money goes directly into savings. Kids aren’t inclined to think about the long-term, so don’t feel bad about helping yours along!

Lead By Example – You won’t get very far saying “spend as I say, not as I do.” If you’re preaching frugality and savings but racking up new purchases on a credit card, chances are your advice is going to be wasted. Actions speak louder. Kids should give you yet another reason to be financially responsible. If you are, let your child see you in the act of saving money, paying bills on time, and foregoing purchases that you may want but not need.

Watch Where the First Paycheck Goes – When your child, perhaps as a teenager, lands his or her first steady job, be involved in how they use their first paycheck. Of course some of it will go for movies and eating out with friends, but what about the rest? Are they saving for a car or going to the mall on a shopping spree? Sadly I had already spent my first paycheck, by checking off things I wanted in catalogs, long before I had earned it – a telling sign of my credit card woes to come. On the flip side, one of my best friends had over $1,500 saved in an IRA before he started college.

Teach Credit Slowly – Credit cards are a necessary evil. Giving a teenager a credit card is risky, but it is also the best way to begin developing a credit history early on. Two alternatives to giving your child his or her own credit card? Create a duplicate card tied to your account. Allow your child to make purchases on it as long as the balance is paid to you in full each month. If your child overcharges, take the card away until the balance is paid off. You could also use a pre-paid card like Visa Buxx. When it is time for your child’s first credit card, explain the dangers of consumer debt carefully, and check in with them to make sure they aren’t racking up a balance.

Helping your child become financially responsible can be a tricky balance between parental guidance and independence and privacy. At least until your child is 18, it is fair to ask to be involved in all of your child’s financial decisions. Doing so may be one of the most valuable things you can do to secure your child’s future.

May 26th, 2006 by David Weliver in Credit, Personal Finance
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The second step in my Debt Free in Seven Steps system involves composing a clear picture of the debts you want to get rid of, any assets you are willing to liquidate to make debt payments, and your monthly cash flow. You will want to have copies of your most recent credit card and loan statements, bank or investment statements, and a pay stub. A calculator and pen and paper will also be helpful. Ready? Read more…

May 25th, 2006 by David Weliver in Debt Help, Personal Finance
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Faced with debt it is tempting to spend sleepless nights aimlessly crunching numbers, as if the right few calculator taps will make that red ink disappear. Sadly we both know that won’t happen—wading through your bills unnecessarily will only exasperate you, and tomorrow you could end up charging three lattes just to perk up for work. But don’t take debt off your mind just yet; ignoring those bills is another fast way further into the hole. Read more…

May 24th, 2006 by David Weliver in Debt Help
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