December 7, 2007
Consumer Reports magazine recently had an article on 10 ways to reduce your energy costs around your home and it reminded me of my recent upgrade to my central heat and air conditioning system. Since I’m kind of a cheapskate, and I like to do home improvement projects, I figured I’d combine the two facets of my personality and try to get a deal on a new Heating/AC system.
The old system was installed in 1983 and was a 8 SEER (Seasonal Energy Efficiency Rating) which, by today’s standards is pretty inefficient. I would have started shopping sooner, but rumors that new AC systems run around $5000 to $7000 scared me into sticking with my current one. My electric bill was high and the unit had to be repaired 3 times in the previous six months, so I figured it was the right time to start shopping around.
I’m a member of Angie’s List, which is a highly regard compilation of competent contractors and service providers, and got some estimates for new systems, both inside (air handler) and outside (condenser/compressor) units. Sure enough, they all ranged from $4800-$7000. That was a no-go for me.
On a lark I looked on eBay to see if they sold such things there. Low and behold. there were tons of sellers for heat pumps and AC units, especiallyfor the southern US. To my happiness, most combo units (inside and outside) for the size I need were around $2300.
A listing just like this caught my eye:
And to my surprise, they were local and I could save another $150 in shipping by picking it up with my trusty trailer.
I went ahead and used Buy It Now and a few days later drove over to pick it up. This was a complete hassle and I’d never do it again. They were extremely unorganized and didn’t have it ready even though I’d called them a day ahead of time to schedule the pickup.
My guess it that their operation is streamlined for shipping, so when a guy like me comes along with his trailer and wants to pick his order up, it completely throws them for a loop. I ended up spending almost 3 hours there waiting for them to get their act together and get the stuff on my trailer. Avoiding that mess would certainly be worth $150.
They also recommended an installer, who came 2 days later and did a great job removing my old systems and installing the new one.
The total price was as follows:
Both Units with tax:…………………… $2130
Misc piping and electrical parts:…. $ 180
Installation Labor Cost: …………….. $1000
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Total:…………………………………………. $3310
By doing a little research and investing a little time, I was able to save around $2000!
Next money saving home improvement project….a tankless water heater.
Posted in Frugal Friday, Home Improvement, Internet 
No Comments »
December 6, 2007
Ok, I know all us worker bees in the corporate world have run into this before, or perhaps regularly, like me. Your friends at the office seem to think that they have a better chance at winning the Lottery, or the Florida Lotto, in my case, if we pool our resources and all chip in to buy a bunch of tickets.
Here’s some quick statistics from plainmath.net and other sources on winning the lottery, as well as some interesting facts:
- The chance of winning the jackpot is 1 in 22,957,480 or the percentage equivalent of .000004%
- The chance of being hit by lightning is 1 in 2,650,000.
- The chance of dying from a flesh eating bacteria is 1 in 1,000,000.
- The chance of dying from a snake bite or bee sting is 1 in 100,000.
- The chance of being hit by an asteroid in 2029 is 1 in 40.
Ok, you get the point.
But, what do I do? Occasionally, I get the courage to say no, but most of the time, I chip in. Why? Despite the stunning logic proving that I’m wasting my money, they are my friends, and the brief sense of camaraderie is worth $5/month to me.
So if I didn’t play the lotto in the office pool and saved my $5 a month, where would it get me? The following shows how much I’d make if I put the $60 in an investment earning an 8% return:
I know it’s not that practical, but getting almost $3000 investing $5/month isn’t too shabby. The total out of pocket for the 20 years is $1200.
I think i’d pay $3K for 20 years worth of some goodwill in the office, regardless of the lotto math. Would you?
Posted in Life No Comments »
December 4, 2007
Since starting this blog, I’ve been thinking alot about goal-setting and the importance of focusing on smaller, more attainable goals. I’ve also been greatly inspired by J.D.’s articles at Get Rich Slowly. This one on goals really inspired me. No Credit Needed also has a great article on his 2008 goals, which also inspired me to get very specific with mine. I think it’s very important to have the “$1 million by age 55″ - type goals, but if they’re not broken down into much smaller chunks, then I think people (ok, me) are much less likely to achieve them.
So, I’ll start my long term goal by setting yearly goals, and maybe I’ll break them down even further, I’m not sure yet. So for 2008, here are my financial goals:
- Pay off all my consumer debt. This includes my credit cards, medical bills and my 1 car loan, for a total of $23,587. I’ve outlined all this debt in my November Financial Status Update.
- Get $1000 into an emergency fund and leave it there. I’ve built up an emergency fund before, but I couldn’t resist dipping into it to pay off a bill. I get anxious like that - I can’t see the sense in having money laying around when I can use it to pay off a debt that is costing me interest every month. I will take this issue up in another post, as it’s one beef I have with Dave Ramsey’s baby steps.
- Fully fund my Roth IRA. I know the ideal is to have 3-6 months worth of living expenses in an emergency fund, before contributing for retirement, but I feel contributing toward retirement is more important right now. I plan on the saving the 3-6 months after I fully fund both our Roth’s. This may be a gamble on my part, but I don’t think I can afford to waste any more time to start really putting money toward retirement.
I have up until April 15th to contribute to this year’s Roth limit, ($4000) so I think I’ll do that first and contribute all I can. After April 15th, I’ll start adding to my next year’s limit, ($5000 for 2008). I really would like to open a Roth IRA for my wife, but that’s probably for next year, or if I get lucky and fully fund mine before the end of this year.
That’s it. Ambitious enough I think, and yet I’m trying to make them as uncomplicated as possible. The complicated part will come, I’m sure, in coming up with the money and avoiding impulse buys, and unexpected expenses.
So my total debt payment goal this year is $23,587, which breaks down to $1965 per month in payments. I’ll get an early boost from a tax return which should be about $3000, so taking that off my total, I’ll be looking at $1715 per month toward my debt repayment goal.
My emergency fund goal should be relatively easy. I’ve already set up an automatic transfer to my Bank of America Savings account at $40/week, (I get paid weekly and this amount seems reasonable to me right now) So I should have that in place by May.
To fully fund my Roth IRA, I’ll need about $416/month ($5000/12). Starting in January, I’ll start an automatic transfer to my Fidelity account at $105 per week.
So my total monthly outlay to meet my goals for 2008 will be around $2295 per month. Seems very substantial, but the majority of this money is for consumer debt! If I didn’t have this big chunk of debt, and only had my Roth IRA and emergency fund goals, I’d only be putting out $500 per month to meet them. And I could easily be putting lots of extra money toward my wife’s Roth, or paying off my mortgage.
So there’s my plan and I’m ready to take it on. I’ll be posting periodic updates to track my progress.
Posted in Goals, Investing 1 Comment »
December 2, 2007
As I’ve described before, I’m not a huge fan of credit cards and I’ve gotten into pretty big trouble when I used it like monopoly money in my stupid days. However, just this week, I’ve run into a situation where I wish I (actually my wife in this case) had used a credit card.
My wife and I are doing most of our Christmas shopping online this year, so in keeping with our general policy of paying for things in cash or with a debit card, she bought something for me at Best Buy’s website with our debit card. I still don’t know what it is, and I probably never will.
After buying it from the website and getting a confirmation email, my wife elected to pick it up at the local store the following Monday, which was an option at checkout. It was all good until…
Day1, Day2. It took Best Buy 2 days to send an email informing us that the item was not available to be picked up, and gave us the option to cancel the order.
This is the part that bugs me about debit cards –> they have a pending charge on my account since the moment my wife hit submit on the Best Buy’s website. This, of course makes the money unavailable.
Day 3. Of course, by the time we called to see if we couple pick it up at another store in the area, their customer service department was closed for the day.
I’m still ok with this being the 3rd day with the pending charge, because we had budgeted for Christmas presents and were prepared to commit to the purchase and be without the money for good.
Day 4. My wife finally connects with BB customer service and figures out that she can’t get the item in any local store and the shipping time would be too long, so she cancels the order. BB informs her that they will refund the money to our debit card.
However, BB informed her that it may take up to 8 days to clear our account.
Day 5. Here I sit, still with a pending charge on my account, tying up my hard earned cash, and now I won’t have access to it for up to 8 more days?
It’s a good thing it was only around $85. What if my wife had gotten me a nice $1200 laptop? or a $2000 LCD tv? Best Buy would have managed to withhold that money for a total of 12 days, without me being able to do anything about it.
While the Best Buy’s refund time seems a little excessive, the bigger problem is that it ties up my real money. If she had used a credit card, it’d be no big deal, because I can live with a portion of my credit line being withheld for up to 2 weeks.
I’m now rethinking my general debit-card policy for everyday and online use. I think from now on, it will be credit cards for online purchases and “major” (maybe over $100?) purchases at local stores, or any situation where I don’t want to tie up my “real money” for something that my not work out.
UPDATE: Day6. The refund from Best Buy finally cleared my checking account.
Posted in Credit Cards, Debit Cards No Comments »
November 30, 2007
I’ve had my Chase credit card for about 9 years, and they’ve always been fair to deal with, even helpful sometimes. So what they did to me recently took me completely by surprise. Feeling like I was singled out, I was glad to read recently over at Consumerist about other people having issues with Chase. as well as Gather Little by Little’s issues with Chase
I’m not a big fan of credit cards and try to use them as little as possible, but occasionally a free 30 day loan comes in handy. My history with Chase goes back almost 10 years, and over that time, I’ve sometimes carried a balance and had to pay interest, but most of the time I was able to pay it off in full every month, and I’ve never been late on a single payment with them.
With my recent home improvement project, I was forced to use a credit card. The subcontractor I hired to do the framing on my new addition needed me to put a credit card on file with the lumber company, so he could go pick up materials when he needed them. I obliged, because he came highly recommended, and he was diligent in showing me the receipts and the material every time he had to make a purchase.
Soon enough the balance on my Chase card was about $6000, all lumber and material costs. I didn’t pay it off with my home equity line, because I needed to keep that free for remaining project expenses. Sure enough, I needed use my HELOC money for a new concrete driveway and electrician bills, so my Chase card balance remained, and I started to go about diligently paying it off.
I opened up my Chase statement recently, and noticed that my minimum payment was twice what it normally is. Looking over the statement, I quickly found out why: my interest rate had skyrocketed to 21%. I quickly got them on the phone for an explanation.
“Sir, we sent you a notification letter last month warning you of this change in terms.” Okay, I’ll admit, they probably did. I get junk mail from Chase all the time about account protection, travel rewards and other such nonsense that I promptly chuck. I most certainly gave this nondescript letter the same kind of treatment.
“You have two choices, you can close the account and we’ll set your rate back to 9%, or you can keep it open and pay the 21%.” It didn’t take me long to realize that keeping it open would cost me approximately$100 more per month, so I closed it.
I still don’t know why they pulled this on me.
- Did they check my credit at notice that I had almost maxed out my home equity line of credit? and thus deemed me a credit risk?
- I recently changed employers, could they have found out included that as a factor?
Maybe I should have called and said I never received notification, as the Consumerist counseled this reader. Maybe I can still do it, I don’t know.
Either way, after I pay the card off (it’s next on my snowball list) I’ll never do business with Chase again.
Posted in Credit Cards 1 Comment »
