Monthly Archives: February 2010

You Can’t Always Get What You Want

Written by in Negotiating
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In Ramit Sethi’s book, “I Will Teach You To Be Rich,” he compares frugal people to cheap people. He has a post on his site showing some of the differences. Some of the comparisons include:

Cheap people try to get the lowest price on everything.

Frugal people try to get the lowest price on most things, but spend a lot on items they really care about.

The one that applies here is:

Cheap people are unreasonable and cannot understand why they can’t get something for free. Sometimes this is an act, but sometimes it’s not.

Frugal people will try as hard as cheap people to get a deal, but they understand that it’s a dance and, in the end, they don’t intrinsically deserve a special deal.

About 3 months ago I purchased a pair of pants from Gap. They looked good in the store, but after wearing them a few times, they just weren’t for me. I knew that it was too late to return them, so I went into the store to ask what they could do to help me. I explained my situation, but unfortunately the sales clerk said that they don’t accept returns past 30 days. I asked for store credit. No. I asked to just choose a different size of the same style. Nope.

So, I asked for the manager. I’ve been getting more and more experience negotiating, and at this point, I have a pretty good idea of what it takes to get what you want. Unfortunately, the manager wasn’t willing to help me, either. I didn’t yell at him, I didn’t argue for an hour, and I’m certainly not bashing the store now. They have policies and I’m no exception. So now I’m left with a pair of pants that don’t fit perfectly.

The point is that just because we don’t like the way something is, doesn’t mean we have a right to change it. Sure, it would have been nice to get a new pair of pants, but I completely understand why I was denied. Had I come in a week or two earlier, things might have been different.

When negotiating, take a step back and think about what you’re negotiating for and whether you have a better argument that the other guy. “Because I don’t like paying full price” works sometimes, but other times it’s best to move on and learn from your experience. The lesson I learned is to read the return policy carefully.

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10 Actions You Can Take To Avoid Credit Card Fraud

Written by in Credit
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Credit card fraud can easily be avoided with a bit of common sense and by being knowledgeable about the potential dangers in general. Unfortunately statistics have shown and continue to show us that fraud is on the up.

Consumers have to face the realities of becoming a victim of fraud because we can’t live without the plastic fantastic anymore. Every time we pull our credit card from the wallet we expose ourselves to potential attacks. The good news is that not all is bad. You can protect yourself with the following steps.

Being a victim of credit card fraud is not fun. Short of having a nervous breakdown because of the fear of losing all of your hard-earned money you need to keep a cool head to be able to stop the perpetrators sooner than later.

Get advice about credit repair to make your future better. The following 10 step action plan will allow you to protect yourself against the commonly seen fraud attacks.

1. Protect your personal details

Your personal details are like a fingerprint. Keep them save at all times. Avoid sharing passwords, PINs  or birthdays with other people. One common problem are social networking website where people freely share their birthdays with strangers.

You should also avoid using birthday dates as your PIN access details because those are the first to be guessed by thieves.

2. Take advantage of protection schemes

Verified by Visa and MasterCard SecureCode are schemes offered to consumers by these card merchants. Both schemes are free to use and can be joined once you get a Visa or MasterCard credit card.

3. Shred all your old statements

Never ever throw your old payment information into the rubbish bin without having shredded the info first. Anything personal containing dates, financial information, your address, your name, etc should be disposed of securely by shredding first.

Financial thieves lurk around household bins and are not shy of raiding your rubbish bin in search of private data that can be used to steal your identity or your money. Oh, and if you’re buying your first shredder – consider purchasing one with your credit card if you have a card that offers extended warranties or purchase protection!

4. Turn your PC or Mac into a fort

Always keep your anti virus software up-to-date. Consider using a firewall at all times and never browse the Internet unless you have these two lines of defense in place.

You also need malware software to help keep you safe from any attack while surfing the Internet.

5. Become wary of telemarketing scams

Don’t be tempted to hand out any information to people over the phone unless you call them first. Your bank will not ask for passwords or login details by phone out of the blue.

6. Email security against phishing

One of the most popular forms of fraud is to steal your personal details via phishing. By using a phishing filter you can counteract any threat. In addition to this, it helps to be alert whenever you receive email. Never click on a link within an email program – always copy/paste and open a new browser window.

If the email is from your bank or PayPal asking you to verify your information before they shut down your account, don’t bite. These are common traps to make people click on the links after which their information is re-routed to another website (a phishing website) where your information (password, logins) will be stolen.

7. Shops can cheat too!

If you use your credit card in shops make sure you cover the keypad with your hand while you type your PIN. If you are in a foreign country identify that the actual terminal is issued by an official merchant by checking the terminal issuer number at the back.

There have been several recent cases of fake terminals used overseas to empty travellers bank accounts. By the time they got home, the money was gone.

8. Be alert

Check your monthly credit card statements and screen them for any suspicious transactions. If in doubt, contact your bank right away and double-check the transaction in doubt.

Thieves often start by stealing small amounts of money from your card. Once they realise you haven’t caught them they will strike.

9. Consider identity theft cover

Because of the rising cases of phishing, identity theft and fraud insurance companies have started to offer identity theft cover options. Also check out an ID theft blog for more ways to protect yourself.

If you want to eliminate every possible risk then taking out cover like this could be something you should look into.

10. If you lost your wallet

You must contact your bank immediately. You can find emergency contact numbers on the back of your monthly credit card statement or online. Even better, keep a record handy on the fridge and in your wallet.

Cancel your card immediately. Unless the bank can proof neglect on your behalf your money is usually safe.

Contact your local bank for more information about credit card fraud protection.

This article was written by Jeremy Cabral who is part of the team at CreditCardFinder.com.au, an Australian credit card comparison service. Read their Credit Card Fraud, Traps and Scams guide for more credit card safety and security tips.


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The True Cost of Coffee

Written by in Retirement, Saving, Spending
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Every morning, from as far back as I can remember until I left for college, my parents would have a cup of coffee in the morning. Occasionally they would have a cup in the evening as well, and I can only imagine how many cups they drank at work (My mother is a fourth-grade teacher, my father occasionally deals with insane criminals).

I hate the smell of coffee. I’ve never had a cup in my life. Out of the four sips I’ve ever taken, I’ve wanted to vomit after each one. I don’t support Starbucks. In fact, I boycott Starbucks as much as possible. It’s not hard considering that I don’t drink coffee, but it gave me a great excuse when my mother asked me to go out and get her a cup.

Dropping the Habit

I tried everything to get my parents to get rid of the awful stench at home. I told them it would ruin their teeth, I told them it was a gateway to opium, and I told them they wouldn’t be able to retire because of it.

Clearly none of my efforts worked, but recently my mother started drinking instant coffee exclusively and it made me think about that third excuse I gave them: how much drinking coffee really cost them.

Calculating it Out

My conservative estimate was two cups of coffee a day. Every single day. For 20 years. I’m sure they drank more than two cups sometimes, and I know they did it for more than 20 years. But we have to start somewhere, and I don’t want to be the guy who completely blows things out of proportion to try and prove a point. This is not a scientific study. Actually, I haven’t done the calculations yet, but here we go:

A few more assumptions:

  • Each week consisted of 11 home-brewed cups and 3 cups at Starbucks (or Dunkin Donuts, or wherever).
  • The average cost of a pound of coffee is $10 and provides 32 cups of coffee.
  • The average cost of a cup of coffee is $2. My parents would laugh at people who got the “tall.”

So the average week was 22 cups of home-brewed coffee and 6 cups of store-bought coffee. That comes out to $6.87 for home brewed per week and $12 for store bought, for a total of $18.87.

My first thoughts are WOW, that’s a lot of money for 6 cups of coffee. The home-brewed stuff was a bargain!

Their coffee habit was costing them about over $75 a month, or about $985 per year, or $19,683 over 20 years. Damn.

But how much would it have been for the instant stuff? It costs about $7 for a can, which makes 21 cups. So $0.33 per cup. Slightly more than home brewed. Still, it comes out to $486 per year, or $9,733 over 20 years.

After all of this, it looks like $486 per year for coffee is rather insignificant. If you do anything for 20 years, the costs are going to look high, but I honestly expected the costs to be higher.

Early Retirement? Not Quite

My conclusion is that my parents’ drinking habit didn’t cost them an early retirement. My focus should have been on them brewing their own coffee instead of buying it 3 times a week, but the trade-off of having that stench in the house more often may have been too much for me.

The main takeaway is that people are getting ripped off every morning when they drink coffee. There is barely any difference between home-brewed and instant coffee (home-brewed is actually cheaper!), but there’s a HUGE difference between home-brewed and store-bought!

Brew it yourself! Why pay $2 per cup when you could pay $0.33? Is the convenience worth the 500% markup?

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January Month in Review

Written by in Month In Review
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I have been giving updates on my budgeting each month, but as my spending becomes more regular and I have less fluctuation to report, it becomes less interesting, so I am going to change the focus to my net worth, which is a long term goal as I reach for decreasing my debt, increasing my savings, and reaching 0.

January was a great month for both my net worth and for the blog. Let’s start with my financial progress. My bank accounts got a nice boost because I received the second half of my signing bonus at work and completed my orientation period. That comes with a small salary increase which I’ll see in future paychecks. It’s always nice to get a raise and receive recognition for doing a good job.

Net Worth

I was able to increase my net worth by $1,510, up to -$15,975. This includes fully funding my emergency fund, starting my IRA, and paying down student loans. This brings my student loan debt down to $22,587, with the average interest rate being a low 2.79%. Since I’m paying just the minimums due to the low interest rates, this won’t be decreasing quickly, but my other accounts will definitely show sizeable increases moving forward.

Blog Traffic

In terms of the blog, traffic increased 158% over December numbers. The great increase in visitors was likely due to several guest posts, which explains the increase in subscribers as well as return visitors. While these increases are beyond what I would ever have expected, I don’t think the trend will continue. However, I would like to continue growing at a 20% rate, which is definitely possible if I continue to guest post and get my name out there.

Samurai Alexa Ranking Challenge

Personally, I have been doing very well in the Samurai Alexa Ranking Challenge. When we started 12 days ago, I was at 682,918, which was my average ranking over the previous 3 months. Obviously, as I grow, my ranking increases, so even then, my 1 month ranking was just 371,965. Currently, my 1 month rank is 213,551, and my 3-month rank is 441,611. As long as I keep my 1-month number below my 3-month rank, I will continue to build toward my goal of breaching the 200,000 mark.

Favorites

Here are my favorite articles from January, as well as my list of guest posts that went up, in order of referral traffic generated from each post.

Mailbag: 5 Steps to Get Out of Debt

How to Avoid Paying $900/Month For Your iPhone

How to Use a Windfall

Impressing Your Friends Can Cost You

Maybe Phone Insurance Would Have Been Worth It (Lauren’s Guest Post)

Guest Posts

Money Relationship – Why I Don’t Stress About My $23,000 Pile of Debt (Jan 14)

Budgets Are Sexy – Who Cares If You Saved Money By Spending Money? (Jan 14)

PT Money – Simple Negotiation Boosts Your Mood and Your Wallet (Jan 13)

You Have More Than You Think – The Pinnacle of Frugality (Jan 13)

PT Money – How I Saved $27.95 on My Taxes (Jan 29)

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