Cutting Costs

Spider FridgeNo, silly, not to cut down on your electricity usage…

A few months ago, MoneyBeagle wrote about clearing out the spiders from his gas grill.

Don’t worry, this isn’t about spiders in or on my fridge.

But his advice couldn’t have come at a better time for us.

We don’t use a gas grill — opting for the old school charcoal method instead — but I was having an issue with another food related appliance at exactly the same time.

The fridge.

My ice cream wasn’t as cold as it should have been. My house-brand grape soda was luke warm.

We’d seen this before.

I’m on my fourth refrigerator since I moved into this house 9 years ago so I was kinda shrugging my shoulders and thinking, well, the streak continues…

(I’ve always thought it was a wiring issue in the house that kills the fridge but haven’t bothered to have it checked out because I’m always of the mindset that we’ll get the entire kitchen totally re-done before this fridge dies…)

Anyway, with the daycare bills crushing my finances and all of the auto trouble, and did I mention that I had to buy a new computer too yet?

Well, anyway, purchasing a new refrigerator would just add insult to injury.

Like I said yesterday, when I pretended to be an auto mechanic, this time I put on my appliance repair man hat.

First attempt was just to jack the coldness setting up in both the freezer and the fridge.

Sometimes it’s as simple as that but after a few hours, well, things were only getting warmer.

It was at this point that I remembered the reading about the spiders in the grill…

Maybe I just needed to clean out that plastic vent/grill thing at the bottom of the door. I know that when I clean the air filter on the lawn mower that it runs better. Maybe it’s just too dusty for the fridge to do its thing.

After a few more hours, I thought the coldness factor was a little better but still far from where it should be.

Somewhat stumped, I decided to dial the coldness dials back to their original position.

But I couldn’t.

They wouldn’t move.

While trying with all of my might to turn one of the knobs, I pushed on the back wall of the inside of the refrigerator for more leverage and heard the sound of cracking ice.

Well, duh?

The knobs were now frozen into place.

After pushing on the back wall here and there I concluded that there was probably so much ice built-up back there that the vent opening that cools the fridge from the freezer was probably totally blocked.

So I pulled the whole thing away from the wall, unplugged the beast, left the doors wide open, grabbed a hair dryer, and some towels.

After an hour or so of hair dryer action (the first action the hair dryer has seen in at least a decade), we loaded the fridge back up and plugged it in.

My ice cream is hard as a rock now; just the way I like it.

And sometimes, the Tang on the top shelf of the fridge even gets a little slushy. Mmmmm…Tang slushie…

Thanks MoneyBeag!

Your spiders saved me a fortune!

At one point early last month I mentioned in passing that we’d dropped our dental insurance.

So, was it good idea? Well, let’s look at the numbers for 2010…

Had I enrolled in the dental plan offered by my primary employer, I’d have had $38.41 withdrawn from my paycheck.

I’m on a bi-weekly pay schedule so if you multiply that by 26, the total in dental expenses for the year would be $998.66.

(I think we pay more than that per month for health insurance — but that’s another story…)

The $998 value is a bit deceptive, though…

Dental insurance doesn’t cover everything — not sure if that’s the norm or if the insurance we’re offered just sucks but in years past (when I was carrying dental insurance), I’d still have to pay for things like fillings, root canals, and crowns out of pocket.

Perhaps I wasn’t paying the full percentage but, still, the grand total dental expenses definitely exceeded the insurance premiums coming directly out of my paycheck.

For the sake of simplicity, though, let’s just pretend the $998.66 premium covered everything.

Now, I didn’t carry dental insurance at all in 2010. I still went to the dentist twice per year — I’m pretty sure I even had a cavity filled. My wife still went on a regular schedule as well.

We never turned down a service — it was just like it’s always been except the bill came directly to us.

Total damagage for the year? $490.00

So using the unrealistically conservative $998.66 value, we saved over $500 by droping dental insurance.

Definitely a wise move.

Now, once Duncan and Duncan II are old enough to be going to the dentist, well, we might need to re-evaluate the numbers.

Coverage for the entire family (using 2011’s numbers) would set me back $1530.10 per year and still not cover many of the, what I’d consider, basic procedures.

I dunno — still seems like a raw deal.

With the “savings” we’ll have by skipping coverage each year, we should easily be afford to pay for braces should they need them…

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So while paying my utility bills this month, something I do online, I was for the first time nagged to sign up for their Budget Billing plan.

The idea is that your electric bill (or gas or water) will be the same amount every month so you can more easily budget.

Though it sounds like a relatively good idea, I’ve always had a negative connotation towards that sort of thing as if it’s for folks who are incapable of managing their money or for folks on welfare or something. I’m not sure why.

In short — it’s not for me.

But since both my electric supplier and my natural gas supplier (both actually the same company operating under different names) nagged me, twice even — or four times if you count the nagging on both sites while trying to pay my bills this morning, I decided to click on the little “more info” link for, well, more info.

Here’s the deal.

If I sign up for Budget Billing my monthly electric bill would be $133 and my monthly gas bill would be $132.

Taking into account that I was in the process of making payments of $183 and $301, respectively, it seemed like a pretty good sales pitch.

It was probably what triggered the nag screen to come up on both sites, actually.

But is it really a good deal?

I mean, why would they offer that?

What’s in it for them — besides a more reliable and steady revenue stream?

They’ve gotta be pocketing something along the way…

Unsure of where they reach their “budget” number, the “more info” link didn’t say, I have to assume that it has something to do with my usage history so I broke down the numbers by referring back to my most recent annual utility expense chart.

Crunching the numbers, in 2010, my average electric bill was $144 and my average natural gas bill was $133.

Wow.

I wasn’t expecting either number to be spot on but the gas bill pretty much was… Let’s ignore that one for now.

So, throughout 2010, I was paying an average of $144 per month for electricity.

Why on earth would they offer to “lower” my bill, upfront, by $11 dollars?

Sounds too good to be true, right?

Well, I’d bet that that’s why they’re offering it… There has to be a catch, right?

I thought about it some more…and then I remembered an article I’d read in the paper a few months ago…

Here’s an excerpt:

New electric rates that will result in lower monthly bills for residential customers of Connecticut Light & Power were approved Wednesday by the Department of Public Utility Control.

Under the new rates, which go into effect Jan. 1, CL&P residential customers will be charged 17.6 cents per kilowatt hour, down from 19.1 cents last year — the rate since 2009.

A typical CL&P residential customer using 700 kilowatt hours a month should save $10.41 a month. Next year’s average monthly bill should be $123.85 compared with $134.27 in January 2010, a 7.8 percent decrease.

Well, that explains it…

So I guess “Budget Billing” isn’t a scam and it isn’t a rip-off either.

Still, though, it’s not for me.

I’d much rather pay a $300 bill now and know that come August, that same bill will only be $30…

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So along the lines of yesterday’s post about my yearly spending trends, I thought I’d narrow my plane of focus a bit.

During any given week, I’d say that I hear at least one person complain about how “everything” is going up while their pay rate remains static.

It’s rare that I agree with one of these folks — I don’t think that “everything” is going up, though I usually just keep my mouth shut when it comes to discussing my finances.

On the other hand, I can’t deny that I’ve heard from the media outlets reporting along the lines that salaries and pay rates are supposed to mirror “cost-of-living” increases and that they’re not because of the economy or whatever. Oh, the disparity…

I think that’s a bunch of bunk…but stick with me here…

Now, “everything” encompasses a lot of things but most of the time I think that they’re refering to monthly household utility bills.

Even if they’re not, I define “cost-of-living” expenses as the monthly utility bills.

Everyone’s got them so using them as a measuring stick will cover a vast majority of the population.

And with such a broad stroke, you have to omit things like groceries because there are too many variables. Some people obviously spend too much on food. I don’t think the same can be said for how much people spend on electricity — at least not anywhere near the variance people spend on food.

Sure, some folks leave the lights on too often but, really, how much does that actually cost? Not very much. And, yeah, the McMansions out there cost a fortune to heat compared to an apartment but it’s all relative.

So, are “things” really going up?

Here are my utility expenses by year from 2004 through 2010:

You can come to your own conclusion but, based on my numbers, I’m going to say that the cost of living has gone down — just like my salary

So it seems that pay rates and the cost of living do mirror one another.

Even downward.

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Late this week we recieved the results of the appraisal done last week for our potential mortgage re-finance.

If you haven’t been keeping up with my nonsensical postings over the past few weeks, well, here’s a quick and dirty recap:

  • At the end of April we thought we’d take a shot at refinancing our mortgage to eliminate paying PMI, lower the interest rate, and, most importantly, lower our minimum monthly payment considerably. [link]
  • Through the re-fi process, we found out just how awesome our credit scores are. [link]
  • When we found out that an apprasial was required to move forward and schedule a closing date, we freaked out because a decent chunck of the interior of our house could *and* should be considered a total s-hole. Rather than do a quick and dirty (but still costly) clean-up, we called in an extreme makeover type of contractor. [link]
  • The quote for the renovation came just over $33k — we cleared out all of our furniture and green lighted the project. [link]
  • Just wanting the potential new lender to leave us alone, and because we don’t *really* need to refinance anyway, we reluctantly scheduled the appraisal even with 1/3 of our home completely empty and in various stages of disrepair and demolition. [link]

Okay, so now you’re up to speed.

So, anyway, the appraisal came in and it’s not as high as I’d expected it to be.

I mean, I could argue about the area homes that they compared our home to until I’m blue in the face — I don’t know how a smaller cape-style home on a 4-lane state highway that faces a HUGE auto dealship can be considered comparable to my huge (in comparison) three story double gabled-ell on a tree-lined residential street but, then again, I’m not an appraiser.

Eitherway, the appraisal came in high enough so that we’ve got nothing to worry about.

We scheduled the closing for next Thursday so, unless anything unforeseen comes up (like if they pull our financials again and see a sudden $17k credit card balance), I won’t need to pay my mortgage at all in June and starting in July, I’ll only need to pay $500 per month.

That’s 60% less than what my current mortgage payment is!

So in one fell swoop, I’m on the cusp of eliminating PMI, paying off my mortgage faster than planned, and paying for this remodel faster than expected too.

I can’t wait for Thursday to be in my rear view mirror so that I know that it’s all official.

Then I’ll have my cake and eat it too…

No, really, I can’t believe how things are falling into place so quickly — it’ll be a huge load off of my shoulders when it’s all done.

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The whole story begins way back in in October of last year when I went to the mall and picked up three new pairs of jeans.

Though I settled on Levi’s on that specific trip, the Gap has historically manufactured my favorite and best fitting jeans.

The Gap discontinued my “style” years ago but I still pop in everytime I visit the mall just to check and see if they’ve made a comeback. So far, no luck on that front.

But I did notice a jacket that I liked. I picked it up. I looked at it. I walked away. I walked back. I picked it up again. Basically, I did everything but try it on.

The price was $129.50.

Too much, I told myself.

I didn’t like it *that* much…

Then, a few weeks ago, I happened to open one of those “junk” emails that I get every so often from the Gap. It was advertising something that I had no interest in but it succeeded in getting my to visit their website.

That’s a win for them…

So, anyway, I see the jacket that I liked months earlier in the “Sale” section for only $69.99 (apparently down from $98).

I thought about it, oh, for maybe 45 seconds, and then I bought it.

Around a week later it arrived in the mail — I tried it on — and it was one of those fat guy in a little coat scenes.

I’d ordered size large.

Now, I know that pretty much none of you out there reading this know how big I am (three apples high — read the about section, will ya?) but in the grand scheme of things, I’d say that I’m a medium sized person.

I’m not small.

And I’m certainly not large either.

But a large-sized jacket from the Gap, well, let’s just say that they’re stuff isn’t exactly “true” to size. It never has been.

So we all piled into the car earlier this week to return it to our local Gap store.

When we entered the store, I saw that they too had the same jacket on a sale rack for — get this — $29.97.

Even better, they had an extra large available (which wasn’t available online).
Oh man…

I was like, uh-oh, what do we do?

I want to exchange this one for that one but I paid over twice as much for the one in the bag.

This would have to be a two step process — I was going to return this one, get the credit, then come back in later and buy the other one for less than half the price.

Yep, that was the plan.

My wife thought I was crazy — just make the return and buy the bigger one all in one shot, she said…

I wanted to play it cool, though, so I made it as if I hadn’t even noticed that they had the exact same jacket on sale for half the price and sauntered up to the counter to make the return.

After punching in a few buttons and scanning my receipt, Warren, if that was indeed his “real” name, lisped out that my account had been credited $74.19 (including the tax) and my wife, Duncan, and I made a hasty exit.

We walked around the mall for around a half hour and then my wife — now acting as a secret agent — went in to the purchase the jacket again in the larger size.

“Warren” was sharper than I’d expected. He was on to our scheme and made it *very* clear to my wife that this one was NOT returnable. He even used a highlighter (pink, of course) to make it overly clear on the receipt.

Doesn’t matter, though — this one fits.

Now I know we didn’t do anything wrong — it was all totally legit — but it still felt sneaky.

I mean, I went in to return a jacket and walked back out with the same jacket and nearly $45.

I dunno, it was very satisfying but felt wrong at the same time…know what I mean?

All told, though, by not buying the jacket back in October, I saved just short of $100…and that doesn’t happen very often…unless you’re a tiny size and gravitate towards ugly colours that you can regularly find on any clearance rack anyway…

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When it comes to my finances, I like to think that I tend to attack my debts aggressively and, for the most part, follow the same line when it comes to my savings and investments too.

But this morning, my wife and I pulled a 180.

We sat down with a mortgage broker and discussed re-financing our mortgage — and not the cash-out variety so as to renovate the first floor of our home (which is desperately needed).

Nope, this was purely a defensive maneuver.

I want a lower monthly payment and I want to eliminate PMI.

That’s it.

Now, of course, we only filled out the application and all that this morning so who knows if it’ll actually come to fruition but it seemed like the right time to, well, play some defense.

See, financially, I think we’re pretty darn close to the best position we’ll ever be in — on paper anyway — with two comfy incomes, retirement accounts where we want them (and growing), over $20k in the bank, lots of equity in our home, and zero credit card debt between us.

Now most of the time I’m not one to prognosticate but I’m also not going to say that we’ll be exempt from any, I dunno, financial disasters in the future… and that’s why I want to take advantage of the situation I find myself in now, you know, before we finally cave in and buy a minivan…

This move could potentially cut my mortgage payment down to around $510 per month. I’ve made monthly car payments significantly higher than that.

That’s a difference maker.

Now this won’t mean that I’ll cut out the weekly payments or even the total amount that I send towards the mortgage anyway — it’ll just be a piece of mind thing knowing that I’ll really only “need” to pay $510…

This all, of course, hinges on an appraisal.

(insert scary fanfare here)

For long time readers, this causes me great anxiety

The guy said that it “could” be waived and I’m hoping my financial info and stellar credit are enough to make that happen but if not, well, we might be having some quick and dirty drywalling on the horizon…

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Review of MagicJackThis morning I just paid what I’m hoping was my last outrageously overpriced AT&T phone bill.

Sure, it was only $56.05, which isn’t exactly a huge sum, but grand total, we made 6 phone calls during the billing period.

That works out to almost ten bucks per call.

Obviously, we weren’t getting our money’s worth — and — that’s the cheapest rate AT&T offers. We can’t lower it.

It was time for a switch. Actually, it’s been time for a switch for years now — and we finally did it.

Now I know a lot of folks have dropped their land line in favor of their cell phone but if you’ve been reading PIAC for awhile, well, that probably wouldn’t be a great option for me.

Though, again, back in 2007 I started saving a TON on that front too…

So, anyway, we went out and plunked down $39.99 for MagicJack at Target.

It seemed like a no-brainer.

If it worked, it’d save me a ton of money each month.

If it didn’t work, well, it was a $40 experiment gone wrong.

Forty bucks to possibly save between $50 and $80 per month — that’s a gamble I’ll take every day of the week.

But like anything that’s guaranteed to save you lots of money, there are a lot of skeptics out there and they’re all overly vocal on the internet. It’s kinda sad actually.

I did a lot of research on the MagicJack (and Vonage too) and it was pretty discouraging…

If you look up a review of MagicJack, or any similar service, or anything, for that matter, on the internet, chances are, the negative reviews will outweigh the positive reviews ten-to-one.

My favorite was this one guy who called it a piece of crap and a rip-off because, as he regularly travels the world from Botswana to Mongolia, his elderly mother in Arkansas can’t make her daily call to him as if it were a local call…

Okay, how many folks can relate to that?

Not many, I’m guessing.

See, it seems that the people that call things like this a rip-off and a piece of junk are expecting a bit too much. They expect a miracle.

This world traveling MagicJack-Off actually expected to save multiple thousands of dollars each year on his very unusual phone bill by making the switch.

Sorry — that’s not realistic.

It’s kinda like how I once thought a pogo-stick was a viable method of transportation… In reality pogo-sticks are tiring and painful and you never get very far…

But saving nearly $1000 over the span of a year, well, that is realistic. And MagicJack can and will do that for you.

That’s pretty significant.

So, from a money-saving perspective, MagicJack gets two blue thumbs-up from PIAC. It provides the exact same services we were paying over 10 times as much for from AT&T.

We didn’t need to switch phones — still the same phone I picked up last year using those goofy credit card reward points — we still have caller id, and we don’t need our answering machine anymore cause we have voicemail now (it’s pretty neat too, we have it set up so that if someone leaves a voicemail, both me and my wife get an email of the recording).

This thing is great — and we don’t need to pay another dime until this time next year when it will be $20 total for another freaking year?! How great is that?

For me (the guy who rarely uses the phone anyway), at a minimum, that’s a $600 dollar savings right off the bat.

For you, well, yeah, you could hit 4-figure savings in just one year!

Take that AT&T…

Now, are there any downsides to MagicJack or is it all unicorns and rainbows?

Well… I’m not really a fan of their control panel interface. It’s got a big old advertisement for, well, MagicJack plastered all over it. It looks goofy and, well, kinda amateur. It’s unsightly.

The simple solution to that is to minimize it and just use the regular phone to make and answer calls.

Yeah, I’m old school. I like to press the buttons on the phone. Besides, you don’t actually need to look at the control panel for anything anyway…

The other issue — and this was kind of disappointing — was that our area code wasn’t available.

The beauty of using an “internet” phone is that you can “pretend” that you’re anywhere. That’s what that Botswana-dude was trying to do — he picked a local Arkansas phone number so that his mom could call him as if it were a local call — even though he was never anywhere near Arkansas.

His failing was that internet service sucks in Botswana — which he laid 100% of the blame on MagicJack… What up wit dat?

The thing is, say you order a pizza from your local pizza parlor here in Connecticut or something… They’re not going to be real cool with someone placing an order from phone with a California area code — at least not until this sort of thing becomes more common which…I’m certain it will.

In the end, though, we were able to select an area code that’s also in Connecticut, though not our own, and then the exchange we wanted — so, as of now, Pants in a Can is coming to you live from the extravagant city of Greenwich, Connecticut.

Yep, Regis Philbin, Ron Howard, Pedro Martinez, Matt Lauer, and Tommy Hilfiger are my neighbors…

Sort of…

I mean, now that I’m saving so much money on my phone bill, you know, maybe I’ll be able to afford to move to Greenwich for real…

Can You Dig It?

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