Archive for September, 2009
Wednesday, September 30th, 2009
During my last book giveaway, a couple of readers expressed interest in a new post on emergency funds. They wanted to know how to know when your emergency fund is big enough. I haven’t covered this specifically in detail before, but I did cover emergency fund basics and how to know when your emergency fund is too big. Both are good primers on this subject. Today I’ll try and answer the question, “how do I know if my e-fund is big enough?”
What is an Emergency Fund?
If you didn’t visit the links above, you may be clueless as to what exactly an emergency fund is. And defining it is a good place to start if we’re going to be deciding how big it should be. In my opinion, an emergency fund is money set aside to be used only in the case of a life emergency. Think of it as a small self-insurance policy.
A last minute vacation to Vegas isn’t an emergency. An emergency is an unexpected and required event / happening that you’re unable to pay for with your regular monthly income. The point of having a special fund setup to cover this expense is so that you won’t have to go into debt to cover the costs. You’ll be able to pay it off immediately, or support yourself over a few months in the case of a job loss.
So, how do you know if your emergency fund is big enough?
The first thing I’d say is, if you have to ask, odds are it isn’t big enough. 
I know I’m not going to get away with that easy answer though. So what I will do is try and give you some points to think about to give you confidence in your emergency funds. After all, I’m not going to be there to bail you out.
Know the Rule of Thumb – Most money experts will tell you that you need anywhere from 3 to 6 months worth of expenses in liquid savings (i.e. cash). If you’re unsure of how to calculate that number, or if you did calculate it and it didn’t give you warm and fuzzy feelings, keep reading.
The reason the 3-6 rule is used is because for the typical family that’s enough to help you get by for a bit if you lose your job. It also ends up being enough to help you cover unexpected medical bills, car repairs, etc. for the insured.
Know Your Monthly Expenses – If you’re going to use the 3-6 months expenses rule, you’ll need to determine what that is. The quickest way to do that is to get online and view the last 6 months of data from you bank. Use that data to determine the total average monthly spending over the last 6 months. Multiply that average by 3, 4, 5, and 6 months. The other factors listed below are going to help you determine which of these numbers (3x, 4x, 5x, or 6x) to use as a basis for your emergency fund.
Know Your Insurance Deductibles – A job loss isn’t the only type of emergency you could experience. Something could happen to your car, your house, or the health of someone in your family. Do you know how much your insurance company is going to cover? Are there large deductibles on your plans? Someone with a $5,000 deductible and a catastrophe health insurance plan is going to need a bigger emergency fund than someone with a premium plan who’s deductible is in the $100s. Based on what you find out here, you may be in need of a 6 months e-fund vs the 3 month variety.
Know Where You’re Not Insured – If you actually go without insurance for some area of your life, consider what an emergency in that area would cost you. Bump your emergency fund up based on what you have uninsured. Those without health insurance should really have a huge emergency fund to help cover those unexpected medical bills.
Know Your Assets – If you’re a one car family, unless you live in the city, you are highly dependent on that car (asset). If that car needed a $2,500 repair, you’d have no choice but to spend the money to repair it. Likewise with your home. If your home is old and in need of constant repair, you’re emergency fund will need to trend higher to be able to cover those repairs.
Know Your Job Market - Are you the sole bread-winner in the family? How confident are you that you could get another job a few weeks or months after you’ve been laid off? If you think it would take more than a few months, because (a) your industry is in bad shape, or (b) you aren’t that marketable (for whatever reason), then consider bumping your e-fund number up above the 6 month mark. Keep going until you feel comfortable with the number.
Final Thoughts
So where does that put your emergency fund? I think if you start with the 3 month rule and then bump that up based on the risk involved in the other areas I listed you can get pretty close to your actual required emergency fund. When in doubt, just strive to make your emergency fund big enough to cover you for 6 months of income instead of expenses. That’s a very conservative number and would put you way ahead of most other savers.
If you’ve decided that your emergency fund could use a boost, don’t stop now. Take the next step and start saving more today. Read the Best Way I’ve Found to Truly Save Money.
photo by alancleaver_2000
Posted in How To Save Money | 7 Comments »
Sunday, September 27th, 2009
Are you taking advantage of the tax incentives available to you as a result of the American Recovery and Reinvestment Act (ARRA)? Often referred to as the economic stimulus package, the ARRA was unleashed on our down economy in February of 2009. It’s been a while since the act was rolled out, so I thought I’d share some of the tax incentives that may effect some of your spending and saving this fall.
The act was a huge piece of legislation and provided tax incentives for you, the individual, in the following areas: for those paying for college, first-time homebuyers, new car owners, and those interested in making energy efficient choices for their homes.
Regardless of how you feel about the necessity of the act, it’s now there for the taking. The way I see it, you might as well make the most of it.
First-Time Homebuyer Credit
I’ve shared in length the details of the first-time homebuyer tax credit. But essentially, someone who hasn’t owned a home in the last three years can get a credit of up to $8,000 towards the purchase of a new home. This is a great win for those true first timers out there. What a windfall. The credit is taken against 2009 taxes (although you can amend your 2008 return and get the credit now) and does not have to be paid back. As you can imagine, home sales are shooting back up again (at least temporarily). The deadline to buy the home is currently set for December 1, 2009. But there’s already a bill in the House to extend the deadline to 2010. Odds are that this will pass into law.
New Vehicle Purchase Incentive
Certain taxpayers are eligible for federal tax deduction of the local taxes they pay on the purchase of a new car. It phases out at certain income levels, and only applies to cars under around$50k. See more at New Car Buyer Tax Deduction.
Making Work Pay and Withholding
The Making Work Pay credit has been providing you tax relief throughout the year, to the tune of about $13 dollars more every week. If you are self-employed, you’ll get to claim the credit at the end of the year with your 2009 return. Be sure and check your pay stub to ensure you are getting the proper tax relief.
Tax Credit for First Four Years of College
The American Opportunity Credit broadened coverage of the existing Hope Credit for years 2009 and 2010. This applies to only the first four years of college. The maximum annual credit of $2,500 is available for qualifying students. Think colleges will respond by raising fees next year? The folks at CollegeScholarships.org sure think so. I tend to agree.
Certain Computer Technology Purchases Allowed for 529 Plans
Now you can include computer equipment and Internet service in the cost of your child’s education when cashing out those 529 Plan funds for years 2009 and 2010. I wonder if Dell and Apple lobbyist had anything to do with this inclusion? Ahh, I’m a cynic.
Don’t have a 529 Plan set up for your children yet? Here’s more than $100 in 529 plan bonuses to get you started with college savings.
Energy-Efficient Home Improvements
The tax credit for energy efficient improvements to your home has been increased. Improvements that qualify include things like insulation, energy-efficient windows, and energy-efficient heating and AC units.
Have you been able to take advantage of these tax incentives? Do you think they’ve helped or hurt our economy?
Source: IRS – Six Recovery Tax Incentives
Good Reads from Last Week
Carnivals
Economy and Your Finances, Pecuniary Delights, Money Hacks Carnival, Festival of Frugality, Personal Finance, Debt Reduction, Financial Planning, Twenty Something Finance, Family Life.
Posted in Tax and Government | 3 Comments »
Friday, September 25th, 2009
An updated list of the top 0% balance transfer credit cards is below.
I recently shared my experience with effectively using 0% balance transfer credit cards to help in my debt reduction plan. That was back in the day. These days it’s become a bit harder to find a good deal on a 0% interest rate credit card. The new credit card rules, the economy, and credit card companies wising up have all had a big effect on the kind of deal you can expect to get from one of these cards.
But, the cards aren’t completely off the market. Some cards are still available and may make sense for someone trying to transfer some debt while paying it off. That’s why I’m presenting some of the top 0% balance transfer credit cards available today.
Be careful though, there are plenty of dangers with completing a 0% interest rate balance transfer. You need to be aware of those before you get going with one of these cards. If you’ve read and understand the risks, keep reading.
What Makes a Good 0% Balance Transfer Credit Card?
Deciding which credit card is best depends on your particular situation and the involves examining the following five factors (the first two are by far the most key though):
- The Promotional Period – This is the length of time that the 0% promotion lasts. In other words, once you transfer your debt balances, how long will you have before you are charged interest on the debt. The longer the period the promotional 0% interest rate lasts, the better the deal you’re getting. Most promotions are around 6 months these days. It’s important to remember that the promotion doesn’t exclude you from making regular payments. It only helps you to avoid the interest charges associated with the debt.
- The Transfer Fee – This is the amount you will pay to make the transfer. You used to be able to make the transfer without a fee. But these days it will cost you 3%-5% of the balance transferred. If you’re lucky, there will be a cap of $75 or $90 on the fee.
- Interest Rate on Purchases – In the event that you’re going to use the card to make additional purchases, you’ll need to consider the initial purchase interest rate. Some cards come with an initial 0% interest rate on purchases. I recommend not using this card for new purchases though. After all, you’re trying to get out of debt.
- Extras Before and After the Promotion – Some cards come with instant bonuses. And some have nice rewards programs that could be used after you pay off the transferred balance. This is just something extra to consider.
- Interest Rate After the Promotion – If you don’t think you’ll be able to pay off your debt by the time the promotional period is over, this is what you’ll have to start paying on the remaining balance. Something to consider if you think the debt will still be around and you can’t make a second transfer.
An Example: Lower the Interest Payments on Your Debt
Let’s say you currently have $10,000 in credit card debt on a single credit card with an interest rate of 20%. You’ve decided to pay off this debt and you’ve established a plan to pay it off in 1 year. Your payments will need to be $926.35 each month to completely pay off the balance. Over that time period, you will pay $1,116.13 in interest payments alone. In effect, you had to pay 11,116.13 to pay off the 10,000 you borrowed. Yikes!
But, if you transferred your balance to a 0% interest rate credit card (12 month promotional period and a 5% balance transfer fee), you’ll pay just $500 extra over the 12 months. That’s a savings of over half your interest payments. That’s a smart move if you’re committed to getting rid of the debt. If you’re in this situation, here’s some cards that might help you out:
Top 0% Balance Transfer Credit Cards
All of these cards offer 0% balance transfers with no annual fees.
Discover® More(SM) Card – American Flag
This is by far the best 0% credit card offer available today. No one else is promoting a 12 month balance transfer rate. Using the example above, you could save over $500 by transferring your debt balances here while you pay them off. It’s a nice reward card too, offering 5% cash back on certain items. Here are the details:
- 12 months!, 5% transfer fee
- no annual fee
- 5% cash back on travel, gas, restaurants, and more
- 1% on all other purchases
- a standard rate between 11.99% variable and 18.99% variable
- it’s patriotic!
Miles by Discover® Card – 6 mo at 0%, 3% transfer fee, no annual fee; a standard rate between 11.99% variable and 18.99% variable; 1,000 miles each month you make a purchase for the first 12 months; book travel through any airline without restrictions; use this card if you only need the 6 months transfer and you want to earn miles on future purchases
Discover® More(SM) Card – 6 mo at 0%, 3% transfer fee, no annual fee; 5% cash back on travel, gas, restaurants; a standard rate between 11.99% variable and 18.99% variable; use this card if you only need the 6 months transfer
Citi® mtvU™ Platinum Select® Visa® Card – 0% APR on purchases and balance transfers for 6 months, if you qualify, based on your application and credit history, 3% transfer fee; no annual fee; 17.24% variable rate after initial 6 months; 10 reward points for every dollar spent on certain items during first three months; up to 2,000 in reward points annually for good grades; points for paying on time and for staying within your credit line; great for students (see more student credit cards)
Citi® Forward™ Visa Card – 0% APR on purchases and balance transfers for 6 months, if you qualify, based on your application and credit history, 3% transfer fee; no annual fee; 17.24% variable rate after initial 6 months; 10 reward points for every dollar spent on certain items during first three months; lots of ways to earn extra reward points; points for paying on time and for staying within your credit line; great for students (see more student credit cards)
Posted in Credit Cards and Credit | 2 Comments »
Wednesday, September 23rd, 2009
No one likes paying overdraft fees. Banks charged these fees to customers who they’ve had to bail out for spending more money than they have in their accounts. Banks have also somewhat taken advantage of this relationship and piled on the fees once things go in the negative. It’s not pretty. But this ugliness can be avoided. First, by never spending more than you have (duh!). But also by putting in controls to help protect yourself from the occasional slip up.
Opt Out – Beginning today, Bank of America and Chase bank allow you to opt out of their debit card overdraft programs. By opting out, instead of incurring a $35 or $40 fee, you’ll be stopped at the register next time you try and use your debit card and don’t have the funds. They’ve also made some changes to the way they tack on the additional overdraft fees once the account is already in the negative. Nice changes for us dumb consumers.
Get Overdraft Protection – Some banks will let you connect a second account (savings or credit) to your checking account. This is called Overdraft Protection. When you spend more than you have, funds are transferred to cover the difference. Fees are usually less with this type of protection vs the normal overdraft program, which uses the banks borrowed funds.
Create Alerts – Most banks now offer a low-balance alert feature. When your balance reaches a designated dollar amount $100 for instance, you are alerted by text message or email. Money management software (like Quicken Online) also features this at a more advanced level, with predictive type alerts. Your past spending trend and expected deposits are used to predict when your money is likely to run out.
Go Cash Only – This isn’t for everyone. But if you have a problem constantly spending more money than you have in your bank, you likely need a stronger control. Dump the debt card and roll with cash only. Spending with cash only has been known to help some curb their spending as well.
Use a Different Bank – The big banks are convenient for their locations. There’s nothing wrong with using these banks for some of your banking: making check deposits comes to mind. Still, you can find a great bank that will give you a debit card and won’t charge you overdraft fees. ING DIRECT’s Electric Orange account is my spending account. They don’t charge overdraft fees. They simply start charging you daily interest on the negative balance. This is peanuts compared to a $35 hit for each overdraft.
Have you ever been hit with an overdraft fee? How did you change your behavior? Do you have some other tips to avoid fees?
Photo by: Andrea F
Posted in Frugal Living, Organize Your Finances | 10 Comments »
Tuesday, September 22nd, 2009
As promised yesterday, today’s post will detail how you can get at least $100 in bonus money for future college expenses. Even if you don’t have children yet.
This past weekend I finally got around to opening up a 529 Savings Plan, one of the most effective ways to save for college. We’ve been questioning whether we should open a 529 for some time, but what was ultimately holding me up was deciding on which State’s plan to use.
In the end, we decided on the Ohio CollegeAdvantage 529 Savings Plan. Don’t let the name fool you, you’re allowed to use the Ohio plan regardless of which state you live in now or which state you’ll be using the funds in.
Ohio CollegeAdvantage 529 Savings Plan
Other features of the Ohio CollegeAdvantage Plan:
- The funds can be used for tuition, books, and even room and board.
- Open an account with as little as $25.
- No enrollment or maintenance fees.
- Multiple, low-cost investment options (i.e. Vanguard), including FDIC-insured options.
- The plan is also very flexible, allowing you to change beneficiaries at any time. You can even open it if you don’t have kids yet.
And like all 529 plans, the earnings from the investments are tax free, if you use them for college.
But here’s the factor that helped me choose the Ohio plan over some of the other top 529 plans (like the Utah plan I was long considering): more than $100 in bonus money to get started.
Bonus College Savings
Here’s how I got the bonus money:
- Initial $25 Bonus – Just by opening an account and using a friend’s referral code I got a $25 bonus.
- 2nd Child “Refer a Friend” $50 Bonus – After opening my first account, I sent a refer a friend email to Mrs. PT. When she opens and funds a second account, I’ll receive $50 in my first account.
- 2nd Child Initial $25 Bonus – By using my referral code, Mrs. PT scored a $25 initial bonus of her own.
- Systematic Savings $25 Bonus x 2 – The CollegeAdvantage Plan is also offering a $25 bonus for each new recurring monthly electronic funds transfer (EFT) or payroll deduction you set up. Since we have two accounts, we will get two of these bonuses.
In total, we’ll earn at least $150 in bonus money to help us get started with college savings. Here’s the step-by-step guide to opening your account and getting your bonus money for college savings.
How to Get Started and Get Your Bonuses
Step 1: Open a new Ohio CollegeAdvantage 529 Savings Plan account by December 15, 2009.
Step 2: Use the referral code 2506962. The picture below shows where you’ll need to place the code.
Step 3: Select a fund and deposit at least $25.
Step 4: You’ll receive your bonus within 7-10 business days after your account is established.
Step 5: Use the “refer a friend” to get unlimited $50 bonuses, plus new $25 bonuses for your new account and others you refer. Open one for another child, or your spouse by selecting “Yes, I am a CollegeAdvantage account owner, and wish to establish another account for a new beneficiary.” Do this for all your children. Be sure to use your referral code (which is your account number).
Step 6: Set up a recurring monthly electronic funds transfer (EFT) or payroll deduction by January 31, 2010. Set up another for even more bonus money.
Step 7: Contribute at least $25 per month for three consecutive months.
Step 8: Get the $25 bonus for each EFT after the EFTs have been active for 90 days.
As you can see, if you have multiple kids and multiple EFT setups you can really maximize the amount of bonus money to help you get started towards college savings. This is a great plan and a great time to start saving.
$25 Referral Code: 2506962
Need more convincing about the Ohio CollegeAdvantage Plan? Check out Bankrate.com’s review, Morningstar rankings, also see this Kiplinger State-by-State Guide. Remember to get all the IRS facts about 529 plans and consult a tax professional to get all the details if you’re unsure.
Posted in How To Save Money, Make Money | No Comments »
Monday, September 21st, 2009
I’ve been getting a ton of questions lately about my 529 plan decision. As you know, with the arrival of little Miss PT, college savings has been a hot topic around here. And it seems with the start of school, people are starting to think more about saving for their child’s future education. Here’s a recent question I received from a friend and reader:
“What do you think the most effective college savings plan for our kids is? A 529? I would love your input. Hope you guys are well. I’m sure little Miss PT is growing like a weed. Keep it up man!”
My response, which gives you some insight into what I’ve learned about 529s, went something like this:
Just Start Now
I heard some advice once about college savings that sounded pretty good: “just start now.” In other words, don’t get too caught up in the different kinds of plans/accounts. Just pick something and go for it. The truth is, a majority of folks out there wait till it’s too late to start doing anything. And it’s not because they didn’t have the money. It’s because they thought about it a couple of times over the years and never acted. Either because they were confused by the choices, or too lazy to set it up. Had they just started an automatic savings withdrawal to a CD or simple savings account they’d be better off than where they find themselves.
Honestly though, I’m currently one of these people. I haven’t decided on a specific place to stash my college savings. Although, I think I’m close. I really like what I hear about the Utah 529 Plan. The fees are low, fund options high (they have Vanguard funds), and you can use the proceeds in any State, not just Utah.
Local and Other Considerations
You live in Texas and so our situation is pretty good. You don’t pay state income tax. Therefore, there are no college plans that are particularly advantageous for Texans, unless you are dead set on sending your kid to a Texas school. In which case, there are prepay plans that might be better for you. Bottom line, you’re more free to look at another State’s plan. Most plans will let you participate in their plan and use the funds anywhere.
That being the case, the next thing you need to worry about is fees, flexibility, and fund options. CNN Money, Kiplinger, and the like are always ranking 529s based on these factors. Find one of those lists and narrow down your choices. Then pull the trigger and start saving.
There are some other options besides 529s, but I don’t see any specific reason for you to choose them over the 529.
What to Invest In
Once you have the 529 plan set up, you’ll need to decide what to invest in. Most plans offer target-date or age-based funds. These fund accounts get more conservative as your child ages. That way, when your child is 16 and the market crashes, half your investments won’t be taken. By then, you’ll be in more conservative investments.
My Game Plan
So, here’s what I’ll be doing asap:
- Choose a 529 and open an account.
- Start auto-depositing a monthly amount into one of the target-date funds.
Retirement Before College Savings
Just a quick note to add that I think it’s important to take care of your retirement needs prior to considering college savings. Not to say you need to have your retirement fully funded before you save for your kids. You just need to be making the maximum contribution needed to help you achieve your retirement goals and then think about college savings. This is just my view. You may take a different stance.
$100+ in Bonus Money for College Savings
Tomorrow I’ll share my experience with opening up a 529 plan and share how you can get bonus money of more than $100 to go with your new 529 account.
Posted in How To Save Money | 3 Comments »
Thursday, September 17th, 2009
This is my review of The 1-2-3 Money Plan: The Three Most Important Steps to Saving and Spending Smart. Scroll to the bottom to find out how you can win a free copy of the book.
About the Author
The 1-2-3 Money Plan
was written by Gregory Karp. Gregory is a nationally syndicated columnist, who is famous for his “Smart Spending” Column, which reaches millions of readers. He’s also the accomplished author of Living Rich by Spending Smart. You can also find Gregory blogging daily at gregkarp.com/blog.
About the Book
Gregory lays out the overall money plan in his book using 3 major areas:
- Smart Spending Today
- Smart Spending Yesterday
- Smart Spending Tomorrow
Easy enough. Within each section, Gregory tackles different subjects. Each time leaving you with 3 steps to complete or remember so that you’re armed with the key information for making decisions about your finances.
For instance, in the Smart Spending Yesterday section, Gregory focuses on debt (yesterday’s spending you’re still paying for). He teaches you the importance of understanding your credit and how to use credit cards. Withing those sub-topics you’re given 3 specific steps to complete or concepts to remember.
The Smart Spending Tomorrow section is all about saving. Gregory walks you through saving for the short-term, retirement, and for education. I particularly enjoyed the college savings section since I’m making decisions on what to do in that area. Gregory’s advice was very practical and has motivated me to just dive in and go for it.
The section called Smart Spending Today is where Gregory really shines. He’s obviously a pro at discussing the smart ways to spend your earnings.
By using this simple 1-2-3 approach, Gregory really makes managing your finances seem easy. Heck, anyone can complete just 3 little steps, right?
My Recommendation
I really enjoyed this book. It was a quick read and it left me feeling like I had a good game plan to improve my finances. It was both practical and specific. Like most personal finance books, it’s structured so that you are able to pick and choose which sections you’d need to review. For obvious reasons, my favorite sections were college savings, life insurance, and how to teach kids about money. You can pick up a copy of The 1-2-3 Money Plan at Amazon.
Win a Copy of the Book
I’m tempted to hold on to this book for my personal library, but I know some of you could use it just as much. So here’s your chance to get my copy for free. Simply leave a comment below listing a topic you’d like to see discussed on this blog. I will randomly select a winner this Friday at noon CST. The winner will be notified by email and in the comments. I’ll mail the book using USPS Media Mail. US residents only please.
Stuff from last week: Debt Reduction, Twenty Something Finances, Persona Finance, Money Hackers, Pecuniary Delights, Frugality, Money Stories
Posted in Money Books | 14 Comments »
Wednesday, September 16th, 2009
TV is costing us all a lot of time and money. Is it worth it?
I recently signed back up with cable TV service. As regular readers know, I’ve been without paid TV service for over a year now. I canceled my Dish Network last fall while competing in the FNBO Direct Pay Yourself First Challenge. There were several reasons I canceled. But the main two were cost and time. It just wasn’t worth paying for something that I wasn’t watching that much of anyway.
As I mentioned, when I canceled I had service with Dish Network. This time around I chose Time Warner because I wanted TV service without a contract. Something Dish was unable to do. Also Time Warner ended up giving me a sweet deal on a cable / internet bundle. We’d been having trouble with ATT internet, so I decided it was a good move. Another reason I chose Time Warner is because ATT never got around to installing uVerse in my neighborhood. You could have had me, ATT!
Anyway, I have mixed feelings about this recent retreat back into the world of paid TV. The past few days have been good in that I’ve been able to catch up on shows that I’ve been missing. Not to mention watch most of the season-opening NFL games. I’ve really enjoyed it.
But I’ve also seen some negatives, in that other areas of my life begin to take a back seat when cable TV is around: family time, exercise, sleep, and blogging, to name a few.
I’ll discuss one of those briefly. Building this blog wasn’t easy. I didn’t do it by sitting in front of the TV every night for the past year watching reruns of Dog the Bounty Hunter. I’ve been hard at work on this site. And having no TV helped me make that happen.
That’s not meant to disparage anyone that watches TV every night (or Dog). It’s just a testimony that you can do something else with your time, make some extra money, and still find time with a little bit of TV. I also said that to motivate myself to not get caught up in too much TV, lest this blog’s content suffer.
So as a nice reminder to you and I, I thought I’d put together a quick guide to keep TV from stealing our money and our lives:
Just Say No
Consider going cold turkey with the paid tube. There’s plenty of TV available over the air for free that will keep you busy for an hour a day (a good limit). You can even watch some shows online. Mrs. PT and I got by using these two methods. You didn’t think I was going to totally let my newly purchased flat screen TV go to waste, did you?
Going without paid service is not for everyone. But if you want to watch less TV and get more done, this is a good compromise. Or, you could make bold move and remove all the TVs from your house. Simply force yourself to spend time doing other things.
Get a DVR
If you’re not into going without TV, then consider a DVR. The Digital Video Recorder (DVR) or Tivo is one of favorite inventions of the last decade. Watch only the shows you want to watch, when you want to watch them, and skip all the commercials. It’s really how TV was meant to be watched. If you’re going to have TV, this for me, is a must have. A huge time saver.
Drop the Extras
While you’re signing up for DVR, make sure you not paying for some other services that you aren’t using? Are you even watching all those premium channels? If not, call up your service provider and have them removed.
Threaten to Cancel or Change Service
If you’re going to keep your service, make sure you’re getting the best deal you can. The cost of TV service varies greatly from person to person. It’s likely the only thing stopping you from getting a lower monthly TV bill is you calling in and asking for it. Scan your local paper or look in your junk mail for a competing TV service offer. With that in hand, call up your current provider and discuss getting a better deal. Be nice and simply ask for a better monthly fee that can compete. They’ll do a lot to keep you on as a customer.
Combine Services
One area of savings that’s often overlooked is the bundling of services. Having your phone, internet, and TV all with one provider can help save a nice amount each month.
Set Limits
Lastly, set limits for yourself on the amount of TV you watch each day. This is especially important if you have kids. Life’s best enjoyed when we keep things in moderation. And TV is no exception. As a family, decide on a good limit (1 hour is enough to help you veg out for a bit). More importantly, find something else to do with your time: read, talk, walk, organize, build something, write, create, etc… Having something to fill the void is what’s going to keep you tuned into life and tuned out on TV.
Is TV stealing your time and money? Let me hear from you in the comments below…
Photo by bdunnette
Posted in Frugal Living | 14 Comments »
