Last week, owing to several issues that I had been having with AT&T, I finally decided to bid adieu to their UVerse TV service. I had been with Time Warner for a long long time and I just loved their service. Then, AT&T came out with an enticing offer (rebates etc!); so I bit the bullet and ordered their UVerse service. I had heard really good reviews from my friends about their revolutionary new TV service which let you record four programmes at the same time among many other things (help us with laundry, dishes etc.). Even though I never had to record four shows at the same time, my biggest frustration came from their HD broadcast. It looked worse than SD. Time Warner’s HD was hands-down a thousand times better than ATT HD. HD was not the only thing that made me pull the plug on ATT though.

My second biggest gripe with ATT was their customer service. Even though they have hundreds of corporate stores across the country and a handful in Austin too, there is no help available whatsoever from any of their stores. The stores are only to signup new customers and from there on, you are pretty much on your own. It takes a good 20-30 mins to get through their 800 number and their ‘offices’ are open only during regular business hours. In other words, you cannot call their 800 number after 6 o clock? What is this, the 70s? When we signed up for the service at one of their stores, the sales guy had told us he would get us a rebate of $300. That was too good an offer to refuse, so we signed up. Three months went by and there was no sign of any rebate. After trying a zillion times to get through to their customer service, I finally received my rebates, for $150. And that, after almost about five months. Their excuse was they did not have my apt # in their database! I wonder how those bills would arrive month after month, promptly, at the right apt #? Hmm! Time Warner, on the other hand, has a local access number and worst case scenario, you can just go to their local office and get your grievance addressed.

Even after ending my relationship with Uverse, my problems did not stop. This happened when I had to return their equipment. They have an ‘arrangement’ with UPS where in you need to find a UPS store and drop in all the equipment there. I had no issues with that. It’s no different than go to a local ATT store right? In fact, the UPS guy was quite nice to us. However, what frustrated me was that ATT did NOT require me to return any cables or the remote control. The UPS guy outright refused to ship the cables and remote back to ATT. According to ATT, the cables and the remote control are ‘yours to keep’. I’m sure ATT is trying to reduce UPS costs but do they really think it costs them less to manufacture another remote than to just ship it back? So, essentially, every AT&T customer in America ends up with a few hundred feet of telephone cable and a remote control for a cable box for good! After this ‘incident’(for the lack of a better word), I do not think we will be doing any new business with AT&T. I have wireless service with them but I have to stick with it just because I love my iPhone too much. I’m just waiting for my contract to get over at this point.

The Time Warner service got installed last week and I’m really glad to see some good quality HD broadcast now. Not to mention, TW is charging me $80 a month against $110 that ATT used to charge us. Total savings for the next 6 months that I plan to keep TW, 6X$30 = $180.

Last year, I had built a desktop for myself. I got some of the best components out there and assembled a high-end quad-core desktop for my home-office. I shall post some pix soon. It was based on Jeff Atwood and Scott Hanselman’s desktop rigs. It is an awesome setup! However, after just about a year, my 24 inch monitor gave up. It was out of warranty by one week and Westinghouse did not entertain my request for a courtesy service (a rant post is coming your way pretty soon). Another thing that had never worked from day one was the NVIDIA 8600GTS video card that I had so excitedly added to the mix. I tried everything I could possibly try to fix it but to no avail. So finally I decided I was going to get a new card. However, I wanted to make sure that it was the card and not the motherboard that was faulty.

I went to Frys and got a 9400GT (512MB @ 550MHz). The damn thing worked like a charm on the very first attempt. I was thoroughly impressed with its performance even though it has a lower clock speed than the 8600GTS (550 Vs 700). But again I’m not a gamer so you’re asking the wrong person when it comes to video cards! By the way, this post is about the moolah that I saved on this card rather than my geek skills’ show off I got the card for $86.59 with taxes etc. A couple of weeks later I stumbled upon the same 9400GT but with 1GB memory on Buy.com that was selling for $65.10 shipping included. I promptly ordered the card and it arrived within 2 days. Yesterday, I went back to Frys, returned the card and said thank you very much. Just now I found that the card I bought on Buy.com has a $15 cashback as well!.

Total savings : $21.49 + $15 = $36.49. Sweet!

The above graph pretty much tells the story but since I have the bragging rights for my Money Experiment, I’m going to use them anyways If you have been following my Money Experiment, you might already know that I have been using several different techniques to come up with ways to save more and spend less money. In one of my articles, I had spoken about our exponentially increasing dining bills lately. The chart above is a standing testimony to our mammoth dining expenditure in the past 3 months or so. So, in January we decided it was time to take matter into our own hands and come up with a plan. The above chart shows how much we ended up spending on dining by the end of Jan.

We decided we were going to use cash instead of plastic for all our Dining expenses and allocated $200 at the start of the month. We told ourselves; that is all you are going to get for the rest of the month for eating out. If we ran over the budget, there was no other option than to eat at home. We weren’t too optimistic in the beginning and thought we will use up the cash in the first week or two itself and the plan would fall flat on its face. Then, as we started thinking more and more about it, it didn’t feel all that impossible. $200 a month meant $50 every week. We had decided we wouldn’t be eating out on weekdays, so that meant $50 every weekend. Somehow we had to make do with fifty bucks for the whole weekend. We had two options, eat at a cheap restaurant on both Saturday and Sunday nights or eat at a pricier one only on Saturdays. Then Khushi gave me a better idea, why not eat at a cheap place for 3 weeks (both days) and a little upscale one on the last Saturday of the month? That sounded like a brilliant idea. I also picked up a Restaurant.com gift certificate for $25 which kinda bumped up the budget a little. Not much, just a little.

To be honest, initially, there was a strong urge to give up. We were used to going out on all three days of the weekend. Not to mention the random trips on weekdays whenever we were bored or sore from a workout. After the first week, though, we started getting used to it. In fact, it was really exciting to wait all week for that one special Saturday night dinner. In the process, I picked up my long-lost hobby of cooking. The last time I had cooked was when I was in college. It was pretty enthralling to get back to cooking good food while also impressing your wife at the same time She never knew I could cook. Hehehe. Last week, we finally pulled our numbers out and we were really really surprised to see what we had spent on dining over the past four weeks. The total was $162. Yes, we had infact exceeded our expectations by 38 bucks. It did take a lot of discipline but at the same time, it was a mighty good experience, which I’d love to go through month after month . As a side effect, we have gotten a little leaner and our BMIs have come down considerably. Try it out yourself, you will have a great time.

These days, before I shop, I use sites like www.deals2buy.com, www.slickdeals.net and www.cheapstingybargains.com. Now I know most of you already know about most ‘deal’ sites. What I also know is that you have been using those sites for the wrong purpose. Yes, you have been buying stuff just because they are on a deal or selling for cheap. That is not our mantra. Before you forget, let me reiterate our mantra. It is “do we need it?” The idea is to buy stuff, stuff you have been wanting to buy or you can put to good use, for cheap. Not buying any stuff that is cheap.

There are a few good sites dealing with coupons and cashbacks that can save you some dough. I particularly like www.retailmenot.com and www.ebates.com. I also use www.workingadvantage.com, an employer-subscribed deal site; talk to your HR department if they would be willing to enroll. And don’t forget the good old newspaper coupons. Or the ones that show up in your mail every day. We’ve saved quite a bit on Dash’s supplies using those Petsmart and Petco coupons. And last but not the least, the grocery store coupons that are printed on the back of the receipts. I just love them. I cut a coupon from my grocery receipts every month and use it towards my haircut. $5 coupons for a good $60 saving every year.

And the most important thing to do before pulling the trigger on a buy would be to compare prices through different vendors. You can use any of the popular sites like www.pricegrabber.com or www.bizrate.com. Do not forget to add up any shipping and handling fees before you buy. Many vendors have a lower retail price but shipping and handling charges can jack up the final price quite a bit.

What I have learned by now is, it’s OK to use coupons. It’s OK to save money. Every dollar that you save is essentially a dollar that you’ve made. I know it sounds cheesy but wouldn’t you like a $3000 raise this year?

In my quest to consolidate everything into a single loan, last week, I made a balance transfer of 4k to my Citi account. They had a zero percent promotion until September of 09 and I had a couple outstanding balances on prime rates. So my brilliant brain thought, for a 3pc transaction fee, I could get a zero rate for 9 months. 4k in 8 months, that’s $500 a month for 8 months. Not a bad deal right? I did the transfer by paying a $120 transaction fee. Next week, I was expecting a balance of $4120 in my statement. But I see $4146 instead. They had charged me $26 in ‘finance charges’. I call them up asking them why the $26 in finance charges and this is the reply I get.

Since you had an existing balance ($2000) on the account and then you made a balance transfer of $4000, your new balance was $6000. However, you did make a payment of $2000 which we have promptly applied towards the $4000 @ 0% APR. The $26 was finance charges for the $2000 that you have had previously @ prime APR. Our policy states that any payments made to the account would be applied to low rate balances first.

If you haven’t gotten confused enough by now, I don’t blame you. This is what corporate America thrives on. A confused consumer. Essentially, what it meant was I had a total balance of $6000 out of which I had paid $2000, thinking that it was towards the statement balance of $2000. But what Citi says is that the $2000 I paid went towards my transferred balance of $4000 even though I had made the payment and the transfer on the same day. So, now my 0% balance was down to $2000 in a matter of 5 days (against my original plan of 8 months) and my prime rate balance was still stuck at $2000. What that means is until I pay off the entire loan, I will be getting charged a prime rate on the $2000. If I were to stick to my original plan of $500 a month for the next 8 months, I shall be charged about $26 a month for the next 4 months and another $65 for the remainder of the 8 month period, a total of $169. This is in addition to the $120 that I had already paid for the transaction. What a ripoff! All I can do now is either take those charges bending backwards or I will just have to pay off the entire balance next month out of my emergency fund. What a bummer dude!

Lesson learned here is, if you are planning on doing a balance transfer, make sure that you have absolutely no existing balance on the account, no pending charges of any sorts. Let the statement arrive, you make sure there are zeros all over the place and only then you go ahead with the transfer. Otherwise, they will make you pay interest on that $20 haircut you got from that Korean woman last week, for the next 3 years.

Ciao!

Oh, by the way, I did call Citi like 4 times and got my $26 back. Take that to the bank Citibank!

Reuse, Reduce and Recycle – Best Friends

Reuse, Reduce and Recycle sounds like a green mantra but today I’m going to show you how you can actually apply this mantra to your financial life.

When I came to the US almost ten years ago, I was pretty intrigued by the whole ‘Back to School’ concept. Kids get to buy new stuff every year? That’s weird! Back in the day (and this applies to today’s kids back home too I’m sure), the only new stuff we used to get was notebooks and pencils. We wore the same school uniforms to the next grade and the next grade if our parents had their way. As long as they were not worn (read torn) or they wouldn’t fit anymore (most likely reason for them to be worn/torn), they were all fine. And if you had an elder sibling, then you were pretty much screwed. All your life, you would just be using his/her stuff! Can reuse get any better? So next time you want to throw away that old TV just because you’re bored of it, think again. The sight of perfectly working stuff lying next to the community trash bin just plain horrifies me. Give it to charity, send it to the bedroom or better yet, put an ad and someone will buy it. Don’t just throw it away; which by the way makes you very eco-unfriendly.

There were a lot of pearls of financial wisdom that one could have gathered back in India while growing up. Another thing that I remember from my childhood was the idea of reduction. I have already spoken about reduction in Part I but I want to write some more stuff just to put the point across. I remember the times as a kid back home, when I used to go on shopping trips with my parents. Never was there an occasion where we just saw something and said ‘Let’s get this’, other than maybe vegetables or groceries. I used to find it quite silly back then. I thought my parents were the biggest misers on this planet. It was excruciating. What I realized later was that it was not a parenting trick, but more of a financial principle. You don’t need it, you don’t buy it. Simple. Classic reduction! It makes a whole lot of sense now.

The last bit of the mantra, recycle, might throw you off a little. You might be thinking I’m talking about taking those plastic bottles out of the trash and puttin’em where they belong, which you should by the way. However, I’m talking about recycling stuff, all that stuff that’s lying in your attic, thanks to the packrat that you’ve been all these years. It’s time to clean all that junk out. ‘That day’ when you will find some use for ‘that thing’ will never come. Believe me. You’re getting this from a former packrat, man-to-man. Scavenge through your closets, underneath the bed, the garage, wherever you can. Hunt down the last piece of junk that you haven’t used in years and will never use in the near future either. Put an ad on your local classifieds or on Craigslist and you will be surprised to see the kind of response you get. One man’s junk can be another man’s treasure. I made a good thousand bucks getting rid of my junk. I’m sure you have way more junk than I did. Use that money to work on your wishlist (more junk?). Do whatever you want, it’s extra tax-free cash. But if you want to buy new stuff, get rid of your existing stuff first.

Lesson learned: Memorize the mantra: Reduce, reuse and recycle. Reduce – Buy less. Reuse – Think before you throw. Recycle – Use old to buy new.

Image courtesy : www.wearmichigan.com

Mr. Overextender – The bad guy

In my article yesterday on the Money Experiment, I spoke about how we had mismanaged our mortgage by deciding to use cash instead of a home loan. Other than mismanaging our mortgage, there was something else we were doing wrong. Overextending. Yes, we were living beyond our means even after knowing that we needed to cut back. Our mantra was, just put it on the credit card. Almost all of us living in the great US of A can identify with me here. We just spend too much money on things that we don’t really need in the first place. Our latest and greatest hobby, unfortunately, is Shopping!

Two of our biggest expenses every month, we realized, were groceries and dining. Groceries is cool right? Well sadly, that $38 sweater at Target that you had to buy while you were waiting in line at the checkout counter, shows as ‘groceries’ in your monthly credit card statement. And our second most favorite pastime when we are bored is, well you guessed it right, eating out. And Austin does tend to throw at you an array of designer name restaurants when you’re bored and hungry. Weird! I ran the numbers a few days back and our average ‘monthly Dining expense’ category had ‘$500′ written next to it. Check yours, it must be really close to that number if not a tad north.

The way I tried to fix this was by identifying the top 2 to 5 biggest expenses of the month that I could cut back on. I ignored expenses like utility bills which were hard to trim. In my case, I wanted to fix my grocery and dining bills. I asked myself, how much was I willing to spend every month on these two expenses. I thought maybe $200 for dining out and another $200 for groceries. Then, I allocated cash at the start of the month to take care of these for the rest of the month. I was not going to use credit cards on dining and groceries anymore.

Overextending does not necessarily have to mean overindulgence. In fact I’m a firm believer of overindulgence, as long as it does not affect my financial life that is. I would love to drink that $70 wine provided I have the means to afford it and I have planned well ahead for that expense. I would certainly not call it an ‘overextension’. Some other overextensions might happen without you even knowing. For instance, I had a $60 Time magazine subscription that was getting automagically renewed every year. Never read a single issue! Another $156 for credit reports. Never felt the need to check my credit rating every month! $240 for a pricier phone plan. Never used even half the minutes. At the end of the year, just add these up and you’d have enough money to take that dream vacation, every year!

Bottomline, buy stuff that you really need, badly that is. I’m sure you can find something more interesting to do over the weekend than visiting malls! Shopping and eating out are not hobbies by the way Eat at home whenever you can. Don’t go and buy a truckload of TV dinners! Learn to cook, not only will it save you money, you will have acquired a new hobby and would have saved many a future trips to the doctor’s office.

Lesson learned: Avoid impulse buys. Cultivate new hobbies to circumvent pointless shopping and dining excursions. Allocate cash every month for your most expensive categories. Avoid plastic on the whole. Don’t pay for services or goods that you do not use.

From the title of the post, you must be thinking this post is about a suspense thriller set to hit the theaters this Friday. Well, I’m sorry to disappoint, but this is a post about our Money Experiment that crossed a small milestone on Tuesday, the 30th of December. However, I promise to keep it as dramatic as a Bollywood movie though. We had set a target of $1000 to scrape before the end of the year. To give you some background on the experiment, let me just rewind a little.

On the fateful day of November 12 2008, I happened to check my bank balance and was unpleasantly surprised to find that I had just 98 dollars in my bank account. To be honest, I had an idea that I was not managing my money properly for a while. However, I had never felt the gravity of the situation until I saw my measly two-digit bank balance. Never had I made a conscious effort to take control of things and be a little more responsible with my finances. That night it hit me though. What if I lost my job? What if there is an emergency? A health issue, an emergency trip? With no money in the bank and loads of debt to pay off, what would we do? That night I decided that it was time to take matter in my own hands. It was time to account for every penny that was coming in and going out. That is how the experiment began. In fact, money scraping was never part of the plan!

The goals of the experiment were simple.
1. I wanted to track the inflow and outflow of money. In other words, track income vs expenditure.
2. I also wanted to fix the outflow since I knew we had been living outside our means for a while.
3. The most important goal was to enjoy the experience. Believe me, the sight of a large wad of cash in my hands at the end of the experiment was pretty delightful to say the least!

So the first thing I did was to sign up with QuickenOnline (Try it, it’s really good). Like I said before, the idea was to see how much money I was making and how much money was I spending. And what I saw was terrifying. I was spending more money than I was making! No wonder I was bankrupt.

Loans- The good guys with a bad side

One of the reasons behind our excessive expenditure was our so-called ‘mortgage’. This was for an apartment that we bought in Bangalore last year. It was a 66k investment that we undertook without much forethought. Well we had thought it out, just that we were not prepared for enormous spending, month after month. I mean 66k is as low as it can get for a home right? It would have if it were a conventional home with a conventional mortgage. But this was on an altogether different payment plan. A mortgage which wasn’t really a mortgage. The way it works in India, and correct me if it works the same way here, is that the builder who is undertaking the project starts booking units well before the construction begins. The client pays the builder through the course of the construction process in installments, usually 10-20pc. We being residents of TX, were not in a position to procure a home loan back in India (security issues) and ended up paying in cash. Long story short, our monthly payment came up to a whopping $3000. What kind of a money-making machinery would it take for a middle-class, service-industry worker like me to make that kind of a payment every month?

We started making our loan payment every month while pushing the credit card payment to the next billing cycle. Months went by like this. After a few months, we had a massive pileup of credit card balances. It was hard playing catch-up. Another mistake that we made was to pay off our car loan. My great theory was to have as few loans as possible. What I failed to realize was that, while I had paid off a 5 percent APR loan, I had also accumulated more 15 percent ones. After lots of juggle work, I somehow managed to consolidate all my high-interest credit card balances into one zero APR balance. It came with a 3 percent transaction fee and I did end up paying finance charges on some outstanding balances that could not be transferred in time.

If you’re in a similar situation as me where you are planning on buying real estate, make sure that you get a home loan first. No matter how much money you make, it is a no-brainer to shell hoardes of cash in one shot. There are other things to be taken care of too other than a mortgage. Also, home loans come with a very small interest-tag. If you have the cash, invest it in high-yield mutual funds or stocks, not in one large asset like a home. Diversify.

Lesson learned: Always buy real estate through a home loan. Pay off your high interest balances first. It is not important how many loans you have, what is important is how much loan you have and how much you end up paying in interest.Your first goal should be to be debt-free.

To be continued…

If you remember, last night we needed a whopping $122 to reach our target of $1000. Just after posting that writeup, I called up AT&T to see if there was even a bleak chance of getting my rebate back. And guess what, not only did I get my $100 back, I was also given a $40 rebate for an ongoing promotion. AT&T had given me a free upgrade last month and this rebate was for that free upgrade. Can the deal get any sweeter? Honestly, I wasn’t too confident of even getting the $100 back leave alone the extra 40 bucks as bonus. Only when I started thinking how would I be making up for the $122 difference and what would I have to sell to close the gap, this miracle happened! AT&T did try to send me from pillar to post by transferring my call to a gazillion departments, but I just did not want to give up this time. Remember, I was supposed to get this rebate in June and I’d kept procrastinating it since then.

I’m extremely excited that we could achieve our goal well within the deadline and with such great style I would like to thank all you guys out there who have supported me throughout the course of this experiment for the past 2 months or so. Your encouraging emails and comments are a big testimony to this fact. I shall do another post detailing the way the whole experiment unfolded and all the events that lead us to our goal. I was just too excited to bring you this piece of news that I had to post. And if you are still wondering if I’m going to continue this experiment, I have an answer for you today. Hell Yeah! I’m continuing the experiment into the new year and might never end it for all I know. Your encouragement has charged me to no end and has given me the motivation to go on. I would like to hear your success stories and how you have managed to make changes to your financial life using ideas from this experiment. Even if I have motivated one soul out there, then my job here is done. Please feel free to send in your stories and I shall be more than happy to publish them on the site.

Again, thanks a lot to all you guys out there reading my blog and also a big thank you to Khushi for standing by me through this 2-month long ordeal.

Money Scraped – $140
Money Meter reads – $878 + $140 = $1018!

One of the items on my yard sale was a Creative Zen Music Player that I’d bought in 04. The last time I used it was when I was in Montgomery, Alabama and I have been living in Austin since November of 05. So you can pretty much say it was lying around the house just collecting dust over the years. I put it on sale last week for $25, without being too optimistic that it would actually sell for 25 bucks. Well, an hour after I put it on Craigslist, the emails started coming in. I was really surprised to see how many people were interested in this vintage MP3 player. To be honest, I wasn’t quite good with keeping up with all the emails given that I had north of 25 items on sale. Long story short, a gentleman picked it up yesterday. He was so happy with the player that he gave me an extra $10. Pretty cool huh?

Money Scraped = $35
MoneyMeter reads – $843 + $35 = $878
$122 to Target!