spending

Tuesday’s Tip: Break the Bad

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Everywhere I go, I hear new year’s resolutions being flung around as freely as candy from a parade float. People are vowing to make changes to better themselves, their lives, their communities, and even the world. However, the most common goal, by far, was to lead a healthier lifestyle, which encompasses a multitude of different options ranging from losing weight to exercising more to breaking bad habits. And that got me thinking . . .

Breaking a bad habit is tough to do. I know, first hand, how hard it is, but I also know how wonderful it feels to be successful – in more ways than one. I confess that I used to smoke. (There it is, folks.) I tried to quit several times, but always seemed to give in eventually. I was smoke-free for quite a long time before having kids and during my pregnancy, then started again when they were about 6 or 7 months old. It was easy to blame it on stress, of course. Then, when they were almost 2, I finally managed to quit altogether and have been rid of the habit for over ten years. Don’t get me wrong, there are days I seriously wonder why the heck I ever quit! Then I think about all the progress I’ve made as a runner, how much I love it, and how smoking would completely ruin it, and I decide it’s not worth it. So, you could say that I’m enjoying the health benefits of being a non-smoker.

Just recently, I noticed a sign at the corner gas station advertising a sale on cigarettes: $6.85 per pack. Wow! I couldn’t believe it. That’s a lot more than I used to spend over a decade ago. And that got me thinking about the cost of being a smoker now. What would I be paying if I were still smoking? When I got home, I grabbed a calculator and did a little experiment to find out the financial benefit of not smoking. I know the cost per pack varies depending on location, but I live in the Chicago suburbs, so I’m going to use the average for this area, which is about $7.50. Ok. Let’s see. I used to smoke about 10 cigarettes per day. That means it would cost me $3.75 per day . . . times 365 days . . . that comes to $1,368.75 per year. If I smoked a pack a day, then the cost rises to $2,737.50 per year. Really? I was amazed at the numbers starting at me from the calculator. I instantly thought of a few things I could do with an extra $2,700 per year. Then, just for kicks, I multiplied that number by 5 . . . $13,687.50 saved in 5 years. Holy cow! Then I took one step closer to ridiculous and calculated the savings for 10 years. I nearly fell off my chair! $27,375. Amazing! Do you know how much house you could pay off with that money? Or you could buy a nice little car! You could save it for a rainy day . . . or college . . . grad school . . . vacations . . . retirement . . . The list goes on and on.

And what about other costly habits? I could think of a couple. How much could people be saving by kicking those bad boys to the curb? They don’t even necessarily need to be bad for you, like smoking was, for me. What about that iced coffee on the way to work everyday? Or eating out for lunch everyday? Or even twice a week? How about takeout dinners? Shopping every weekend? Blah, ba-blah, ba-blah . . . Please understand that I’m not suggesting we all become hermits, eat ramen and rice for the rest of our lives, deprive ourselves of things we need, and never do anything fun – we gotta live, right?! The trick is to be sensible about it.

Moral of the story: breaking a bad habit, or any habit that drains your pocketbook, could potentially save you more money than you think. Don’t believe me? Pick a habit . . . do the math. See what happens. The truth lies in the numbers. Cutting out a habit, or at least scaling way back, could mean some serious extra cash in our pockets. I don’t know about you, but I like that!

Tuesday’s Tip: Renewal Screwal

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In an effort to save some money, my husband and I are very picky about our magazine subscriptions. We only get those that cater to our specific interests, and we decided that, if they no longer serve their purpose, we let the subscription expire. As it is, we only get three: scientific for him, running for me, and one for the whole family that focuses on current events. We used to have four, but I was getting a little tired of the same thing month after month and got bored. I mean, how many times can I make myself over, overhaul my happiness quotient, and un-clutter my life in one year?

Anyway, one day, my husband got a postcard in the mail from the current events magazine. We were in the kitchen – I was making dinner and he was going through the mail – when I heard him chuckle. Not the kind of chuckle he makes when he thinks something is amusing, but a kind of cynical chuckle. Like an “unfunny” kind of chuckle.

“What’s up?” I asked.

“Hmm,” he began. He flipped the card over, then back again. Then he quoted, “This is just a reminder that your subscription is about to expire. But no need to worry! Because you have opted for our convenient auto-renewal program, no action is required. We’ll simply charge your credit card $45 and delivery will continue as usual, with no interruptions. Should you have any questions about your subscription, please visit blah, blah, blah dot com, or call 1-800-blah and our team will be happy to assist you.”

I paused, mid-stir, and frowned. “Ok,” I said, not quite understanding what the exact nature of the problem was. So I asked, “I don’t understand. Is that not good?”

“Um, no,” he replied. “Especially since I only paid $20 for the subscription in the first place. Now they want to charge us $45 for another year?”

“Oh my,” I said. (Not really, but this is a tasteful blog.) “That’s more than double. That’s . . . that’s . . .”

“Stupid,” he finished my sentence. He proceeded to disappear to the computer room, then returned just a few minutes later and told me that the magazine’s website is offering the same exact subscription for $30. “Why should I let them charge me $45 when their website is offering it for $30?” he asked. I shrugged. I couldn’t think of a reason. Then he disappeared again, this time taking the phone with him. He returned a few minutes later, with that disgusted look on his face, put the phone on its cradle rather forcefully, and informed me that we were no longer going to get the magazine. Ok.

“Ok,” I said. “Why?”

“Because the guy I talked to said he couldn’t just lower the price for me. In order for us to get it for $30, we’d have to cancel our current subscription, then go online and sign up for it again, which means entering all our information again even though we already have a subscription.” He rolled his eyes and shook his head. “It’s not worth the hassle.”

So I guess we’re down to two magazines now.

Moral of the story? It’s twofold, actually. First, if you have magazine subscriptions, make sure you pay close attention to how much you paid, initially, for the subscription and how much your renewal will cost you. I’m not against paying for goods and services. Hey, people work hard and should be paid for their efforts, but don’t screw me over by charging me double (or more) for the next round! Charge me a fair price, treat me well, and I’ll be loyal. Secondly, automatic renewal is incredibly convenient – something I secretly love – however it’s also a marketing gimmick. Companies are counting on consumers to either forget how much they paid for the initial deal, or be so grateful that they don’t have to send something in by a certain date to continue service that they don’t pay attention to how much they’re being charged, or they’ll forget that they need to cancel by a certain date in order to not get charged. Or all three!!!

So do yourself a favor and be a savvy consumer. Pay attention to what you pay for things. Check the prices. Ask questions. Don’t be afraid to say ‘no’ to something you don’t think is fair. (But be reasonable, too!) Chances are companies will work with you to get you a good deal so you’ll stay. It’s win-win.

Tuesday’s Tip: Don’t Blow It!

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A short time ago, my husband and I filed our income taxes and were delighted to learn that we’d be getting a sizeable chunk of change from our dear Uncle Sam. Our pupils dilated, the fresh scent of crisp bills filled our noses, the joyous chorus of jingling coins resounded in our ears. Suddenly we found ourselves rubbing our hands together, giggling devilishly, and drooling. Visions of our ‘wish lists’ danced gaily in our heads.

Our excitement was short-lived, however, when the adrenaline wore off and we came crashing back to reality.

Of course we got a little carried away . . . but who doesn’t when the heat of unexpected cash begins to burn a hole in our pockets. Which leads me to the tip of the day: If you have a tax refund coming to you, don’t blow it!

Hear me out, now. What I mean by that is don’t blow your tax refund on frivolous crap. Harsh? Maybe. But true. Would my husband and I like to spend our refund on things we want? Like a Hawaiian vacation? Sure! A really cool digital SLR camera! Absolutely! Another computer? Uh huh. A huge HDTV? Yup. But we know we won’t. Why? Because those things are not on our list of priorities that we’ve set for ourselves and our family.

So, if you have a refund on the way, wait! Don’t do anything yet! Hang out with me for the next few weeks or so. I’m going to post ideas on ways to put your tax refund to work for you. I’ll give you ideas on ways to save it, ways to spend it, or a little of both. But do yourself a favor first: take pencil to paper and make a list of priorities in your life. Begin with the things you need. List things you’d like to accomplish. The things that are most important. Then stick around . . . hopefully you’ll get a few good ideas to start brainstorming and make good use of that refund!