DollarVersity

You can expect to find articles on topics such as taxes, entrepreneurship, credit, debt management, personal and business finances, and a variety of other financial and business related issues. More than that, the blog's goal is to inform, teach, and hopefully entertain you as well. The theme of the blog is to provide "A distinctive voice standing out from the crowd". What that means is that you will notice a more rebellious and challenging tone to many of the articles. This is because so many writers out there talk about the same topics in the same way, and so many people take everything that they read and hear at face value without thinking for themselves. The articles here are meant to take take common social and financial issues and challenge those norms, getting people to question things and think for themselves.

[dollarversity-blog]

Wrong Ways To Work Out At Home

                            Gym memberships make frequent appearances on "biggest wastes of money" lists, whether compiled by the media or from people's' individual experiences. Signing up for a gym is something that many people end up regretting, either because they caved under the pressure of the sales person, or because of their own laziness and loss of motivation after the initial excitement phase wears off.  What a lot of people are turning to is building their own home gym.  Be careful not to cheap out on this endeavor if it is something you are planning on doing.  Not only can you can just as easily lose the motivation here too, you may end up causing more harm to your body than your wallet.

Cheap options can lead to further expenses

It's perfectly fine to look for a good deal when buying almost anything.  It's even ok to do it yourself in some instances.  However, when it comes to putting together a home gym, these steps should be taken very carefully.  

If you decide to purchase equipment used, especially those items which contain moving parts or which need to support your body, you need to be particularly cautious.  Treadmills, steppers and ellipticals need to be inspected thoroughly. Without testing them completely, you can not only be left with a monstrous piece of junk sitting in your home, you may also be in danger of causing serious damage to your body should any piece suddenly malfunction.  Benches and cable/pulley towers should also be inspected for any sign of severe wear or compromise in structure.  When it comes to anything that is relied upon to either support or move any amount of weight (particularly your own) you need to ensure that the structure is in perfect condition.  A bench failing can lead to serious damage should it collapse under you, and is even more dangerous should you be in the middle of a lift.  A pulley that fails can lead to not only the potential for injury due to recoil, but also damage to your home if the weight comes crashing down uncontrolled.

The same can be said for do it yourself home gym equipment.  Many people think that a weight bench is easy to build, or that using scraps for making jump boxes, step-up tables, or any other form of equipment is an economical option. What they may not realize is that when you purchase any piece of equipment manufactured by a reputable company, the items are assembled of quality (hence the reputable precursor) parts and are tested to support maximum loads.  If you try to make your own, unless you are an engineer experienced in load testing, you are taking a tremendous risk with your body.

   Household items do not make stable weight lifting equipment

Another popular trend, especially among the frugal or cheap, is the use of household goods in home workouts.  This is not only dangerous from a physical standpoint, it is also ill-conceived from a training stand-point.  The reason weight-training equipment is shaped the way it is, and made of the materials used by manufacturers is because of reliability and ergonomic issues. There are a few myths out there regarding DIY training equipment that not only can cause bodily harm due to both of these issues but also negate any effort you put into working out:

1. Using household containers as weights--Milk or water jugs are simply not designed to be used as weights.  The handles do not provide the grip necessary for any recognized training routine, and the placement of the handles place unnecessary stress on the joints.  The reason barbells, dumbbells, and kettleballs all look the way they do is to provide even and balanced distribution of the weight throughout the entire range of motion of any exercise.

2. Stuffing cans of food or books into bags as weights--See above. Also, things like grocery bags and canvas books bags are not meant to carry heavy weights.  Then you have the issue of imbalance from the fact that cans or books or anything else you use don't conform to the shape of the bag (and vice versa) meaning that the "weights" are imbalanced and unstable. Again, this is just an accident waiting to happen

3. Strapping a backpack to you for added weight--Again, another instance of being cheap leading to possible injury.  Unless you are going to duct tape the backpack to your body, the weight will simply shift around.  There is a reason weighted vests are made the way they are--they have the weight rods (or whatever form of weight is used) strategically placed all the way around the vest and the vest straps to the body in a way that keeps it close in all positions. Have you ever tried running with a backpack on?  It leaves your body and slams back into as you move.  Imagine trying to do situps or pushups or even running with that going on.  Not only will you lose the proper form, but also will have the annoyance of constant shifting to deal with.

It makes perfect sense to not want to waste money on a gym membership that you will likely never use.  It also makes perfect sense to not want to spend a fortune to be able to work out at home.  Staying healthy and active are very import, but not when those benefits are lost when going about it the wrong way. And, the money saved doing it the wrong way isn't going to be worth anything if you end up having to spend significantly more in time and pain should you end up getting injured by taking the cheap route and having it backfire in any of the ways mentioned above.  

Do yourself a favor--don't put so much emphasis on saving money all the time. Sometimes, it simply isn't worth it in the long run, and putting your body and health at risk is not an equitable trade-off.

[bripblap]

If you’re careful with your money, you probably face an occasional dilemma of how much to tip various people in service positions. Tipping ranges from the $3 slipped to a doorman who hails a cab to a couple of hundred for some guys who move your stuff cross-country.

Before I was married, I...

[dollarversity-blog]

Why I Have No Desire To Own A Status Car

                          I'm not a car guy.  I never have been.  Growing up where I did in New York, it was certainly liberating but not totally necessary.  My father was never a big car guy.  Most of my friends weren't either, so I never got into the whole thing.  In fact my first two cars combines only cost about $2,000.  Sure, at one point, as I mentioned when detailing my worst money mistakes I went a little overboard with a car, but the car itself wasn't expensive.  Truth be told, I really don't care about, nor care for the price tag of a vehicle.

Cars that supposedly represent a person's social or financial "status" are just jokes to me.  Too often I see someone in a crazy-expensive car, yet when they get out, they look like they're wearing trash bags or have absolutely no class and decorum whatsoever.  So that right there tells me that the idea cars as status symbols is a completely flawed theory.  Aside from that , I just have issues with...

Care, maintenance, and worry involved

This is quite simple: I don't want to be bothered with all of the hassles of owning an expensive car.  I don't want to have to be anal about where  drive, or what I allow inside.  I don't want to have to carry a towel to wipe it down every time I drive it.  I don't want to have to hassle with going to a specialized shop for routine maintenance.  I don't want to become one of "those'" people who look at their car like it is one of their children.  I don't want to have to deal with any of that stuff.   

Auto insurance premiums

Many of the most frequent causes of high auto insurance premiums are associated with shiny, expensive, new cars.  The price of the car and not coincidentally, the cost of parts/repair is high among those factors.  So is the incidence of theft, and where/how the car is parked.  Unfortunately, I don't have a garage in which to keep my car parked, which makes me susceptible to this factor.  Check out tip number 6 in Jeff Rose's article on lowering insurance premiums for related info.

Damage from road debris/parking lots

I'm probably not alone when it comes to being the victim of damage to a car that was truly not my own fault or avoidable.  Debris on the road can be kicked up by other cars which has the potential to scratch my own car, cause dents, or even crack the windshield.  Trucks that are by law supposed to cover and secure the crap they are transporting often do not, and that stuff flies all over the place.  Idiot people who shove shopping carts across parking lots recklessly can scratch and dent cars and not think twice about it.  I've seen and experienced these things with my own two eyes, and it's very frustrating to have to deal with after the fact.

Other drivers and their bad tendencies

Going back to the parking lots, at one time I came out of a mall only to find that my front passenger-side door was dented, yet no one was around.  No note, no witnesses, and of course no security cameras to review in an effort to catch a glimpse of what had happened.  I'm the type of person who likes to park far away from my destination, knowing that most people are too lazy to do so themselves.  I also like to park against the curb so the possibility of a moron opening their door into mine is limited to one potential side.  Sadly, people always find ways to be stupid and careless.  Not paying attention when opening their door, being preoccupied on the phone or with others in the car, not being aware of their surroundings or trying to find where their destination is all fall into this category.

The elements can be disastrous

When I lived in New York, it was snow that made driving difficult at times, and the road salt which was the enemy of metal parts and a car's finish.  When I moved to south Florida, it become the thunderstorms and hurricanes.  In destructive weather, anything has the potential to damage a car.  I've seen trees and light poles knocked down, resting on top of cars.  I've even seen street and store signs pulled off of structures and be thrown through windows, landing inside of cars.  Even if I did have a garage within which to store a car during these times, it's not always guaranteed to be safe.

Kids playing in the street

This is something I know about firsthand because I  was one of the people I've grown to bitch and moan about.  Growing up, we'd play football and basketball, toss a baseball and ride bikes or skateboards in the streets right next to parked cars.  I've crashed a bike, skateboard and even my own body into a few.  Now that I have my own car and know how much time and money it would cost to repair if from damage caused by any of those activities, I understand why we got yelled at so often as kids.  It still doesn't change my mind, however.  Maybe I'm a hypocrite or out of touch now, but I still don't want any of the neighborhood kids doing kick flips on their boards, or throwing a baseball across the parking lot when my car is only a few feet away.

Perhaps if I had more money than I knew what to do with, and I could own a fleet of cars if I so desired, I would reconsider.  It's doubtful that would ever be the case, though, as I could think of numerous other things to do with that kind of money.  Who knows what can happen in the future, but even though I tend to stick to my convictions, I will never say never.

[dollarversity-blog]

Looking At Google’s Updates And Actions From A Business Perspective

I am not an SEO (search engine optimizer).  I am not an SEM (search engine marketer).  I don't have very much technical skill or deep understanding when it comes to coding and meta tags, or keywords and anchor text.  I write based on what I know and try my best to pick up tips on that which I don't know from the experts' blogs.  And, what I can't figure out on my own in a reasonable amount of time, I hire someone with more skill to do for me.  What I do know is business, and it's that knowledge and perspective that makes me laugh at some of the decisions made and actions taken by Google in recent months.

Over the past several months, Google has made several updates to its search algorithm for rating websites in its search feature and the way it ranks sites using its Page Rank system.  There have also been waves of people who have had their AdSense accounts banned for reasons that remain unknown to them.  Sites have been de-indexed by Google during this time in part of their belt-tightening process to reduce manipulation of search rankings.  The way sites are set up in terms of showing advertisements have taken a more prominent place in Google's overall ranking system.  All of these things are deemed to be good for the consumer.

But, who is Google to decide how the internet is run and how businesses operate within this space?  What makes the Big G. the be-all end-all when it comes to how sites are built, optimized, marketed, and monetized?  Yes, it is a huge company, and its innovations have changed the way people operate within cyberspace, but I for one don't view it as the all-encompassing technological deity that people make it out to be.  I actually take issue with several of Google's initiatives and changes.

Google's stance on purchasing links

I find it just a little hypocritical that Google takes money for advertising links, yet it punishes websites that do the same exact thing.  Perhaps it is because the way Google sets up AdWords in the form of an auction, where you bid for your placement, they don't consider it to be an outright sale.  To me, it's simply semantics.  They are taking money in exchange for the opportunity for the advertiser's ads to be shown ahead of others based on how much they are willing to pay.  Straight sale or auction format, it is still selling links.

From a strict business aspect, if Google was true to their claims of wanting to provide users with the most relevant search results possible, then they defeat that purpose just by placing "sponsored links" at the top of the search results, and making them seem like part of the search results.  That in and of itself detracts from the "relevant results" if they are only being placed up there due to payment from the advertiser.  And, yes, Google does give the option to customize this feature, but it shouldn't come to that if the purpose is the search itself.  If they wanted to display for-pay links, they can relegate them to the sidebar which does not inhibit the users view of the search results, which is the reason they did the search in the first place.  

This also goes against their own demand for websites to offer more content above the fold.  Part of the changes implemented in their ratings system is to penalize sites that are advertisement-heavy at the top of their pages.  The point is to provide more content in the initial view of a page rather than pushing ads when visitors first land on a page.  This is exactly how their own search results pages appear, which runs contrary to their own guidelines.

I don't necessarily have a problem with selling/buying links in general, but I do have a problem with all of the sites that game the system while providing little to no value.  Punishing those sites is a good idea, as long as there is consistency and accuracy in flagging the bad as opposed to the good, quality sites.  In this modern age, however, websites are the new newspapers and magazines. Since old media sold advertisements in the form of both textual and pictorial ads, why is it such a big deal that websites do it as well.  After all, if websites are the next evolution of media, shouldn't advertising be allowed on them as well?  As such, isn't the owner of the piece of internet real estate where the ads will show up entitled to be paid for that space just as magazines, newspapers, radio, and television are?

Google's de-indexing of blog networks

Businesses build strategic alliances to strengthen their positions in their respective fields and gain advantages over their competitors.

Teammates in NASCAR and cycling work in tandem to win, even though those particular ones are individual sports.

Medical professionals band together to form care groups so they can negotiate better rates from the insurance companies.

So what is the big deal if a group of websites band together to collaborate and broaden the collective reach beyond that which was possible as individual sites?  It is simply good business to align yourself with others that can provide benefits such as introduction to a new audiences, credibility enhancement, and transference of experience in the name of helping others.  In essence, most sites are businesses and businesses from networks help each other out. Networks such as BNI International are designed to do just that, get professionals in different industries together to help one another and refer potential clients back and forth among them. At the most basic level, that's what a real blog network does.  It allows bloggers to join, share information and resources, and introduce their readership to new and interesting writing.  

Now, I can understand the removal of those networks which do nothing of any value, or charge users to join in exchange for trashy links.  I can even understand the desire to rid the internet of black-hat techniques for SEO.  The problem occurs when they are all lumped into the same category, regardless of the value they provide.  Like anything, without having the ability to view each one as a separate and distinct entity, this is just a poor system.

Banning of AdSense accounts

The whole idea behind Google shrouding the reasons for banishment in secrecy, using the excuse of protecting the privacy of the AdWords customers is complete and total crap.  If you get denied credit, you are legally required to be sent an explanation notice revealing the specific reason for the denial (ie: too many recent inquiries, not enough history, poor history, credit utilization ratio too high).  But, I guess we now live in an age where the government and the credit industry are more customer-friendly than the almighty Big G, and its stranglehold on the internet, and by extension, almost all of us.

Besides, if someone is angry enough to sabotage a site by triggering false click-throughs, why should that be the responsibility of the site owner.  They have no control over who can access their site or click-through links once there.  All you have to do is read the sports section to hear about how Steve Blake of the Los Angeles Lakers received death threats after missing one shot in a single playoff basketball game via social media.  Or how the wife of Jonathan Lucroy, a catcher with the Milwaukee Brewers, received threats after he was injured because she moved a suitcase which ended up falling and breaking his hand requiring surgery.  These are only two isolated examples of how people can be vengeful and aggressive behind the anonymity of the internet, so is it really that hard to imagine someone doing something like purposefully clicking on ads in order to get a site banned just because they didn't like what that person said, or they have differing views on a topic?

Additionally, how can Google justify closing then banning these accounts with the very first infraction?  There are no warnings and no suggestions for changing how the site owners use the system.  People get lighter punishments for breaking laws than what Google does in treating these comparably inconsequential situations.

If people continue to get banned from using AdSense to monetize their sites, that would be bad business.  The advertisers need the publishers to display their ads just as much as the publishers need to display those ads to make money.  If you continue to eliminate heavily trafficked sites, real sites--not like the crappy tabloid sites where people go to read bullshit stories and leave half-assed comments--then the AdWords customers will end up suffering because of it.  From a pure business standpoint, it is stupid to disillusion and piss off your customer base. 

The business landscape online is not much different than it is offline in terms of principles and strategies.  I understand that the folks at Google are trying to make the internet more intuitive, and are trying to improve it on a global scale, but sometimes it seems like their actions go against basic business principles, not to mention flat-out applying rules to others that it does not follow itself. Good intentions aside, there are lots of issues that Google needs to address in the way it is approaching those objectives.  I'm not going to sit here pretending to have all of the answers, because I don't, but I do know that punishing basic business techniques, having double standards, and being secretive about causes behind actions is not going to be good for business.  No company stays on top forever, and it's only a matter of time before Google has to start looking over its shoulder when the new "next big thing" comes along and threatens the dominance it currently enjoys.  

[dollarversity-blog]

Need Some Summer Savings? Talk To Your Power Company

Every year without fail, as summer approaches so many media outlets turn their attention to the energy costs associated with staying cool during these hot (sometimes sweltering) months. There really isn't very much different across the different articles, blog posts, and news reports.  The old standards always take center stage: turning off lights and accessories when not in use, using digital thermostats to automatically regulate indoor temperatures, using ceiling fans to reduce the reliance on air conditioners among various other tips. Believe me, I have no problem with several different sources reporting the same information in similar ways.  There are, after all, only so many topics for an entire niche group to speak on, and there are bound to be some topics that get repeated.  However, it surprises me that I've never read about this one simple way to save significantly during those hot-weather months.

Everyone can attest to the fact that the summer months are the most draining on their finances, with so much energy being needed to bring the indoor temperature down during this time.  Stopping just short of walking around the house naked, there is only so much you can do without an air conditioner to escape the heat.  Sure, you can sit in a tub of ice water or take a cold shower, but continually doing so will increase your water bill, and you really can't multitask very much while doing so.

Did you know that your residential power supplier can help you reduce the costs of your summer cooling bills?  It shouldn't cost you a single penny to do, while taking a minimal amount of time to set up.  Who wouldn't want to take advantage of such a deal?

Really, all you have to do is sign up with your power company for their energy reduction program.  Each company calls it something different, and the savings also differ across the companies, but the premise is relatively the same.  You call the power company and tell them you want to be part of the energy savings program.  They schedule a technician to visit your home and install a remote switch inline with one of several types of high energy usage appliances.  The technician leaves, and you're all set.

What happens once the switch is installed?  For the most part, nothing.  Many times, you won't even notice that the attached appliance isn't being run.  Most of the time this is just a convenience fee that you get paid to make yourself available for these programs.  The only time you will be effected is in times of energy emergencies, which don't occur very often, if at all.

I have my air conditioner set up with Florida Power and Light.  The installation took all of 10 minutes, and on my bill each month, I can clearly see the credit being given to me.  Some companies give a flat amount, while others give a percentage paid monthly; some have high dollar value incentives, while other pay less.  It all varies depending on who services your home and the program they offer.

Power company cycling programs

These are just a sampling of some of the companies in the bigger markets in the United States.  You would need to call or go the website of your own provider to see if you are eligible for anything like this.  If you are, you may be in for a summertime bonus.

PG&E SmartAC program

FP&L OnCall program

SCE Summer Discount Plan

PECO Smart A/C Saver program

BGE PeakRewards Air Conditioning  and BGE PeakRewards Electric Water Heater (winter) programs

Do yourself a favor: give them a call.  What is the worst that can happen?  Your company may not have an energy saving program?  The alternative is being able to save a few (or few hundred) bucks by doing nothing other than allowing your energy company regulate some of your power consumption in order to keep full power to your area.  Sounds like a win-win to me!

Have you ever heard of thees types of programs before?  If you have, are you on one right now?  If not, do you think you'll be calling to find out if you can get on a program like these?  What kind of incentive would it take for you to sign up if you have no plans to so (and are eligible)?

[dollarversity-blog]

Is The Apple Siri Lawsuit Extortion Or A Valid Complaint?

Controversy seems to be eternally tied to Apple, its products, and its late founder Steve Jobs.  Whether it's the cult-like following Apple  has, the brash manner in which Mr. Jobs carried himself, or the success of the company's wildly popular iPods, iPhones, and iPads, there are always people taking shots at the company.  I have also been one to remark negatively against the high prices for items such as the iMac or MacBook line relative to the PC alternatives.  But, even I have come to the realization that certain things just cannot be ignored, such as the complete and utter dominance of the iPad compared to any number of the Android alternatives in the tablet universe.  All of this beings us to the most current controversy: the class action lawsuit against Apple concerning the operation of its Siri companion on the iPhone 4 line of smartphones.

The lawsuit basically revolves around the fact that a New York man is frustrated with the fact that Siri cannot understand his accent, or takes "unacceptable" time in determining the answers he is looking for, which tend to be the ones. He points to the smooth and seemingly flawless image of the feature the advertisements for the iPone 4 present.

To that point I say get over yourself buddy (and everyone else who hopes to benefit financially from the potential class-action suit).  Everyone knows that advertisements take advantage of consumers by appealing to their sense of aesthetics and their fandom for celebrities.   For decades marketers have made their advertisements in such ways to show the products featured in the best possible way.  Car ads tell you the absolute best fuel economy possible even though the results will most likely be much lower.  Restaurant ads often times don't even use real food in order to make the products look "perfect". Actors are always airbrushed and touched up in print ads to remove all noticeable blemishes.  Camera, smartphone and tablet ads use simulated images to illustrate the capabilities of those products.

It's common practice, and only someone who has lived in a cave for most of their life would think that these ads represent what they will get in real life experiences.  In fact, most of the ads come with disclaimers stating this fact, regardless of how minuscule those facts may be shown.

I would also ask this guy, and everyone else who jumps on the bandwagon two simple questions:

If you have 30 days to return the product, why would you not do so when you find the product not living up to your expectations? and  

What if your employer finds that you do not live up to their expectations of your work, could they sue you?

These are two valid questions.  The first revolves around the consumers own indifference to the operation of the Siri feature.  Particularly with Apple products, people who buy them get right down to business and start using them right away.  If you mean to tell me that someone held the item sealed, allowing the return period to pass, I'd have a hard time believing that.  Or, that if after using the product for more than a few times that people didn't realize it didn't work to their expected level of proficiency they continue using it rather than exchange it, I would scoff at them.  When you have a full month to essentially test a product in-home risk-free, there is no reasonable excuse for not figuring out that an important feature doesn't work as well as you would like. And if it wasn't important enough to return it then why is it so important to cause you to sue over it?

The second question is a bit more abstract but quite poignant.  The premise of this lawsuit is the "misrepresentation" of the performance of the Siri feature. When people are hired for a job, they are doing the exact same thing--selling themselves based on certain features and abilities.  If anyone in the proposed class was to fall short of their advertised abilities, it would be the same as Siri not performing as advertised.  Would it be ethical or even right for their employers to take them to court for "misrepresenting" themselves in the same manner?

Bottom line

Is this a lawsuit based on realistic expectations of the way a product should operate or is it a way of extorting a settlement from one of the largest US companies?  People, especially money-hungry lawyers (and we all think many of these types of lawyers are unethical to a degree) know that large corporations would rather reach a quick, out-of-court settlement than face a long, drawn-out attention-grabbing court case. This is especially true in this age of sensationalized and immediate media coverage.

If this is a lawsuit that is truly based on the observations and expectations solely gained from viewing a television commercial, then it's a complete joke.  This is especially true if you consider all of the other examples of similar marketing tactics seen on a daily basis that this man and every single litigation attorney on the planet have allowed to exist without a peep.

What are your thoughts on the issue?  Is showing the optimal performance of a product in a n advertisement unethical?  Is that a good reason to sue the manufacturer when the product doesn't perform to that standard in real-world applications?

[dollarversity-blog]

Mistakes New Graduates Should Avoid When Applying For Jobs

Summer means beaches, barbecues, vacations, and for many graduation, either from high school or from college.  The next step (yes, some high school grads don't go to college) is finding a job.  The question is, where do you begin?  For college graduates, the process probably has already stated with the headhunters who paid visits to the campus during the year.  Not all schools receive such visits, however, and not all students get headhunted either.  And, when it comes to high school graduates, there aren't very many who get targeted for jobs at all.    So the question still remains open.  You need to cover all of your bases, not just prettying up your resume, to ensure that you get a job interview that leads to a promising career.

Everyone and their mother--as well as their father, brother, sister, aunt, neighbor, fiend's girlfriend's coworker--has been through the job hunting process and has an opinion on the subject.  They all have their advice and tips for being "successful" in acquiring that coveted position of becoming gainfully employed. They will give you tips on where to begin searching for a job,  what size fonts to use for your resume, whether or not to list the job you had last summer that lasted all of three weeks, and how much money to ask for.  The problem with that is they only know from their personal experience, which can differ greatly from one person to another, and they may have actually been hired in spite of what they did.

There are a great number of articles and books about resume writing--what should be included, excluded, the length, etc--and those are great advice for when you formally would like to apply for a position.  But what about the advice for choosing and then applying for a job opening?  

So, let's get to the things you need to avoid when you start applying for those jobs...

Not doing a self-assessment

(Most) Everyone wants to go for the gold, reach for the stars, or whatever other cliché you can insert here.  However, not everyone is qualified for their dream job. Additionally, the competition for the job you may really want may be quite stiff, with many more qualified candidates.  What you need to do is sit down and do a real, rational self-assessment to see what you are educated, qualified, and/or experienced to do.  You know better than anyone what you are and aren't good at--if you are honest with yourself.  Don't allow others to push you towards thinking that you can do something you clearly have no business getting into. Ignore the temptation to reach out to employers that exist in fields you know very little or nothing about.  It will only hurt you when you don't get a call regarding your submission.

Failing to research companies

There is a lot of information on the internet about potential employers.  Check with the state's Attorney General's site, the Better Business Bureau, Yelp, or Google Local for complaints against the business.  Look at the state's Division of Corporations to see who is in charge and whether they are current in their registration (if they aren't it can be a sign they are not going to be around very long or simply an oversight).  Go to their website, assuming they have on (and who doesn't these days) to see what their mission statement is, what aspects of the industry they deal in, potential new coworkers.  All of this can give you tremendous insight into a potential employer, and can help you eliminate them from your to-apply-to list and save you the hassle now, plus headaches later on should you be hired only to realize it was a mistake to accept based on what you would have found during your research.

Ignoring specific requests and actions

Each company looks for different things when it comes to the hiring process, so how do you know what you should be doing to grab their attention?  Well, the best way to make yourself stand out is to give them exactly what they ask for. In many job ads, especially online, the employer asks for certain things to be provided, and by adhering to those requirements you show that you pay attention to detail and can follow direction.  Many people simply look at the position and pay when searching through the job listings, and the people who screen the applicants look for the things they ask for specifically.  So, if the company wants you to list specific software programs you are proficient in, tell them.  If they want to know what salary requirements you have, tell them.  If they ask for your GPA and/or standardized test scores tell them.  One of the worst things you can do is ignore their specific requests, as they would not have spent the time making them part of the job advertisement if it wasn't important to them.  If you can't do something as simple as this then how can you follow company procedures or protocols should you be hired?

Thinking that a GPA alone means anything

Lots of people go through their college careers trying to obtain a high GPA, thinking that it is the ultimate proof of hireability.  The simple truth of the matter is that it isn't.  Many students can reach such a goal through learning study techniques.  The issue here is that there is a difference between being able to pass a test with high marks and actually learning the material.  Employers want to know that you are able to apply what you supposedly learned to real world situations.  The only thing a high grade point average represents with any certainty is an ability to retain information.  Being able to use that information in practice is a more highly valued trait to employers.  That is why in many industries, you must complete practical examination as part of the application process.

Being cocky/having a sense of entitlement

Confidence is a great trait to have.  Being cocky or arrogant  is taking things a bit too far and seen as a red flag.  Coming off as such may signal a possible inability to work well with others, a problem with authority, putting yourself ahead of the team or the company as the case may be, and an inability or unwillingness to be flexible.  It is possible to be confident in your abilities while being humble simultaneously.  Check your ego at the door when it comes to looking for a job and realize that there are only so few opportunities for so many candidates.  After all, there is always going to be someone smarter, who learns quicker, is harder working, has a better pedigree...does something, anything at a higher level than you.  Just remember, everyone has to start somewhere, and for you that may very well mean at the bottom.  Don't look at it as an insult to your skill or intelligence.  Instead, look at it as an opportunity to show your potential employer that you are willing to earn your way and then blow their mind by exhibiting your true capabilities.

Not having a backup plan

You've heard of the phrase "putting all of your eggs in one basket" before, but you probably never associated it with the job market.  In essence, you need to have two, three, or even more companies or even fields to which you want to apply for employment.  It is just like when you were selecting colleges (if you went that route): you had your first choice--your dream school, but also had to apply to a couple of others just in case you didn't get accepted or couldn't get the financial aid to attend number one.  Applying for jobs is no different.  Just like college admissions, there are more applicants than open spots; the applications get sometimes outnumber the openings by a large margin.  That dream job you had your sights set on may not work out, so you need to be ready with backup options to apply to.

Foregoing search firms

This is a free service available to candidates in a wide range of fields, so why not take advantage?  It's free to you because the employer who eventually makes the hire pays the fee, so you  have no risk whatsoever.  The biggest reasons to at least consult with a search firm are experience and contacts.  The search firms and their representatives have experience in all facets of the job search process.  They can advise you on ways to improve your resume, prepare you for interviews, and do the legwork of screening positions for you. They also have relationships with many of the important people who make hiring decisions in the companies you are likely looking to work for, and know their personalities and tendencies so they can put you in the best position. And, the companies they work with trust their judgement and often times don't even publicly advertise job openings, opting instead to inform the search firms so that only the truly qualified candidates' resumes make it onto their desks.

The job hunting process is a competitive and sometimes difficult undertaking. Don't put yourself at a disadvantage by starting off on the wrong foot and making any of these mistakes.  Remember, this is your career we are taking about, so you want to get started the right way the very first time!

And, the great thing is that although this is targeted at recent graduates, these tips can be applied to anyone who is in the market for a job!

[dollarversity-blog]

Stop Being So Obsessed With Saving Every Penny

Everywhere you look, people are writing about ways to cut "unnecessary" expenses from their lives.  People are constantly looking for new and inventive ways to save and hoard every penny they can.  Saving for retirement, and the future in general seems to be an obsession.  Maybe it's the effects of several economic failures in the US over the last decade.  Perhaps it's the financial media's focus on the fact that the US has an abysmal savings rate as a whole. While there is absolutely nothing with keeping an eye toward the future, there seems to be a big part of the picture being ignored, perhaps tragically so: today.  

So much of the focus in personal finance journalism tends to be on the future but no one seems to be talking about living in the here and now.  There are several reasons why this intense and narrow focus on obsessive saving and future planning needs to be addressed:

Tomorrow is not guaranteed

This is perhaps the most obvious reason.  We see and hear about it every day: peoples' lives being cut short either due to the malice of others, bad luck with health issues, natural disasters, or whatever other circumstances happen to be the cause.  Benjamin Franklin famously coined the phrase: 

The only certainties in life are death and taxes

This may be a very dark and morbid view, but it cannot be more accurate and should not be ignored.  You can stash as much money away as you would like. You can deprive yourself of anything you wish in the name of saving.  You can avoid spending money on anything that you don't consider to be a need as much as you want.  The simple truth of the matter is that there is no guarantee the day you designate for being able to start spending that money will ever come.  

Besides, what is the point of making money if you aren't able to enjoy at least some of those spoils while you are still alive and able to?

Speaking of which...

You can't take it with you

As far as I know, none of us are Egyptian Pharaohs, meaning that none of us will be buried  with our treasures and worldly possessions to take with us to the afterlife (if you even believe in that).  You simply cannot spend any of the money you stockpiled when you are dead.  Having decades worth of maxed out retirement accounts, savings accounts overflowing with cash, brokerage accounts flush with investments that will support your lifestyle for many years to come, income producing investments that will continue to supply you with positive cash flows for as long as you will possible need are all great if you can take advantage of them.  You need to be alive for any of that to matter.

Sure, you can leave your wealth to future generations or choose to be philanthropic with it, but if that wasn't the original plan, then all of that effort and dedication to scrimping and saving will go to waste.  

And while we're on the subject of wasted efforts...

You aren't indestructible or immortal

Physical limitation impact your future plans.  It's great to have grand plans, and the discipline to follow through on those plans.  The bad part is that many times things do not go according to plan.  The reason is simple: life gets in the way. How many people do you know who, as they enter the latter stages in life regret not doing some things while they were younger?  This happens quite often as so many people do not take life into account when planning for the future. They talk about working hard during their prime years in order to travel or spend their golden years doing the things they enjoy with no financial worries.  While they are working hard, sacrificing certain amenities and cutting every corner possible time is taking its toll on their bodies, and life is wearing on them.

Health is a very important consideration when it comes to seeing those dreams and plans come to fruition.  There are many things that simply cannot be done at an advanced age from a physical standpoint.   There is simply no denying that fact.  What do you do when you are ready to retire but your body won't let you accomplish or enjoy any of the things you put off until this time?  Will you look back and wonder "what if"?

This doesn't meant that you shouldn't stop thinking about the future or stop looking for ways to save on the things you enjoy.  While there is nothing wrong with saving, a balance needs to be found.  One of my personal quotes is "live for today while keeping an eye on the future".  I think that it would be wise for others to do so as well.  Life is meant to be lived, and by allowing it to pass you by for the sake of saving for the ideal future which may never come can lead to huge regrets.

How do you achieve the balance between living in the moment and planning for the future?  Do you consider yourself to be obsessed with the future?  Have you lost sight of the importance of living for today? 

[dollarversity-blog]

Don’t Be An Ass: Rules For Using Bank Drive-Up Services

It may seem like a task that is becoming less necessary with each passing day. More businesses are equipped to accept payments via credit and debit cards. Individuals have the same ability thanks to services like PayPal and Popmoney. Some banks are even allow you to deposits checks electronically via smartphones and tablets.  Still, going to the bank is a required errand for many people.  If you are one of them, you need to be aware of the rules that govern the use of the drive-up service provided by your bank.

It may not seem like a big deal, but the purpose of the drive-up lanes is to speed up the banking process and provide those with simple transactions a break from having to wait on line inside for the full-service tellers.  It is a way for banks to provide a better customer experience.  It begins, however, with the customers themselves, and their ability to follow the rules that are in place to allow the banks to offer the experience they wish to provide.

Drive-up is only for customers

If you aren't a customer of the bank, don't bother going to the drive-up. All you will accomplish is wasting your time as well as that of the teller and the people around you. It doesn't matter that the check you are trying to cash is drawn on an account held there, it just isn't going to happen. When cashing a check that is presented by anyone other than the account holder, the signature needs to be verified, which takes time and defeats the purpose of having express lanes if that needs to be done.

It's common for many people to not have a bank account, and many such people go to their employers bank to cash their checks.  If you are part of this group, don't even bother driving around, just go park the car and right right inside.

Have your transaction ready

This is another major rule for keeping the drive-up lanes flowing smoothly. After all, it is called "drive-up" and and "park here while gathering your transaction and filling out your paperwork" banking.  It's also not called "send us an empty canister and ask for deposit slips because you aren't prepared" banking. When you show up to the bank, you need to already have all of your stuff done and ready to go.  The teller may not be permitted to tell you "no" when you ask for something to prepare the transaction or make you go leave if you are sitting there unprepared, but the customers behind you most certainly will! 

So if you are taking money back from transactions, send your identification with everything the first time.  If you are withdrawing money, make sure the form is signed.  If you are depositing money, make sure the slip is fill out completely and that the totals are accurately calculated.  And, if you are unsure if your transaction can be done there, don't even waste anyone's time to begin with--go inside from the beginning.

@wellsfargo do you not allow employees to make drive thru customers go inside if they aren't ready or need to fill out slips? #fail

— Eric J. Nisall (@DollarVersity) April 20, 2012

Only basic transactions are accepted

Don't drive up to the bank looking to purchase a cashiers check, travelers checks, open or close an account, or do anything more than a simple deposit or withdrawal.  The reason certain transactions are not permitted in the drive-up is the time it takes to process them.  Most banks don't provide much more than a cash drawer to the drive-up tellers, which means that they would have to start leaving their post in order to get certain transactions done, which is not what they are supposed to do.

And please, please, please don't argue with the teller about how you have a kid in the car with you, or how you need to get back to work, or whatever else you want to try to get them to break the rules for you.  In the time you spent waiting to get to the front of the line, then arguing you probably could have gone inside, done what you needed to, and been on your way already.

Limit your transactions please

Sure, banks are more technologically advanced these days, and the time it takes to process a transaction is much shorter than in days gone by.  Does that mean you should carpool to the bank and send over transactions for the five people inside the car?  Heck no!  There is a purpose behind the limit to the number of transactions.  Simply because the processing time is shorter, the teller has to be able to move between the lanes efficiently, and if they are stuck handling your five transactions, that means the other lanes are idling while the traffic build up behind them.

Again, if you need to transact on several accounts, or for different customers, head directly inside.  

Don't think that you are so special that the rules don't apply to because you have a self-inflated ego, or because you may have a certain amount of money in the bank, or whatever other cockamamie excuse you can come with.  Even if there isn't a lot of traffic at that particular point in time, you never know what the next moment will bring. 

Remember, speed and volume are the main objectives of the drive-up lanes.  If you can't abide by the rules of this area, then just go inside.  Nobody wants to sit in their car, delaying the rest of their plans while you fumble around looking for a pen or trying to calculate the deposit amount on your ticket.  Not only is it annoying, it's really discourteous to your fellow bank patrons, and you never know who you may piss off in the process.

Do you still even visit your bank's physical location?  If you do, do you ever get frustrated at the lack of courtesy shown by people who break these common rules?  Are you one of those who are guilty of breaking any of these rules?

[dollarversity-blog]

My Experience With Chase For A HARP 2.0 Refinance

I recently closed on the refinance of my condo.  It has been a long time coming, considering the fact that I tried to do a modification back in September of 2009, and after almost a full year of submitting (and re-submitting every quarter) all the requested paperwork, I was ultimately told that I didn't prove that I met the hardship requirement.  So, when the Obama Administration announced the HARP 2.0 initiative, I was kind of skeptical yet fairly excited since the "hardship" requirement was gone.  I made a call to Chase, who held the original mortgage to find out the exact details of the program as it pertained to their participation, and waited for the word to come along of when it was to take effect.  The problem was, and I should have known, that in most instances nothing is ever as easy or smooth as it is made out to be.

From my very first conversation with the Chase mortgage representative in Arizona (you will see why this little fact is important soon enough), all of my questions were addressed completely and satisfactorily.  Not only that, but the rep sent periodic emails when more information was made available to them so that I, along with anyone else with whom he was working, would be kept in the loop.  Ultimately, it was announced that February 6, 2012 would be the day the program went live.

I'm not one who likes to be late to the party when it comes to the chance to save some significant coin, or very much else for that matter, so I made a point to call my rep the minute I got home from work on that very evening.  It was great, he answered right away, and we got the ball rolling right then and there.  He took all of my information to make sure it was as they have it recorded in their files.  I gave him all of the information as it relates to income and housing situation, even offering to provide proof of income and residence (as opposed to this being an investment property which would eliminate me from the program), but he said it wouldn't be necessary.  He sent me the authorizations to sign for him to run my credit and obtain copies of my tax returns, and within minutes of receiving it, the document was signed and in his inbox.

We got everything squared away and moved onto the numbers.  I told him how I wanted to roll all of the costs back into the loan, and how everything else should stay the same as far as my taxes being escrowed, but the insurance remaining separate from the escrow account, and being solely my responsibility.  The numbers ended up being quite favorable for me.  I got to knock off 2.125% from my interest rate for a savings of over $300 per month!  We were plowing forward at breakneck speed.  I couldn't believe how smooth and effortless this was compared to my last attempt to obtain some relief from the dumb luck I ran into by buying at the top of the market cycle right before the subsequent crash.

Boy, was I premature in my celebration.  Here is a timeline of the chain of events that followed:

February 10--I schedule the appraiser to come out the following morning.

February 11--The appraiser sis a no show, and not as much as a phone call.

February 13--I receive an email from the processor in Ohio (told you the reason for giving the location would become apparent) stating that the loan went to underwriting and a determination should be expected in 7-10 business days, with his goal of wrapping up the entire process within 45 days.

February 14--The appraiser, from a different company I presume, comes and inspects the property.

February 17--The refinance is approved, but they ask for a letter of explanation regarding the ownership percentage of my business.  That was easy enough to take care of.

February 18-March 14--No communication from the processing representative in Ohio, so I call my Arizona guy to let him know that I haven't heard a single word.

March 15--I receive an email from the Ohio processor informing me that the new loan is in underwriting for final approval.  he states that he hopes to have it completed by the end of the month (March)

March 20--Another email from Ohio telling me that it is still in underwriting.

March 27--I receive an email from Ohio asking me to verify income and liabilities. The numbers he send for verification are correct on the liability side, but he is only reporting half of my monthly income.  That pisses me off.  I call my guy in Arizona to tell him what's going on and he gets pissed since with this program, none of that stuff even matters.

April 2--I finally get a response from Ohio on the income/liability verification issue, 5 days later, apologizing for the delay and telling me that proof is not needed but verification is.  This is totally the opposite of what I was told, and in fact ends up not being necessary in any form.  And, he totally ignored my response to the first inquiry correcting his figure!  I also ask that he push it along, since we were approaching 2 calendar months with this already, and past his target of the end of March.  His response is that he will do that and "it should be clear to close by the end of this week" (week ending April 6).

Of course the end of the week comes and goes with no word on the closing.  Big shock there!

April 12--I get an email from Chase saying that my welcome package is available for viewing.  This is the same email I received that included all of the papers to start the process.  Needless to say I freaked out.  I emailed and called the guy in Ohio, but of course got no response.  So, I got on the phone to Arizona and my guy out there got everything all cleared.  Apparently the Ohio processor filed the papers incorrectly which caused the email to go out.

April 13--Ohio guy emails to say that we are clear to close, and set up a time on April 16 for the notary from the title company to come process everything.  Of course, that just happens to mark the 45th business day of the process since his declaration that it would be done in 45 days.  He also tells me that I will have the final HUD statement to review before the closing.

April 16--I never receive the final HUD.   The title rep shows up, and we start going through the paperwork.  Lo and behold, the information is incorrect.  They are expecting me to pay $2,500 to close, plus the insurance is included in the escrow.  We each get on the phone to clear it up.  As it turns out, no one is around to take care of it, so I leave a message for the Arizona rep.

April 17--The guy in Arizona calls me in the morning and he isn't very happy with the situation either and tells me he will make some calls.  A little later I get a message from the Ohio processor apologizing (once again) because he went home ill before lunch and never got to send me the final HUD.  Plus he didn't see the errors I pointed out, if he even looked at it to begin with.   The loan had to go back to underwriting for re-approval since I had a payment in transit, and it hit the account before anything got settled.  Then they had to rework all of the intermittent figures like taxes and interest.

April 18--Another email from Ohio stating that everything was fixed on the HUD, and asking if closing can be set for the coming Friday (April 20th), to which I say "yes!"  He then asks (like he always does at the end of his messages) if there is anything else he can do for me.

April 19--I rant about not understanding why my insurance has to be escrowed since it was never done that way on the previous loan.  He goes on about them needing to have a years of insurance paid into the escrow account and blah blah blah (I stopped paying attention because this guy does nothing but piss me off with his delays, mistakes and apologies) until I see him tell me that I have to pay additional points to have the insurance non-escrowed.  That put me into a rage. Again, I call out to Arizona and vent to the rep out there, who, once again, calls Ohio and sets this guy straight on what does and doesn't need to be done with this loan.

April 20--Day of closing (again).  I get a final HUD, and it has me paying no money at the closing.  However it still shows my insurance as part of escrow. I send it back telling the Ohio processor to fix it and get me a new copy before the end of the day so I don't waste any more time with another failed closing.  I hear nothing until 4:37 PM, 23 minutes before the processing department goes home for the weekend, when the new HUD finally arrives.  I'm fuming, because if anything was wrong, there was no way it would be corrected in time to close.  I finally closed later that evening.

May 15--I received the refund check for the additional interest charged as a result of the Ohio processor's screw-ups leading to the additional delay in closing.

I have to say, although it was much easier to to the refinance than it was to try with the modification, there were way too many bumps in the road for my liking.  For something so straightforward and simple, there were a ton of mistakes and the guy processing the new loan sure showed a pretty high level of ineptitude.  I had to give a huge amount of thanks to my rep out of the Arizona office.  Without him, I would have stopped the process after the first failed closing and gone elsewhere.  He did an amazing job of putting out the fires caused by the guy in the Ohio office.  And, in fact I emailed the whole thing to the Arizona supervisor and talked to him on the phone about it, telling him how lucky he was to have the guy who was working with me in his department.

At the end of the day, I have to say that the HARP 2.0 program did do what it was supposed to do for someone in my position, who ended up getting screwed by others while contuing to hold up his end of the bargain.

Have any of you tried to do a refinance under the HARP2.0 program?   Are you considering it?  Share your thoughts or experiences in the comments!

[dollarversity-blog]

A Business Is Not Your Personal Piggy Bank

Keep your business and personal money in separate accounts." That is one of the most fundamental pieces of advice any accountant, lawyer or business coach will tell you.  It is relatively uncommon for certain things to be almost universally agreed upon, but this is one such rare instance.  And, it is very sound advice. One reason is the cost savings when it comes to accounting costs by not needing your accountant to spend time separating the information. Perhaps more importantly, if you commingle or misappropriate business funds, you run the risk of running into trouble with the IRS.

What?  How can mixing business and personal expenses lead to IRS issues? The answer is because, just like anything else, there is a right way and a wrong way to get money out of the business to take care of personal expenses.

The problem

The money that comes into a business is meant to be used strictly for business purposes. That means it can only be used for paying for supplies, business rents or utilities, payroll, and anything directly related to the operation of the business.

That money is not to be used to pay your mortgage, groceries, anything for your kids, personal vacations, or anything else that has nothing to do with the business. If you work from home, you can take a reasonable portion of certain household expenses such as phone, power, internet, or auto related outlays. 

Sometimes, however, it is necessary to take money out of the business in order to cover some personal expenses...

The wrong way

Lots of people who own small businesses don't know how to properly handle the task of taking money out of the business.  They simply make payments for their personal expenses out of the business checking account or use the business credit card for those personal expenses.  Some even head over to the ATM machine and take cash out of the business for no other reason than to have some pocket cash.  None of those methods are even close to proper.

The correct way(s)

If you need to access money for personal reasons, there are two accepted methods for doing so:

Putting yourself on salary

Writing a check to yourself in the form of a distribution

You should always create some sort of separation between business and personal expenses, and taking either of these steps does so without drawing any unnecessary attention to the transactions.  It also creates a paper trail which keeps you in a good position if/when it comes to...

What trouble can follow

So what's the worst thing that can happen if you don't keep your business and personal money and expenses separate?  If you continue to treat your business as your personal piggy bank?  Bottom line is that if you are ever looked at for any reason by the IRS, a whole lot actually.  The first that that would happen is that you would have to undergo an audit, during which the burden would lie on your shoulders to establish the expenses in question as valid business expenses.  It is your responsibility to show proof in the form of receipts or invoices that can support your claims.  If you cannot, then the fun really begins.  If you happen to be a C-Corporation, then the tax return would be recalculated with all of the expenses added back. What makes this particularly troublesome is that C-Corps are taxed at higher rates than individuals.  Not only that, but you will be assessed interest and penalties on the unpaid portion of the newly calculated tax liability.  

If the business is a partnership or an S-Corporation, the expenses will still be added back to the tax return, but it gets a little more dicey from there.  Since those business formats flow through to the personal 1040 income tax return, you not only have to have your individual return recalculated, but the additional income may in fact cause you to be phased out from deductions and/or credits that were originally claimed.  From there, your new income tax liability will be computed and you will again be charged penalties and interest on the unpaid portion of this new figure.  

Additionally, you will now be on the IRS's radar and the chance for future review and audits will increase.  On top of that, if you needed to raid the business accounts to support your personal lifestyle, then you will be in even greater trouble once the interest and penalties start piling on. 

The bottom line

There are very severe consequences for not following the proper protocols when dealing with business funds.  All of this can be avoided very easily.  All it takes is an extra step in taking a distribution of income from the business or taking payroll to accomplish the simultaneous tasks of having money to pay personal expenses while staying out of trouble with the IRS.

Basically, if you do things the right way, you never have anything to worry about.

[dollarversity-blog]

Does Cash Really Keep You From Overspending?

People out there think that by only using cash, shunning credit cards in the process, they will put themselves in a better position to stay out of debt and control their spending.  They think that simply because cash is a finite resource, they can only spend what they have available and no more.  They also believe that the only form of debt is overextending themselves with credit and credit cards. Unfortunately for all of these people, that line of reasoning cannot be further from the truth.

There are a couple of misconceptions when it comes to cash and debt.  Both, if taken too lightly or ignored, can be just as dangerous to a person's financial state as mishandling credit cards can be.

Cash is not foolproof

The first wrong assumption, and the most dangerous, here is that you cannot get into financial trouble by adopting a cash-only lifestyle.  In fact, this is further from the truth.  Just because you shouldn't be able to spend more money once your balance reach zero doesn't mean that it is always true.  There is a little thing called overdrafting, which is a common problem among people who have poor money management skills.  

For the uninitiated, an overdraft is what ends up happening when you make a purchase via check or electronic debit and there is not enough money in your account.  In some instances, the bank will process the payment and allow the account to remain overdrawn, or negative, while charging interest until the balance is brought back to a positive value.  In other instances, the payment is rejected outright.  Either way, your bank will charge you an overdraft fee, and in many cases, they company you paid will also charge you a fee to cover their own returned deposit charge.

Overdrafting is very easy to do if you do not have a handle on your account balances, or if you try to play games with floating funds--planning on a deposit coming in but hits the account after purchases have been made.  The best case scenario is that only one payment bounces.  The other end of the spectrum occurs when the one creates a cascading effect on a series of payments.  The end result can be a significant negative balance in addition to a serious number of returned item fees and fees passed along to you from the companies you attempted to pay.

Debt is not exclusive to credit cards

The first thing people equate with consumer debt is credit card debt.  That is far from where the line is drawn.  The reality is that debt means owing anyone anything, monetary or otherwise. You may be wondering if you only use cash then how can you end up in debt?  It's really quite easy to do.

The answer lies in your spending habits.  You're undoubtedly aware that putting more on credit cards than you can repay is a major cause of debt.  But what people tend to ignore is that even if you don't use credit cards mishandling your money can also lead to debt.  You may go out on a shopping spree, using just your debit card, but wind up spending more that you originally planned.  When it comes time to send in your payments for things such as housing, auto, phone, power, or any other bill you may not have enough in the bank to pay one or more of them.  What happens next?  You become indebted to these companies.  You are now in debt.

The more out of control your spending is, the further behind you get on your bills. Debt is not exclusive to credit card users, and as you can plainly see here, it is very possible, and not that difficult, to get into debt even with a cash-only lifestyle.

The information is all there for anyone to see: cash is not as safe as some of the pundits will have you believe.  No matter what the experts and studies say about the psychology of people's spending habits, no matter how much people will argue that cash makes them spend less, it is very possible to overextend yourself financially using cash.

[dollarversity-blog]

There Is Being Frugal And Then There Is Being CHEAP

As a financial professional, it's my responsibility to be able to help people come up with ways to save money, whether it be on their taxes or on day-to-day expenses.  As someone who has financial responsibilities of his own, I read a lot  on the subject for my own benefit as well. And even though I don't view myself as being frugal I do read quite a bit on the subject.  What I have found in my research sometimes shocks me: the extent that some people go to in order to save money, even in very small increments, just blows my mind.  I have no problem doing comparison shopping, using coupons, timing my purchases, and other things in order to reduce my expenses, but some of the people out there absolutely refuse anything that isn't free! 

This isn't about choosing water rather than soda or alcohol at a restaurant. This isn't about alternative options to a gym membership.  This isn't about DIY projects. It's really not about the benefits or drawbacks (depending on whose view it is) of living a frugal lifestyle.  This is simply an observatory piece about the lengths some people will go to save a buck .

Where exactly do I see this transition from frugality to cheapness occurring?

Household/Food Storage

Let's be honest--these types of things aren't really a tremendous strain on the wallet (and if they are, you may want to think about how you spend your money). Paper goods, glassware, storage, etc. can be had at relatively low prices particularly if you aren't interested in high-end products.  But, it is still an expense that some people would rather not have to deal with.

Being frugal

Many restaurants provide you with a great alternative to purchasing expensive food storage containers, and you won't even mind if you lose or break them since they were free!  I have accumulated a nice collection of containers in various shapes and sizes that can accommodate a wide array of needs just by doing something I do anyway--eat.  So the next time you decide to order in, be sure to toss the containers in the dishwasher so you can use them for future needs.  Restaurants also can provide great things like coasters and glasses, especially special edition beer steins, tumblers and such which are sometimes just given away to customers.

Being cheap

There have been numerous mentions of people reusing plastic zipper bags.  That is just cheap, not to mention unsanitary.  It's one thing to reuse the bags for storing packaged goods, but something totally different when talking about putting food directly in them, then washing the bags to prepare them for the next use.  For one, it's a health risk.  There is a reason why food and health experts advise against using plastic cutting boards for raw meats, fish, and poultry--they do not get 100% clean even in a dishwasher.  Is it really worth the health risk to save the few pennies?  Then there are people who stock their cupboards with sugar packets, napkins, toothpicks, etc by stuffing their pockets or pocketbooks with these items off of restaurant tables and bar-tops.

   Cars

There is nothing wrong with not giving a crap about the image others may have of you based on your vehicle.  I can say this, because I don't put a high importance on mine.  Most items aren't even all that useful, such as a sunroof, spoiler, chrome rims, or other aesthetic accents.  They are mostly just for show, adding very little (if any) performance value.

Being Frugal

Buying used it a good way to keep your initial out-of-pocket expenses to a minimum as is buying new but without all of the high-end factory-loaded options. Driving your car for as long as you can until the repairs no longer justify the costs is also an option, although to me that borders on being cheap due the hassles presented by doing so.

Being Cheap

Now, on the opposite end of the spectrum are the manics who really neglect their cars for the sake of saving money. Driving around with cracked windshields, doors and trunks that are held closed by ropes or zip ties, dragging exhaust,  roof lining that sags to the driver's head (or lower), etc goes way beyond frugal. There is a significant difference between not placing high importance on one's car and coming off as if you don't take care of your possessions.  It's important to understand the distinction between this fact and the use of a car as an image enhancer, though. Additionally, as cars age they lose performance which also leads to a loss of fuel economy.

Energy Bills

Energy bills are one of the biggest living expenses a household has to worry about. Depending on the location, energy costs can take huge swings as the seasons change, and keeping things manageable takes a little bit of effort and dedication.

Being Frugal

These days many electronic items are EnergyStar compliant, so choosing such items helps a little bit.  Using power strips to centralize power control and turning off unnecessary devices at night or when leaving the house makes a lot of sense, and can save additional money.  So can using digital thermostats to automatically regulate the interior temperature so as to not wast energy when no one is home saves quite a bit more than the other ideas.

Being Cheap

Having a "home" is supposed to be about having a space to live within which you are comfortable and which reflects you as a person.  The comfort factor is where the cheapness comes into this equation.  I cannot believe that some people actually do this, but I have heard of people who go quite far in an effort to keep energy costs down.  Rather than running the heat in the winter months, there are some people who absolutely refuse to do so, instead choosing to layer their clothing.  I've even hear of people wearing jackets and heavy sweaters indoors in order to not use any additional energy.  How can that possibly be comfortable, and how can someone possibly be so cheap as to choose wearing multiple layers indoors over running the heat and walking around comfortably inside of their own home?

Social Activities/Entertainment

Possibly one of the most budget-unfriendly expenses for sure, but something that is necessary (at least according to normal, socially-adjusted people).  This is perhaps one of the easiest areas to save a buck or two without going cheap and isolating yourself from friends, family, and coworkers.

Being Frugal

There are tons of ways to save money while still being able to experience social and cultural activities.  One of the best ways is to set aside a little bit of money in predetermined intervals like a slush fund in order to pay for such things.  Coupon magazines like The Clipper and Sharp Saver, websites such as restaurant.com, and livingsocial.com, signing up for email promotions like free birthday meals all offer ways of saving money without hiding out in your home like a hermit all of the time.  

Being Cheap

Saying no time and time again when people want you to go out with them gets old, and after a while, they will simply stop asking.  There have even been suggestions out there that people should cut out those who have different spending habits from your life.  That is the ultimate in cheapness--judging people based on spending habits regardless of the quality of their company and your history together.  There are only so many places and events that be attended and taken in without spending a single penny, and doing the same thing over and over without experiencing anything new is not living life, it's more like surviving until you die.

   Of course, there are a number of areas that people can blow completely by frugality and venture deep into cheap territory, but these are some of the most obvious and ridiculous things I have seen and heard about.  Everyone has to figure out what works best for them, and not let others dictate how they should live their lives--not even me

   Do you fall into any of these categories?  Have you ever wondered if what you do would be considered to be cheap rather than frugal?  What are your boundaries for what qualifies as frugal as opposed to being cheap?

[dollarversity-blog]

What You Thought You Knew About MPG Ratings Is Probably Wrong

Do you remember me telling you that advertisements lie, how the marketing people (as well as the product manufacturers themselves) think you're a sucker and how their goal is to target gullible people who believe everything they see and hear? Well, it's still true, and nothing is going to change that.  This time, my ire wasn't drawn to companies claiming to be the "best" or "highest quality" or any other subjective claim.  No, lately I've been more annoyed specifically with car companies and their practices for pitching their automobiles among stiff competition.  My beef with them centers on their non-stop talk about how you should buy their cars because of their fuel efficiency ratings.  Contrary to what many people believe and what we are allowed to think, the government doesn't actually run the tests that determine the fuel economy advertised by car companies

The thing that really gets me is that in all of the advertisements I have seen and heard, the number being used is the estimated highway mileage estimate.  The way it is presented, it is being made to sound like the higher of the estimates is what you can expect to get when you purchase a particular car.  Never mind the fact that a more moderate figure is readily available (the combined mileage estimate), but the big issue I have is that not only do car ads misuse the published estimates, or the fact that they make the figure they throw out there seem like a solid guide, but mostly the fact that most don't even mention the term "estimate", nor do they mention the biggest fact of all....

Let's start with a simple fact:

The auto manufacturers are the ones that determine fuel economy ratings

Yes, what you just read is 100% true.  There is no independent lab tests or specialized third party firms that do the testing.  It is the manufacturer of a vehicle that creates these estimates.  And, in most cases, the tests are done on pre-production models, and not even on the exact models that come off of the line and to the dealerships--the ones you will actually be buying.  The federal government, by way of a joint venture between the Department of Energy and Environmental Protection Agency, established a website to educate consumers on fuel economy and to help them make informed choices on the matter (as well as maintain their vehicles).  It also provides standardized guidelines for testing, but it's active involvement essentially ends there.  When they are done with the tests, the auto manufacturers will send their reports to the agency, which then will review only 10-15% of the results.

Faulty assumptions in testing phases

First, this key piece of information essentially results in your having approximately a 1-in-10 of purchasing a vehicle that was verified as having the same fuel efficiency rating as is advertised.  It also means that there can be significant deviations between your actual experiences and those estimates.  The biggest reason is the fact that any number of events can happen between the testing phase and the end of the production process which can change these estimates. Think of it like a movie with bonus deleted material and extended scenes--not everything makes it to the final product completely intact, sometimes things are removed, added, or changed during the production process.  The same can happen during the manufacturing process of any item.  There is always room for change or improvement, and there is no guarantee that the models which are shipped for sale are the exact specifications of the ones used in pre-production testing.

Secondly are the ways that the tests are conducted: inside a lab, with the car on a dynamometer simulating "typical" trips.  All this means is that they put the car on rollers while the car is being driven at a speed determined by the simulator program.  Variables such as temperature, wind resistance, and more recently the use of air conditioning are then accounted for by the use of mathematical supplementation.  It is a purely speculative means of testing, while at the same time giving consumers false expectations and incomplete information since much of this is not common knowledge.

Impact on you as a consumer

What does this mean for you?  Well, for starters, it means that you will most likely never experience the same mileage ratings in terms of fuel economy that the window stickers claim on new cars.  In fact, since the testing methods changed in 2008 which lowered estimates across the board, it became even more difficult to shop for used cars which were tested using old, outdated standards.  The reasons for variances between actual and estimated fuel economy are significant and very important to understand.

The basic premise of these fuel economy estimates is a 55/45 split in terms of the percentage of highway/city driving.  In essence, these numbers can skew the picture greatly depending on where you live.  People who live in metropolitan areas with heavy traffic during most of their drive time will see greatly reduced results whereas those who do most of their driving on open highways with little impediments will see opposite results.  Fuel is burned more efficiently at constant speeds rather than continual stopping-and-starting, so the traffic patterns play a significant role in the results one would see in real world scenarios.

Another factor that is not specifically factored into the estimates is the style of driving.  Those who have what is known as a "heavy foot" will see reduced fuel economy as the amount of gas used to accelerate at an abrupt rate is greater than a gradual increase in speed.  Also of importance to fuel efficiency is manner of activity.  Those who make frequent stops to complete driving tasks requiring the disengaging, then reengaging of the engine will also see diminished fuel efficiency, as an engine burns fuel more optimally when properly warmed up.

Weight and accessories play increasingly important roles in fuel efficiency as well. With more and more electrical components being included in cars, such as large displays, touch screen navigation, built-in monitors, etc. the less efficient fuel will be used.  Even carpooling can have a negative impact on fuel economy.  While being touted as an environmentally friendly transportation method, it may be more costly to the individual doing the majority of the driving, as increased weight requires more fuel to move the care at the same rate of speed as when driven alone.

Solutions to the problem

It's pretty difficult to return a car if you realize it is not getting the fuel economy you thought it would when you originally bought it.  There is no way to take it home for a 30 day home trial like you can do with some other consumer products.  Fortunately, there are a few ways to protect yourself.  One way is to check out what others are saying about their own fuel economy results.  This resource is provided for people to report their own real-world results, and edmunds.com states that the reports are fairly accurate and reliable.  Another way to go about it would be to check out independent research authorities like Consumer Reports, or auto & financial magazines that run their own tests on vehicles.  Along those same lines, you can ask people who have purchased the same vehicle you are considering.  Although the last two methods still leave room for error, as personal driving styles will vary it is still better than not having any other resources other than the figures the auto manufacturers provide.