Saturday, January 12, 2008

Sharper Image is broken

Sharper Image, the retail store that prides itself on selling little electronic wonders, can't even maintain its own computer system. For the past month, when attempting to find the value of a gift card on its automated system, the phone goes dead after entering the information and - about 10 minutes later, reports that a "system error" has occurred. Their system error has been occurring for about a month!

Also interesting, their website doesn't allow you to check the balance of a card - a fairly basic function that most retail websites offer. I can only hope that the gift card will cover the balance when I ring up an electric self-cleaning nose hair trimmer and illuminated drink coaster with built in radio. How embarrassing if I were forced to choose between the two.

Monday, December 17, 2007

2007 Financial Report

I finally sat down and compiled our 2007 financial report and put together a presentation. Unfortunately the 2008 projections will have to wait, but here are some highlights.

Spending on food and utilities are unchanged from last year - though our dining out spending was slightly up, our grocery spending was slightly down.

We spent 10% more on gas this year than last year. Not bad considering gas prices are much higher. Our carpooling efforts, I think, are having a positive effect.

We have paid 59% of our total debt from the beginning of the year. Rough projections still put us at paying it all off in 4 months.

Our emergency fund (not including the bill pay/readjustment account or unscheduled maintenance account) has averaged $2,045 throughout the year, with a range of $1,940 to $2,150. We really didn't need to use it this year.

For the most part, we met or exceeded all of our goals for 2007 (with the exception of me finding a better paying job).

That's about it! I'm looking forward to sitting down and figuring out some goals and estimations for the upcoming year. Of course, overall goals will have to wait until my wife and I go over the year-end report and discuss what they should be.

Anyway, what's the point? I handle most of the finances, so I like to print monthly reports of our spending/balances for my wife to read. At the end of the year, it is nice to have a presentation to show her so she can get a clear picture of where we are financially. For both of us, I think it helps us get on the same page and focuses us on similar goals.

Sunday, December 9, 2007

Unscheduled maintenance account nuked

Today our microwave died. It was a good old microwave and had given its various owners many years of faithful service. Lately however it had begun to act strangely. Last month it inexplicably stopped running. A quick unplug fixed it. Then randomly it would activate its exhaust fan - often in the middle of the night. Then the little lightbulb inside burned out, as well as the little light underneath.

Finally, today at 12:15pm as I attempted to make a bag of popcorn to watch the pilot of season 1 of Heroes (I'd never seen it before) on Netflix, I discovered it was no longer heating anything.

The fan, the light, the random shorts...that I can handle, but a microwave that doesn't heat just isn't acceptable.

Fortunately, I recently started an unscheduled maintenance account. Thus, the $160 microwave was fully covered. However, having just started the fund, the account is now empty...but my wife was certainly happy that we had it! Maybe I'll ask her to use our new microwave to make me some cookies (can it do that?).

Saturday, December 8, 2007

AT&T lied to my wife

My wife lost her AT&T cellphone. Fortunately, someone found it and returned it, but not before we called AT&T to suspend the account. We also needed to get ourselves a new sim card, and that's when the lies began. The rep told her that she couldn't just buy a sim card, that she needed a whole new phone - an AT&T phone of course - to run on their network. He was happy to sell her one for just $170 and an extension of her contract.

So, I called them back and explained the situation to a different rep. She was happy to send me a sim card for $25, which I could then call to activate with whatever phone I had. Having averted this disaster, I noticed a few discrepancies with the rep's information.

- An unlocked phone will work on AT&Ts network with any of their sim cards. You need only program the sim card, not the phone.

- Buying a new phone does not require an extension of your contract.

- You need not call AT&T to "activate" a different phone. Just take your sim card, pop it in another phone, and it will recognize the network.

- Any sim card can be programmed with the serial number provided with the card. You can buy a whole phone from Walmart with a sim card included for less ($18) than what AT&T will charge you just for the card itself ($25).

It is important to remember that when calling AT&T service reps, even those who are not in "sales" departments, are usually either clueless about how any of their services actually work, or are so sales driven that they happily dish out misleading information to land some commission. Everyone you talk to is pushing sales.

In fact, if I had not already been using different phones with our sim cards or had not already purchased prepaid GSM phones (I have a couple of extra sim cards and phones that work just dandy), we might have fallen for the first reps story - leaving us $170 poorer (plus sim card, activation, taxes, and other fees of course).

Friday, December 7, 2007

My available credit exceeds my income

One of our credit card companies (the one we actually use on a regular basis) has once again increased our credit limit by 48%. It really doesn't matter what our limits are, because we only spend what we can afford to pay off immediately. We are fortunate that we never pay any interest to these card companies because of it. I don't feel guilty, knowing they make a killing on interchange fees.

Still, I can understand how some families manage to get in over their heads. All that credit can look tempting, especially if you have an emergency. The amount of credit they will give you is staggering. In fact, the available credit on our cards (we have 4) now exceeds our total yearly income. It is humbling to think how quickly someone could ruin their lives in the blink of an eye with these tiny pieces of plastic.

Thursday, December 6, 2007

Whose interests is the mortgage bailout addressing?

AllFinancialMatters has a couple of great posts on the mortgage bailout proposals.

If you haven't heard, it's one of the leading subjects of the political debates: how to save homeowners in over their heads. The popular proposal now, and one that some lenders have already gone forward with on a limited basis, is freezing the rates of soon-to-adjust ARM loans for a specified number of years.

Everyone wants to know who is paying for these bailouts. Taxpayers? Why are we responsible for their problems? Shouldn't it be the bank's problem? Why should the government be involved at all?

Are Bush and Hillary really concerned about the American people and the poor citizens in danger of losing their homes? Or do they realize that massive foreclosures would results in housing prices readjusting to real market values, before the ridiculous housing "boom". With property values plummeting, states would lose billions in tax revenue. It makes you wonder who Uncle Sam is really looking out for.

Monday, December 3, 2007

Is 97k rich?

An interesting discussion is ongoing at WSJ's Wealth Report, regarding a recent campaign dispute over the future of the social security cap.

The article is good, but what really fascinated me was the comments. Do people who make 97k feel rich? Are they rich?

As a few pointed out, feeling rich on 97k has much to do with your location. An apartment in NYC eats up far more of your income than in Dallas. We make around $40k a year and our mortgage is $900. This is living in one of the largest cities in America, albeit about 10 minutes in the suburbs. I feel like I'm doing pretty good, but others making much more are barely scraping by. How can this be? Here's what some people had to say.

My base salary is exactly 97,500 wtih 30% upside as performance bonus. I support a wife and 3 young kids. I rent in the Bay Area a home SF home for 2,400
This guy takes home $5,200 a month. Minus his mortgage, he has $2,800 left over. He has no child care expenses, since his wife doesn't work. How does that compare to the average income of $45k a month? His $3k after his residence is more than the average American lives on.
I live in SouthEastern PA in a median priced home for my area ($375K) My wife and I make $132K anuually. I commute to work in a 14 year old car and she has a new SUV. Other then my mortgage ($250K) and my interest free car note I have no other debt. However, the cost of living here is so outrageous I am lucky to save $500/ month.
$7k a month in his pocket each month. He consumes $6,500 of his income every single month. He doesn't feel rich because he's barely making it. But how do people making minimum wage make it where he lives? Obviously they are living somewhere.
People I know in this boat are not living large by a long shot. Older cars, no private schools, modest savings rate, no time or money to play golf…much less join a club.
Very interesting here is the qualifications for being "rich". Private schools. New cars. Playing golf and joining a club. Do you need these things to feel rich?

They don't feel rich, but does that really have anything to do with how much they make? They in the top 6% of the earners in America, which means that they earn more than 94% of their neighbors. The top 6%! What must "upper class" be? 4%? 1%? .05%?

Then, if that makes you middle class, what is lower class? Are 80% of Americans lower class? Are 50% of them poor?

Maybe feeling rich has nothing to do with your income? Maybe people making $130k don't feel rich because, just like their $40k brethren, they max out their lifestyle.