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Archives for April 2015

A Nerd Learns To Resist Early Upgrades

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New Apple Macbook - Photo by Jun Seita

Defenses are weakening as devices age

My smartphone is aging. The screen doesn’t always respond to my finger, the camera is mildly fogged over from scratches and dust on the inside, and the metal bits have little divots from drops. Sometimes when I press the “home” button, nothing happens.

My laptop is sluggish, too. The U key is sticky, the processor is beginning to struggle amidst a wealth of recent programs, and certain features aren’t available to my 4-plus-year-old computer. Every now and then the computer freezes up and I constantly have to be vigilant.

I’m a massive tech nerd, and when I begin to see cracks in performance and usage, I immediately jump to one conclusion: time for an upgrade. I can quickly rationalize the “need” for new. Look at all of these aforementioned faults and — hey! — I’m a digital writer/blogger. I need these things, right?

Lusting for the latest

In college I upgraded computers about every year at great expense. Smartphone upgrade plans didn’t matter to me. I spent the full price when necessary and negotiated early upgrades when possible.

The smell of freshly molded plastic was a beautiful sensation. I lusted after that unboxing process — from the plastic wraps to physical perfection. Hundreds — no, thousands — were spent to maintain this status and newness. I couldn’t stand to keep something that no longer was the point of affection for others. The commercials had changed to newer, “better” devices, and I unconsciously moved in unison.

Juxtaposed with my love for the latest and greatest was a powerful disgust that developed for the old. That technology became embarrassing and frustrating for me. But now, I’m holding back for the first time in my life.

Learning to resist the urge to upgrade

Admittedly, this process of buying less and refusing to upgrade early has been slow. After years of buying conspicuously, I’ve turned a new leaf. I don’t want to buy new immediately anymore. Here’s what keeps me grounded:

Value comes in time — it’s not a flash in the pan.

I want to purchase devices that last and take advantage of that worth. And there’s a lot of time to take advantage of lasting material goods. Think about it, life expectancy for those in the U.S. is about 78.7 years. That only leaves a set number of devices, objects, and material possessions over the course of a lifetime. Make them count.

Climate change is worsening

There are other reasons to resist the spending. Constant changes in technology and devices contribute to far greater climate change. Those electronics and material goods are likely made in China, shipped or flown across the Pacific Ocean, and trucked and trained to their final destinations. From the packaging, production, transportation, and actual purchase, tremendous amounts of energy must be used. And most of it is from fossil fuels — the kind that contributes to climate change.

Forever young only exists in music lyrics

I cannot help but notice that the same magazines, newspapers, and websites that advertise beauty products also share the latest gadgets. The beauty culture encourages us to stay young; forever, at great cost. Similarly, our beauty culture has disconnected and made us feel fearful about aging. Our devices are no longer timeless investments — they are planned for obsolescence. Be wary of these messages that try to subtly obliterate your older device.

That money can go to a million better places

If the preceding reasons weren’t enough, it costs a lot of money to upgrade constantly. Save the money, put it to work in the stock market, donate it to charity, or fix your bike. Nearly anything is better than spending it on a slightly newer device.

Can our devices get worn in, and could we actually begin to appreciate this character and value? How did we become so fearful of having something old?

Think You Can Trust Credit Card Reviews? Think Again.

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Advertising in New York City. Flickr photo by Pascal Subtil

These ads are everywhere!

The multinational, multibillion-dollar bank, JP Morgan & Chase, spent about $1.9 billion on advertising in 2013. That was down from a peak of $2.35 billion in 2011, but still one of the largest amounts by any bank. With that kind of money, you should be curious what they get in return.

Advertisements for companies like Chase, Citigroup, Barclays, and others are plastered over billboards, magazines, newspapers, and websites. You’ve likely passed by one of their ads today if you live in a modest size city. Heck, there could be one next to this article, due to the Google ads running on Frugaling!

That money is spent to attract new “customers” of credit. Their hope is to entice people with signup bonus offers, and keep them for life. After they click an ad, sign up online, and begin to swipe, the banks begin to profit. From credit card transaction fees to late payment fees to cash advance fees to interest rate fees, companies enjoy lucrative profits. For every new customer, banks trust they’ll make hundreds of dollars over the next few years – if not more.

Personal finance writers are easily influenced

Those advertising pressures and interests can trickle down. Websites that aim to address personal finance concerns and offer advice might succumb to the fire hose of potential profit available to them. With my hat in hand, I must admit I was one of them.

I made thousands of dollars in about 1.5 years by marketing credit cards. By placing links to select offers, I was able to make $50, $75, and even $150 per person who signed up. The affiliate money helped me radically change my life and pay off my debt. But as it helped me pay off my debt, I began to see how I had been duped.

In financially unsound and uncertain situations, people do things they’d rather not do. Frankly, society sometimes encourages us to put our heads down and work through the pain and ethical dilemmas – ignore your internal compass for the good of the company, profit, and revenue. I had become one of those people.

When reviews are really advertisements

Reviews aim to feature both the pros and cons of certain products. Readers want honest feedback and advice from authors, but they weren’t getting it. Visitors to my site were coming droves to see my “reviews.” But that’s not what they were really getting.

Unfortunately, moneyed interests in banking have a tremendous sway on the rating of products. Look through many websites that market credit and banking products, and you’ll begin to notice an overwhelming pattern of 4- and 5-star reviews – across the board. With this positivity, you’d expect credit cards to wash your dishes, clean your laundry, and chauffeur you to work.

How could any company’s product be rated this highly? There’s a reason for optimism and it all comes down to money. Those advertising dollars – billions from banks – trickle down to the simplest of bloggers, directly influence the content, favorability, and overall reviews.

Visitors who are interested in honest, open advice might be shocked to know that when they click that link to sign up, they are crediting that blogger hundreds of dollars in the process. Even more, that the entire review was fabricated to drive more clicks to the bank’s site. When I wrote these articles, I suppressed the negatives to encourage clicks. I was advertising products, and framing them as reviews.

Credit cards aren’t the devil, but they’re not for everyone

We live in a world where big banks spend billions to get at us. Their money travels onto TV, print, and diverse digital media. Eventually, it even lands into the pockets of personal finance websites. That’s when the magical influence occurs, and people end up following the manipulated “advice” of trusted sources.

With revenue pouring over the Internet from companies, my real advice is simple: be skeptical. My hope is that no one gets tricked into thinking that a writer completely – and out of his or her own volition and without profit motive – decides to write a credit card review.

Here are 9 important questions you should ask yourself before following any credit card review:

  1. Do the reviews link directly to the bank’s sign up forms?
  2. Are there affiliate tags embedded in the links?
  3. What makes the writer optimistic about the company and card?
  4. Do they personally use all of these cards that they recommend?
  5. What income bracket is the reviewer in?
  6. What’s their credit score?
  7. What was their experience with customer service representatives?
  8. How long has the reviewer been providing advice?
  9. What makes them an expert in credit cards?
  10. How might incentives influence the quality of this review?

Credit cards aren’t the devil, and they don’t tend to be the sole contributor to debt. Usually, it’s a lifestyle of spending more than you can afford, with little income to pay the bills. That doesn’t mean excessive purchases at Burberry and Hermes; rather, that any amount over what you take in will lead to debt (groceries included). Credit cards just facilitate that process – faster – as the fees quickly compound.

When personal finance writers begin to weigh in, it’s vital that their advice be accurate, fair, and balanced. Unfortunately, it’s frequently manipulated by advertising revenue potential. I learned how the money could influence what I ultimately write, and I no longer want to lobby for an industry that sometimes preys off of people that genuinely need help. If you see a review article from me, it’s my hope to be as analytical as possible.

Frugal Articles of the Week

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Reading Nook Photo

Every week I like to feature a few frugal articles that caught my eyes. Curl up in your favorite reading nook and enjoy. Hopefully these encourage you to live frugal lives!

Families Ditch Cars for Cargo Bikes by Laura Moser
The Hoverman family lives in a ritzy neighborhood with a luxury, Audi SUV. They have it all, seemingly. But one thing that sets them apart is that they avoid driving on the weekends. Instead, they opt for “cargo bikes,” which allow for the whole family to ride in comfort and still be eco-friendly. What a great idea!

Nearly a third of savers have less than $1,000 for retirement by Vaishali Gauba
The statistic might shock you: a significant minority has little to speak of for retirement. Of the total sample population for the survey, 57 percent had less than $25,000 saved. This absence of wealth could be exceptionally difficult for future comfort, livelihood. But beyond the basic stats, I must caution readers that the solution isn’t as simple as saving more. The problem is that people are not paid enough to save enough. Then, and only then, people can be better directed to plan for retirement. Their immediate needs must be met first.

The Three Rules of Self-Sufficiency and Preparedness by The Frugal Farmer
Laurie’s a prepper. She has been storing food and goods for whatever financial straits she might find. In this enlightened article, she addresses three types of self-sufficiency: physical, financial, and spiritual.

Google launches its own mobile network by Chris Welch
This is tremendous news for all cell phone subscribers. Google has entered the cell phone network market. Now, they’re doing more than just building the operating systems and contributing to hardware development. With Google’s Project Fi, users can switch seamlessly between providers (Sprint and T-Mobile) across the world. Wherever there’s wi-fi, the phone defaults there, and then pops up to cell towers when you leave that area. Plus, the phone will work internationally, too. The best part — the frugal part — is that the monthly fee is $20 plus $10 per GB of data. If you don’t use your entire allotment, you actually get paid back as credit!

To fight income inequality, tell your friends how much you make by Meredith Bennett-Smith
It might sound counterintuitive, but income inequality calls for drastic measures! Despite this being the 21st century, there’s great income inequality between races, genders, and social classes. One author is advocating that people of all stratums rise up and say how much they earn. The hope is that people will be able to get an accurate and fair assessment of what they should be paid.

A Married Person’s Guide To Love And Frugality

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Frugalwoods with dog

Today, I’m excited to share with you a guest article from a fellow frugal writer, Mrs. Frugalwoods. She writes under a clever moniker at www.frugalwoods.com. She details her journey to financial independence and a homestead in the woods with her husband and greyhound, Frugal Hound. I asked her to share how marriage, as opposed to my singledom, could actually help you stay more frugal. Please enjoy and comment!

Marriage has turned out to be an extremely frugal endeavor for Mr. Frugalwoods and me. It wasn’t our original intention (there was no mention of “frugality” in our vows, though in retrospect I wish there had been…), but it has absolutely been our experience.

Marriage = Efficiency

Being married is like having a lifelong roommate, who you love, and with whom you can share all your stuff. Two people, one bed; it’s the ultimate exercise in efficiency! Over the six years of our marriage, we’ve discovered we can share just about everything other than toothbrushes and clothing. We have one house, one car, one dog, and one bottle of shampoo; although, come to think of it, we do have separate deodorants, which is probably for the best.

‘Til Death Do Us Spend

In addition to owning less — by virtue of sharing so many things — we also spend less. We were both pretty frugal before we got married, but our union compounded those tendencies. I’ve found that Mr. FW’s efficiency-oriented frugality has rubbed off on me and likewise, my creative money-saving schemes have influenced him. He convinced me of the merits of simplifying life and I’ve educated him on the ways of thrifting and great trash finds.

The man is now a certified expert in scoping out excellent roadside treasures — last summer he toted home an entire box of free glassware he found by the side of the road. I was so proud. We brought different frugal strengths to the table and by learning from each other, our frugality is now unstoppable.

Frugalwoods
The Frugalwoods mascot, Frugal Hound. 🙂

Being partners in every sense also means that we work in tandem on all aspects of life instead of paying people to do stuff for us. I’ve discussed how we insource everything from house cleaning to Frugal Hound bathing to changing tires to home repairs to cooking and more. But since we’re in it together, the labor is distributed between us. And since we’re working side by side, the labor is actually quite pleasant.

That’s another fabulous secret of marriage: when you enjoy collaborating with your partner, even the most banal tasks become fodder for humor and pleasure. We cracked ourselves up to such a degree while at Costco last week that I thought they might kick us out of the store. What can I say, we have a good time and the canned fish section is frankly hilarious (Cod in a can? Come on, you would’ve laughed, too!).

We also insource our own entertainment. Being old, boring married folks means we love staying in on Friday nights (it’s pizza night after all!), snuggling Frugal Hound, and watching movies (until I fall asleep… circa 9pm). Our entertainment costs decreased rapidly after we got engaged and have continued to plummet. We’re big believers in going on dates — we just happen to do them cheaply. Free days at museums, hiking, walking Frugal Hound, romantic dinners at home, Costco trips apparently… we find plenty of ways to entertain ourselves for $0.

Shared Financial Outlook

More important than our practical applications of frugality (say through our $0.39 rice-and-beans lunches) is our shared financial outlook, which guides how we’ve decided to structure our lives. Mr. Frugalwoods and I feel incredibly fortunate that we found each other and evolved together into the frugal weirdos we are today.

Our united approach to money enables us to pursue our goal of quitting our jobs, reaching our version of financial independence, and moving to a homestead in the woods of Vermont in 2017 at age 33. To facilitate this, we’ve attained an aggressive 71% savings rate (not including maxing out both of our 401Ks). I can say with confidence that neither of us would’ve had the discipline or vision to achieve this by ourselves.

Without this mutual long-term ambition, we’d be adrift and untethered in our overarching aims. But having our future homestead on the horizon keeps us both on the same page and happily operating on frugal autopilot. Plus, we get to have hot finance dates during which we review our spreadsheets and whisper sweet nothings about safe withdrawal rates in early retirement. Told you it was steamy!

The Ease Of Joint Finances

Communicating openly about our finances for the duration of our relationship has fostered an environment in which we trust one another implicitly. Thanks to this trust, we’ve been able to streamline and combine our finances.
For us, having joint finances is about both efficiency and respect. It’s easier on a daily basis to dip into our communal pot for paying the mortgage, buying 6-lb cans of garbanzo beans (we have a mild obsession with homestead hummus), and ordering Frugal Hound’s toothpaste. It’s also a reflection of how much we respect and trust one another — we have no qualms about combining our resources since we know the other person approaches money with the same frugal worldview.

If one of us was dramatically more or less frugal than the other, I think we’d be in for a challenge. Communicating about financial goals, or what we’re comfortable spending, could become a tense encounter involving guilt and accusation. Mr. Frugalwoods and I aren’t identical in our beliefs, but we are aligned in the core tenets of frugal optimization, minimalism, and spending only on the things in life that matter most to us.

Financial Checks and Balances

We provide a system of financial checks and balances for each other. Talking through potential purchases helps us identify our priorities and realistically determine what we actually need and what’s merely a want. When we decided to buy an electric blanket earlier this year (yes, we live on the wild side), we discussed and researched options together, which made us both feel bought into the process.

Anytime Mr. Frugalwoods wants to buy a new beard comb/tool/kitchen implement, he talks to me about it. This type of communication doesn’t stem from distrusting each other, but rather from the respect we both have for the other person. We apply this team-purchase approach to everything from socks to our future homestead.

By engaging one another in every purchase we make, we continually create opportunities to check in with each other financially. These frequent conversations (sometimes about things as mundane as a bag of sweet potatoes) ensure that we don’t resent one another’s purchases or, more crucially, drift apart in our view of money.
When I accidentally broke Frugal Hound’s toothbrush last week (no clue what happened, I swear, the thing just snapped), instead of immediately ordering a new one on Amazon, I talked to Mr. Frugalwoods. And sure enough, he had an idea: why not try using a human toothbrush we’d gotten for free from our dentist. Guess what? It totally works in a dog mouth.

I realize this doesn’t sound like an earth-shattering discovery–after all, doggie toothbrushes are only $7.29–but, it’s a perfect reflection of how ingrained our shared spending habits are. Plus, we don’t buy much stuff, so I don’t have a whole lot of recent examples ;). It’s second nature for us to consult one another on even the smallest of purchases, which makes our conversations about the biggest ones (ahem, a homestead on 20+ acres of land) follow the same familiar, successful framework.

Marriage Made Me A Minimalist

Ok maybe not a fully fledged minimalist, but a whole lot closer than I was before. Prior to Mr. FW’s good influence on me, my life (including both possessions and brain) was cluttered. I owned too much stuff and I was stressed about way too many things. Mr. Frugalwoods, on the contrary, owned perhaps too few things (he had a mattress on the floor without even a mattress pad, people) and had too little stress. I quickly introduced him to the concepts of proper bedding and home decorating. See how helpful I was in adding to his stress levels? 🙂

Mr. FW brought me around to his way of thinking: it’s liberating not to be owned or defined by your stuff. He also helped me let go of caring so much about what other’s think. I’m still an imperfect work in progress on both of these fronts, but I can say that minimalism of both the mind and the physical space has been wonderfully freeing for me.

And as for Mr. FW’s mattress on the floor, we now have a comfortably (albeit minimally and almost entirely from Craigslist) furnished home. Mr. FW often remarks on how cozy our home is, which makes me beam with pride. Some things, like bed frames, are just worth the expense.

Frugality Is Good For Our Relationship

Parallel to the balance in simplicity that we brought to each other’s lives is the benefit that frugality has had on our relationship. By stripping away the distractions of lifestyle inflation and the endless pursuit of more stuff, more experiences, and more “needs” on the consumer carousel, we’ve been able to focus on what matters most to us. As a result, our marriage has flourished under frugality.

We’re no longer distracted by what the media or neighbors are saying we should own, do, or feel. Instead, we’re focused on what we want out of life and how we can make the world better in our own tiny way. Our homestead plan wouldn’t exist if we were still bogged down by the consumer rat race. It’s only through extreme frugality that we’ve been able to take stock of our lives and realize that we’re not fulfilled working our full-time jobs and that what we truly desire is to work side by side in nature every day.

I’m deeply grateful that frugality opened my eyes and forced me to be honest about the direction of my life. It allowed me to push aside the pointless preoccupations of image, wealth, and success and instead devote myself to my dream of building a life out in the woods with Mr. FW.

Parting Thoughts

For Mr. Frugalwoods and me, our marriage is integral to our frugal worldview. Our frugality has reached new heights thanks to our combined efforts, and as a result, we’ve reaped the benefits of simplicity and focus within our relationship. To go this journey without shared goals would be tremendously difficult and would likely make our wildest dreams unobtainable. But together, we’ve been able to eliminate the noise and acknowledge what we want our lives to encompass. We’re frugal, content, and aligned in our vision of the future.

How do you communicate with your partner about money?

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