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Archives for March 2016

The Frugal Guide To Buying A Used Car

By Frugaling 10 Comments

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Volkswagen VW Jetta Used Car Buying

I have a confession to make, but I’m a bit embarrassed to admit it. I bought a used car. Please don’t judge me for this news update. Would you allow me to explain why a frugal guy like me did this and how I made it as frugal as possible? Pretty please?

For starters, I’m moving out of Iowa City this year to another city nearby. The rents are cheaper there, but it’ll require a little commute. Without a car, the move would be impossible. There’s no regular, public transportation available. I wouldn’t be able to make it to school and work each day.

I fretted over this decision for quite some time. I remembered how stressed and awful I felt with a car. It encouraged me to be lazy — driving instead of biking or walking. Additionally, the car loan I had left me nearly penniless each month. I couldn’t save much.

For the last year-and-a-half, I went without a car. I sold it, paid off the remainder of my car loan, and began saving hundreds of dollars by biking everywhere. The commutes to grocery stores, school, and work were tiring, but I was saving every pedal of the way. In fact, over this last 18 months, I saved thousands of dollars.

Now, I’m re-entering the world of car ownership. To make this purchase, I needed another car loan. I paid off about two-fifths of the total price and financed the rest of a $10,000 2014 Volkswagen Jetta. Let’s dig a little deeper into why I chose this car and how I made it as frugal as possible.

Make time for the search

When someone finally decides to buy a car, two pressures tend to take hold: I want it now and I need it now thinking. The want it now has extra time to find a good value, but feel compelled to be zooming around in one as soon as possible. The secondary, need it now group has not left enough time to thoroughly search. They don’t have the luxury of looking.

If at all possible, plan for a car search. Begin it as soon as you get an inkling you’ll need a car. For me, I knew about 6-7 months ago a car would be needed. I started browsing Craigslist, eBay Motors, and dealers’ websites for more information about what was available, pricing, and distance from me.

Then, for every car that sparked my interest and seemed like a good deal, I researched price expectations, reliability information, ratings, and true cost of ownership. Around the same time, I visited my car insurance’s website to calculate expected monthly costs for every possible iteration. By the end of my 6 month search, I knew my stuff — I just needed the car.

Use a credit union for financing

Big banks have one motivation: big profit. When it comes to financing, they’re usually a last resort — regardless of credit history, score, or income. Unless you are immensely wealthy, big banks can’t help save you money on a car loan.

When I was gearing up to buy my first car a few years ago, the first trip I made was to Wells Fargo. I’d been a banking customer with them for 6 years at the time. Curious to know what they’d offer me, I asked the loan officer and was told I should expect double-digit interest on any loan duration or amount. I laughed out loud at the absurdity, and asked if those were the final offers. They were.

I found solace at a credit union; PenFed, to be more specific. Credit unions run on shareholders, much like banks do. The key distinction is that shareholders are credit union members. If you open an account, you usually become a shareholder. You can vote on new board members, propose programs, and advocate for fairer pricing. Credit unions are motivated to help their members succeed. They’re not in it solely for the profit.

With my used VW Jetta, PenFed was able to give me a 2.49% car loan for four years. Even though I’m spreading the remainder of the car over four years, the payments add up rapidly. Fortunately, little will be going back to the bank as interest.

Find rental/fleet vehicles

When you look at the price I paid versus the expected price for a 2014 VW Jetta (upwards of $12,000 for one in this condition), you might wonder, how the heck did he do it?! The key was finding a rental vehicle in this instance.

There’s an underlying assumption that rental and fleet vehicles get driven harder than personally owned vehicles. In fact, it’s pervasive if you look into buying rental cars. Commenters and “experts” weigh in to tell you what they think, but the best advice I’ve seen comes from Bankrate.com:

While we all know rental cars have somewhat of a bad reputation as cars that have suffered abuse by their renters, there’s no guarantee any used car you buy hasn’t been abused in the same way unless you personally know its history.

It simply comes down to logic and critical thinking on this one. All used cars get driven, right? When we buy a used vehicle, we assume either the individual owner or dealer is telling the truth. Some rental vehicles get driven hard, and some non-rental used cars get driven hard, as well. There’s really no way of knowing.

Amidst the murkiness, you can often find a good deal. Whether true or not, people tend to discount these cars and the dealers usually do, too.

Find a friend — don’t go alone

Whether you go to a dealer, a Craigslist creeper, or your neighbor, scoping out used cars can be tricky. It’s hard to check over an entire car at one look, and oftentimes test drives don’t allow the potential purchaser to spot the defects. This is a simple instance where four eyes and two brains are better than yours alone.

When I went shopping, I tried to bring a good friend of mine who also happens to know cars. That allowed me to assume a role when at dealerships and individual’s cars. I could play stupid, as my friend checked under the hood, around the brakes, inside the wheel well, etc. This team effort allowed me to focus on what the seller was saying to pay careful attention to the words shared.

Additionally, having two people present makes a more convincing argument. When you’re negotiating a final offer, having an “expert” around can help convince someone to lower the amount. It’s a game of triangulation against the seller, and if you can perfect it, the prices can become much better.

Alright, now I’d love to know what secrets you have to securing a good value when shopping for used cars. What tips do you have?

Filed Under: Loans, Save Money Tagged With: buying, car loan, Guide, Interest, Shopping, used car

Think Outside The Subscription Box

By Frugaling 22 Comments

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Think Outside The Subscription Box

“Show someone you care with a random box of stuff this holiday season.”
— CNNMoney

There’s Graze, Birchbox, Barkbox, Brobox, Dollar Shave Club, Trunk Club, Blue Apron, and now, there’s Minimalism & Co.’s new minimalist themed subscription box. Each box has their own flavors, qualities, and featured products. Some use corporate partnerships to market products through these boxes, while others are hand-selected items by the box creator. These subscriptions can include makeup, food, and much more.

The subscription model is usually set at one box per month, but this varies between companies. The prices range from $25 to $100s each month. If you’re using Blue Apron — a meal preparation service — you’ll likely sign up for more regular deliveries. Although, Minimalism & Co. sends their box once every quarter (3 months). Regardless, once you sign up, you’ll be getting regular deliveries of unexpected “gifts.” It’s like getting a surprise present each month!

However, there’s another way of looking at this subscription craze. To mindlessly subscribe and receive trinkets, makeup, and/or men’s grooming products seems to be the epitome of conspicuous consumption. It’s unclear who might need these products; I mean, truly need a product received through a subscription box.

Initial subscriptions are often discounted to make the first box free or inexpensive. Subscription services know that once they have someone on the trial, they’re more likely to continue using their product and/or try it again at a later date. And even if you were done with the service, you might not want to go through the terrible phone trees and/or automatic email exchanges to get your cancellation confirmed. All the while, you’re spending money, adding clutter, and struggling to cancel the onslaught.

Subscription boxes have made minimalism, orderliness, and frugality harder. Fortunately, there’s an alternative to this madness. Today, I want to introduce a solution to effortless consumption. In fact, I’ve come up with a clever name for the subscription, too: “ByeBox.”

Our worries will be solved. It starts with a nearly empty box. When you subscribe to ByeBox, you receive nothing but a cardboard box and a piece of paper. Isn’t that revolutionary and minimal!? And there’s no need to be careful when carrying the box into your house, as there’s nothing to break. Once you’ve opened up the box to see no goodies, makeup, razors, grooming products, or exotic foods from Chile, you can prepare for a far more intentional decision.

Written on the 8.5 by 11-inch paper is a simple request: “Pick something from your house that you once wanted/desired, but no longer find enjoyment or need. Place it in box and ship it back to ByeBox for another empty box!” It’s just that simple!

We are faced with countless opportunities to spend and collect every day. Surprisingly, many have embraced subscription boxes and taken to spending outsized proportions on tchotchkes that provide little value to our lives. My idea — ByeBox — might be a joke, but wouldn’t this make more sense to those working to live a minimal and frugal lifestyle? The harder decision always seems to be fighting against the mode of consumption — to find ways to minimize by going without and throwing out.

Filed Under: Minimalism, Save Money Tagged With: ByeBox, Conspicuous, Consume, Consumer, Consumption, frugality, minimal, Minimalism, subscribe, subscription box

We’ve Outsourced Our Lives

By Frugaling 9 Comments

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Outsourced food preparation meals

Michael Pollan likes to talk about food. In fact, he’s written six books on the subject. Some of his highly reviewed books include Omnivore’s Dilemma, In Defense of Food, and Food Rules. Amazingly, Netflix caught on to Pollan’s popularity and turned his latest book — Cooked — into a series.

Cooked is about the transformation from raw to cooked foods. This simple difference is what Pollan thinks distinguishes man from the rest of the animal kingdom. He’s got a point: we love our cooked food. The flavors ignite. Further, when we cook food we chew less and do more than eat all day.

In the first episode of the Netflix series, Pollan explains how hunting, farming, and scavenging have all been outsourced. We’ve simplified the process of eating on every level. Corporate giants have vertically integrated food prep and delivery with surprising efficiency. From frozen meals to prepackaged sandwiches, everything has been prepared for us. For example, the turkey has been raised, fed, slaughtered, plucked, deboned, frozen, thawed, sliced, seasoned, and placed. We don’t see the life and death — we’ve outsourced everything.

The reasons for the decline in food production and cooking are multifaceted. It seems work and productivity have motivated us to pursue this path. Imagine the busy lawyer or medical doctor having a catered lunch because they are “too busy” to prepare and eat. We accept this in society — hell, we encourage it. We accept there’s a certain class of people who cannot “afford” to spend the time making food. And we accept that people should specialize until they merely focus on their vocational tasks.

As the episode unfolded, my appreciation of food outsourcing shifted more globally. I thought about what else gets outsourced. Our society has taken almost everything off of our plates so that we can focus more time on other activities. We continue to specialize well beyond food.

The decline of manufacturing in America can largely be seen as an effort to reduce costs, time, and environmental burden on the countries that now produce. We’ve outsourced the “negatives” and taken the cost savings. Comically, we criticize China for using so many coal-fired power plants and then click buy on our new computer, coffee maker, smartphone, etc. — all made in China.

We’ve outsourced reading longer books and research to journalists and even computer algorithms. Now, people read books for us and distill what we need to know — what’s most important. Consequently, this means we get a synthesized perspective of a book. It’s like playing the telephone game through articles, but most of the time we read that review to understand the book.

Even budgeting and financial management are thrown to others. We use Mint.com or other financial software to manage and update us about spending. There’s no need to balance a checkbook anymore — I’m not sure if I’d even know how. We trust financial advisers and/or digital facsimiles to manage everything for us. We’ve got better, more important things to focus on!

More and more, we watch sports and reality TV shows instead of playing outside and engaging in our own relationships. The drama of a royal, elite families and others’ lives encapsulates our attention, as those nearest us seem to wane. Many watch the throw, shot, or pass, but I’m not sure how many are making that throw, shot, or pass themselves anymore.

Even in academic circles, professors and graduate students are using other people to do their statistical analysis. Academics can even outsource their statistical analysis to India for further review and completion. Afterwards, with a nice, clean result in hand, researchers can write up the interpretations — or pay another person to do that part.

And as I type these words, they’re being stored in a cloud server for safekeeping, backup, and preparation for publication on my website. Both the cloud and website servers are miles and miles away from me. I’ll never see the computers, nor would I need to. I’ve outsourced these storage needs — someone else is handling them for me.

Again, I settle on this simple conclusion: we’ve embraced the streamlining of our lives for the purpose of efficiency. But what is this efficiency for? Is it so that we can focus on work more? Is it so that we can make more money? Is it so we can relax more?

Absent of answers, I wonder where we’ll be in a few decades. When asked questions about our personality and identities and hobbies, will we reply that we enjoy watching and reading others’ accounts of life? Will we effectively outsource our identities to the TV shows, movies, and reviews of reviews?

Filed Under: Social Justice Tagged With: Books, China, Cloud, Food, iCloud, Life, Meals, Michael Pollan, Netflix, outsource, outsourced, preparation, Reading, storage, Work

Special: Spring Break Sale On My Book!

By Frugaling 5 Comments

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Frugaling Book Cover

Finally, after another long winter, the sun’s out and weather is getting warmer. For many students, this week or the next represent a wonderful respite from the rest of the semester. Or, in other terms, it’s Spring Break! From beaches to family visits, the fun begins soon! Meanwhile, I’ll be having a “staycation” and working throughout the week. Isn’t it fun getting older?

Regardless, I wanted to celebrate in my own special way. Over the entire week of Spring Break — March 13th through the 20th — I’ve created a sale for my book, Frugaling: Save more, live well, give generously! Regularly priced at $2.99, the book will be available for $0.99, and if you’re an Amazon Prime or Kindle Unlimited subscriber, it’s free.

The book took years to make, as it was a compilation of all my essays and stories. Additionally, I added special notes and updated articles to reflect new ideas and changes. I poured my heart into making it a special, light, fun read — perfect for a little time away from textbooks.

I hope it’ll inspire you to become more frugal and live intentionally. If you enjoy the book, please share it with others and give a review on Amazon. I’d love your feedback!

Thanks for being a faithful reader.

Stay frugal,

Sam

Filed Under: Save Money Tagged With: book, frugaling, give generously, live well, sale, Save more

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