JAY'S CONSUMER BLOG - NO MODEM FEE
This probably belongs on my Comcast / AT&T post but I will break it out since that one is kind of long. When Comcast comes out, they bring you a modem. I advocated in my last post that you get the skinniest bundle of telecom services possible - which means just the basic Internet for most people. If you are Internet only or internet/TV only, you can purchase a refurbished Arris cable modem on Amazon for $35.00. First check Comcast's site or tech support to ensure compatibility. Comcast will charge you $11/month to use their modem. This amounts to savings of around $229/ 2 years to buy your own. While that may not be huge, the focus is on developing frugal/smart consumer habits and making many small smart decisions that, taken together, can result in huge savings and improved consumer self-confidence. I believe AT&T may include the equipment, but if not investigate purchasing your own.
Car purchases are the second largest purchases for most people. other than a house. As such, this is a big opportunity for a business to take advantage of us or get us to overspend. It deserves a more detailed blog post than I can write today, but I will comment on a few things while a bigger more detailed post is in the works.
Payments - like the cell phone, we overspend on cars by focusing on the monthly payments. There are at least two transactions in a car purchase, really, for most people. Part 1 is the purchase price negotiation. Part 2 is the financing negotiation and closing the deal.
Car dealers are great at getting us to jump to Part 2, and this enables them to make us overspend on both the car and the financing. My suggestion is that you enter the dealership telling them you plan to pay by cashier's check, and begin negotiating the price. Costco and insurance companies like USAA offer car-buying services that may make this practice much easier. I usually buy used, but the one time I did buy new I found the USAA service to be excellent and the best price I got by far on a new Subaru. Focus first on price. You should almost always go for the base or mid-level trim. The car company makes lots of money off leather seats and alloy wheels! When you go to sell, you won't recoup more than a small fraction of these expenses.
Once you have the best purchase-price deal, tell the dealership you plan to shop around for the best financing and ask them what they can do. Once you get your answer, walk out even if it is a good deal. Go home and call your bank or credit union - look online for rates.
Suppose the dealer has the best rates so you go back to finalize things. If so, they will next take you to who I call the "ripoff dude". He will try to sell you an extended warranty, some sort of spray for underneath the car he says makes it not rust, and an alarm. Say a firm no to all of it and whatever else he has. The ripoff dude on my Subaru purchase resorted to guilt tripping me - saying they needed to make some money and I needed to help out! Dealers do not make nearly as much off new vehicles but they have replaced this revenue stream with financing and rip off dude's array of unnecessaries. If you want the extended warranty, you can get it later and you may be able to buy it online from another dealership of the same car that discounts them over the Internet.
Physical cash is on the way out - the writing is on the wall. Venmo, Google Pay, Apple Pay - along with good old Visa and Amex - is where the future is. Some stores no longer accept cash in the US, and this is even more common abroad. This is unfortunate, because using physical cash is a great budget-discipline tool.
In short, it is much more painful to pull out physical cash and hand it to the teller than it is to insert the chip. This pain will instill discipline in us. Retailers would hate it if we switched back to cash from "easy money plastic" because we would spend so much less.
Spending cash has a cost - no frequent flier miles, some of the purchase protection aspects of a good credit card. But especially for casual shopping trips, I encourage my clients to only spend physical cash for 90 days, and see whether they are cutting back their spending.
Since bankruptcy is both the end of the road and a new beginning for credit, many clients have no choice but to use cash or an ATM card for purchases. An overwhelming number have told me they were just as happy, and had everything they needed, and were spending much less than they did in their plastic days. A large number have told me they continued to do this voluntarily despite having restored their credit.
If you do not want to employ this strategy for all or even most purchases, consider using it when shopping for non-necessities or things that you think you tend to overspend on.
THE COSTCO TRIP - BUY OFF THE LIST
Like me, many of my clients shop at Costco. I have thought a lot about dollars and sense and Costco trips. On the one hand, they have great deals on things we all need like paper towels and detergents. But they also have lots of things we can live without and they are great at getting us to buy them. I have a two-fold strategy I use and suggest my clients use to keep down the Costco bill.
First, sign up for Google Express for delivery of large, bulky stuff. It can be delivered to your door without extra charges. In addition to the convenience? It keeps you out of the store!
I have noticed how when it rains and I go to Costco, there are great looking umbrellas for sale as soon as I walk in the door. A little nip to the air, and sure enough - a great deal on Patagonia jackets just past the membership-card checker lady! Costco is great at what I call "need discovery enabling."
You go in the store, and the next thing you know, you realize there are all these things you needed that you didn't even know about! The umbrella, the jacket, the camping supplies. The enormous bag of organic veggie chips. Enough to throw a raging party for a bunch of vegans! Do yourself a favor and spend less time at Costco by signing up for Google Express.
A further strategy is to only shop off a list when you are there. If you see something you want, write it on the list for next time. You may find you don't really want it when you think about what else you could do with your money.
Lastly, they have a great return policy. Don't be shy about taking things back when buyer's remorse kicks in. You don't want to be back in my office, needing to file bankruptcy again.
Do you look at your cell phone bill and immediately feel cheated? Sure, I use my Iphone a lot, but most of the time it is connected to wi-fi at home. So I have to pay $85.00 just to send a few ten-digit texts a day and read the newspaper while I am sitting in the car waiting for three year old to wake up? Say it isn't so!
The most obvious way for almost every consumer bankruptcy client I see to improve their finances immediately is by reducing their spending on telecommunications bills. Comcast and AT&T bills are a good place to begin your financial decluttering.
I am developing a new blog to help clients and other site visitors avoid bankruptcy. This is obviously against my economic self interest as a bankruptcy lawyer, but is the right thing to do and something I feel very passionate about. Having filed hundreds of bankruptcy cases, I have been in a position to review my clients' household budgets, tax situations, family finances, and work situations. I also assist them with obtaining new car and home refinance. Unfortunately, I see many avoidable mistakes prior to the clients coming in my office the first time. More unfortunately, I see these same mistakes being made twice! While it is nice for my clients to keep in touch, I want to hear how they are doing better and that they feel more at peace since we met, and not have them asking whether they qualify for another Chapter 13 or 7 discharge yet!
Additionally, when it comes to my own finances, I have always really liked getting good deals, and have also tried hard to avoid bad deals. The bad deals make me feel bad about my finances, and worse about my own judgement. There is a temptation to mentally "write off" small economic errors that cumulatively add up to very large amounts of money. These mistakes may not be the primary cause of bankruptcy. However, when the bankruptcy is over or while it is in progress, making changes to the household budget could mean the difference between eventual economic security (including a rainy day fund), a more comfortable retirement, and self-empowerment, versus being "played" by multinational financial institutions. These "players" are all around us!
I try to be vigilant, but I had some experience with this fairly recently. As my practice quickly expanded in the early 10s, I took on many software subscriptions, probably bought a few too many computers and Iphones, and generally overlooked small insults to my finances on the basis that I was trying to "focus on the big picture" - making my practice successful and busy. Once I took a step back from that "big picture" and cut my expenses, I found that the benefits far exceeded the financial benefits. I felt better about myself when I had fewer financial commitments, was getting better deals, and had less equipment and vendor relationships to manage. There is a recent, very popular book by Marie Kondo about de-cluttering our homes to reduce stress. One big-picture purpose of this blog is to advocate for financial de-cluttering. Whether or not you have any interest or reason to file bankruptcy, I want to help you save money, save stress, and generally feel like a more prudent consumer.
We walk out of our houses every day, and so-called reputable corporations have their hands in our pocket - almost from the beginning. So I want to point out these pocket-pickings so my clients benefit financially, and feel more in control of their financial destiny. I come across good deals, bad deals, and flat-out ripoffs almost daily, so I will use this blog to point those out - along with other consumer tips.
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