Milk Your Money

The Pros and Cons of the iPhone 3G

Ben — Thu, 03 Jul 2008 01:45:28 +0000

There are few pieces of technology that have been hyped, promoted and sold in record breaking numbers than the iPhone. Now, there is a new shiny toy: the iPhone 3G. This new miraculous device is going to make the previous iPhone seem like small place holder in the realm of mobile devices. And will arrive on July 11th. It was announced a few weeks ago, and just lately the price plans have been announced from AT&T. That’s where it is determined whether the iPhone will be worth the money or not. Let’s take a look at the details…

PROS
Its sleek, its sexy and is now more fully connected with a much faster wireless connection. This means that you can be just about anywhere in civilization and browse the web with speeds that make it worth your while. It plays your music, videos (YouTube as well as video podcasts) and has the ability to pin point locations through GPS.

The other good news is the new pricing plan. If you are like me, you have the absolute lowest amount of minutes and the standard 250 text messages for about $35 to 40 dollars a month. With the iPhone 3G, you can have this in addition to unlimited data. Unlimited browsing. All the web you could possibly surf at any time. That’s a nice thing.

In addition to all this, there is also the syncing that comes with the whole package so all of the information you could possibly want are right at your finger tips. Fingertips being the operative word as just about everything is done through the nicely done, sensitive multi-touch screen that allows you to browse, edit and manipulate all the media you could possibly imagine. Email? Now it works with Exchange right out of the box with push email and eats up attachments and spits them out. All in all, it is an amazing piece of hardware.

CONS
But wait, there cant be any cons here! What could possibly be wrong with this genius token of engineering? Well for starters, its on AT&T’s network. Granted, AT&T is not too shabby when it comes to coverage, but compared it to Verizon, its not good. Verizon, hands down has the absolute best coverage. Want proof? For one, I travel all over the country and always have signal and cannot remember having a dropped call. But I am not surprised as they have always been that way and that’s the main reason why I have them as a carrier. Verizon is almost too dependable. Apple approached Verizon first and pitched the original iPhone to them and they turned it down as quick as a bunny. Why? I think its because they don’t need it. (They said they didn’t want to give that much access to Apple, and by control I think they meant money.) They know that the other carriers can’t touch them as far as coverage goes and they don’t want to lose money in trying to woo new customers.

The phones expense is not necessarily a con, as most new phones are expected to be wicked expensive. If you are on the fence and about to go in, you can snag it for $200 and $300 (for the 16 gig model) as long as you sign a 2 year agreement.

This agreement has a few other angles associated with it. They state that you can get this new phone with out signing a 2 year contract and go month to month. Then that price jumps up to $600 and $700 (for the 16 gig model). Wowzers. So now you have it and maybe in a few months you want to break free from the crappy coverage of AT&T. Think your iPhone 3G is going to work anywhere else? Doubtful. They leave that part of the brochure. You now have a very fancy iPod that only has 16 gigs of memory on it.

But the lowest monthly plan is only $70 bucks, thats not bad. No its not, as long you never, ever go over your minutes: $.045 a minute when you go over. Might be competitive but you have to feel gouged at some point. By the way, the price difference for the lowest plan out there now (on average $35 or so) and the iPhone 3G’s is an extra $420 a year. I am trying to think of a guaranteed advantage to go with the non-committed price. Contracts like this seem like crap, but you’ll have to ask Frank about that.

Still no copy and paste? No multimedia messaging? No video recording? No voice command? Bluetooth for headsets only? Third party apps might cover these but for a price, that Apple gets 30% of. Read on…

Whats a (frugal) techie to do? I say wait. Wait until Google’s Android comes out. Android is going to completely revolutionize cell phones just like iPhone did, only more so. When Google went public, their stock did some skyrocketing that made the janitors at the Google campus millionaires. And that was when they had a basis of about 20 million computers. Think whats going to happen when Google gets cut loose onto 70 million cell phones. Its going to be unreal. Google makes its money through advertising, so the cost of production of hardware should be nil for any cell carrier to pay for the operating system. Oh yea, and did I mention that the whole operating system was free open source? Yea. Google also loves voice over IP. Thats the other thing that will blow your mind: there is going to be free wireless out there just like there are cell phone frequencies. Google made sure of it when they pumped the price up at the auction block the FCC held. They raised the price easily to 4.7 billion dollars so that the threshold would trigger that who ever owned it must make it available for public use. Guess who is holding the receipt for all of that? Verizon.

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Jump Start Your Savings

Ben — Wed, 02 Jul 2008 02:52:52 +0000

Back in April, I wrote an article about Jump Starting Your Frugality, and it has seemingly been well received. Now we are going to approach this from another angle: Savings!

Getting your savings in order is a tricky thing…It’s just enough ‘out of sight, out of mind’ that you can easily dismiss it throughout the day and go to sleep at night thinking, “I need to start tomorrow.” Then tomorrow comes and its the whole cycle over again. Over and over again. One of the things that causes me anxiety is the idea that I will wake up one day, and it will be time to stop working for a paycheck and I will have nothing. Maybe not nothing, but not enough to fully enjoy the remaining years of my life. Its a scary thing, but setting up more and more financial vehicles now while there is still time gives me hope. The hardest part is getting started. Here are a few ideas:

Set goals. Duh. This is an easy one. But to elaborate a little bit, don’t just set goals, keep them. Make a list and order it from small to grand. The smaller goals can be anything really, like telling yourself that you will pack a lunch instead of heading out to your favorite hot sandwich spot and record how much you would have spent as well as what you have saved. Give yourself one week to do this and see what happens. The achievement will be a great boost towards your next goal. Your larger goals might be something more long term like some sort of time frame to have your mortgage paid off. This will need its own set of goals of course, so set up another list for that. Start small so these objectives are attainable and keep moving forward.

The other important thing is to talk to your spouse about what you both want and build the list together. Its sounds dorky but my girlfriend and I do this almost weekly. We used to have long drawn out conversations about it as we have a great deal to map out but now that we are clear with each other, these conversations are much more brief and specifically to the point.

Create a cushion. Here is where the saving begins. Imagine a layoff or some sort of large emergency. I recently had one and if my buddy hadn’t happened to have a travel voucher on hand I would be out $1300 for a next available flight. I am grateful to both him and Southwest. But it made me think: Thats not going to happen every time. I need to be ready for anything and be able to take care of myself. To get this done, set up a recurring money transfer to a savings account that is devoted to be used only when absolutely necessary. You will have to make a few sacrifices but not much. And it will be much more worth it in the long run. Set this goal to be at least 3 months of salary and try to achieve s good chunk of change equally 6 months worth. I recommend ING Direct, their rates are competitive and when the economy starts to turn for the better (next year? year after?) their rates should be the first to go up.

Pay your bills automatically. We have talked about online bill pay before and while its not the most monumental idea in finance, its still pretty powerful. Usually what happens is that you think about paying your bills and something comes up and you put it off. You have the money for it and everything but sometimes it takes a late fee to smack you upside the head to square it away. Just set up bill pay and save money by not getting a late fee. Your credit score will thank you for it.

Whats your 401(k) doing? This may seem dry to some but read it anyway…its quick and easy and you really only need to do it once. If your company has a 401(k) (or a 403(b)) talk to whoever sets it up and takes your order to set it as index funds. Three to be exact. One domestic, one foreign and one bond. This doesn’t have to stay this way and I am sure there are thousands of suggestions as to what it should be but until you are ready to analyze and make informed decisions, this is probably the safest way to go for now. Take a look at all of what Vanguard has to offer while you are at it. Feel free to comment about other ideas though!

Automate again. See a pattern? What you did for your emergency savings as well as your work fund, do this with a Roth IRA and a 529, if you have kids. Or maybe even if you don’t have kids but you might someday. These don’t have to be extreme values that cause you to live like a monk but it should be something significant. Don’t Dump so much money that you can’t live, but then again, $5 a month is not going to work very well for you either. Moderation. There is a good quote about moderation that I can’t remember now…

Paper (money) or plastic (card)? Whittle your credit card debt down to one card. Don’t cancel the rest as your credit score might take a hit but get them to zero. You now have one bill to look at and keep track of. Use the card with the lowest rate the most and try to lower all of them by calling.

Challenge yourself to try these. See what you can achieve. And then don’t worry so much about it. Remember that if you slip up, gather yourself up and keep moving forward. There is nothing gained by worrying about the past.

Is Your Patience Tanking with the Market?

Frank — Tue, 01 Jul 2008 02:58:47 +0000

If you have been paying any attention to the markets lately, then you probably have noticed the huge fluctuations the past couple of weeks. Key market events, like the Fed’s decision to keep the interest rate idle, and the rise and fall of the price of oil, seem to mean more to investors than companies actual books. Lately, the market seems to be moving with the cost of oil, if the market is way up or way down look at the price of oil, it’s almost guaranteed to have swung the opposite direction. What does all of this mean to us and how should we react?

We realize that looking at your monthly investment statements is starting to become a drag. Each month seems to be getting worse. Naturally, when we see negative amounts in our holdings we automatically feel like selling. There are times when selling is probably the best option, for example when you sell losses to offset some gains or the company is just really going nowhere. But for the most part, holding is probably your best option and if you can afford it, purchase additional shares at a discount. For those of you that automatically invest with each paycheck, you are in the best position. You are experiencing losses, but are buying cheaper, which in the end will amount to less stress and a decent return.

Remember, when you sell a security at a loss, you lock in the loss. In other words, that money went to the left, to the left (Beyoncé anyone?). There’s no waiting for the stock or fund to recover and this fact is easily overlooked when emotions take over. In particular, selling off small amounts of securities sets you back in commissions as well, which adds to your loss. I’m not saying you should hold on and never sell anything, however, when times get bad, your best bet may be to pretend you don’t notice. Check out a previous post where we discuss the benefits of staying calm when the market falls. $

How to Reduce Your Car Insurance Payment

Ben — Mon, 30 Jun 2008 02:18:32 +0000

As the price of gas gets worse, food prices rise out of control and finding a reasonable mortgage gets more and more difficult, we need to find a better way to save money. One way is through our car insurance. My significant other and I both have USAA and we both love it. But I realize that not everyone is privvy to USAA as there are certain requirements to being a member. Here are a few ways (check out July’s issue of Money) to reduce the cost no matter what insurance provider you have…

Slim down coverage on old cars. Once your vehicle is worth less than 10 times waht you pay each year to insure it, toss the comprehensive coverage plan you had and go as low as possible. Check Kelley Blue Book to find your vehicles value.

Increase your deductible. Car insurance exists to protect you from insane costs that could arise in an emergency. Raise your deductible from $200 to $1000 (and stash away that $1000!) and you could save about 40% on your premiums.

Get discounts. There are all kinds of savings here, from having a good driving record, having good grades (if you are a student), even using the same insurer for your home. (Go to Insurance Information Institute for more answers to your questions.) The trick to getting almost 25% off your premium is to call them, they won’t call you. Why would they? They make more money by not calling you but once that info is out there they want to keep you.

Pit them against eachother. This one has the most work involved but if they want to keep you then they will match what you find. And if not, you have a better place to go. Heres the rundown:

Go to naic.org to find your state insurance commission website and then download a car insurance buying guide.
Call them for quotes after finding the closest situation to you.
If that doesn’t work, get the top five quotes at insweb.com (State Farm not included)

Watch for hassle. Be sure this new quote in hand is not a sham by making sure that the ratio of complaints vs policies written. Your states insurance commission websute will have this.

In other news…

We have added two new members to the Money Life Network! Emily of Remodeling This Life and Kacie of Sense To Save.

Remodeling The Life is a site that focuses on her and her family’s ongoing adventure of remodeling their house. As a major DIY fan, this is intruiging to me. Take a look at her site and be sure to subscribe!

Kacie is another one of our favorites and authors the well known site, Sense To Save. I am a huge fan of her writing and have been reading her for a while now. She knows what she is talking about and we recommend her site as well as her feed.

The Art of Hypermiling

Ben — Fri, 27 Jun 2008 01:54:28 +0000

One of The Washington Post’s most esteemed writers, and coincidentally, one of our favorites, has written a nice piece on hypermiling. Before we go any further, lets first define what hypermiling is…

Essentially what it entails is altering your driving behavior to get better gas mileage. Sounds simple right? Well there is a lot more to it if you put in the effort. Nancy found a great deal of information on the topic and ended up getting first hand experience in the best methods for getting the most mileage out of a vehicle. Its an interesting article and can really open your eyes to how to get the most out of your vehicle. Check it out here!

Hypermilers do such things as drive slowly, brake as little as possible and limit their use of the air conditioner to save fuel.” - Nancy Trejos

Some sites that she found that had other great information about hypermiling:

Ecomodder.com
A nice community that rates different vehicles based on their MPG. Also, there are fair amount of DIY things you can do to as well.

HyperMilingForum.com
A pretty robust list of tips to look at as well as a nice section of videos. Again, an active community with current forums.

CleanMPG.com
Has the best lsit of the latest news on advances in hypermiling. If you are really curious about the ins-and-outs, their forums have a ton of content.

This post is meant to contribute to the MoneyLifeNetwork’s Summer Saving Series. Have you entered to win the $100? The deadline is 11:59 am Monday June 30th!!

The Joy’s of Three Paycheck Months

Frank — Thu, 26 Jun 2008 02:30:40 +0000

July is around the corner, and for Ben and I, this means a three paycheck month! Many employers, like ours, pay their employees using a 26 pay period cycle versus the traditional 24. Of course, this means each check is a little less, but twice a year we get the third magical paycheck. These extra paychecks feel like bonuses and are very tempting to spend foolishly. How should you approach these months?

Cons with 26 Pay Periods
It’s too easy to blow these extra checks on “stuff,” because we don’t notice the extra money is missing from each regular check. Just like having your savings taken out of your checks each month, if it’s always gone, you don’t miss it. In a way, it’s kind of like an interest free loan to your employer, because it’s money that could be earning interest for us – similar to tax refunds. Although the extra money accumulated from adding just two paychecks isn’t a ton of money, its still money.

Pros with 26 Pay Periods
It’s a mandatory savings vehicle; after all, we have no choice! It’s like getting two stimulus checks a year (only it’s taxed). Used wisely, these extra checks are great for paying down unavoidable debt. Maybe your hot water heater went out and you were forced to swipe it on a credit card. Well, you can now pay it off. Or, maybe you have a couple thousand left on a car loan, not any more! Another great way these extra checks can be utilized is funding an IRA to the fullest amount. In my opinion, if your savings is low, these should absolutely be saved for the just in case moments.

Personally, I like the 26 pay period system. My wife and I typically try to save about 60-70% and spend the rest on items we have been wanting for awhile, that just didn’t quite fit into our budget. You have to allow yourself to splurge every once in a while, other wise, maintaining a fiscally responsible budget gets harder and harder. $

How Will T-Mobile @Home Save Me Money?

Ben — Wed, 25 Jun 2008 05:05:44 +0000

If you are a current T-Mobile customer, then there is a great deal waiting for you. T-Mobile @Home is a new solution to your home phone needs.

This new phone service allows T-Mobile customers to stay connected using their home number. It has unlimited nationwide calling for only $10 a month, with a 2 year service agreement and qualifying T-Mobile wireless rate plan.

Imagine what you are paying now for a home phone plan…then imagine the difference between that and $10. Take that number and multiply it by 12: that’s your annual savings! If your paying about $30 (plus or minus taxes), you could potentially save $20 a month, which turns into an extra $240 a year!

How Does it Work?
All you need is to plug in your touch-tone phone into the HiPort™ wireless router ($49.99) and in turn connect that to your broadband connection. You are able to keep your same regular home phone number. There is no additional charge for the extra features like Caller ID, Voicemail or Call Waiting.

Other Applications
Let’s imagine that you have a small business that you need some communication service with. Get a T-mobile cell phone for the business itself so that you can have employees get in contact with you or your customers and you will in turn be able to provide the office with a regular phone line for only $10 a month. Definitely a good deal for any bottom line.

Want to Learn More?
Head on over to T-Mobile’s Talk Forever page and read all about it.

Don’t forget to subscribe to hear more of the latest deals that could save you money!