Category: Frugal

I was really impressed with the comments and discussion when a post on VOIP services (and specifically Vonage) generated a lively discussion last year.  Along similar lines, I’d be very interested in what people have been using for their ISP in Canada, especially anyone based in Ontario.

I used Bell years ago, and without fail they messed up everything they had the chance to mess up.  Recently a man called me asking what it would take to get me back at Bell.  I told him straight-up that I didn’t believe anything Bell offered me, so there wasn’t really any way they could get me back (which seemed to be the right answer as it got me off the cell phone quickly).  A friend in Toronto got a similar call where the woman was VERY hard sell trying to get her to switch from Rogers to Bell.  After my friend asked if she could review the numbers and call back if she wanted Bell’s offer (the answer was no, she had to accept immediately) I figured that Bell is the same old company it has always been, despite how they keep claiming they’ve changed.

I’ve been happy overall with Rogers, but the one thing they do that’s driving me nuts is that they’ve started charging a “usage overage fee” (basically a bandwidth cap that you get charged per gigabyte if you exceed).  The fee itself doesn’t really bother me, but they snuck it into their service (after I purchased “unlimited Internet” I don’t like that they’ve suddenly and quietly changed it to “very limited Internet”).  It’s also no fun checking every day what your usage is to make sure you aren’t using up your monthly allotment too quickly.

Recently I’ve gotten to the point that I’m ready for a change.

Most of the small ISPs are Bell re-sellers, which basically uses the same technology Bell uses, but you interact with another company.  I’ve dealt with a number of these over the years, and they’re ok for the most part, but inevitably problems seem to come up that they blame on Bell (and Bell blames on the re-seller), which from a customer’s perspective gets annoying in a hurry too.

I was originally going to sign up with “Yak” when I moved to Waterloo, but they had this stupid policy that you have to set up your home phone with them, THEN you can sign up for Internet with them (and they’ll be delivered in 2 installation trips).  This was silly enough that I decided not to do business with them.

I used Primus for my home phone / Internet years ago and at the time I didn’t have any complaints with them.  I switched to Vonage for a cheaper price and regretted it.

Teksavvy has come up a few times when I’ve been researching ISPs and is supposedly good, but I’ve never talked to anyone who is actually their customer.

One thing Rogers claims about Bell (and their re-sellers) is that they supposedly have a hidden cap as well, above which your speed suddenly slows down dramatically.  So instead of charging you when you exceed their cap, they just slow your transfers to a crawl.  Has anyone experienced this or know enough to verify / disprove it?

I’m currently paying about $70 / month for Internet and phone (before usage fees and long distance charges, last month’s bill was $100 which prompted this post).  I’m willing to pay this rate ($70), ideally without a transfer cap.  Unlimited long distance (within Canada is good, to the US as well is even better) would be gravy.

What is your phone / Internet plan?  What company is it with?  How much are you paying and how happy have you been with the service?

With the economy in a downturn, this year more than ever the pressure is on to find cheap gifts for loved ones.  Luckily, this is Mr. Cheap’s forté, so without further ado may I present the “Last Minute Cheap Christmas Gift Guide”.

• Pine Cone Bird Feeder:  A perennial favourite, this feeder can be made by finding a pine cone and smearing peanut butter on it.  If you’re like Mr. Cheap and you really like to give on a shoestring, you can just give the cone and explain to the recipient how to “load it”.  Perfect for environmentalists or animal lovers, this proved to be the ideal gift for the Four Pillars’ household this year.  Each time I’ve talked to them since giving them this little treasure, they’ve assured me how much fun Mike and the kids were having watching the birds nibble on it (until it attracted a family of raccoons who now live in their attic – definitely one danger to be aware of).
• European style rolled cigarettes:  For the smokers on your list, this gift can be had for the price of some rolling paper.  For tobacco, stake out bus stops, entrances to office buildings and other areas smokers congregate.  Collect the “gently used” butts, break them apart for the unburnt tobacco, and roll yourself some stylish, continental luxuries.  Just like they smoke on the Riviera, ooh la la!
• Hobo cocktail:  For those of us short on funds but with a well stocked liquor cabinet (or left-behinds from a recent house party), Hobo cocktails can be made by digging out all the undrunk booze, mixing it together, then pouring it back into the bottles.  You haven’t lived until you’ve drunk a 1/3 gin, 1/3 vodka, 1/3 rye delight!  Scrub off the labels, so recipients don’t mistakenly believe they’re getting boring, “pure” liquor.  If the budget allows, make up funny labels like “Mr. Cheap’s Patented Apéritif, Molotov Cocktail and Nail Polish Remover”
• New-To-You Pets:  This works best if you live in a rough neighbourhood where pets are mistreated.  “Liberate” a neighbour’s pet who you think would be happier living with someone on your gift list.  Then give the gift that keeps giving, a loving addition to their family!  You need to make sure that the recipient doesn’t live too close to the pet’s former home (or there might be an awkward encounter when your uncle Bob is out walking his new mutt).  You should warn the pet’s new family to make sure he doesn’t get outside without a leash, or he might make a bee-line back to his former prison.

Whether shopping for a smoker, a drinker, or a naturalist, with a little creativity you can find a spot-on gift that doesn’t cost an arm and a leg!

Read the 2011 Cheap Gift Guide!

There’s a wave of frugality going through the world, as people are worried about jobs and money in light of a looming recession.  I’m amazed at how people have developed the expectation that spending $65 monthly (or far more) on a TV subscription is a “necessity”.  Possibly this attitude will be re-examined in the current environment.  I remember as a kid having 3 channels come in on the rabbit ears.  Some of my friends have only recently gotten cable, while I don’t have it myself.

A popular suggestion would probably be to get rid of the TV altogether and start reading library books. While I’m sympathetic when people like to rant about how brain-dead television is, in my opinion it provides an amazing diversity of engaging entertainment.  Wealth isn’t just dollars and cents in a bank account or a car that makes the neighbours envious.  The readily available, high-quality, inexpensive entertainment we have access to is absolutely part of the wealth of modern living.  Please watch this commercial for the Discovery Channel before slandering television.  If nothing else, it’s a chance to hear Stephen Hawking say “Boom De Ya Da!”

As a total aside, I had an idea for a science-fiction short story that would be about a war between Earth and a colony that wanted to break away.  The war would end up being a trade war where the colony withholds resources (radioactives and whatnot perhaps) that Earth needed shipped back, and Earth blocking entertainment from the colony (and driving them nuts when they couldn’t find out what happened next in serials they followed, and being unable to consume new music, movies and literature being produced by artists they liked).  The colonists would be unable to be satisfied by amateurish home-grown entertainment when they were used to the overwhelming supply of high-quality, sophisticated entertainment from Earth.

Say you really like TV, but want to get rid of the re-occurring expense.  What to do?  If we restrict ourselves to legal options, there’s still a variety of choices:

1. Visit friends with cable on the night your shows are on.  Years ago I used to go over to a friends house to watch Sopranos.  We’d make Italian food beforehand, then all watch it on HBO (which I was too cheap to buy myself).  I like watching TV shows with people, and with the meal thrown in it became a great night out.
2. Check out your local library.  Beyond a wide selection of movies, they probably also have seasons of older TV shows available.
3. Look on Craigslist and Kijiji for used season of shows that you’ve heard are good but haven’t gotten around to seeing.  I can particularly recommend “The Sopranos”, “Sex in the City”, “Buffy the Vampire Slayer” (anything by Joss Whedon is good), the first couple of seasons of “24”, “The Simpsons”, and “Futurama”.  You should probably be able to resell it after watching it for about what you paid (how much more used is it going to be?).

Say you watch quite a bit of TV and you’ve already got through all the seasons of the older shows that you’re interested in.  “But Mr. Cheap,” you complain “I need fresh, new, SURPRISING entertainment!” Fair enough, you whine, I deliver.

I’m really not suppose to say anything about this (American readers might be best served surfing away from this page now), but in actual fact, unbelievably, not all entertainment is made in America!  Occasionally (very rarely I admit), other countries produce something that is watchable (if just barely) when nothing American is available.

From Canada

Pretty much all the “Degrassi” shows are decent for what they are.  If teen melodrama is your thing, check them out.  I found them quite enjoyable when I was in my late teens (watching highly dramatized versions of the issues I’d gone through a few years earlier was fun).  Kevin Smith has  said that watching Degrassi on TV was one of the high points when he was working as a convenience store clerk.  He’s since guest starred on “Degrassi:  The Next Generation”.

From England

The entire run of the original “The Office” is available and quite funny for anyone who has worked in an office environment.  Ricky Gervais is totally unique (I sometimes have to stop an episode and take a break because I get so uncomfortable watching him).

“Coupling” is another BBC series which is basically “Friends “, with the sex dial turned to maximum (one episode is about a woman finding a tape called “Lesbian Spank Inferno” in her boyfriend’s VCR).

From Australia

A friend recently introduced me to “Wilfred” which is a black comedy about a man, Adam, who moves in with a girl he meets (and her pot smoking dog).  Wilfred is played by a man in a dog costume and he and Adam have at length conversations about such things as what a nacho is (Wilfred’s contention is, if it doesn’t have cheese on it, its just a corn chip).  It’s never made clear (at least to the end of the first season which I’ve watched) whether Adam is actually communicating with Wilfred or if he’s psychotic.

From Japan

Anime are Japanese animated cartoon’s based on manga (Japanese comic books).  People think that all anime is “Sailor Moon”, but everyone in Japan reads manga and watches anime (many series target adults, not children or teens), so there’s probably a series that would be interesting to you, regardless of your “demographic”.

I’ll turn this over to our (far more knowledgable) readers now.  What non-American series would be worth tracking down for someone trying to go cold turkey off of cable television?

One of my uncles (by marriage) loves to gamble.  He doesn’t bet the mortgage payment at the horse track or anything like that, but if there’s a possibility to win money, his eyes light up. One of the meanest presents I’ve ever given was a fake lottery ticket I put in his stocking.  After scratching it off, he stood up, held the ticket in the air and shouted “I won $50,000!!!”  Funny, but quite evil of me.  He said after I told him what it was that he felt like he’d just lost $50K.

I meet people who get a real thrill out of buying lottery tickets and taking trips to Las Vegas.  To me, when I see that over time the house is going to win (be it a casino or the Ontario Lottery and Gaming Corporation) I’d be willing to be the house but I don’t want to be a player.  As the saying goes, “Lottery:  A tax on people who are bad at math”.

I’m open to taking calculated risks, such as starting a business or investing in equities, but I’m not interested in something that I KNOW the risk/reward is against me.

More and more, I’m seeing promotions where they offer you the chance to win something to get what they want.  We bloggers do it when we run contests and reward links, signing up for newsletters or commenting.  My alma mater has been doing it recently trying to get me to sign up with their “affiliate partners” for insurance (“This is my chance to save and win!  Get a car insurance quote.  Get a home insurance quote.  Win $50,000 in cash.”), my ISP (Rogers) is badgering me to fill out a survey about their service and potentially win a $100 credit to my account and McDonald’s does this with their “Monopoly game” stuck on their food.

The argument might be made that these promotions are more “fun” than offering someone a discount or a small gift.  I think it’s more a way to sucker people by paying far less, per person, for an incentive.  I’d fill out the Roger’s survey for a guaranteed $5 credit to my account.  I wouldn’t fill it out for a $0.50 credit to my account (they say it takes 10 minutes to fill out).  Everyone sees the $100 and thinks “that sounds good, maybe I’ll win it!”, but chances are definitely against them.  Assuming 1000 people fill out the survey (a pretty conservative estimate, given Roger’s LARGE customer base), having a 1/1000 chance of winning a $100 credit is worth $0.10.  Is my time worth more than 60 cents / hour?  Yes it is.

Because these promotions have taken off in recent years, I think people must be responding to them in an irrational way.

I wrote last week about the value, as I see it, of keeping track of things in order to make changes in your life. While a common refrain in personal finance is to spend less than you earn, its obviously quite difficult for people to do so. I think part of the reason is that people have trouble actually seeing what they’re spending every month and where its going. On shows like Gail Vaz-Oxlade’s “Til Debt Do Us Part“, it often starts with the host telling the participants how much they spend each month, and the person being shocked when they find out.

Three ways that I see for keeping track of your spending are:

1. Write down everything you spend

Keep a notebook with you, and every time you spend money on something, write it down. At the end of the day, put each of the purchases in an Excel spreadsheet (categorized however you want). Each day you’ll get more data and be able to better estimate what your average spending is, broken down to as many categories as you track.

Something like:

Does the job reasonably well. If you get sick of carrying a notebook around with you (or are embarrassed to be writing down every cent you spend), just start asking for receipts, put them together in the back of your wallet (or in a section of your purse) and enter them all in your spreadsheet at the end of the day. Another way is to use your credit card for EVERYTHING you can, then at the end of the month you’ll have a listing of what you spent and where (and you can add in any cash withdrawals from the ATM as “miscellaneous”).

Make sure that you record things that are automatically paid for (such as monthly reoccurring charges), or interest on debts.

2. Record Your Accounts Each Month

If its too much work to record everything you spend money on every day, an alternative can be done once a month. This is easiest if you use one checking account for everything (including on-line payments), and don’t carry a balance on your credit cards.

Each month look at the balance in your checking account, compare it to the balance last month on the same day. Add all the deposits, and that’s how much you’ve spent. If you withdrew money to pay down debt, or to move into an investment account, add that money back in (its not an expense).

Say on October 1st I had a balance of $1,794.56 in my checking account and on September 1st I had a balance of $1,385.80. During September $1453.47 was deposited in the account. This means $1,044.71 (1385.60 – 1794.56 + 1453.47) was spent over the course of the month. If I had $25 / month automatically moved to an ING direct savings account, then I actually only spent $1,019.71.

Alternatively you can just add up all the withdrawals and payments and you should get the same number.

This is less accurate than the first method (and doesn’t break down your spending by category), but its easier to do.

3. Record Your Accounts Every Few Months

If you mostly get paid from one source (say a paycheck), you can also make an estimate of your spending by subtracting the current balance in your account from the balance at some point in the past, dividing by the number of months and adding in your monthly pay. Say my account is currently worth $1,794.56, it was worth $2,585.23 6 months ago, and I get paid $1,453.47 / month (after taxes). I’m spending $131.78 ((2585.23-1794.56)/6) per month MORE than my paycheck, for a total monthly spending of $1,585.25.

This is even less accurate and easier to do than the second method.

If you have credit cards or a line of credit and carry a balance each month, you should do the same thing for them that you did for your checking account in order to get a complete picture.

How do you track your monthly spending?

We have a ritual in the Cheap clan.  Whenever a member is “nearing the end”, we all gather around the matriarch or patriarch.  They’ll look each of us deeply in the eye to convey the gravity of the situation, then when their hour approaches, hold the gaze of a younger member of the clan (who may not have the message fully sunken in yet) and gasp “buy in bulk!” as their final words.

Its good advice.  We’ve mentioned the chocolate article Guiness416 pointed us to a couple of times, and basically their business is based on this (buy in bulk, then get a massive markup when you sell smaller amounts).  The success of stores like Costco have been built on the idea that if you’re willing to buy a lot of something, the store will give you a good price.  A while back at “The Real Canadian Wholesale club” I came across a MASSIVE can of chili (we’re talking army feeding size) for under $10 (which is quite a deal when you consider they sell a single meal of chili in a can for $2.50).

A few of the downsides of buying in bulk have received a lot of press:  Don’t buy stuff that will go bad before you use it, don’t buy stuff you don’t have room to store (“Ooh, that’s a good price on twelve pounds of nutmeg” – Marge Simpson) and don’t buy stuff you don’t need, just because its a good price.

The one element of buying in bulk that always gets me a bit hot under the collar is when stores try to trick you.  They’ll have a larger amount of something for a HIGHER price per unit, instead of a lower price.  People assume they’re getting a deal buying more, and end up paying more for the larger size.  Sobey’s has 3 lbs of baby carrots for $3.99 and 2 lbs. for $1.49.  If you buy two 2 lb bags you get an extra pound of carrots for a buck less, but I’m sure some people see the larger bag and just grab it.  Recently at Wal-Mart I picked up a box of Rice Crispy treats (a box of 16 for $5) and on my way out saw a box of 14 for $4 (grr).

The simple way of avoiding this is to look at the price / unit of something (weight if they have it, or by item for something like Rice Crispy treats).  If your math skills aren’t so great doing things like this in your head, practice! (and until you get good, carry a pocket calculator).

The real zinger is its often picking the right product that saves you big money instead of trying to get a discount by volume (don’t tell my relatives).  After I purchased the Rice Crispy treats, I came across “Crispy Rice” treats (off brand knock-offs) for 5 for $1 at Dollarama *sigh*.  Similarly, if you made your own chili it’d cost way less than $10, and if you bought regular carrots instead of baby carrots, they’d be way cheaper too.

Everyone is familiar with the idea that a new car loses value the instant you drive it off of the lot. Having it sit there shiny and new is worth something that disappears when you make the purchase. A number of other products have this same property, although we sometimes delude ourselves into thinking they don’t.

I’m not saying that people shouldn’t buy these products (if they improve your life, why not?), but just that we shouldn’t fool ourselves into thinking we’re sitting on something valuable that could be sold to someone else if we no longer want to own it. Any value these things provide is restricted to us as the owner and perhaps we should view their use more as a service, comparable to our daily newspaper or utilities.

Furniture and Appliances

Meg at World of Wealth recently got a used fridge from a tenant in exchange for $275 in rent. She was quite pleased as the unit didn’t have a fridge, and she would have had to buy one before she could rent it to the next tenant. I actually think she over-paid. Having just one property (and my first tenants are still there), I haven’t experienced this personally, but long term landlords get SWAMPED with furniture. A number of people seem to take the view that its easier to just buy replacements than deal with moving it.

The last place I lived in Toronto, when I was looking at it the landlord asked me what furniture I had. I admitted that my current place was furnished, and I didn’t have much. With a smile she told me she could provide me with any of the basics (bed, tables, chairs) until I bought my own, or if I was content with her’s I could just use them. We went over to another one of her properties and in the basement she had a mini-furniture store of things that had been left behind by previous tenants.

My hat is off to landlords who offer a “furnished” suite at a premium price. First they get a free furniture collection from tenants moving out. All they have to do is store the things, than they can get monthly payments from something they got for free. Smart.

Books

I *LOVE* books and had quite a collection that I eventually got tired of moving (a box of books is HEAVY). Having assembled them over the years, I was convinced that they’d be worth at least a couple of bucks to someone. When I got looking into it, it turns out that used bookstores typically just give you credit (so you’re not really selling them, just exchanging them for a smaller number of someone else’s books). Selling on-line is more trouble than its worth (people will just want to buy a couple of books each: meeting them or shipping to them is a pain in the butt).

Eventually I just gave all my books to friends who might be interested (and told them to toss anything they didn’t want or when they were done with them). Those I couldn’t find a home for, I turned in at my home town used book store and gave the credit to my family (so we’ll be getting free books for the next few years).

A friend recently inherited a bunch of books from a boyfriend who moved away and was looking forward to making some money selling them. I laughed and wished her good luck (in the end I think she left them out in her office for anyone who wanted them, then threw the remainder in the trash).

Jewelry

I read once that the early appeal of jewelry was that it was wealth in a concentrated, portable form. Beyond looking nice, it also represented a worst-case security policy for women. If they needed to flee their home, or if their husband unexpectedly passed away, jewelry could always be exchanged for the necessities of life for them and their children.

Da Beers’ well known sales pitch “A diamond is forever” has made sure that few people actually try to sell their diamonds. Sadly when they do, they often find its much harder than they expect. One amusing anecdote involves a computer guy who stole money from the bank he worked at, transferred it to Swiss company in exchange for diamonds, and then couldn’t sell the diamonds. When he was caught, the bank was initially relieved, since they figured recovering the diamonds was as good as getting the money bank. Then they tried to sell the $8.3 million in diamonds and couldn’t find a buyer. The same article relates the story of diamond thieves in New York that sold $50k of diamonds to a fence for $200 (who in turn wasn’t able to sell them).

With artificial diamonds that can be inexpensively created (and are identifiable only because their crystalline structure is too perfect) I would be very nervous buying a diamond that I expected to retain its value in the coming years.

Is there anything you’ve encountered or purchased that you thought would be easy to resell but turned out to dramatically lose value after purchase?