Category: Personal Finance

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Personal Finance

Can Customer Service Be Too Good? The Swiss Chalet Story

One of the oldest mantras of customer service is that the customer is always right.  I doubt very many companies actually follow that idea since it clearly can’t always be true.  And even if it is true then the company still has an obligation to the shareholders to maximize profits even if it means losing some clients.

A few months we ordered take out dinner from Swiss Chalet which is a very yummy Canadian chicken place.  My wife ordered a family pack which is a whole chicken, 4 fries and some buns.  Because it was near the holidays they had a special where they include stuffing and cranberry sauce for another couple of bucks.  My wife is a big fan of stuffing so she got the holiday special.

We picked up the dinner and everything was great except they forgot to include the stuffing!  I didn’t care but my wife did.  I suggested that she phone and complain – perhaps they would give us 10% off next time.  She entered a complaint online and surprisingly enough someone called the next day and said that we could get another holiday family pack for free!  I was quite surprised since I didn’t think the omission of some stuffing was worth it for them to give us a $28 dinner for free.

As I expected we had the usual problems claiming “the prize” since the outlet we went to had no idea about this freebie we were supposed to get.  Eventually we got it sorted out and had another great meal.

Personally I thought this was overkill.  They could have just given us 25% off and that would have been good enough.  I’m not complaining of course, but I think if you are going to run a business then you shouldn’t give too much away.

Tim Hortons (another Canadian institution) was in the news this week when they literally banned a customer who kept returning coffees because they were bad.  From the description in the article it sounds like they were very patient with the guy but eventually they just decided to cut rope and move on.  This makes a lot of sense to me and the only part of this story that is hard to understand is why the guy (who was banned) is complaining about it.  Tim Hortons is really just preventing him from buying more coffee which is something that he should have done himself.  Ie if you don’t like the product, then don’t buy it.

Maybe “the customer is always right” should be changed to “the profitable customer is always right (most of the time)”.

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Personal Finance

I Sold The Sony External Camera Flash

Recently I wrote about the external flash I bought for my Sony A350 DLSR camera.  While the flash itself seemed pretty good, both my wife and I found we really didn’t need it for the shots we take.  After a couple of months of not using it I decided to heed Mr. Cheap’s advice and sell it.  On the original post there were a lot of very inspirational comments but the reality is that we just aren’t going to take the time to learn how to use the flash properly.

The cost of the flash and batteries was about $410.  Because this package would cost around $470 if bought from Future Shop I decided to try selling it for $375.  I put an ad on Kijiji and waited.  After about 2 weeks with no replies I decided to lower the price and also post on Craigslist.
I put a new ad on Kijiji and Craigslist asking for $300.  I didn’t get any responses from Craigslist but after a few days I got several responses from the Kijiji ad.  One guy was very keen and came over that night and bought it.  I know I could have gotten the full $300 for it but he asked if I could move on the price at all and I said $280 would be ok which he accepted.
I thought it was interesting that while I’ve learned a lot about negotiating over the last few years and was able to recognize that he would have paid the $300 – I still lowered the price a bit.  I guess I’m just not a hard-nosed negotiator.  🙂

The overall loss was about $130 which is a fair bit but considering I overpaid about $50 for the batteries (yes, dumb), the actual depreciation was about $80.

As Mr. Cheap said, the flash is new and if I’m not going to use it then I should sell it right away.

Definitely sell it, if it’s going for $435 at Future Shop, I’m sure you could get $300. Even $200 sounds like it’d be better than a flash you’re not using. With tech like this, it depreciates quickly, so sitting on it and trying to sell it in a year or two will probably lose you a lot of money.

Now I think I might take a look in the basement and see if there is anything else of value… 25 year old cross-country skis anyone?  🙂

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Personal Finance

Should I E-File My Taxes Or Mail Them?

This guest post is from PT of PT Money: Real Personal Finance for a Life Without Limits! Check out PT’s latest post about using a joint savings account.

PT is a pretty interesting guy with a blog that you should subscribe to.  He also has a finance rap video which I featured here a long time ago – if you haven’t seen it then I insist that you check it out.

It’s tax time again! What are you going to do this year? Stick with the old school method of filing by mailing in your forms? Or are you going to try this new thing called e-filing (now a 20 year old process)?

Don’t worry. I won’t beat up on you non e-filers too much. There are actually a few reasons why mailing your forms may make sense and even be required. Let’s look at the differences between the process of e-filing and mailing in your forms.

The Traditional Filing Process

Before e-filing was around (pre-1990), everyone mailed their tax forms to the IRS. Even if you use fancy tax preparation software, you can still print out your completed tax forms and stick them in an envelope addressed to the IRS. It’s a simple process as old as the idea of paying income taxes.

What is E-Filing?

Last year, the IRS’s e-file processed 95 million tax returns. That’s 66% of all the returns that were filed. E-Filing is simply taking an electronic version of your tax return and sending it using the Internet directly to the IRS data processing center.

Advantages of E-File

There are many, well noted reasons for e-filing. It’s faster, easier, you get your refund quicker, no trips to the post office, no stamps, less chance for error, and the list goes on. It’s obvious that the case has been made for e-filing. But what about security?

At first glance it might seem less secure to e-file your taxes. After all, you are sending your personal information, income data, and credit card or bank account information from your computer, over the Internet to another computer to be processed. That’s not the kind of data you want to be careless with, right?

But it’s actually less secure to mail your return. Data transferred using tax software to the IRS is going to be encrypted. Plus, both the software companies and the IRS have strict privacy policies that their reputations depend upon. Tax returns get lost or stolen in the mail every year.
One advantage of efiling is that tax software programs such as TurboTax will help you with recent tax changes or new tax deductions which you might not know about yet.
Advantages of Mailing Your Forms

Mailing your return is less expensive than e-filing. There are some people who qualify for free federal tax filing, but most people have to pay a fee to have their taxes e-filed. State e-filing can be especially pricey.

It takes longer. If you owe money on your taxes, the last thing you want to do it rush the job. Wait till April 15th and mail in your paper forms along with a check. Hold your money as long as you can. Mailing will always be the method of choice for those who owe. Especially when the IRS has the nerve to charge a convenience fee for those paying with a credit card.

Who’s Required to Mail in Their Forms?

Lastly, there are some people who have to mail in their tax forms this year. You must file by mail if:

  • You are claiming the first time home buyer tax credit on your 2009 return. Since you have to mail in your closing settlement papers, a physical mailing is required.
  • Another filer has already claimed your dependent as theirs, and you need to dispute this.
  • You have some type of dispute about your date of birth with the SS Administration.
  • You are filing an amended tax return.

So what’s it going to be this year? E-File or Mail? I’d love to hear your thoughts in the comments below…

If you want to read more posts from PT then check out his blog PT Money and consider subscribing to the feed.

More resources

Should I use tax software or do return by hand?

How long to keep tax receipts

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Personal Finance

Income Tax Software – Desktop Version Versus Online Version

With tax season in full swing many people are gathering the necessary documents to prepare their tax return. There are many options available to consumers, each with their own pros and cons that must be considered. If you plan on preparing your tax return on your own, you should carefully research each option in order to find the one that is right for you. Here we look at the difference between two popular do-it-yourself tax preparation options – the desktop version and online version of tax software.  If you are considering using tax preparation software such as TurboTax or TurboTax Canada (for Canadians) then this article should be of interest to you.

Ease of use

Desktop version– If you opt for this method of tax preparation you will have to download tax software to your computer from either a CD or tax software download. Installing tax software on your computer is generally easy to do, however there is always the chance that problems may arise if the software is incompatible with currently installed hardware or software. Beyond the initial installation, downloading software to one computer limits the user to that computer only to access their information.

Online version– When you prepare your taxes using the online version there is no software to install, thereby eliminating the chance of incompatibility. You can access your information from any computer using an Internet browser such as Firefox or Internet Explorer. While this can be convenient for users who have limited access to a computer, there is also a risk for those who access their tax return via a public network. If you have no other option and must use a public computer you must be certain to log off of your account and close the browser window completely before leaving the computer.

Affordability

Desktop version– The desktop version is more expensive however this can be the most affordable approach for families. Once purchased the downloaded software applies to up to five people.

Online Version- When you prepare your taxes online it is less expensive initially, however costs can add up if you have to add other options. This can still be the least expensive option for a single individual.

Security

Desktop Version– When you download software to your computer you do not have the same implied security risks as you would entering personal information online. You also have access to your tax return information when you are not online. There is still a risk associated with storing your information locally as your computer and the information contained there can still be hacked into if your anti-virus software is not up to date or working efficiently.

Online Version– Any time you enter personal data online you must first check the security of the site you are visiting. For the purpose of filing your tax return you will likely be on websites that offer the same security that is used by large financial institutions. Before entering any information take the time to review the websites privacy and security policies.

Storage

Desktop Version– When you download tax software to your computer the file and data contained on the file will remain on your computer until you delete the file. It is not uncommon to have to go back to previous tax returns therefore you should keep the software as your data can only be read by the software used to file the return. Since software changes year to year, this can be a problem if you do not have access to the original software. When switching computers you may have to transfer the data from previous returns.  Make sure that you back up your computer files religiously in order to avoid losing data.

Online Version– Websites that offer online tax preparation usually save that information for three years in PDF form. You can access this information online or save it to your computer or removable storage.

As you can see there are differences between the two options that must be taken into consideration when making your decision. Remember that every person has unique needs therefore what works for one individual may not be the best option for another. Pick the method that best suits your personal needs.  Some good software to consider are TurboTax or TurboTax Canada (formerly QuickTax).

More resources

A complete review of popular tax software TurboTax.

What if you lose your W2 form?

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Personal Finance

Complete Tax Return Myself Or Should I Hire An Accountant?

Many people would rather have a root canal than file their own taxes every year but with all of the technology now available to assist with tax preparation such as tax return software like TurboTax, the decision to get help or help yourself does require some more exploration. Each method does have some pros and cons. Take a look for yourself and make a more informed decision for this tax year as to whether you should complete your own tax return or hire an accountant to do your taxes.

Complete Tax Return Myself

If math is your forte and taxes seem fun, then by all means go for it on your own. For those a bit more squeamish, there are still opportunities where you can try your hand at it with no risk involved. There are many online sites that allow you to prepare your whole return without actually paying a fee until you are ready to file. You can try it out just to see where you stand and if you are not comfortable with your input, you simply go elsewhere for help.

There are also relatively inexpensive tax preparation software programs such as TurboTax that you can purchase to make your preparation time shorter and more efficient. If you have your documentation ready and understand the laws, using the software can save you the cost of professional help. Most software will pose enough questions to help you figure out what you are doing and if you are doing things correctly.

Preparing your taxes on your own may be the right choice if your tax situation is pretty straight forward and you have the basic knowledge of income tax deductions you are eligible to receive. You can save money by processing your own taxes and not seeking professional help.  Keep in mind that efiling your return is easier than mailing it.

Hire an Accountant to Complete Tax Return

If you taxes are more complicated and require itemization, you might do better with an accountant who is up to the task and has the knowledge to get you the maximum deductions. There are professional accountants and CPAs to hire or you can opt for a chain tax preparation company. Depending on the level of complexity of your tax information, you need to do your research to find out who will best meet your needs at a price you can afford.

Professionals know which questions to ask you that will benefit your return. They will also stand by you in the event something is not correct after filing. If you have questions or concerns about your taxes, you can call on their professional expertise throughout the process. You will need to be organized and ready to get started once you mean with a professional. Some companies will bill for time while others will opt for a flat-fee service.

If you are just starting a new business or had some other dramatic lifestyle change that has affected your finances, it may be wise to seek the help of a professional accountant or tax preparer so you will understand how the changes will affect you and to feel the peace of mind knowing your taxes have been properly handled.

One thing to keep in mind is that an accountant won’t organize or locate all your tax slips.  You still need to do a fair bit of preparatory work if you hire an accountant.

More resources

2009 Income tax changes

What to do if you lose your W2 form?

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Personal Finance

Income Tax Changes to Be Aware of On Your 2009 Return


As tax season is underway and people are planning to prepare and file their tax returns, they should be aware of the many changes for the 2009 tax return. From the increase in common tax deductions to numerous new deductions offered in the stimulus program, you won’t want to miss out on money you are entitled to.  If you are hiring an accountant then these might not be relevant – but make sure you understand the ramifications of completing your own tax return vs hiring an accountant.

Here are some income tax changes for 2009 tax year.

If you thinking about buying tax preparation software then consider software programs such as TurboTax

Increases from last year deductions include the following:

Standard deductions have increased for 2009. If you are single, your standard deduction will be $5,700.00. If you are married and filing separately from your spouse, your deduction will also be $5,700. If you are the head of the household your standard deduction will be $8,350.00. If you are married and filing jointly with your spouse your deduction will be $11,400.

Mileage deductions are also up for 2009. Business miles deduction can be claimed at 55 cents per mile, charitable service miles at 14 cents per mile and medical travel at 24 cents per mile.

Earned income tax for low and middle income working families who have at least two children was also increased for 2009 returns. Families will now qualify for a $5,028.00 deduction if their qualifying limit income is $43,415 or less.

New tax credits you should be aware of:

One time $250.00 payment credit for retirees, those that are disabled, disabled Veterans, and government retirees who are do not receive social security benefits. Many individuals already received this payment. Those who did not and qualify can claim this deduction on their 2009 federal income tax return.

Sales tax deductions for new vehicle purchases. If you purchased a new vehicle after February 16, 2009 you could qualify for a tax deduction. The deduction is available only for new vehicles and is limited to the tax paid on the first $49,000 of the purchase price. You must also meet income requirements to claim this deduction.

First Time Home buyer credit for 2009. If you became a first time home buyer, meaning you or you and your spouse had not owned a home in the three years prior, and purchased a home in 2009, you are entitled to a refundable tax credit. Depending on your purchase date and your income the amount and terms can vary. Be sure to check details for your situation before filing.

If you were unemployed during 2009 and collected unemployment you will receive an additional tax break. The first $2,400 you earned on unemployment wages will be tax free.

If you attended and paid for college during 2009 and were in the first four years of your first post secondary education program, you could be eligible for a tax credit. On the first $2,000.00 you paid on your education including tuition, books and related expenses you will receive a 100% deduction. On the second $2,000.00 spent you will receive a 25% deduction. Some people will not qualify for this deduction based on household income.

Tax credits are also available for qualifying energy efficient purchases during the 2009 tax year. Windows, insulation, solar energy are some of the items that qualify.

More resources

Hire an accountant or complete tax return myself?

How many years to keep tax paperwork

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Personal Finance

IPhone 3GS Review – Mobile Internet And Job Saver

As I mentioned recently, I purchased an iPhone 3GS cell phone.  This is one of those fancy “smart phones” which not only can be used like a normal cell phone, it also has internet access and a pretty good camera (still and video).

It wasn’t long ago that I posted about my new pay-per-month 7-11 phone which was a pretty good deal.  See this cellular plan deals comparison for a better idea.  I still have the 711 phone and plan to keep it (it doesn’t cost anything to keep it after all).

The reason I went for the iPhone was for the internet access which I can use during work hours.  Now, I don’t plan to spend half my work day surfing on my phone but I would like to be able to do a bit of surfing without my employer knowing about it.  I’m not overly worried about being fired for internet usage at work, but it does make me nervous sometimes.  The other problem is that my internet at work is quite limited and I can’t access a lot of sites like online email.
The other reason is that I blog anonymously because I don’t want my employer to know about my sites.  Having access to my sites and the backend on the iPhone will help ensure that.

It also allows me to manage my time a bit better – running 4p means more stats, emails etc and it really helps if I can get some of that stuff taken care of during the day.  I can do it during my commute or lunch hour and then it helps save some of my home time.

My iPhone deal

The phone itself was $199 with service fees of $57.50 per month with the first month free.  This works out to an average monthly cost of $56 over the 3 year plan.  I have a 1GB data plan.  I have no idea if this is enough or too much – it depends on how much surfing I do and the size of files I send and receive.  I get 200 minutes of phone time a month of during the day and I chose the Rogers My5 option which means you pick 5 phone numbers in Canada and get unlimited minutes to those numbers any time of the day.  This was less expensive than I thought it was going to be although it’s a great deal more than the 711 pay-as-you-go plan.

If you order this phone from Rogers (and probably anywhere else) I strongly suggest phoning rather than get it off the internet.  When I called I told the guy the plan I was interested in and then I didn’t even have to ask and he waived the $35 activation fee, gave me an extra 50 minutes, gave the first month free and added 500 MB to the data plan.

I’m sure these upgrades are pretty standard, but had I ordered from the internet I wouldn’t have gotten them.  I have no idea why Rogers would give a better deal if you phone since it seems to me that it would be cheaper for them to have clients order the phone off the internet – but what do I know?

How do I like the iPhone?

I love it.  I was worried that the surfing wouldn’t be very good because of the small screen but it’s actually quite good.  I can do pretty much all the surfing I want to do and although it’s slower and not as convenient as using a computer, I’m pretty happy with it.

I don’t love the onscreen keyboard.  It’s just too small and typing with 1 finger is frustrating for someone like me who can type quite quickly.  For this reason I don’t do as much commenting on other blogs during the day as I’d like.  Even emails are tough to write unless they are very short.

iPhone applications

To be honest, I haven’t figured out how to download applications to my phone yet so I’ll have to report back later on this one.  🙂  I know there are lots of apps which would probably improve my iPhone experience but for now I’m happy just learning how to use the basics.   Jordan tells me that jail breaking the phone allows for a lot more apps and functionality so I’ll be checking that out eventually.

Cheaper options to iPhone full service plans

I was telling to Mr. Cheap about the phone and he mentioned that you can buy an iPhone without a service plan (which is quite expensive) and put in the phone chip from a 7-11 pay-as-you-go phone which would allow continuation of the very cheap 711 plan.  You can then use the phone to surf the internet anywhere there is a wi-fi signal such as a coffee shop.

Save on data transfer amounts

This will probably seem pretty basic for experienced smart phone users but I don’t think it is worth paying too much for a larger data plan.  If you download or email large files such as music, videos etc and use the smart phone cell network then it will count against your data plan usage.
The way to get around this is to do all your heavy data transfer when you can connect the phone to a wi-fi network.  That way your data usage is not affected.  Another strategy is to do the downloading on your computer and then synch the iphone to the computer which will move the large files onto the cell phone at no extra cost.

Any smart phone users out there?  Why did you buy one?  What do you like about it?

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Personal Finance

Smarty Pig Gift Card Winners And Some Links

First off – last week we had a competition for two $25 Smarty Pig gift cards and the winners were Debbie and Kate.  They have been contacted and will receive their cards shortly.   SmartyPig is only available to Americans but for any Canadians looking for a $25 bonus for opening up an account check out my ING $25 bonus page.

Some links

Thicken My Wallet had a great post on the riskiness of starting your own business.  He argues that starting a new business is not as risky as the general public assumes it is.

BBC News – Why do people often vote against their own interests? I really liked this article since it addresses something I’ve wondered about – the opposition to health care reform in the US by people who would benefit from it.  I don’t know how many times I’ve heard the sentiment “I don’t want the government deciding my health care”.  Meanwhile, right now it’s the insurance companies that decide their healthcare (if they can afford the premiums).

Fantastic roundup at Len Penzo’s blog.

Million Dollar Journey gives his views on the Talking About Finances With Your Aging Parents … or Grown Kids

Preet is Severing The Link Between Price and Weight Part I

Financial Blogger talks about fixing up your house for a better sale.

Canadian Capitalist recommends watching The card game on PBS.

The Intelligent Speculator has the best oil stock picks for 2010.

ABCs of Investing wrote about money market mutual funds.

Carnivals

Carnival of Personal Finance
Carnival of Mutual Funds 4 :Beat Mutual Funds