May 24, 2010

My first new store credit card in 10 years

While I apply for regular credit cards with almost reckless abandon to get a new round of bonuses every year (no more than 3 per year, noted on a spreadsheet for maximum bonus and cancellation efficiency), my store credit cards have been limited to Macy’s (unused), Victoria’s Secret (unused) and Best Buy (long since canceled).

And now, Banana Republic. On my Desperate for a Sweater shopping trip, there were no coupons or sales. Le horror!  Unfortunately, I simply wouldn’t have time to shop again for weeks and I wasn’t going to survive another week in the frozen tundra of an office space so I bit the bullet and bought a lightly discounted sweater.

Confronted by the usual “do you have a store card, and do you want to sign up for a 20% discount today?” I halfheartedly waved the baited hook away until I realized that that was the only worthwhile discount option. No gift cards in hand, no coupons, no cashback. It was the store card or nearly full price.  My bargain dependent heart couldn’t take it and so I did. Take the card, that is. Oddly enough, I promptly forgot about the card. Three weeks later, it appeared in the mail, I paid the bill and noted the various ways they get you to keep the card:

1. Bonus points for purchases at their stores
2. Loyalty tiers for spending at least $800. per year.
3. Cash outs for every 1000 points, which means any points that are leftover are held prisoner until you spend more.
4. Bonus points for making a purchase outside their stores within 30 days of activation. This is to get you accustomed to spending with their card all the time.

I’ll keep it open long enough to benefit from the bonus point for signing up for paperless statements (500 points) and for making an outside purchase (2000 points). That nets me a $30 credit. But beyond that, is it worth keeping this card?


My thanks …..

to Adam of Money Relationship for including my post on Lingering Side Effects of Debt in this week’s Carnival of Personal Finance.

Be sure to submit to this week’s Carnival hosted by me this week!

Check out ….. 

the Carnival of Money Stories hosted by Funny About Money!

April 12, 2010

I need a netbook!

How cool is this Lenovo Skylight? 

I could be typing this on the netbook at work on my lunch break instead of frantically tapping on the iPhone on my ride home.  My hands are cramped enough already. 

More importantly, I can easily carry the netbook to and from work for note-keeping purposes and keep confidential information on my employees secure.  The 1-subject spiral bound that I’m using to take notes during every meeting is just not going to cut it because I have to keep taking it home with me and it’s positively NOT secure when I’m at work.  I can’t very well put a diary lock on it, now can I? 

There’s a touch of concern that it’ll just look uppity carrying a netbook around the office, but frankly? To save myself the time and pain of typing up post-meeting summary translation of my hand-scribbled notes and to be able to secure all employee related files on a flash drive that I can easily pop into my purse?  Call me MS. Uppity!

In all seriousness, a netbook’s not in the budget. I don’t even have a new saving plan set up – I’m still waiting on my first paycheck to straighten out my budgeting. But I surely would love to make some room for it.

[small part of me pipes up: “You’ve already spent thousands already, what’s another two hundred dollars?”  *smack!!* “Cuz shut up, that’s what!”]

The Skylight’s not to be released until later this summer, and there’s no way it’ll be affordable — ’tis a Lenovo, after all.  But a girl can dream, can’t she?

November 4, 2009

Rules of money engagement

The guest post on Money Tips from Poker at Bargaineering gave me a different perspective on the conversation we’re having at Fabulously Broke about personal spending limits.

As a once and former overachieving student, I like rules.  Not because they’re limiting and I like to obey, but because they offer a benchmark to measure performance and the opportunity to go you one better, much like the Stretch goal is to the SMART goal.  You’ve got to set the original goal first before you can beat it. [Note: I like my rules best.   Who doesn’t?] 

That’s why I kept moving my savings goals up as soon as I reached them – it’s boring not to have something to reach for. That’s not to say my rules don’t know how to limbo, they totally do.  And have.  And probably will again.  It’s ok, as long as I don’t completely shatter the major ones.

When talking about the upper spending limits we set and why, it seems we all have a personal comfort level up to which we can spend.  Spend more than that and we’re big squirmy excuse-making babies trying to justify the price tags.  Or maybe that’s just me ……

But I don’t know anyone who has a mathematical reason for why this can cost up to $100, but that can only cost $15.   The general levels rise and fall according to the feeling that one set of pricing is ok and the other is not, but why not set rules with a basis in fact?  Mathematical rules?  Ones that are rational?  I’m talking about the bankroll management from the article. 

I love the idea of setting your levels of spending by multiples of your available cash.  In the article, the example is between 30-50 multiples of the bankroll. I’d like to steal that formula as is, but it doesn’t quite work out because my expense budget is vastly smaller than my entire bankroll.  I’m protective of my savings, the multiple would be something insane like 300.  

In our cases, that formula could translate into a percentage of the clothing budget.  If you’re planning to save $100/month for clothing, perhaps each season gets 25%, or a weighted percentage because coats on sale tend to cost much more than bathing suits on sale.  By a ratio of 5 to 1, in fact.  If I were doing this, Winter would get 40%, and the other 3 seasons get 20%.  That’s not precisely fair, but it’s probably more true to shopping reality than people realize.  Breaking that down:

Winter: $480
Spring: $240
Summer: $240
Fall: $240

Right off the bat that tells you not to spend $400 before tax on a winter coat unless that’s the only thing you’re going to buy.

Of course, seasonality is only one way to break that down.  You could just take that whole annual budget of $1200 and allocate 80% for staples like jeans, daily wear shoes, accessories, etc.; 20% for specialty items. 

Truthfully much of this is hypothetical for me because I don’t yet have a clothing budget.  I’m definitely still just saying “$100 is too much for jeans, I’ll pay up to $40 for them” and “No summer dress can cost more than $20.”  As soon as my budget changes, though, I think it’d be great to implement a set of rational rules that I didn’t just make up as I encounter sales.

September 2, 2009

Economics of Food Service and Coupons

Today we put together one of our almost-frugally creative meals: bought a large bag of chips and juice boxes from Trader Joe’s for double the volume, if not half the price, and used a BOGO coupon at the sandwich place for $7. The sandwiches are something like a cross between Subway and Quiznos, but much better overall.

It got me thinking about the advertising and coupon model. I know most businesses (should) have a line item or budget for advertising expenses, but for simplicity’s sake, let’s assume that at the end of the day, the income generated needs to cover all outflow.

A bit of research into Val-Pak revealed that I can’t get pricing for the actual cooperative mail campaign, which is basically those blue envelopes you see in the mail chock full of coupon goodness, but they do estimate that your reach is 400k potential customers in a given time period.

Many restaurants are advertising during this economic slump, and two for one deals seem most common. Sit down eateries tend to offer one free entree with the purchase of one full priced entree plus two beverages, or some variation on that theme. Much like gas stations, the sandwich shop expects to recoup revenue in the form of extras: drinks, chips, and salads on the side. I think we all know by now that drinks carry huge profit margins for the restaurant, and a commonly touted cost-reduction strategy is to drink water instead of the highly overpriced soda.

But how many people really do spend the extra money on chips, drinks, and side salads? How many need to, of those that use the coupons, for the business to recoup the coupon discount? And how many MORE are needed to make up for those of us who only use the coupon as intended without buying extras? And in addition to all that, how much did they spend on advertising in those Valu-Paks in the first place?

August 26, 2009

How much is your time worth?

Emotionally, when is it worth it to you to spend money to save time (sanity)?

Shopping for shoes on a tight budget is no joke, and flying wingwoman on a bargain hunt is usually my thing …. BUT …. after a particularly draining and unproductive 6 hour shopping trip through 4 enormous big-box discount shoe stores 17 months ago for a friend, I swore off in-store shoe shopping for the next three lifetimes. Very dramatic, yes. But Lordy!

We walked miles through soulless outlet malls, made all the more torturous by the hordes of screaming children and No Good Shoes. If we’d walked out of there with a halfway decent bargain, I would have been over the moon. As it was, we only found a single decent pair of shoes to even try and they were way out of her budget.

Recently, my only chance to spend some time with another girlfriend was to join her shoe shopping expedition. Teeth gritted, I agreed, lacing up my comfy new running shoes and lightening my pockets of anything that might weigh down my aching bones. “Haven’t seen her in over a year,” I grumped, “probably won’t get another chance before June next year.”

She picked a rather obscure (to me) shop, a wee little bit of a specialty shop, and didn’t name any other destinations when we set the itinerary. Another shrug from me, and off we went.

To my surprise, she spotted over a dozen pairs of possibilities in our first pass. That’s more than I see in full search of any run-of-the-mill DSW or Nordstrom Rack! (Then again, if I were the buyer, they would all have been eliminated on price alone. The cheapest regularly priced pair was $68!) My only job was to evaluate the look of the shoe, sitting on a comfortable couch, as the sales assistants brought wave after wave of shoeboxes. All told, she must have gone through 30 pairs, and they were unfailingly courteous and reasonably attentive.

After nearly three hours of sitting and chatting, lacing new pairs, and restuffing the unwanted shoes, she picked her favorite pair and paid $75 for them. As we sat and caught up over coffee and lemonade, I had a rather discomfiting sense that as a bargain shopper, I may have reached my emotional limit on the subject of shoes.

Once upon a time, not too long ago, I prided myself on finding a good deal on anything I bought, ever. Now, I might just hate fruitless shoe hunting enough to be willing to pony up full price on a comfortable, high-quality pair of shoes.

Honestly, that’s sort of disappointing. It’s not so much an unwillingness to sacrifice on quality by paying lower prices for a cheaper good. I just can’t stand the process! Seems like a wuss of a cop-out.

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