Reinvigorating the frugality discussion
gnltabor: Great advice about cable v. dish. Our local cable provider has this policy that you can only lock into a plan for eighteen or twenty-four months after which they automatically start charging you the highest rates. You then have to call, or visit one of their centers, to renegotiate a lower rate. Luckily another provider is wiring our area with fiber optics so you can play one provider against the other and negotiate back to nearly new subscriber rates. But it still is a pain to have to keep redoing the contracts. I never seem to catch the time my contract ends and usually end up stuck with the high rates for a month or two until we lock in again.
Four years ago we bought a cabin in Northern New England and deliberately decided not to install cable or wired phone service. When looking at properties we made sure there was cell phone service in the area. I obtained a dedicated internet cell phone account through Verizon, which cost me about $25.00 a month in addition to my regular cell phone service. The credit card size device can connect by wifi to up to three laptops or tablets. The data usage is tied to my cell phone and I rarely go over basic monthly allowance.
We decided to not even have a television in the cottage. We have a small portable CD player to watch movies and I purchased an inexpensive Crossly combination radio, CD, cassette tape and record player. I also invested in a battery operated am/fm and shortwave radio. My wife and I find when we are there, even for days at a time, we do not miss television at all. Sometimes we will watch a movie but more often will play music from our collections built up over thirty five years, or if we are crazy for news, will listen to Maine or New Hampshire Public Radio, both of which cover local and national news as well as connecting to the BBC several times a day.
We have found it to me very pleasant not having a television constantly blaring away in the background. However, after visits of a few days, several of our friends and relatives went into absolute withdrawal to the point that they will not come again if we do not have 24/7 cable..
I would love to go no television cold turkey at home but have been warned by the two adult children and the grandchildren that live with us that I will start an inter-family war if I try something they see as extreme deprivation.
I switched last year to a slower internet speed with our cable provider, and cancelled the limited basic tv service. Now we pay $49/month. We have multiple users and streaming with no complaints even though we are on our cable providers lowest internet speed
Since my car is a 2004, this year I took comprehensive off of the car insurance, since its value is low, and just carry liability.
I pay homeowners insurance and car insurance annually, so I do not pay extra to make monthly payments. I just set the correct amount of money aside in my saving account each month so I am ready to pay the annual bills when they come.
These and other small steps taken as a whole realy add up in annual savings.
jtwalsh, We face the same issues with our kids. I used a website to locate antennas in our area and identify the type(s) of antennas needed to pick up the stations. Some mountain locations are unable to receive signals, but it's worth checking. Try http://www.antennaweb.com or http://www.antennapoint.com for specifics using either your address or gps coordinates if your cabin is back country and mapping systems can't find you.
While I installed an antenna and connected it to my home's existing coaxial cable infrastructure to feed multiple TV's throughout the house, you can also buy a countertop antenna that connects directly to your TV for something less than $50.00. Of course, if your TV is an older analog set, you'll also need a converter box. I bought one for an older back-lit projection TV we had in the basement and it worked for a few years until prices for a good replacement set had come down to something more reasonable. I gave the old set to our Boy Scout Troop who was able to sell it for $50.00 to someone who was happy to have it. Depending on your distance from the digital tower(s) in your area, this option may be more than adequate for many people.
Given you're in a cabin, there may not be cable service in your area. However, for vacation homes in areas with residents who may be seasonal, the providers have adopted an ability to activate and deactivate with a phone call. My brother-in-law owns a condo in a resort area which he bought during the R/E downturn for a song. He eventually plans to retire there, but has another 10 years to go before making it permanent. In the mean time, he's able to activate the services while on site and de-activate them while away. We've used their condo a couple of times and were able to turn cable service on and off with ease.
Cellular service quality in your area is the most important factor, but staying abreast of the latest plan offers from your provider is essential to making sure you're getting the best deal.
I used to have Sprint, but I use Republic Wireless now. It mostly runs off wifi, which makes sense since I am usually home, and runs off G3 when I am out of the house or away. The phone was $150 but the fees are $15 a month, with a discount if you do not use much cellular. My bill has been $13.40 most months. The highest monthly bill I had was $17.84 when I was out-of-state for 10 days traveling last August. For the year I have had it, the phone's total cost was $330, and at two years it will be $510
With Sprint I had a "free" flip phone that cost me $75 a month on a two year contract, which they would renew starting the two year contract over every time you got a slightly better phone for "free". The two-year cost for my non-internet ready phone was $1800.
My stepdaughter moved out two years ago. She was an entertainment addict, and the cable TV was always on when she was home. When she moved, we dropped off our cable box at the provider (Time Warner) and canceled our cable service. We hardly ever watched it anyhow. We mostly read or listen to radio.
But because we have very high speed internet (my husband needs it for work) we discovered we had most of the channels anyhow, for free! Some channels 'leak around the edges' when you have high speed internet, according to the folks at Time Warner, and they know and don't care.
We still do not use it much, except for the channel that has doppler radar maps when we have severe thunder storms, or if there is a news item we want to follow, but it's nice to know it's there.
My stepdaughter let us use her Netflix, which mainly became something to watch if we were sick with the flu or had a once-in-a-blue-moon craving for a movie that was not free streaming anime. Now that she no longer has Netflix, we just go to IMDB (the Internet Movie Data Base) and rent things via Amazon. In the last year we've watched three movies at $3-4 each, about the same price as a month on Netflix. And that is without Amazon Prime.
Sometimes we bring up live concerts on YouTube and use our TV as the display. But we have our own instruments and can make our own music.
Your comment about removing comprehensive off your 2004 car is a great example of right-sizing your insurance based on your needs. When you have financial margin, you can raise your deductibles and reduce your premiums. This makes sense especially if you're a good driver and have set aside enough money to replace the car if the unexpected does happen, or the car is a family "extra" that you could live without for a time if something happens. You can quickly calculate the risk you're assuming by taking the reduction in premium and dividing it into the amount of financial risk you've assumed by dropping comprehensive coverage.
As an example, a $200 savings/yr that drops $2,000 in replacement insurance coverage, has a break even of 10 years. If you've been driving for years without having an accident, that could be a good risk for you. If you're doing that for a new teenage driver in the family, the savings on insurance will liklee be higher each year, but the risks of an accident are also increased. In this case, having the money to replace the car in an emergency fund would be a good basis for such a decision.
This same thinking can be applied to most any kind of insurance. Another classic example is when choosing between various employer sponsored health insurance plans. There's usually a premium coverage with lower deductibles, a standard coverage with deductibles that may be 2x the premium option and offer a higher percentage co-pay such as 60% coverage versus 80% under the premium plan. One of the benefits that usually doesn't change regardless of the plan you're under is the prescription plan. You may also have coverage items that do not require you to meet deductibles or co-pay such as well baby visits, certain immunizations, etc. The number of family members who must meet their maximum deductibles before reaching the family maximum may also differ between plans.
I run a spreadsheet each year to evaluate the plans, and unless I'm facing a known major medical expenditure in the following year, I find that the lowest overall cost is usually the standard plan. Typically, I'd need to incur medical expenses for my family of 4 in the neighborhood of $15,000 or more before the Premium plan would make sense, a number that implies some sort of accident or emergency medical need that rarely has occurred in my experience of 54 years. The money I save by selecting the lower coverage, I usually direct into my Medical Spending account. That means that the first dollars in out of pocket expenses are paid from the pre-tax savings, giving me an offset to the higher deductibles and co-pays I may experience.
If you're fortunate enough to have an employer sponsored medical plan these days, I'd strongly encourage you to develop a spreadsheet to evaluate the level of medical expense you'd need to incur to justify a higher payroll deduction to buy down your deductibles and co-pays. This is a form of "Self Insuring" by taking on more risk and paying less in premiums.
For those who are young and in good health, you may find that taking out a high deductible plan which only provides catastrophic coverage is the best way to go. Some employers may even kick in money to encourage you to select one of these plans as a way to offload their own risk and expense potential. These plans may have deductibles of $5,000 or more and high co-pay percentages as well, with maximum out of pocket limits as high as $20,000 or more, but if a major emergency does occur, you're covered above the maximums. Such plans will often allow you to put aside money into a Medical Savings account that is owned by you and can be accumulated into the future. Such plans provide a tax shelter for your contributions, which may also earn income while accumulating in your Medical Savings account. When needed for a future medical expense, the funds are available but are not restricted as with a Medical Spending account that must be used no later than March 15th of the following calendar year or you forfeit the balance.
>>But we have our own instruments and can make our own music.<< Sooo good for the brain, too – making your own music gives a great "return on investment" when you consider the psychological and neurological benefits. Plus, fun!
One bit of insurance we recently canceled was the "credit protector" feature on one of our credit cards. Supposedly it would pay our balance in the event of certain catastrophes. The fee would vary depending on the balance, so many months had no cost and we kind of forgot about it. But after a recent trip where we used the card a lot, the charge was close to $30. Not something we need!
We're now on a mission to reduce "vampire expenses", those multiple small costs that bleed our finances but create little value for the household.
It's easy to look for finance deals and the cheapest product on the block when you're in the market to buy something, but translating saving money into a habit that applies in everything from grocery shopping to how you run your household can be an entirely different thing altogether!