You don't need a cell phone

Matt over at Steadfast Finances had a piece recently on cutting down telecommunications expenses. He points out that most of us pay between $100-300 a month for land line, Internet and cell phone. (This assumes $25-100 for a land line, $35-45 for Internet and $40-110 for your mobile phone.)


He mentions three options for cutting down on expenses. The one I like most is the option of the Magic Jack. Apparently, he's had a good experience with it. And this is definitely one way to cut down on costs.


But.


His other two suggestions? Kill the land line, up your wireless minutes.


Let me see... Our options are a $25 land line or a $50-110 (I haven't met anyone in ages who actually has a $40 cell phone) cell phone. Now, I haven't taken a math course in 13 years, but even I see some basic issues here!


First, let me say this post is not intended to criticize Matt. His is actually the second post I've seen in the past week with the same advice. So he just happens to be the most recent example.


Now, getting back to the matter at hand. I know you all love your cell phones. I get it. I do. They're awesome and shiny and fun.


But, if you are really looking to cut costs, why oh why would you choose a cell phone over a land line?


I haven't met anyone in ages who pays less than $50 a month for a monthly plan. In fact, with data plans, most people hover a lot closer to $100 than to $40. Yet, in the other post (which I wish I could recall) a reader was cutting costs as a newly single mom by getting rid of her land line. Meanwhile, she and her kids had cell phones.


Once again, I feel the need to point out some basic math here: $60 a month (the cheapest you can generally get with a three-line family plan) is a lot more than $25.


I guess I should take a minute to state what I hope is the obvious. If you aren't hurting financially, if you've budgeted for a cell phone and data plan and can still save money each month, I'm not talking to you. That's a luxureed, and that's just fine.


Similarly, if your company covers some (or all) of your cell phone service, by all means. Or if you are one of the few folks who is not really based out of a home office, but instead is on the road -- hey, that's legitimate.


The rest of us, though? We don't need cell phones. We want them. We find them useful. But for all of you who are about to protest that you absolutely need your phone, just know that I'm skeptical, to put it lightly.


Most people work in an office -- either at a company or from home. Offices have phones, and home offices can have phones. A cell is convenient, since you can be reached in transit to either place. But is it convenient enough to justify a $25-75 premium? I honestly don't think so.


For those of you who protest that you'll miss calls, most answering machines can be accessed remotely nowadays. At worst, you can usually get a $25/month land line package that includes voice mail. Again, a cell phone is a convenience, but hardly the necessity we tend to claim.


The one I understand best is that parents want to have a way to reach their kids, or to have their kids reach them -- especially in case of emergency. But that's when a prepaid phone can come in handy. At least once a month, some store is offering one of these devices for free after rebate.


Of course, no matter what I say, most people will guard their cell phones with their life. They will insist that their phone is absolutely a necessity, and no amount of arguing (logical or otherwise) will dissuade them.


Then again, it's easy to rationalize something you already have. I think the true test is whether you could justify the expense if you didn't already have it.


If you didn't have a cell phone, how would you feel about the expense? If you had the extra $50-100 a month to put against debt or into savings, would you still sign up? Would you really give up $1,200-2,400 you spend in the two years of a contract?


Maybe the answer is yes. I don't know. No one can dictate your priorities. But it is a convenience, make no mistake.


This misconception that people have fostered -- that, for the average person, a cell phone is, anything other than optional -- drives me crazy. It's a luxury, and it's okay to have it. But don't pretend otherwise. Don't talk proudly about how you're cutting down costs by getting rid of the far cheaper option.


Incidentally, two years with a land line will run $360-600. Even if you have to pay to cancel your cell phone, that's a pretty big chunk of change to save.


But I understand that I'm in the minority here. Most people consider their cell phone a life line, if you'll forgive the quasi-pun. So I'm interested in hearing from people who have chosen a cell phone over a land line.


That said, I feel the need to embed this hilariously angry little rant by one Foamy the Squirrel. (If you haven't heard of him, shame on you!)


Caution: The following video has a rather gratuitous amount of swearing!

Talk & TV: How much is too much?

A post over on MSN Smart Spending had some pretty horrifying figures. Apparently, the average American spends just under $2,000 a year for entertainment and communication: $997.07 for Internet, TV and video game services, $1,000 for cell phones.


Oh, and that $1,000? That doesn't include data plans. The average $83 a month is just for talk time.


It all sounds pretty obscene, eh?


Then I started to do the math. Internet and TV add up pretty quickly. We pay $25 for DSL and $47 for DirecTV. We don't have a game rental plan, but we do pay $40 a year for Xbox Live. That means the average monthly cost is $75.33, or $903.96 a year. Not too far off from the article's $997.07.


On the other hand, our costs end there. Our cell phones are part of a family plan, since my mom needs to have a cell for her work anyway. Each of our lines is $10 plus taxes. And right now, my mom is graciously covering that expense for us, while we try to plow through our debt.


That puts us at 44 percent of the national average. Definitely not bad, but $900 a year is still pretty pricey for anyone.


Of course, our home entertainment costs are high because of my condition. With my energy problems, I can't be very active and outdoorsy. Books are great, but I already read two or three a week, on average.


So we invest in satellite TV and Netflix. From what I've read in the blogosphere, in-home entertainment seems to be one of the main investments for people trying to be frugal. So I guess I could kind of understand the increasing amount -- especially since it only started outstripping inflation since 2008, the year when the economy really started struggling.


So what do you guys think? Is $2,000 a year too much? Is the entertainment expense more or less acceptable than the cell phone costs? How do your own numbers stack up?

I may never buy toilet paper again!

And not in some creepy three-seashells kind of way. Or stealing TP from restaurant bathrooms. I'm talking about Alice.com, where I will now be getting lots of things free!


If you're not familiar with Alice.com, it's a nifty little site. Essentially it's a newer, better drugstore.com. There are all sorts of toiletries and household items to buy.


A helpful checklist when you sign up lets you designate specific items you tend to shop for. Then, you can click on those items -- garbage bags, laundry detergent, etc -- and see the selection available. Or do a search (by item or brand) for the exact thing you want.


One of my favorite features is that you can set up reminders. As you choose items for the "My Products" page, the site asks how frequently you buy them. It will then remind you if you're due to run out soon. This is great for people like me. I constantly run out of garbage bags, hand soap and a few other random things. Then I have to hunt around for whatever deal I can get at that exact moment. The reminder function will probably save me a bundle.


Another nice thing? Automatic coupons. The site keeps track of various manufacturer's coupons and applies them without any work on your part. No fuss, no muss. Great for anyone who hates the hassle of clipping.


Finally, and perhaps most importantly, shipping is always free! This has always been a sticking point for me, when it comes to online drugstores. Sure, the prices may be lower, but that doesn't help me if the shipping costs obliterate any savings. Alice.com, though, has no physical location, so there's never any sales tax or shipping costs. The price you see is the price you get.


Okay, all this is great, you're thinking, but how does any of this mean I get free stuff? Well, we're back to one of my favorite themes: Why Swagbucks is awesome!


Swagbucks has $5 Alice.com gift cards for 20 SB. Twenty. If you're even remotely diligent about your searches, you can get that in about 10 days. If you're kind of compulsive, like me, you'll get one in 5-6 days. (And when you sign up, Swagbucks starts you off with 3 SB, just to get you on your way.)


Alice.com has a pretty wide selection. Under my products, I have deodorant, shampoo, razors, garbage bags, storage containers, hair scrunchies, vitamins, sunscreen and cat food -- just to name a small selection. I was psyched to see a couple of Catwalk products that I have been wanting to try out. (I'm a sucker for anything by Tigi!) We've also been discussing the need for a Swiffer around here, and that's in Alice's inventory.


Just think how nice it would be to spend $25 less a month in your drugstore. Whether you want to try out Gladware, stock up on batteries, get some Forever stamps or get some extra contact lens solution, you're set with Alice.com. And isn't it always nice to get a little extra breathing room in your budget?


Use that $25 to snowflake your debt, add a little extra to your savings, or -- heck -- go out to Chili's and get the "2 for $20" deal. Whatever. All I know is, we'll be spending a lot less on toilet paper around here.


Sign up at Swagbucks, and get started on your own free toiletries.



If you got $25 a month for Alice.com, what would you buy? Necessities? Indulgences?

The economics of geography

Especially in the wake of the subprime loan crisis, we've heard a lot about the variance in housing costs throughout this country. That's not what I'm talking about. Frankly, I don't think I have much to add on the subject.


But there is another facet of the cost of living: geography-based consumer needs. These tend to be wildly different, as you move from one climate type to another. Now that I'm on my third distinct one, I find myself pondering how climate affects the cost of living.


Mostly, it seems to boil down to the creation of new needs. Anchorage may have been one of the more severe examples, in that sense. To survive the winter with all your limbs and digits in tact, a good coat, mittens/gloves, a hat and scarf were all pretty important. Bear in mind that a "good" winter coat generally included goose down. Of course, there are always sales. Usually it was smartest to buy at the end of the season for optimal prices. Even so, you considered yourself lucky to find a coat for under $40. Adults could get away with the same coat for many years, but growing kids made such things, at minimum, an annual expense.


Then there was the cost of boots. Snow boots (we all called them moon boots, since they looked remarkably similar to astronauts' footwear) were important for traction on snow and ice. And if you had to wade through snow -- either to shovel it or to play in it -- you were thankful for the things. And each year for "break up," when snow and ice melted and created a chilly slush, you needed a good pair of rubber boots.


Of course, there were other costs: Warm blankets (sometimes electric), thermal underwear, warm socks, etc. Fur attire, while obviously a luxury, was relatively common. Of course, we found ways around some of these items. My family never had electric blankets, which might short out. Nor did we buy special, heavy blankets for warmth. We just used layers. (Similarly, my parents saved on bedding by never indulging in pop-culture sheets and comforters for me. That meant they never had to replace these items as my tastes changed.)


In Seattle, costs were a lot lower. Still, it was a good idea to have a quality, water-repellent coat. A good windbreaker was also a smart investment. Those were rarely cheap, unless you found one at a thrift store. In that respect, I was lucky: My rain coat was a hand-me-down from my aunt, and my windbreaker was purchased with a gift certificate from another aunt. Otherwise, I would have been looking at a minimum of $50 each.


Here in Phoenix, though, things are a bit different. I'm definitely going to need some quality sunblock. (Interesting, by the by, how you never find sunscreen anymore. Only sunblock. Advertising is full of smart, crafty people.) On the drive down, I applied a store brand spray-on, 50 SPF before we left in the morning, then again two hours later. I often forgot the third application until three (sometimes four) hours had gone by. I burned (lightly) pretty much every day. Eesh.


In addition, if I decide to go for fashion at all, I'll probably need at least one or two pairs of sandals rather than just tennis shoes. I know this isn't a need, per se. More a luxureed. Nonetheless, I'm betting it will happen.


For a lot of people down here, the major cost is utilities. In Seattle, water/sewer/garbage is generally paid by the landlord, unless the apartment coms with a washer and dryer. Not so down here. It's a desert. Water's a commodity. So you pay for it.


Similarly, in Seattle, electricity bills are pretty low. Most people I know pay about $15-30 a month. Before I got on the low-income program, I generally came in around $17 a month -- and that was with being home almost all the time.


Here in Phoenix, though, air conditioners run most of the time. That will suck up a lot of electricity. When Tim was down here the first time, he misunderstood the apartment agreement and thought electricty was paid for completely. (In fact, it was paid for up to a point.) He and his roommate ran the air conditioner constantly, and after one month had to pay $200 -- over and above the flat rate they were normally charged.


I think that these costs are one reason that rents are so low out here. (The other major factor being that minimum wage is about $1.50 less than it is in Seattle.) Sure, you can get a one-bedroom for under $500, but utilities may easily make up the difference.


Since Tim takes two or three showers a day, we made sure to find a place with a flat rate for w/s/g. (And, yes, we checked to be sure that there was no limit on use.) Electricity is included in rent, so we don't have to worry about that. While we may pay a bit more for rent, this means we're probably saving money overall.


Still, there is one aspect of the desert we cannot escape: drinking water. Once upon a time, Tim found out the hard way that tap water out here isn't drinkable. I'm taking his word for it. But it's hard for me to stomach paying for the stuff. I grew up on well water, and the tap water in Seattle was great.


Granted, a gallon of water out here is relatively cheap. I found it on sale for 67 cents, merely by walking into a random grocery store. But when you start to consider how much water Tim and I drank in Seattle... Well, we're going to be guzzling the stuff out here.


I checked into water services and about choked. We'd be looking at around $40/month, minimum. And that wasn't including the water cooler rental -- about $8-10 a month. So I bit the bullet and spent $50 on a four-foot tall cooler on Craigslist. I figured, even if we get a water service, having the cooler will save us around $100 a year.


It turns out, though, we will almost immediately make our money back. I finally had a chance to price the refill stations for water jugs around here. We can get a 5-gallon jug filled for $1. A water service would cost us around $1 per gallon. Even buying an extra 5-gallon jug at retail, we'll save over $20 in the first month. By the second month, the water cooler will have paid for itself and then some.


Doing that math, I felt rather triumphant. I had faced down a new expense and found a way around it. Of course, I don't kid myself that new ones won't pop up. But for now, I've conquered one new environment-related expense. And I'm choosing to focus on that.


What geography-related expenses do you have?

When is it time to cull the budget?

Photo by Jeff Keen

On Thursday, I talked about the fact that there should be distinctions among the various non-necessary expenses. Right now, they're all considered "luxuries" or "wants." But some items are more dear to us than others. (Thanks to Revanche for supplying me with the term "luxureeds" in the comments section of Thursday's post!)


So, when we start the debt reduction process -- or even just begin living more frugally -- we assess our expenses. We trim out the absolute expendable stuff. We try to keep desirable luxuries (ie, eating out or buying clothes) to a minimum. And slowly we begin to make progress.


Still, budgets are made to be tweaked. So at what point do we take it upon ourselves to reassess our priorities? When do we question what we need, what we want and what we can afford? In short, when is it time to cull your budget?


Many of us have basic budget allotments each month. Personally, I do a week-by-week budget because a) Tim gets his unemployment checks weekly, b) we have so many costs it's easier to break them down and c) it keeps us from spending all available funds at the beginning of the month. Whether you go month to month, week to week or even day to day, the real question remains: How often do you review your budget?


We're not just talking about updating for new expenses or triumphantly lowering the amount of old ones after a successful attempt to decrease your bills. This is the sort of thing that should be an ongoing effort or, at the very least, something that you do at the start of each budget cycle.


I guess I'm wondering how folks handle the more thorough budget scrutiny. Do you sit down and really think through your necessities, luxureeds and flat-out luxuries? Do you make an effort to slowly pare down further? In other words, is there a defining moment when you realize your current effort isn't enough?


I know that some PF bloggers have trial periods. Frugal Dad and his wife decided to try living without expanded cable. After one year, they talked and evaluated whether to continued. (In the end, they reinstated the cable, but it was more for the kids than the adults.) Others try to treat it like a game. They are always trying to find a new savings route: a new savings method, a new attempt to lower expenses, a new item they can live without.


So, for you, is budget scrutiny an ongoing thing? Is it a constantly simmering back burner in your head? Or do you and your spouse schedule times to evaluate budgetary issues? Or is it simply spotaneous, as you find inspiration through blogs, friends' anecdotes or bits of news?

How much mad money do you allow?

Kind of like emergency fund vs. debt reduction this is one of the eternal questions, no?


Especially while you're still in debt, how much money do you give yourself to spend without concern? And how much is that in relation to your actual income?


This question is once again rearing its head for Tim and I. For awhile, we had a whopping $10 each per week. That got nixed in the midst of our terrible April. And has yet to be reinstated.


It wasn't a big deal, really, because Tim has been selling so many Magic cards, he has been getting along with that money. But that source has officially run dry until we get some more orders together to mail off.


He recently approached me about this. Right around the time I was trying to find $20 in the weekly budget for farmer's market season. Tim loves the special cheeses (I swear that boy was a cow in a previous life), and I delight in the multitudes of cherries (and, later, peaches).


Tim's request is actually very financially sound. He doesn't even want $10 a week, necessarily. Well, I'm sure he wouldn't mind it, but he knows it'll stress me out. So he's asking for a whopping $5 a week. That would mean finding $25 a week. Surely, not an insurmountable task.


And I've always believed that having no money to spend on yourself is one of the quickest paths to insanity. At the same time, every dollar we spend on ourselves is a dollar that could go toward debt. So where does one draw the line? And where should the mad money come from?


I'm still not sure what a good amount is. I do, however, know what we can afford -- at least, in my mind. It's not much. So I had to get creative, especially in finding the money. In the end, it seemed easier to make a few small cuts, which makes the whole process a lot less painful.


Tim's mad money, actually, won't even be from a cut, so much as a reinstatement. He used to get $30 a month: three, $5 Friday Night Magic tournaments and one $15 draft tournament. (The latter is more expensive because you walk away with new cards, regardless of how you do.) Once he began playing Magic Online, I put the funds toward debt. Since it's only been about a month, though, it should be a relatively pain-free reversal to make.


As for the farmer's market, I think the money should come from our food funds. It's logical because a) we're buying food and b) our food budget is one of our only flexible expenses. My first inclination was to pillage the grocery budget. But $10 per person per week would mean our $200 grocery budget would shrink to $120. That's way too big a jump to make all at once. We'd probably fall and hit our heads, thereby incurring hospital bills. And metaphorical injuries are surprisingly expensive!


So, I'm thinking we cut from two different sources: $10 from the weekly grocery budget, $10 from the weekly delivery/eating out budget. This will keep the "food-money from food-money" ideal in place, but without going into privation mode. And I think it'll help keep us on better track in regards to delivery and eating out.


So that's my tentative plan. (At least, until I remember that I can easily plow through 3 lbs of cherries in two or three days, when left to my own devices, and so have to increase my farmer's market allowance.) It might work for us, it might not.


You may have noticed that I haven't allotted myself any mad money. It wasn't an oversight. Here's the thing: Once I have a little money, I start noticing all the things I want. No matter how diligently I save up for something, in the meantime I find at least five other things I wouldn't mind getting. It's very frustrating and leads to the urge to spend spend spend. In other words, it ends with my being resentful and horribly materialistic. It's unpleasant, and it's not the kind of person I want to be.


Instead, I think I'm going to just take things as they come. I did already spend a pretty penny on some new clothes that would actually fit. Things like that crop up every so often.


In fact, I've become acutely aware in the past sweltering week that two sports bras and one set of shorts is truly not enough when the weather is hot and my sweat glands go into overdrive. So, today we're going to Old Navy to use the new coupon I have -- 30% off $50 or more -- to get two or three more sports bras and a couple more pairs of shorts.


Frankly, I wish I didn't have to spend at all. It makes me feel exponentially further away from getting debt free. But the fact is, I need this stuff. And, other than the aforementioned Old Navy trip, I haven't spent money on clothes since our honeymoon last May. A pretty good track record, if I do say so myself.


So, to recap our mad money plan: $10 a week from the meals out/delivery fund and $10 a week from the grocery fund will take care of the farmer's market needs; Tim gets his $30/month back for Magic; and I get along as needed because if I have a little money, I start to want a lot of money.


Does that seem reasonable? How do you deal with mad money? How did you come up with your plan?

Want vs need: Is it too simplistic?

As I reviewed the budget yesterday, seeing if we could pare the budget down to $1,000 a month, I began to really consider the PF idea of "wants vs. needs." It's one of the most basic PF tenets -- and for good reason. When people's financial lives are out of control, they tend to have very skewed ideas of what is a "need."


But how long should that last?


Is it really a good idea to keep this idea of things being either expendable or not? Of course, there are three basic needs: food, shelter, clothing. Once those are met, the rest are luxuries.


But are they, really? Obviously, my medications are not luxuries. If I don't have them -- or don't have enough of them -- I stop being able to function. I am either too exhausted to accomplish much of anything, or I am too severely depressed to cope with the world. Similarly, Tim needs his inhaler. And if he doesn't see a doctor regularly, his skin tends to become so terrible that he can't wear clothes. So, medical items, and medical services, should probably be added as necessities.


At the moment, that about taps out my ideas of absolute necessities. Anything else is technically a luxury. But aren't there gradations? When people get rid of non-vital expenses, they tend to prioritize. Sometimes it's based on cost -- a weekly breakfast with friends is going to be more tenable than a weekly massage -- but other times it's based priorities.


For example, Tim and I pay $60 for Dish TV. It isn't technically a necessity. But since we're both home all the time, it's a closer to the bottom of the "Expendable expenses" list. So, it's not really a need, but our lives would be a lot worse without it. My energy issues prevent us from forgoing TV in favor of hiking or other sporty activities that offer hours-long entertainment. While Tim and I could spend more time online, it would mean more evenings of each of us doing our own thing and not interacting -- not great for a marriage. It would also probably make us more prone to cabin fever, which can result in more outings (and, thereby, more unnecessary spending).


Whether or not you agree with this line of thinking, we all have things that we acknowledge aren't actually "needs," but are loathe to call "luxuries." We think of them as things we "need" inasmuch as we can possibly find a way to afford it.


Of course, most of us have more than one luxury. Even the most dedicated PF bloggers aren't going to go completely bare bones. Living that way tends to lead to frugal burnout. Most of us have a range of "wants" -- some large, some small. Most of us also have prioritized them, in case fat needs to be trimmed from the budget.


So we have things we could give up relatively easily (if somewhat reluctantly) and things that we will cling to tenaciously until there is absolutely no reasonable way to afford/justify it anymore. But we have the same term for both. How much sense does that make?


Thus far, I've only come up with "needxuries" (or maybe "neexuries" but I think the former looks better).


Some of you may be wondering why such a distinction is important. There is an awful lot of comments in the blogosphere that cast aspersions on people's budgets. While people have a right to their own opinions, they often have different priorities than the person who has to live with the budget. Wouldn't it be nice, when talking about expenses, to have a kind of shorthand for "very important" expense? Rather than answering various readers' suggestions that you cut the items most dear to you, they would know better what you could do without.


Granted, this isn't a huge issue. But I know some bloggers deal with very judgmental readers. (I'm lucky to have escaped most of that with you awesome folks!) And there is simply the annoyance of having to listen to people tell you to cut the item that you want to hold onto the most.


So, yeah, we could all start laying out our budgets by priority level. But isn't making up a new word more fun? Someone had to come up with "smores" and "blog," right? So let's brake some new ground here.


What words or terms would you use to denote the importance of your various expenses?

Could you live on $1000/month?

Photo by The Consumerist

Fabulously Broke in the City revisited this question with a resounding, "Yes I can!"

Then she asked the real question: Can you?

Honestly, I don't know. Would that be just me? Me and Tim? Or me and Tim averaged out.

Here's what we have on budget for the month. (Sorry for the lack of formatting. Blogger did NOT want to import the Excel table for some reason.)

Item Me Tim

Total/Average

Food $100 $100

$200 $100

Insurance $0 $502

$502 $251

Meds $20 $15

$35 $18

Rent $350 $350

$700 $350

Laundry $20 $20

$40 $20

Therapy $160 $100

$260 $130

Quarterly taxes $187 $0

$187 $94

IRA $100 $0

$100 $50

Light Therapy $0 $224

$224 $112

Student Loans $0 $51

$51 $26

Energy meds $111 $0

$111 $56

Eat out/Delivery $70 $70

$140 $70

Dr Visits $0 $38

$38 $19

Cigarettes $0 $61

$61 $31

Dish $30 $30

$60 $30

Phone $9 $0

$9 $4.50

Misc $50 $50

$100 $50

Total $1,208 $1,611

$2,819 $1,375

So.... What's the breakdown?


Well, if you're just looking at me (assuming Tim is still living here, paying part of the rent), I have to cut $208. Not bad. All it takes is cutting:

• My IRA contribution ($100)
• Cut my therapy to 2x per month ($80)
• Use half the miscellaneous expenses ($25)

Okay, that's only $205, but assume I'd find the $3 in savings from food. And, of course, I could take out Dish rather than cut my whole IRA contribution.


Tim, though, needs to cut $611. Not really feasible. He could cut:

• Light therapy, which we may cut anyway - lack of results ($224)
• Cigarettes ($61)
• Eating out/delivery ($70)
• Miscellaneous ($50)
• Therapy ($100)

That's still only $505. And it's not realistic, because he would still need to get lotions for his skin. He could potentially find cheaper hemp-based lotions, but it would still be a significant cost. Really, his insurance is what kills the deal.



Now, on average, we each spend $1375. So to cut down to $1,000 per person, we'd have to cut a total of $750:

• Light therapy ($224)
• Cigarettes ($61)
• Eating out ($140)
• IRA contributions ($100)
• Fewer misc. expenses ($50)
• Therapy only 2x per month ($130)
• Nix the Dish ($50)

Voila!


But together? There's no way. Just rent ($700) and Tim's insurance ($502), we're over the limit.



What about you? Could you pare it down to $1,000?