Thursday, April 30, 2009

Is Pet Insurance Worth It?

My wife and I are in the process of adopting a yellow lab puppy. We are considering pet insurance for this new addition to our family. Especially, after our cat Gabby had a hyperthyroid problem that cost us over $900 last year.

I have done some preliminary research and found that the average life expectancy of a dog is about 12 years according to the SPCA. The statistics from the AAHA, APPMA, and the AVMA show the average health care costs for dogs to be about $550 annually. Approximately $146 of that is directly due to annual physicals. This amount seems extremely high to me, but it was sourced on many sites.

Utilizing this data, the average cost to maintain a dogs health is about $45 a month.

[12 years x $550 per year = $6,600 per lifespan = $45 per month ]

Pet Health Insurance Plans range between $25-$50 a month depending on the size of dog, and type of coverage. Each plan has deductibles, and exceptions that are not covered.

If this is correct then I would pay roughly same amount regardless of whether I had pet insurance plan or not. Also, by having insurance plan I limits myself to the terms of the plan, and lock myself into a $6,600 debt even if my dog require less medical care. If I were to put that same $45.00 a month into a savings account, then it could grow to $7800 at 3% after 12 years. I know that expensive operations exist, but they are rare, and usually just prolong the inevitable.

In order to test other variables, I conducted a brief survey with my friends and family about their dogs. Only a few had one or two times they might have spent $300-$400 dollars for an injury during the lifespan of the dogs. That is nowhere near the amount to justify pet insurance. I also learned by recomendation that programs like 1-800- Petmeds really can save you money, since a veterinarian will charge you top dollar for prescription medications. This supports my notion that Pet Insurance is not necessary.

After everything I have learned, we will not be getting Pet Insurance for the puppy. Some people feel the need to spend $20,000 dollars to keep their 18 year old cancer ridden dog alive for another 6-12 months out of guilt, but this is more of a emotional decision and not practical.

It may sound heartless to choose saving money over pet insurance, but remember whether my dogs medical bill costs a few hundred dollars, or a $20,000 treatment is always an option.

Monday, April 27, 2009

Free Credit Report, Not Free Credit Score

You've all seen the guys on TV with the pirate hats advertising free credit reports, but there is a big difference between a free credit "report", and a credit "score". The Fair Credit Act entitles you to a free credit report once a year. This will allow you to review your payment history with creditors, and see an overview of your various credit accounts. The problem is that most people want to know their credit score which costs money.

A credit score is a number between 850-300 that ranks your creditworthiness. Your credit score is calculated by the three separate credit bureaus Experian, Equifax and Transunion. Each credit bureaus can have a different score. It is important know all three scores to help identify errors, and give you an overall average.

With that being said, is the ONLY authorized source to get your free annual credit report under federal law.

*Beware of sites that claim to have free credit reports and free scores, they will usually lure you into subscribing to some kind of credit monitoring program that will end up costing you money.*

A good website to purchase your credit score is They offer a fairly encompassing evaluation of your credit, including your all three credit scores for around $50.00. is also highly recommended by Suze Orman.

It is good to check your credit at least once a year.

Sunday, April 26, 2009

Stop Living Paycheck to Paycheck

According to a Career Builder Survey 47% of people live paycheck to paycheck. 40% also say that they could live comfortably with an extra $500 a month, even though 21% of people making $100,000 or more still spend their entire paycheck before their next pay day.

Many people don't understand, that it's not how much money you make, but what you do with that money. Complaining about not making ends meet is useless, if you are unwilling to change your standard of living. Changing you spending habits is the only way to stop living paycheck to paycheck.

Test Your Standard of Living

Try setting aside 20% of your paycheck next month. Could you survive and still pay all your expenses like rent, car payments, grocery bill, utilities, gas, and credit cards? If not, you are probably living outside of your means. A 20% decrease in pay is not fun for anyone, but you should never require more than 80% of your paycheck for regular living costs. With 20% less income you may have to put you social life on hold, and temporarily eat less expensive food, but you should still be able to pay your bills. If you cannot survive one month with a 20% decrease in pay, you may want to consider reducing your expenses like making a grocery budget, driving a less expensive car, or even considering living in a less expensive home. Most personal finance consultants recommend saving at least 10% of your income. I am a strong believer that having 20% less income, even though unpleasant, should not be detrimental to you survival.

The stress of living day to day is self induced, and has nothing to do with how much you make. Being unemployed is a different story entirely, but as long as you have a job, there are plenty of people in the world that would be happy to earn what you do. If they can be perfectly content, so can you.

Wednesday, April 22, 2009

Happy Earth Day Challenge

I am challenging everyone today to do at least one small thing to help out our planet. Just between you and me, I didn't take a shower this morning and hope my co-workers don't notice.

Tell me what you are doing to save the planet one small step at a time.

For the history of Earth Day check out the article presented by National Geographic News.

Tuesday, April 21, 2009

Cover Your Pin at the Checkout Stand

Whether it's Costco, Shell gas, AMPM, MacDonald's, or Starbucks most people are now using debit cards as their primary form of payment. The amount of people conducting debit card pin transactions is growing [Pin Payments Blog]. After analysing the last few months of my own bank statement, it appears that I use my debit card on average about 50 times a month, or 1.7 times per day. With this frequency it doesn't surprise me how some people can be oblivious, and nonchalantly enter their 4 digit pin in plain view of strangers.

Keeping you card number secure is one thing, but not covering your pin is asking for trouble.

How to tactfully cover your pin at the checkout stand, without looking paranoid
I like to use my left hand to cup over the key pad device as if I am shielding the light to better read the LCD screen. I simultaneously take my right hand and type in the code. It is actually quite seamless. If anything, people might assume I am having difficulty reading the screen. It is nothing personal against the clerks, or other people in line, it is just common sense.

Friday, April 17, 2009

Getting Out of a Traffic Ticket

In my lifetime, I have received my fair share of traffic tickets. I have dodged some, and paid dearly for others. Below are some tips to minimize the consequences of getting a traffic ticket:

*Take these tips at face value, I am not a lawyer*

1. Show respect to the officer when pulled over- The initial issuing of the ticket is ultimately at the discretion of the officer. He might let you off with a warning if you don't make his day more difficult.

2. Contact the Court Clerk or Prosecuting Attorney- If you can get on good terms with these people, they might be able to come to agreement or settle outside of court, usually with traffic school or some kind of probation.

3. In Washington request for Deferred Findings- If you have a clean record, and are a responsible driver, deferred findings will place you on a probation for a year. If you don't have any other citations in that year, the charges will be dismissed without appearing on your driving record after the $150 administration fee is paid. Deferred findings can only be administered once every 7 years.

4. See the Judge - By checking the "mitigation" box you can go see the judge, and humbly ask for a fine reduction or to have the violation not reflect on your record.

5. Fight it, if you can - If you have any kind of case against the ticket, fight it. If the officer doesn't show up to court the case will be dismissed.

Anytime you are dealing with law enforcement or the courts, it's imperative to be polite and respectful. Arguing with a judge or a police officer is just asking for more trouble.

Wednesday, April 15, 2009

Last Day For Taxes

Hopefully none of you waited til the last day to file your taxes. If you did, you have until midnight tonight to file, before feeling the wrath of the IRS.

Here are some interesting Tax facts according to the [Daily Chronicle]:

1. The Internal Revenue Service estimates that 20 percent of taxpayers wait until the last week, and 5 percent to 10 percent wait until April 15 to file.

2. Just over 92 million returns were filed with the IRS through Friday, about two-thirds of the 141.2 million expected this year. The total is expected to be about 10 percent less than last year, when many people who weren’t required to file sent in returns so they could claim economic stimulus checks.

3. Taxpayers who owe taxes and don’t file their tax return by the deadline may face interest on the unpaid taxes and a failure-to-file penalty.

Tuesday, April 14, 2009

Emergency Fund Before Credit Card Debt

In past years, financial experts such as Suze Orman have encouraged people to pay off their credit card debt as a top priority. It was considered foolish to put extra money into a savings account earning 5%, when you have a credit card debt costing you 19%. Well times have changed.

Due to the volatile nature of the current economy, people are finding it much more advantageous to pay the minimum on their credit cards, and instead build up their emergency fund. Having a paid off credit card, and no emergency saving, does not provide the liquidity necessary to survive a lay-off. With the unemployment rate reaching 8.5 in March [], I don't blame them.

I believe the number one priority should be to have an emergency fund, then focus on credit cards. The size of an adequate emergency fund depends on your job stability, dependents, and asset portfolio. A sufficient emergency fund can range from $1000 to a 1 year's salary []. It all depends on your personal comfort level. If don't have kids, I would still recommend having at least 1 months salary before paying more than the minimum on your credit cards in today's economy.

Monday, April 13, 2009

Automate Your Minimum Credit Card Payment

Forgetting to pay the minimum amount due on your credit card by its due date can generate all kinds of problems. Some of the problems that can occur are late fees, poor credit, limit reductions, and it can even cause you to forfeit the current 0% introductory rate or special terms.

If you lack the discipline to consistently pay your credit card bill on time, you might want to automated your finances, as described in Never Worry About Paying Bills Again. By simply logging onto the website of most credit card companies, you can enroll in a reoccurring direct payment plan. Set up the payment so each month the minimum amount is paid automatically from your checking account. If you forget, hopefully your checking account can absorb the minimum payment. If some months you want to pay more than the minimum amount, just make that payment. When the billing period cycles, the minimum amount due will be $0.00, and you will not be billed twice.

Now you will never default on your credit card payments.

Sunday, April 12, 2009

Free Quick Books

QuickBook's is now offering a "simple start free" edition of their software to encourage small businesses to learn their product. QuickBook's in general is a great way for small businesses to evolve from bulky spreadsheets and word documents to more advanced accounting software. QuickBooks "simple start free" software allows small businesses to create invoices, track sales, track expenses, pay bills, print checks, organize data for customers/vendors/employees all in one easy to use program.

If you are still cutting and pasting customer information into an invoice created in Word, get Quick Books now!!!!!!!! Too many companies try to reinvent the wheel by making spreadsheets to manage their data. Don't waste your time when a pefectly good business management tool exists for free.

Quick Books can be downloaded safely from Cnet

Happy Easter

Saturday, April 11, 2009

Beer-ster Egg Hunting

A Beer-ster Egg Hunt is a fun way for those of us who don't yet have kids to celebrate Easter.

Start by inviting a group of friends over at your house. Before the party go around and hide bottles of beer or mini-bar size bottles of liquor. When the guests arrive, let it be known that they must find their beverages of choice. Everyone will scramble to find what they can and after the hunt is over everyone can trade bottles for their favorites. It is important to also have backup drinks on hand for guests to consume while searching. The more creative you are the better. If you feel like handing out baskets, and bunny ears, that's even better still. This year, my wife and I will attempt to fit the mini-bar liquor bottles inside of balloons and inflate them to resemble colored eggs. Have fun this holiday, be safe, and happy hunting.

Thursday, April 9, 2009

Keep a Spare Change Jar at Work

Like many workplaces, my office has a couple vending machines strategically placed for quick impulse buys. I try to refrain from spending money on junk food and soda, but some times the temptation is too great. However, I have developed a system to limit my consumption by keeping a change jar and only using it's contents to quench my impulses. In a quiet environment such as mine, the jingling of spare change is very noticeable, and can be very disruptive. I am constantly pulling the change from my pocket and putting it in my desk. When I finally got a jar, I was surprised at how quickly it grew. By using the change from the jar, it doesn't feel like I am spending money, and the balance of the jar limits my consumption to about 1 snack or soda each week. It's a win-win situation that provides a simple reward for the occasional hard days work.

Wednesday, April 8, 2009

Dealing with a Door to Door Salesman

Throughout my life I've worked in a variety of fields and industries. I even had the pleasure of working as a commission door to door sales rep for a large company many years ago. Believe me when I tell you that door to door sales is a very tough job. Getting rejected on a regular basis without taking it personal is difficult. The fluctuation of income can put you in the presidential suit one week, and in a card board box the next week. I commend, and respect those of you who choose this line of work. It is not for everyone. With that being said, let me tell you how to deal with door to door salesmen.

First of all buying anything from street hustling door to door salesman is risky, and usually not worth your time. If you really want a good deal, spend some time researching the product online and finding the best price. Kirby might make a great vacuum, but I feel awkward buying something from the trunk of a 1987 Toyota Camry. I would much rather buy a Dyson from a store and be able to return it if needed. If a product is really that great, odds are you can find it elsewhere for cheaper.

After opening your front door, you can usually tell if someone is trying to sell something within the first 5 seconds. Is the person holding anything like a clip board, or wearing a shirt with an insignia on it? Is he standing at the door, or back a few steps? Do they instantly start in to a long winded speech. Identify a sales man is easy, how you spend your time after that 5 seconds is up to you. You can either listen to the entire monologue of previously rehearsed sales pitch, or you can politely take control of the conversation and end the sale. There is no point in wasting time for either party.

The simplest way to end a sale is to thank them for the opportunity, and politely close the door. Don't be guilt tripped into hearing them out. The longer the door is open the more of a chance they have to charm you into purchasing something. A good salesman will continue to sell as long as the door is still open. The trick is to be tactful about it when closing the door. You don't want to anger the seller to the point that he steals your front lawn gnome and smashes it in the street.

It's difficult for many people to close the door on a Girl Scout selling cookies, or a kid fundraising for his school. Personally I would much rather buy cookies from the Girl Scout Troops' stand at the grocery store. That way I am not bothered at home, and realistically young children probably shouldn't be encouraged to go to strangers houses anyway.

Whether it's rain gutter system, cleaning products, magazine subscriptions, or donations for world peace save your money and close the door. It's just not worth it.

Monday, April 6, 2009

Keep Your Documents Safe (Fire Proof)

Like most shoppers, when I go to Office Depot, I like playing with the safes on display. I don't have a need to store money, because I am "young fabulous and broke" according to Suze Orman. Yet, I am still considering purchasing one.

As I get older, I am starting to accumulate more an more important documents like birth certificates, marriage licenses, passports, and car pink slips that should probably be protected. If I had a safe those documents would not only be protected from the elements, but from me accidentally miss placing them.

I haven't really researched where to find the cheapest safe, but it looks like a security chest can be purchased for under $40.00, and a standard box safe for around $130.00.

Maybe I am just paranoid, but I can only imagine what it would be like trying to replace any of those documents. So I am asking the readers: Am I crazy for wanting one, or am I crazy for not having one?

Thursday, April 2, 2009

Watch for Stragglers

A few days back, I published the article called "Watch for Shrinking Credit Cards." It talked about how credit card companies can be sneaky and how they should be watched closely. Since then, I had yet another unique experience that furthers this point.

As stated in the article, I used my tax return to payoff one of my credit cards completely. I monitored the account for a few days to make sure there were no pending transactions that would post after the payment was made. For the last few days the account has maintained a $0.00 balance. While managing my other expenses today using Mint, I noticed that there was now a $25.13 finance charge on that credit card account. I went to the site to investigate and found that with my new statement, a pro-rated interest was being charge for the previous balance on the last statement before it was paid. Silly me for thinking that by clicking on the payment button that says "Pay Current Amount" that would bring my account current.

If it wasn't for Mint, I probably would have never seen that charge and it would have gone delinquent causing all kinds of problems. So the morale of the story is even after you pay off a credit card, continue monitoring it for at least a few billing cycles.