ThredUP.com: Swap Outgrown Kid’s Clothing With Other Parents

Kids grow. Clothing doesn’t. That’s the basis for a new swapping site called ThredUP, which I’ve seen in multiple news articles recently. This week, daily deal site KGBDeals has a 2-for-1 offer on ThredUP. You get two boxes of kid’s clothing including shipping for $15.95, instead of just one. Another similar site is Zearly, but it seems like they are on hiatus.

Got clothes that doesn’t fit any more? Box up about 10 items (tops, bottoms, dresses) that fit the same age level and gender. They send you free boxes, you print a prepaid postage label online, and have it picked up from home or drop off at the post office.

Want some cheap clothes? Browse other people’s boxes and pick one. There appears to be feedback rating system for users. Each box costs $15.95 ($5 + $10.95 shipping). Some boxes have toys and books as well.

I don’t have kids, but I think I would definitely try this if I did, especially for babies and younger ones. At about $1.50 an item (regular price), it seems like a reasonable system. Any users out there?

Posted in Family, Frugal Living | 10 Comments »

80% off Restaurant.com: $25 Certificates for $2 Until 8/31

I haven’t mentioned these in a while. Restaurant.com is running one of their temporary 80% off sales on their $25 certificates (Regular price $10) with coupon code TASTY. Offer valid through 8/31 at 11:59PM PST.

Despite my initial skepticism about these things, many readers responded that they indeed found these certificates very useful for saving money. Always note the restrictions (dine-in only, not valid Friday night, etc.) which can vary for each place.

Here’s an example of how the savings math might work out. You find a restaurant on the list that you like that usually runs around $20 + tip per person (~$48 for a couple). You buy a $25 certificate for $1, which usually comes with a $35 minimum purchase + 18% required gratuity on full price.

If you haven’t searched them in a while, they’ve been adding more restaurants to the list. I use these when I travel as well, so if you know of a good restaurant value in a big city, please share the name and location in the comments.

Posted in Frugal Living | 8 Comments »

Brand and Price As Shortcut Quality Indicators & The Coach Factory Outlet Trick

I’m currently reading the book Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell, which is very well researched and a good read so far. One of the major themes of the book is how our culture is losing the ability to discern quality for ourselves. As a result, we use brand names and prices as shortcut indicators of quality.

First, take brand names. In general, we love brand names, because each of them allows a mental shortcut as to what to expect. Mercedez Benz. Rolex. Nike. This is why outlet malls are so popular. Since brands = quality, and outlet = low prices, we get insanely excited. Outlet malls are greater tourist attraction draws than national monuments.

As for prices, how often do you see a huge number on a shirt price tag, but with a slash through it? Retail Price: $80. Your Price: Only $19.99. Even better, make it one-day only like Groupon or Woot.com. The Manufacturers Suggested Retail Price (MSRP) is often purely a marketing scheme to make you feel like you’re getting a deal. This is called the reference price. You may not know anything about fabrics or stitching, but hey, this shirt used to cost $80, so it must be pretty good quality. I’m saving over 75% off the original price, how can I lose?

Coach is given as a great example of a well-recognized brand name that uses these tendencies to its advantage. Starting out in 1941 as a small leather workshop in New York, Coach is a maker of “affordable luxury” leather purses and other accessories complete with trademarked logos. Most manufacturing is now done in China and other cheap-labor countries. In fact, the gross margins across the company are now a huge 70-75%. (Gross margin is the difference between selling price and the cost to produce.)

Traditionally, outlet and factory stores sold slightly damaged or defective examples of their regular products at a steep discount. However, it may surprise you that now many brands make goods designed specifically for their outlet stores. At a Coach Factory Store, 80% of the stuff inside is sold exclusively in those stores. These are lower-quality versions, intended to be sold only at outlets for a lower price. You can’t return outlet purchases at a regular store, because they aren’t the same thing and are subtly marked as such (also because they want to make it harder to return).

Would it surprise you further to know that Coach makes more profit from its factory stores than its full retail stores? Per this article, Coach had 347 retail stores and 129 factory stores in North America. In a way, you could say that the main purpose of the full-price Coach stores in upscale shopping centers is to keep up the facade of quality. Meanwhile, the Coach Factory Outlets provide all the profit. The glitzy stores create that critical reference price ($800 purse!), so you think the Factory Store price is a good one. A $149 Coach? What a deal. If you own Coach bags or know people who do, think about it. How many did you buy at a “real” store vs. a Factory store?

Over time, this practice should dilute Coach’s brand equity. However, if we are indeed unable to judge quality and are just interested in brand names anyway, then it will take a while.

Posted in Behavioral Economics, Frugal Living | 17 Comments »

Get Out Of Sprint Cell Phone Contract, Avoid Early Termination Fee (August/September 2011)

If you are under a Sprint cell phone contract and want to get out of it without paying the steep Early Termination Fee (ETF), check your statements with a billing date in August. Look for the following text:

Administrative Charge Increase & Terms & Conditions Changes for Consumers
Effective 9/9/11, the Administrative Charge will increase to $1.50 per line for customers that receive the charge. For details, visit Sprint.com/taxesandfees. In addition, the Sprint consumer Terms (Ts&Cs) are changing. Please review them carefully at your local Sprint store or Sprint.com/termsandconditions.

You may be “stuck” in a contract, but a contract runs both ways. Sprint is also “stuck” and can’t go increasing your monthly bill whenever they want. The law states that if a company makes a material change to the contract, then the consumer has the ability to exit the contract without an ETF if they notify Sprint within 30 days of the notice. As stated on their own fees page: “The Administrative Charge is not a tax and is not an amount we are required to collect from you by law.” From the Sprint contract:

You may terminate each line of Service materially affected without incurring an Early Termination Fee only if you: (a) call us within 30 days after the effective date of the change; and (b) specifically advise us that you wish to cancel Services because of a material change to the Agreement that we have made. If you do not cancel Service within 30 days of the change, an Early Termination Fee will apply if you terminate Services before the end of any applicable Term Commitment.

I believe this admin charge used to be 99 cents per line. However they rephrase it, this is a price hike and thus a “material change”, pure and simple. If it wasn’t material, they wouldn’t be raising the prices on their 50 million customers x $0.50 extra = $25 million per month in additional revenue!

Many users on this Slickdeals post as well as some MyMoneyBlog readers have already reported success. You may need to ask for the Retentions Department or a supervisor, but don’t them talk you out of it. Sprint knows what they are doing, they just wanted to minimize the publicity, this already happened back in January 2010. One additional tip for some folks who want it is to ask for your line to be marked “out of contract”. This will allow you to simply exit your contract, but continue your service on a month-to-month basis. If not, you can ask to cancel at the end of the month to allow time to port your phone number to another carrier. Finally, they may offer you some sort of cash credit or other incentive to stay in contract.

Posted in Frugal Living | 46 Comments »

Make Money Bidding on Self Storage Auctions?

Self-storage unit auctions have been getting increased attention to two new reality TV shows, Storage Wars and Auction Hunters. The premise is simple. If someone pays to have their stuff stored there, but stops paying the rent, the storage company won’t let you pick up your stuff until you pay up. If you still don’t pay your bills, they’ll auction off all your stuff in order to make the unit available again. I’ve always tried to avoid such places because I figured that just meant I had too much stuff!

The auction itself is quite a gamble. Bidders usually only get to see what is visible while standing outside the unit, and that’s it. So you could end up with valuable antiques, or a carefully-folded collection of used underwear. Want to participate in a live auction to see what it’s all about? Traditionally, you would be looking for the legally-required notices in your local newspaper. These days, the best site I could find for looking up self storage listings in your area is Sparefoot.com, a start-up that primarily does self-storage price comparisons. Bring cash, and verify the time and place by phone on the day of the auction.

A few added warnings. First, the new popularity means winning bids have doubled in some areas. Second, some shady places now actually scam people by making the unit look artificially valuable with things like (empty) brand-name boxes. Almost sounds like a Freakonomics topic.

Posted in Frugal Living | 7 Comments »

Buying Discounted Gift Cards Just Before Purchase

Now that there is a secondary market for gift cards, you can also buy gift cards at a discount to face value and use them at your preferred retailer. Better yet, you can combine them with whatever coupon or sale is already going on. A good use is for larger purchases at stores like Home Depot or Lowe’s, where an additional 7% off means $35 savings on a $500 appliance. These guys often also have 10% off coupons floating around, for example in US Postal Service moving kits or in exchange for signing up for 0% financing.

The downside to this is that for physical gift cards and brick-and-mortar stores, this takes advance planning. You have to buy it, wait for it to come in the mail, and then use it in a store on a future purchase while hoping the sale/promotion is still going on and the item is still in stock. It would be great if you could simply go a store, pick up your items, and then buy some discounted gift cards right before reaching the cash register. This turns out to be possible, but it was a bit clunky. This will only work with retailers that accept online gift certificates in their physical stores.

1. Find it. You need to find a website that sells discounted Home Depot “eCodes”, which are electronic gift certificates. I used Plastic Jungle (PJ), which currently offers a good selection of Home Depot codes at 7% off. Now, the PJ site says that these codes are for online-use only, but but both the HomeDepot.com website and my actual conversation with an HD employee confirm that you can use them in-store.
   

   Where can I use my eGift Card? You can use your eGift Card at any The Home Depot store in the United States, its territories or possessions, and in Canada. You may also redeem your eGift Card online at homedepot.com.

2. Buy it. Browse the website on your mobile device, and purchase the required amount. You’ll have to decide whether to buy a little less than you need, or a little more and use the rest later. I prefer just buying a little less if I can, like $100 worth for $110 of stuff. PJ uses Paypal, but you can still use a rewards credit card to get extra savings.
3. Hope it comes instantly, and use it. Now, the extra-clunky part is that most websites don’t promise instant delivery. For example, at Plastic Jungle this was in their purchase confirmation e-mail:
   

   The PayPal payment you authorized is pending, your order will be processed within 1 business day. You will receive a notification when your payment has been approved. Please note eCODEs purchased after 1PM PST will be delivered via email the next business day.

   However, my gift code did indeed come immediately, literally 30 seconds after the purchase confirmation. Perhaps this is how it goes with Home Depot cards, as I even bought after 1pm PST. I checked the balance and it was legit. You may get a cashier that doesn’t know how to enter the code, in that case ask for a supervisor.

So here is my suggestion for gift card reseller websites. Create an iPhone/Android app or mobile website that allows quick and easy purchases of gift certificate codes that can be delivered and used immediately. Let me save “favorite stores” and secure payment information to make things even faster. As consumers, we should encourage stores to allow online codes to work both online and in-store.

Posted in Frugal Living | 16 Comments »

Comcast Internet Essentials: Low Cost Broadband Internet For Lower Income Families

Comcast is rolling out a new service called Internet Essentials that provides high-speed internet service for $10 a month, a discounted $150 computer, and free digital literacy training to eligible low-income families. Specifically, you get their XFINITY Economy Internet Service for $9.95 per month with no activation or equipment rental charges. Via Butcherboy of FW. Qualification details:

To your household must meet all these criteria:

Be located where Comcast offers Internet service
Have at least one child receiving free school lunches through the National School Lunch Program
Have not subscribed to Comcast Internet service within the last 90 days
Not have an overdue Comcast bill or unreturned equipment

If I read the income guidelines for the NSLP correctly, a family of 4 within the lower 48 can’t make more than $29,055 a year to get free lunches. From some quick research, this program does not appear to be directly supported with government taxes. It wasn’t all gumdrops and teddy bears, however. Via the AP:

The program, which could reach at least 2.5 million households, was proposed by Comcast as it sought Federal Communications Commission approval of its takeover of NBC Universal. The commission subsequently mandated the program as a condition of its approval of the deal earlier this year.

Posted in Deals & Offers, Frugal Living | 2 Comments »

Book Review: Early Retirement Extreme

Earn more, or spend less. That’s what you have to do in achieve financially independence. My own philosophy has been to try and earn more than average, perhaps look about average to casual observers, and spend below average. Now, what if instead you earned about average, but spent way, way below average?

Various studies have shown that with a portfolio of about 60% stocks/40% bonds, you can withdraw 3-4% of your portfolio value each year (inflation-adjusted) and have a 95%+ chance that your money will last a lifetime. Using a 4% rate, that means to retire, you’ll need to save up 25 times your expenses. So if you spend $40,000 a year, you need $1,000,000. By that same math, if you only spend $8,000 a year, you only need $200,000 to retire.

Impossible, you say? Not to Jacob Lund Fisker, author of the book Early Retirement Extreme, who says he lives on about $10k a year and retired by 33. Extreme is a good word for it, though. In the US, the poverty line for a single person is $10,890; for a family of four is $22,350. But that’s how he can make the following claim about his book:

It’s possible to retire and live on invested savings after just five years of full-time work.

Five years?! No, I don’t think he’s crazy. I think it’s awesome that he presents such a different perspective, even if few others can achieve it. He observes that as humans we are more productive than ever, yet we work just as hard or harder than before. The opportunity for early retirement is definitely within grasp in this country.

So how do you manage to lower your expenses to such a level? You’ll likely need to alter your entire philosophy. Living a low-cost, self-sufficient lifestyle must be the end goal, not just a means to an end. If being financially free means driving fancy cars and eating at a new restaurant every night, this will not work for you.

Being Fisker’s ideal “Renaissance man” means going back to when people were mostly generalists (proficient at many things) instead of specialists (exceptional at one thing and outsourcing everything else). It means buying stuff that last forever (high-quality shoes), and learning to fix stuff that doesn’t (darning your own socks). It means not using air conditioning and accepting that sweating also cools you off. It means being willing to bike/run/walk 5 miles to the store instead of jumping in a car. It means living in smaller, more efficient housing that should cost no more than $200-$350 per month per person. It means not paying $100,000 for a college education, but going to a trade school or apprenticeship instead.

Going back to the 4% withdrawal rate. Let’s say your cable bill is $40 a month. That means you would need to save up $12,000 solely to pay for your ongoing cable bill. Is cable TV worth $12,000? Maybe, maybe not. Now do this for all your expenses.

Investing philosophy. Fisker does not like “Buy and Hold” or even low-cost index funds as an investment strategy. However, he does not offer up a satisfying alternative. There are some vague references about how if you devote some time to learning about investments, you’ll be able to earn much better returns. After gathering up clues from the book and his blog, I can only guess that he focuses high dividend stocks that have a very small market cap and thus avoid Wall Street analyst attention (a less efficient market). He doesn’t share actual holdings, so we are unable to follow along or track returns.

Conclusion

Jacob is a Physics PhD and this book is written like a scientific paper or textbook. The text is small, the information is densely packed in, there are lots of footnotes, and it was even written with LaTeX. Much of the same material is available from Jacob’s blog at EarlyRetirementExtreme.com. I recommend reading the archives chronologically from the beginning, especially now because there are few new articles (most are simply randomized re-posts of his old ones and it can get confusing).

In the end, I enjoyed reading this book primarily because it is so “extreme” and thus different from any other book on my nightstand. Even if you don’t adopt his philosophy entirely, it will hopefully make you question some of your current choices. I feel that we need more insight on this side of the spectrum, as opposed to all the attention on the “I sold my company to Google and made a bajillion dollars that’s how I retired early” folks.

Posted in Book Reviews, Frugal Living | 27 Comments »

Health Insurance Now Required To Provide Free Vaccinations

There are many changes to health care that have come and are coming from the Affordable Care Act. For example, if you are a young adult looking for health insurance, you can now be covered under your parent’s plan (if it covers children) until you turn 26 years old. (See here for more info.)

Another change that I was reminded about from this CNN Money article is that plans must cover “recommended preventive services” without charging a deductible, copayment, or coinsurance. In other words, it’s free as long as you visit an in-network provider. Something to consider if you’ve been putting them off due to cost.

The list of included preventive services is long and covers a variety of screenings, and also includes the cost of 10 vaccines recommended by the Centers for Disease Control and Prevention. Here is the list from CDC.gov. For adults, the CNN article highlighted the Influenza, Pneumococcal, Tetanus/Diphtheria/Pertussis, and Zoster (shingles) vaccines, but I see other familiar ones like Hepatitis A, so talk to your doctor. The required frequency varies from annually for the flu to once total for the shingles vaccine. A family member got shingles recently and it was not a pleasant experience.

There are some exemptions for existing plans, but as time progresses almost all plans should participate. From Healthcare.gov:

Unless noted otherwise below, the recommended services must be provided without cost-sharing when delivered by an in-network provider in the plan years (in the individual market, policy years) that begin on or after September 23, 2010. For recommendations that have been in effect for less than one year, plans and issuers will have one year from the effective date to comply.

Posted in Frugal Living | 10 Comments »

Virgin Mobile $25 a Month Plan w/ Data : Price Increase on July 20th

Virgin Mobile has a set of no-contract Beyond Talk plans that include minutes and unlimited data. Their lowest plan currently offers 300 minutes and unlimited data for only $25 a month. Previous post with more details here, but now you can buy an LG Optimus V with Android OS for $150.

However, starting July 20th, the price will increase to $35 a month for new customers. However, if you are an existing customer or activate by July 19th, you will be grandfathered in on the $25/mo plan. Edit: The 1200 Beyond Talk plans will increase $5 a month, while the unlimited will actually decrease $5 a month. So if you’ve been meaning to switch, you can save $60 to $120 a year by doing so before 7/19. I’m not sure how long shipping takes, so you might need to act quickly and find a phone in a store like Target or Walmart.

$25 including taxes is a great deal for light talkers who still want a full-featured Android phone with apps and all that. My mother uses Virgin Mobile prepaid and the coverage seems to be adequate in most areas. Virgin Mobile uses the Sprint network, but you aren’t allowed to roam on other networks like you are if you actually are a Sprint-branded customer. Any readers use this plan?

Posted in Frugal Living | 57 Comments »

Netflix User Poll: How to Handle The New Pricing Changes?

Netflix users around the country are abuzz about Netflix’s new pricing plans. Previously, all DVD plans included unlimited internet streaming. Late last year the prices were upped slightly to $10 a month for 1 DVD out at a time, $15 for 2 DVDs, and $20 for 3 DVDs. (I’m rounding because I think .99 pricing is annoying.) Coming September 1st, 2011, Netflix has separated the DVD and Streaming options completely. Streaming is $8 a month, and there is no discount if you add it to a DVD plan. 1 DVD at a time is $8, making the total now $16 month – a 60% price hike. 2 DVDs at a time is $12, making the new total $20 a month, a 33% price hike.

Now, that’s one way to look at it. However, I really only used Netflix streaming very lightly. Instead, I can now get my 1 DVD a month for only $8. Or, I can upgrade to 2 DVDs for month for $12. I think that streaming video is the key to Netflix avoiding becoming the next buggy-whip manufacturer, and that making things a la carte was something that had to be done sooner or later. I just think the move came too early. Their streaming quality and selection is simply not good enough for me to pay $8 a month for it.

According to a reader poll last month, 63% of you subscribe to Netflix. So think about it for a minute… what are you going to do?

Netflix Subscribers: How Will You Respond To The New Pricing Plan Changes?

• Keep both DVDs and Streaming, and pay the increased price.
• Only keep the DVD rentals.
• Only keep the Streaming service.
• Keep only the DVD rentals, but increase the number out at a time.
• Cancel my Netflix account entirely.

View Results

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Some people say that they are going to switch to Redbox or Blockbuster Express, but I’m actually probably going to go with the 2 DVDs for $12 plan, since I don’t like having to remember to return movies at the grocery store. If anything, this will push me to explore other online streaming options for the occasional “I’m bored and there’s nothing to watch” moments. I know that with a paid Amazon Prime membership ($79 annually) you can get free access to Amazon Instant Video as well as that handy 2-day shipping. Not sure how good their selection is, though. Alternatively, I could rent movies a month from iTunes at $1-$4 each, and they’d be new releases.

Posted in Frugal Living | 47 Comments »

Wow, I Actually Found Some Unclaimed Money

Over the years, I’ve read numerous articles about “missing money” that the government may be holding for me. I would always enter my name, but there was never any unclaimed property for me… until today!

I was reading an Businessweek article about how California and many other states were using the interest from all their unclaimed money from things like dormant savings accounts to bridge their budget gaps. Even Warren Buffett is owed $20 from an old escrow account.

I visited the California Unclaimed Property page and found that I was owed $75 from an unclaimed check from “DSL SERVICES LITIGATION ACCOUNT”, which I can only assume is the result of being part of some class action settlement. I’ll have to send in a copy of my driver’s license and Social Security card for identity verification.

You can find your state-specific unclaimed property page via Unclaimed.org. You should search in any state where you have lived. MissingMoney.com is a related site that will search several participating databases all at once, but not all of them (like California, for instance). Finally, also check out TreasuryHunt.gov to locate any Treasury bonds and savings bonds using your Social Security Number.

While looking around, I saw several other official-sounding websites offering to locate missing money for a fee. Not surprisingly, one of them always “found” $156.16 in my name, whether it was James Smith or Iam Notsosmarten. What a scam, so watch out.

Posted in Frugal Living | 15 Comments »