I Lost My 2016 Resolutions

I had a list of New Year’s Resolutions divided into categories: Work, Money, Personal and Relationships.  It was neatly typed up, with photos, printed out and pasted to the back of a daily planner.  A few days ago, I dumped the planner. I forgot that I hadn’t saved a copy of the NY Resolutions List.  Luckily, my finance and career-related resolutions were logged in an old blog post.

  1. Get my house in order with a will/special needs trust, life insurance, etc..
  2. Look into passive/side income. Research the rental market, perhaps increase funds in my peer-to-peer lending account.
  3. Focus at work.  I had 4 concrete actions to achieve this goal.
    1. Have only 2 tabs open on my computer at one time so that I’m not clicking between 5+ different websites.
    2. Read career-related books or articles during down time.
    3. Print out important information so that I really read it instead of scanning, as I tend to do with content on screen.
    4. Limit blog reading time to Grumpy Rumblings in the morning.

So far, I’ve been doing well with the “Focus at Work” goal.  I’m multi-tasking a lot less and absorbing more information. I also signed up for a conference in my field. I’m hoping that my employer will pay for it but it’s my personal goal to keep up with changes in my field and this conference was the most reasonably priced one I’ve seen in a while, and it’s local.  I’m extremely bad at networking but it’s important to keep your skills fresh and that’s my primary goal for going. I’m pretty excited because I haven’t invested any extra time or money into my career for years.

Even though I no longer have my resolutions list, I know that it included exercise (fail) and making time for friendships and spouse. I’ve been pretty good about planning outings with friends but that’s obviously an ongoing process. My spouse and I had an “accidental” date and it reminded me/us of our carefree pre-kids days. We’re planning another half-day lunch/outing soon.  We’re also going to a concert in a few weeks – my first in years! I can’t stress how important it is for us (and most couples) to find quality time together. Otherwise, most recent memories will be of family stuff, fights and chores. At least that’s the way it is for me.

I also added a shopping ban after a rather spendy January/February. I have some good tips on keeping to this ban which I’ll share at some later date.
Hope you’re doing well on your resolutions!

HTSMC: Join The Right Clubs…And It’s Not What You Think

I’m not talking about the Country Club or Skulls & Bones. I’m not talking about clubs that are much easier to join for middle-class folks, and ones that will reap some rewards.  I’m talking about “clubs” like Rubio’s Beach Club, Del Taco’s Raving Fan e-Club, or other loyalty programs for popular chain restaurant and retailers.

The sign-up process for these clubs are usually just your name and email address.  However, once you sign up, you’ll realize that not all clubs or reward/loyalty programs are created equal. Some make it worthwhile to stay loyal; some are a waste of time.

Here’s a run-down of my experiences with various “clubs”:

1) Rubio’s Beach Club – I like their mix of eco-friendly messages and special coupons. They send you a $7-8 coupon for your birthday, which is pretty much one meal without a drink.  They also send you a special coupon on your “half-birthday”.  Yes, they also send you marketing messages about new menu items and what-not. However, special deals make it worth staying around.

2) Del Taco – I signed up. I left soon after. Other than a few low-value coupons, I don’t remember much about this program.  Maybe it has changed but I just wasn’t impressed back then.

3) Waba Grill – I think this is a relatively new chain of healthy teriyaki foods.  I signed up at a physical location — only full name and email address required.  I never got one email (and I do check my spam folder once in a while). Maybe others have had different experiences?

4) Panera Bread –  Since this place is kind of pricey, I don’t think the rewards are worth it. However, if you’re a Panera regular, you can easily accumulate discount coupons, free cookies and other rewards.

5) Farmer Boys – This is another smaller California hamburger chain. Since signing up a few months ago, I’ve received at least 2-3 coupons and 1-2 marketing type message.  I like that they don’t send too many emails.

6) CVS Beauty Club – You get a 10% discount for signing up, then you earn $5 CVS “bucks” per every $50 spent on beauty purchases. It has an easy sign-up process and it’s worth it if you shop regularly at CVS.  However, don’t try to spend $50 just to get that $5.  In general, toiletries are much cheaper at Target and Walmart.

7) Sam’s Club and Costco – I couldn’t finish this post without mentioning mega-retailers like Costco and Sam’s Club. I’ve been to both a handful of times.  I know that Costco has many quality food products and excellent discounts on electronics, but I still can’t make myself pay the joining fee.  I hate fighting crowds, I don’t have tons of storage space, and I think you can still get better prices if you watch for sales and use coupons.

What ‘clubs’ do you belong to?

Why Everyone Should Take Marketing 101

Many years ago, I took a Marketing Fundamentals course.  I was more interesting in branding and advertising but this class covered basic business principles as well, and most importantly, the idea of retail mark-up was permanently etched in my mind.

Every product on the market is priced to make a profit for a retailer.  Below is a good explanation from a Houston chronicle article:

markup_percentage“The markup percentage measures the percent a company adds to its costs to set the retail price. Knowing the markup percentage for each of the items you sell helps you figure which of your items are the most profitable, which can help you decide which products to promote. For example, if your company can markup product A by 150 percent but can only markup product B by 30 percent, your company may elect to devote more advertising to product A because of the greater potential profits.”

As a class exercise we had to figure out a mark-up percentage for different products.  I quickly realized that high mark-ups are the norm.  According to a Wall Street Journal, “the typical markup on designer fashion is 55 to 62 percent.  Premium denim jeans often wholesale for around $150 and may sell at retail for up to $375.”

J.Crew jackie cardigan

What is the real value of this J.Crew jackie cardigan?

While I know that companies and retailers need to make a profit, I question paying such a high price for things that had nothing to do with the actual quality of the product itself — building rental, advertising, taxes, salaries, etc… In other words, when a factory churns out two similar quality products (say, a cotton sweater) and distributes Lot A to J. Crew and Lot B. to Old Navy, you will pay substantially more for the J. Crew one because of the label on the back.

There are certainly quality differences between products. For example, you can’t compare a run-of-the-mill cashmere sweater with one from Loro Piana, an Italian company whose name is synonymous with the finest cashmere.

At the same time, the vast majority of people associate price and quality — i.e. If it’s more expensive, it must be better — and that is simply not true.

Not all marketing classes are structured the same but I’ve listed a handful of online classes that should give you a sound foundation for understanding our free market system.

Even if you have zero interest in business, I highly recommend that you take at least one Intro course.  That’s because once you understand of basic marketing strategies, you have a better chance of becoming a smart consumer.

One course will not make you a marketing expert, but it could open your eyes.  I know… because that happened to me.

News: Free Tax Help For The Middle Class

The IRS has a Volunteer Income Tax Assistance (VITA) program that offers free tax help to people who make $53,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individual.  Although I wish the income limit was higher, $53,000 or less certainly qualifies as middle-class!

To find a location near you, do a search with the word “VITA” or use the IRS website.

Note: This is not an April Fool’s joke. The suffering Middle-Class do not play jokes…

5 Things That The Middle-Class Do For Money

The advice is not intended for those at either ends of the financial spectrum — very rich or poor. This advice is intended for those who are “solidly middle-class”.  My definition isn’t perfect and there are variables like cost-of-living, family help, and more but key characteristics are: likely employed, not living paycheck-to-paycheck, have some retirement savings, and able to leverage their money in small ways.

Credit cards1) The Credit Card game – There are two main ways to play the credit card game. If you’re still paying off charges, you can switch to a lower-interest card every so often to reduce payment amounts.  You do have to read the fine print and make sure that there are no sneaky fees associated with the switch, or that any fees will be worth it due to a much lower interest rate.

The second way to play the game is to sign up for new cards if there’s a compelling offer.  I would be aware of having too many cards but if you pay them off in full, and the deal is enticing, it’s an easy way to earn extra money.  And if you’re considered a “good” consumer, you’re probably bombarded with tons of offers.  In addition to my main Visa card, I have a Amazon card ($30 credit for signing up) and a new American Express card ($200 statement credit if you spent X amount in 3 months and a free year of Amazon Prime, a $99 value).  This particular Amex card has no annual fees and was definitely worth getting!

2) The “Bank Game” – I’m not sure there’s a name for this tactic, but banks often provide incentives to switch banks for selected customers. This year, I finally opened at account at Chase bank. The incentive was just too good — $450 total for a savings account and checking account (with direct deposit).  I wasn’t very happy with my bank because I had chosen it a few years ago due to an incentive for new customers which they never gave me.

3) Call cable, internet, and other services to get better rates – When you first sign up for cable service, they give a great deal and throw in a gift card or free premium channels.  Same for internet, wireless and many other services with monthly billing.  What happens after that honeymoon period? Your rates go higher and higher while they go on to woo other new customers.  To combat this, middle-class folks call customer service at least once a year, or whenever the last promotional period ends, and ask for a better rate. If necessary, they will  call the company multiple times or threaten to cancel service.  This can add up to huge savings and I highly recommend this tactic.

4) Buy in bulk – Cash flow is essential to take advantage of super deals.  All major retailers have clearance deals and if you stumble across these, it’s a good idea to stock up.  I’ve stocked up on everything from toilet paper to diapers to Brita water filters.

Another popular option is Costco, which is swarming with middle-class folks who love deals and often have room to stock up on bulk purchases.  While I’m not sure it’s always financially wise to stock up on foods, non-perishable goods are a good bet.

cvs5)  Sign up for Store Loyalty Cards –  I would love to see the average household income for drugstore loyalty cardholders. I assume it would have more appeal for middle-class folks, who have to evaluate time and money savings on a constant basis.

These type of programs have different benefits but in general they offer lower prices in-store just for cardholders and let you accumulate rewards toward future purchases (ex: $4 off $20 purchase).  You may also receive special coupons that can be used online or in-store.  With CVS, I like the ease of uploading coupons to my card so that both my spouse and I can take advantage of coupons. It’s very handy if a spouse tends to forget or hate using coupons.

I am well aware that the above “tactics” are used by those not in the middle-class.  However, I think some of these are easier to take advantage of and more appealing to those who fall into this socioeconomic status.  What do you consider typical money-saving tactics for middle-class households?

HTSMC: Sorry, You Have To Shop At Kohl’s

This is one in a sporadic series of tips/ideas to how to stay in the middle-class (or HTSMC).  Whether you consider yourself on the lower- or higher-end of the spectrum, you can probably find some useful tips to help you stay there and find save more for retirement even as wages stay stagnant.

Dear Average Middle-class person:

I’m sorry to tell you this but your preference for the finer things in life is in conflict with your actual income, if you hope to retire comfortably or buy a house someday.

I know, I know. You went to a good college and got a decent-paying job.  If not for stagnant wages/being passed over for the promotion/salary freeze/etc.., you could own all the latest gadgets, buy organic all the time, and do at least one big trip a year.

You don’t even know how you got such expensive tastes. In the old days — 10, 20 years ago — the Middle-Class did not own tons of tech toys, ate happily at middle-brow restaurants, rarely traveled abroad, and did not have as much access to luxury goods in general.  Now we’re exposed to the “good things” in life all the time. That’s not necessarily a bad thing. Why shouldn’t we enjoy well-made food or immerse ourselves in other cultures?  Why shouldn’t we appreciate the fine design of an iPhone or Birkin handbag?

The problem is: your wages have most likely NOT kept up with your tastes. ‘

Luckily for you, you can still look richer than you are.  At places like Target and Kohl’s, you can buy lower-priced versions of designer brands from Peter Som, Narciso Rodriguez, Missoni, Elie Tahari, Rock & Republic, and many more.  You can also score second-hand versions of luxury goods via Craigslist, Ebay, or local Facebook groups.  You can buy iPhones and other $500+ phones on an installment plan.  You can lease a car (although I wouldn’t recommend that).

The hard part is Acceptance. Before you can save money, you have to admit that your budget is more Kohl’s than Nordstrom.  Yes, you have to shop at Kohl’s (or the equivalent retailer in your area).

Once you have accepted this fact, you can get better at saving and spending wisely. More to come…

Olivia Palermo wearing Peter Som for Kohl's

Olivia Palermo wearing Peter Som for Kohl’s