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I’m back in debt, but that’s OK

Filed under: Credit Cards General on January 30, 2014 @ 4:30 pm

When my husband and I made the final payment on our debt this past year, we broke out the bubbly. So, it’s a little hard to admit that we’ve decided to go back in debt.

As I’ve mentioned before, we recently did a major remodel on our house. As our funds were dwindling, we still had a little more work to be done by a plumber and electricians who don’t take plastic. We also hadn’t purchased appliances, and we needed to do some finishing touches.

To give ourselves a little flexibility, we decided to buy all of our appliances on our rewards card and do a balance transfer deal. This enabled us to leave enough money in the bank to pay our service providers.

On one hand, I’m surprised both of us were so open to the idea of taking on debt again when we were still reveling in the afterglow of debt repayment. On the other hand, this doesn’t quite feel like debt (though I know, it is). It feels more like using credit strategically.

These are the reasons we felt comfortable with taking on this debt:

  • We found a great balance transfer deal. We got 0 percent interest for 18 months and we even managed to find a deal with no balance transfer fee. As long as we follow the rules of the offer and pay off the amount we owe in time, the credit will cost us nothing.
  • It gave us the ability to make a few upgrades. At first, I argued for getting cheap, basic granite countertops (our Realtor told us to get granite for future resale). Then we fell in love with a slab of gorgeous stone with gray swirls that cost double what we wanted to spend. We also got an induction range. Our choices weren’t just blatant consumerism: We knew the countertops would give our house a polished look that could help us sell in the future if we decide to move. As I learned in the past, selling a house faster saves money. And I’m an avid cook, so a good range is important to me.
  • Using credit took away some stress. As the remodel wound down, I kept crunching the numbers and going over our choices about how we should use the money remaining in our remodel fund. Because I didn’t have hard numbers on everything — such as exactly how much the remaining plumbing and electrical work would cost — it was really making me anxious. Using credit allowed me to relax and know we’d have plenty of cash to pay the service providers and finish off our space.
  • We still have cash in the bank. I know we’ll have a good chunk of money left after the final bills are paid. We can put that toward our balance, which means we’ll pay off our card way before the introductory period ends. Basically, we have enough cash to back up a big chunk of the debt we’ve gone into.

In sum, it’s not that we absolutely couldn’t afford to complete our remodel without going into debt — but credit gave us more flexibility and the ability to buy a few things we wouldn’t have otherwise been able to afford at once.

What do you think? Is it ever a good idea to take on debt, even at 0 percent, because you want to? Not because your car died and you have no other way to get to work, but because you want a prettier piece of granite and a nicer range and the flexibility to go over your budget a little? My take: Not going into debt is always the better choice. But if you get a good deal and are confident that you can pay your debt off responsibly and fairly quickly, credit can help you feel a little richer.

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Confession: 3 discretionary purchases I regret

Filed under: Credit Cards General on January 23, 2014 @ 6:04 pm

Fun money is supposed to be fun, right? In the past, I’ve always thought that meant I should just blow it on whatever I want.

Lately, though, I’ve been rethinking that attitude. It bugs me when I buy something on a whim and it ends up collecting dust, especially if it was expensive.

So, I’d like to figure out which purchases I’ll use and enjoy — and which ones I won’t — so I can maximize the happiness I get from my discretionary dollar. The past is a good teacher, so I’m looking back at three things I wish I hadn’t bought:

1. A fitness hula hoop. I read about hula hooping as a form of exercise and thought, “Wow, that sounds like fun.” I spent about $40, including shipping, on a weighted hula hoop on Amazon.com. I used it twice.

Why I regret the purchase: Like a lot of exercise equipment purchases, this one hinged on starting a new habit, one that I wasn’t even sure I’d like. According to the blog SavingAdvice.com, exercise equipment is one of the top items people regret buying. In my case, after I made the purchase, I took a hula hooping class and decided that, while fun, it wasn’t really for me. I guess I should have taken the class before buying a hoop.

2. A Clarisonic. This rechargeable face-washing device is one of the “it” items of the past couple of years. In fact, I bought one after a good friend made a 10-minute speech on the wonders it did for her skin.

Why I regret the purchase: It’s a pain to use. OK, I actually love the Clarisonic — when I remember to charge it and use it (and when it’s not falling on my head from my overcrowded bathroom shelf). But it’s discouraging when a new purchase turns into one more thing to add to my to-do list. This falls into another category of purchase that, according to SavingAdvice.com, many people regret buying: fad items.

3. A cute dress on sale from the British retailer Boden. I ordered it on impulse even though I know I usually have to try on 10 outfits to find one I like.

Why I regret the purchase: The cut is all wrong for my body type, and I haven’t worn it even once. As much as I want online clothes shopping to work for me (I hate crowded stores and the harsh light of dressing rooms), it usually ends up being a waste of money. Ginna, the blogger behind My Pretty Pennies, writes that five out of six of her online clothes purchases end in failure. Sometimes the colors look different in person, the outfit doesn’t fit or it’s “just plain ugly on me,” she writes.

How to avoid purchases you’ll regret later
Looking at these three bad buys and others I regret, I’ve come up with some guidelines to avoid discretionary purchase disappointment:

  • As SmartAsset.com points out, hobbies often cost money (though some can earn you money) and it pays to be smart when selecting a new one. Think about why you want to do this particular activity, SmartAsset.com recommends. Also, test it out first to make sure you actually like it enough to make it a regular part of your life. Take a class or maybe rent or borrow a piece of equipment from a friend before you buy the gear.
  • When buying online, try to stick with purchases that leave little room for surprise (say, a book) instead of purchases such as clothes or accessories that might end up being not what you expected. If you do order clothes online, Ginna at My Pretty Pennies recommends checking the size chart and your measurements and making sure you know the return policy first. Free shipping on returns is best.
  • Try to avoid buying something that’s going to require a lot of upkeep. I’m hoping to start using my Clarisonic daily so maybe it will no longer be a purchase I regret. But there’s something else I didn’t consider: It requires refill brushes, which aren’t cheap — just one more reason to think through how much a new purchase will cost you in future effort and money.
  • And, finally, look at which purchases you’ve loved and used in the past. For me, I know that it’s hard to go wrong buying a book (though I usually try the library first), a really good bottle of wine, an interesting spice for cooking or a package of yoga classes at the studio across the street. Also a winner: saving up for a nice dinner or weekend trip with my husband, family or friends. Bonus — there’s nothing to create clutter later.

I’m hoping that if I follow these guidelines, I’ll enjoy my discretionary purchases more, and won’t need to spend my free time making trips to the Goodwill to drop off odd exercise equipment, ill-fitting clothes and trendy gadgets.

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Hungry, angry, lonely, tired spending

Filed under: Credit Cards General on January 16, 2014 @ 2:52 pm

Have you heard of the acronym H.A.L.T., which stands for hungry, angry, lonely or tired? It’s used in everything from addiction recovery to overeating — and I’ve found it applies to spending, too.

The idea behind the acronym is to stop and think whenever you get the urge to do something that’s probably not the best (like scarf a doughnut, down another drink or pull out your credit card, again). Ask yourself if you are more prone to making a bad decision because of hunger, anger, loneliness or tiredness.

I thought about H.A.L.T. recently when I realized I’d been overspending because I was tired. My husband and I just went through an exhausting few months that included a major remodel, a health scare (with doctor appointments, tests and a CAT scan) and a bad back that required a trip to the ER. Cap that all off with the stress of the holidays, and we were both feeling really tired. My husband was plagued for weeks by a “weird fatigue” (he took up gnawing on ginseng), while I felt a chronic exhaustion that couldn’t be remedied by sleep.

On the monthly spreadsheet where we chart our budget and spending, there’s an uptick in spending that coincides almost exactly with those weary weeks at the end of our remodel. We found that being tired made us more likely to just throw money at a problem. One ridiculous example: During a hard rainstorm, we discovered a leak from an air return cover in our ceiling on the second floor. We weren’t sure if it was a hole in the roof or something to do with our HVAC system. We called an HVAC company and they said they’d send someone out to look, for $85. We told them to come out, even though one of the guys who did our remodel probably would have checked it out for free — or, heck, we could have tried peering up there ourselves. The HVAC guys climbed up on a ladder, told us we had a small hole in our roof and asked for a check. It took about 5 minutes.

I also did a little too much online shopping during this time, ordering things for our new kitchen and imagining the day when all the chaos would be over and we’d have a shiny, functional home.

So, how can you use H.A.L.T. to help with overspending? The most important thing is to recognize what’s going on. Then you can do something about the underlying problem.

Frugality blog Northern Cheapskate recommends that you simply never shop when you’re hungry, angry, lonely or tired.  Meanwhile, Andrea Whitmer, blogger behind So Over This, prescribes the following H.A.L.T. regimen:

For hunger: Recognize when you’re hungry, and definitely don’t go grocery shopping. Carry healthy, affordable food with you (granola bars, a homemade lunch) so you don’t make a beeline for the drive-through.

For anger: Talk it out with a friend, write in a journal, exercise, do anything that will help you work through your anger without spending.

For loneliness: Try to connect with others, but in a way that doesn’t cost a lot. For example, call a friend you haven’t talked to in a while or invite a neighbor for coffee.

For tiredness: Get enough sleep and try to postpone your decision-making until you’re more rested — until the weekend, for example. That’s exactly what I did. I had decided to paint our ceilings, walls and trim, partly to save money. But I was spending every free moment on a ladder with a brush in hand, and it was exhausting. When I realized tiredness was clouding my money decisions, I took a few weekends off from painting to rest, veg out and get my life (including my finances) back in order.

I even postponed some purchases I’d been planning to make — leaving the items in my online shopping cart but not clicking the “purchase” button. Once I was no longer so tired, I realized they could wait. Now that my exhaustion is gone, my overspending is, too.

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Don’t let a gym membership ruin your financial fitness

Filed under: Credit Cards General on January 10, 2014 @ 3:19 pm

Many consumers join a gym hoping to shed pounds but instead end up losing only dollars. With contracts that can trap you into a monthly payment and salespeople more than eager to sign you up for one, protecting your best interests can take more energy than that first post-holiday workout.

I know this, yet I’m still considering signing up for a gym membership this year. I’ve been doing my research and trying to make a good decision — and I’m keeping these four things in mind before signing anything:

1. It’s important to shop around. If you go into a gym to ask about memberships, a salesperson might pressure you to sign up that day, possibly by touting a limited-time deal. But take your time and comparison shop, points out Steve Kamb on his blog NerdFitness. That way, you can think about whether a gym membership is for you and, if it is, pick the right gym at the right price. NerdFitness.com also recommends trying to get a free guest pass at any gym you’re considering and actually going a few times. Then try another gym, and so on.

2. Having an “out” could save you money. Because I’m not a regular gym-goer now (my idea of exercise is a long walk with the dog), I’ll only join a gym that allows me to cancel when I want to. If you do sign a contract for a certain time frame, make it a short one — a year max. Gyms will try to convince you to sign up for several years in exchange for a lower monthly rate. But face it: Even if you’re sure you won’t trade the treadmill for the TV in a month, who knows what you’ll be doing that far in the future? Maybe you’ll decide you don’t like the gym or will move, but not far enough to get out of the contract. Many gym contracts specify that moving is only an excuse if you end up a certain number of miles from one of its locations. With large chains that have many locations, there’s practically no escape, even if the “closest” gym is farther than you’d care to drive every day after work.

3. Cancellation might not be easy, quick or cheap. Even gyms that let you cancel whenever you want will likely have cancellation rules. For example, the YMCA near my house that I’m considering requires cancellation in writing 30 days before you want your membership to end. If you don’t time your cancellation exactly right, you could be on the hook for an extra month. If a salesperson agrees to more lenient terms, get it in writing. Cassie, the blogger who writes the debt blog Tales from the Trenches, got a verbal promise that she could cancel her gym membership any time, then got surprised by a huge hassle and a $149 cancellation fee.

4. A gym membership can mess up your finances — and credit. Different gyms collect payment in different ways. Some — such as the Y I’m considering — require you to hand over your bank account information and let them do a monthly automatic debit. If a debit overdraws your checking account or puts your credit card over the limit, you could get hit with fees from you bank — or have the transaction declined and get hit with fees by the gym.

Even if you pay cash upfront to get a better rate, you might still rack up charges if you unwittingly run afoul of a cancellation policy. For example, the anonymous blogger behind the personal finance blog Girl Meets Debt paid cash upfront for an 18-month membership. After she thought her membership had ended, she was told she owed $160 more because she didn’t give two months’ written notice that she was leaving the gym. The gym claimed to have “auto renewed” her membership, said she was four months late on payments, started calling twice a day and threatened to send the account to collections (it ultimately didn’t).

If you end up in a contract that you can no longer afford (or simply no longer want to keep), nonpayment could also put your credit on the line. If you try to wiggle out by canceling the card or closing the account associated with payments, your account will go into collections — and collectors can sue you. Both collection accounts and judgments your collectors win against you will cause credit damage.

Committing to a gym membership can be an excellent way to keep you motivated in your fitness goals. But, because the gym’s salespeople have goals of their own to meet, make sure you know your contract inside out before you sign.

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Dodgy service providers are a charge-back gray area

Filed under: Credit Cards General on January 3, 2014 @ 12:37 pm

In an ideal world, you’d have time to vet every service provider who comes to your house. But when you have a household disaster — the toilet clogs, a pipe bursts, your basement floods — you might end up making a hasty decision.

That’s what happened to me several months ago when our hot water heater broke. And the situation that ensued got me wondering: Is it ever OK to dispute a credit card charge for services rendered if you feel they’re not up to par or the company was dishonest?

In our situation, the plumbing disaster happened right before a holiday weekend, and the leaky heater flooded the wood floor in our utility room. Desperate, we called the first local plumbing company we found.

The company sent out a person who said he was a plumber. We were about to go out of town for the weekend, and the “plumber” told us he could just turn off the water and come back on Monday. He did, and I sopped up the mess on the floor. When we returned, we could hear water leaking into the crawl space under our house. On Monday, the “plumber” never showed up. On Tuesday, he called and said he was coming over. I had a bad feeling about him, but wanted the repair done quickly, so I agreed.

We ended up having the company replace two hot water heaters, the damaged one and another one that was very old. When my home insurance company later sent an adjuster over to take a look at the water damage to our floor, he asked, “You did have a licensed plumber install these hot water heaters, right?” I started to worry and called the company to verify that the “plumber” was licensed. The company evaded my questions and one employee yelled at me for asking. After a few calls, I learned the company had sent an unlicensed tech, in violation of state law.

I really wished I could undo the whole purchase and hire another company, but the heaters were already installed at that point.  I had paid $4,000 to a company that violated state law and had my work performed by someone with iffy qualifications. I briefly considered disputing the charge.

I’m not alone in having this problem. One of the Top 5 fastest growing consumer complaint categories in 2012 involved unlicensed contractors, according to a 2013 survey by the Consumer Federation of America. And according to Chargebacks911, a company that helps merchants in credit card disputes, an unsatisfactory product or service is an acceptable reason to file a charge-back.

After talking with my credit card company and probably over-thinking the whole thing, I decided it would be too much hassle (and possibly a losing battle) to dispute the charge for the service — especially since I wasn’t actually having problems with the heaters. But, because hot water heaters can leak and cause damage, I still wish I had the peace of mind of knowing the job was done by a licensed pro.

Experts say it can be tough to win a charge-back dispute for services you have received, even if the service was faulty. Take, for example, this consumer, who wrote to MyBankTracker.com, asking for advice after Citibank denied her charge-back request for a payment to a shady locksmith. The consumer had hired the locksmith to fix a door handle, which did not really get repaired and later fell off. It turned out the locksmith was operating without a license.

Simon Zhen, the analyst for MyBankTracker.com who answered the reader’s query, pointed out that filing a charge-back dispute for shoddy service can require lots of documentation from the consumer, and credit card companies don’t always tell you what evidence you need to supply.

According to Zhen, consumers can increase their chances of prevailing in such a dispute by providing three key pieces of documentation:

  1. A receipt for the service.
  2. Documentation of unsuccessful attempts to contact or resolve the issue with the merchant.
  3. Written confirmation from another professional that the original service provider did not complete the job properly.

If the consumer loses the dispute, there’s always small claims court, Zhen adds. And, according to DailyFinance.com, a card issuer might provide a courtesy refund even if the situation doesn’t merit a charge-back.

For me, the situation with the shady plumber was a good reminder to always have service providers lined up before an emergency occurs. Having the number of a qualified plumber would have helped me avoid the whole mess.

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Video: The Points Guy talks travel perks

Filed under: Travel on December 18, 2013 @ 11:03 am

Wondering how your credit card can smooth travel hassles and help you fly for free? CCG Editor at Large Erica Sandberg hung out with Brian Kelly, founder of ThePointsGuy.com, to find out how to maximize your card’s travel rewards during the holidays — and year round.

In the video, Kelly talks about his time as a road warrior, the upgrades he’s snagged and how rewards newbies can become seasoned travel hackers.

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Gone paperless? You still need to check your mail

Filed under: Credit Cards General on December 13, 2013 @ 5:19 pm

Like a lot of people nowadays, I pay my bills and get my account statements online. That means I’ve gotten pretty bad about checking my (snail) mailbox. It’s mostly full of catalogs and coupons, anyway. Unless I’m expecting something (such as a replacement for a soon-to-expire credit card, a package or a medical bill), I often go as long as two weeks without checking.

Last Friday, however, I learned the folly of my ways when I retrieved my mail for the first time since before Thanksgiving. There was an envelope from my bank marked “Important account holder information enclosed.” Inside was a new debit card. Although my current debit card isn’t set to expire for more than two years, my account had gotten flagged in one of Bank of America’s fraud assessments. There were no suspect charges on my account, but, to be on the safe side, they were sending me a new debit card (with a new card number) and canceling my old card. Because I’d waited so long to check my mail, I now had just four days until my old card would be canceled.

I tend to avoid automatic payments as much as possible, and the ones I do have are generally linked straight to my bank account, rather than my card. So I didn’t have many automatic payments to switch over to the new card. I did, however, have to go in person to my jiu-jitsu school (which didn’t have an online system for me to log in to) so that the school could fax over my new card info to their payment center in time for my next automatic payment. I also canceled an Amazon order I’d placed with my card the night before (and hadn’t yet been billed for) to avoid payment snags when the order shipped in a few days.

While the ability to handle so many financial chores online offers time-saving benefits, I learned that it can also lull you into a false sense of security. Many consumers essentially have two financial lives (an online one and a dead-tree one), leaving our attention divided.  My bank hadn’t sent me any emails about the new card, so I thought I had no pressing reason to check my mailbox.  If I had waited just a few more days, I would have gotten hit with returned payment fees and an even more frantic dash to get my bills in order.

Has an important piece of mail ever lingered in your mailbox? And has your divided financial life ever caused you any problems? If so, follow these tips from personal finance and personal organization bloggers for keeping your scattered financial life under control.

DollarVersity points out that going paperless isn’t an excuse to become less organized, but a reason to become more organized.

Little Green Blog calls out an important paperless billing snag — you’re less likely to notice errors.

In a blog for Happy Cog, Ryan Irelan, outlines how he went paperless — and how he kept his financial matters organized electronically.

Moving more bills online entails a lot of passwords. Wise Bread has some tips for keeping them all straight.

Bargaineering emphasizes the importance of creating electronic backups of the documents and statements you used to receive in the mail.

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Developing a healthy relationship with one-click purchasing

Filed under: Credit Cards General on December 10, 2013 @ 4:00 pm

I have a personal finance confession to make: I love one-click purchasing.

I write about personal finance, so I know that anything that makes spending more mindless typically is a bad thing for consumers. And I know that I definitely spend more when I have the ability to make quick, easy impulse purchases online. In fact, I often check out via PayPal, just so I don’t have to enter my credit card information.

One major guilty pleasure that sometimes eats up my “fun money” rather quickly: one-click impulse purchases of my favorite television shows. (“I Survived” marathon, anyone?)

I find that one-click purchasing makes it easier for me to be less honest with myself about the total amount I’m spending. I’ve told myself, “Just one more episode,” many times and then checked my credit card statement to see that I’ve shelled out more than I would have if I had just bought the whole season at once. But that would have felt, initially, like a bigger purchase, and I might have hesitated about handing over that much cash.

Still, I don’t want to turn off one-click purchasing because it is so convenient. Some personal finance bloggers say the same thing. For example, blogger Daniel Packer, of Sweating the Big Stuff, says he likes using the one-click option to buy books for his Kindle because it allows you to save so much time by bypassing the shopping cart and check-out part of online shopping.

But he also says quick, easy online purchasing can be dangerous for consumers because it encourages impulse shopping. I agree. According to personal finance blog Planting Our Pennies, we should all just turn off one-click purchasing to make buying stuff a little harder for ourselves.

I don’t plan to turn off one-click purchasing, but I do want to be smarter about it. The first step I took was to look at my credit card statement and identify my problem area: $1.99 TV show episodes that add up to big bucks quickly.

Next, I plan to be less impulsive about buying shows. I’ll consider taking a break from a show and waiting for the latest season to get added to Netflix. (I’ve noticed that Netflix sometimes lags a season or two behind on some shows, while Amazon is more likely to have the most recent seasons available at a price.)

If I really want to watch the show now, I’ll admit to myself that I’m going to buy the whole season, and I’ll purchase it upfront at a slight discount rather than buying all the episodes individually. One bonus: That allows me to see exactly how much I’m spending, rather than having to count and add up many small purchases. Overall, it will keep my credit card statement less cluttered.

I also love this tip from Lifehacker: Use gift cards for small purchases made by computer or mobile device. That will simplify your finances, as, instead of a mess of apps, songs and TV show episodes littering your bank statement, you’ll have the single gift card purchase. Gift cards can also help you stick to a budget by providing you with a finite set of funds.

If you really have issues with impulse purchases, Lifehacker also recommends using software like StayFocusd (a Google Chrome app that prevents you from visiting certain time-wasting websites) to block your problem sites during the times you’re most likely to overspend.

I don’t plan to go that far yet, but I think I’ll buy some gift cards to keep handy for the next time I get hooked on a new show.

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The unexpected expenses that have been attacking my budget

Filed under: Credit Cards General on December 6, 2013 @ 3:55 pm

I have an emergency account. And I count myself as one of the lucky folks who can keep enough in a checking account for regular expenses and some fun on the side.

But what about those sneaky “gray area” expenses that aren’t quite emergencies, aren’t quite regular living expenses and definitely aren’t fun? Here are a few I’ve encountered in the past month:

  • My vacuum cleaner broke. It wasn’t the end of the world, but I was surprised by how quickly an oatmeal-colored carpet could start to look dingy.
  • My car needed new tires. When I took my car in for a state-mandated safety inspection, my mechanic reminded me that I hadn’t replaced my front tires since he’d first suggested it a year ago. This time, his reminder was less of a suggestion and more of an “I wouldn’t let my wife drive on these tires” kind of thing.
  • My seven-year-old laptop is not long for this world. It has been lugged around constantly, dropped on cement and crashing more and more frequently. I’ve already backed it up, knowing the end is near.
  • My passport expired. I don’t have immediate plans to go abroad, but I don’t want to scramble with “expedited passport” fees when I do. So I opted for the regular, slow snail mail option — and it was still $110.

Minus the new computer (which I haven’t bought yet), these other expenses have cost me almost $460 in roughly a month (even though I had a gift card that I used to pay part of the cost of the vacuum cleaner). I run a pretty tight ship when it comes to my checking account, with money automatically getting siphoned out toward emergency and long-term savings when I get paid. So it’s not as if I have an extra $500 in checking at the end of the month, on top of what’s needed for rent and other bill payments. And I didn’t want to dip into my emergency savings (which I consider designated for scenarios much scarier than a broken vacuum cleaner).

Luckily, my financial adviser had encouraged me to also send a small amount a month to a “general” interest-bearing savings account for big expenses that crop up between now and retirement. Eventually, the contents of this account will be my down payment on a car. I transferred $480 to my checking account and used it to pay those gray expenses (some of which I routed through my credit card to get rewards points).

This experience taught me an important lesson: While I almost always deliberately save for fun short-term financial goals (such as a new camera or a vacation), I never think ahead about the non-fun stuff, such as tires. As this blog on Breakthrough Personal Finance Trainers points out, there’s no excuse for that, because many of these expenses can indeed be predicted. I knew for a year I should get new tires. My passport had the expiration date printed right on it. My vacuum had been getting gradually less effective and making strange noises. And it’s a miracle my cheap laptop is still hanging on. I could have spread those expenses out over almost a year instead of waiting for the holiday crunch — or sent a bit more each month to my general savings account (rather than making a huge dent in it all at once).

I feel incredibly lucky that I was able to pay for unexpected expenses without going into debt, but I can do better. I plan to be more aware of these types of expenses in the future, and I’m going to start with my laptop. I’ll be sending extra money into my general savings account for the next several months so that I won’t be hit with a massive surprise expense when my laptop dies for good — and rely on my phone or my boyfriend’s computer until I’ve saved enough to pay for a new computer in full.

Need help predicting big expenses — or dealing with those that sneaked up on you? Follow this advice from the personal finance blogosphere:

The Personal Financier explains how you can predict, with surprising accuracy, the expenses you think are unpredictable.

Simple Finance Blog provides a road map for those who get surprised by expenses and don’t have enough savings to cover them.

Experiments in Finance walks you through the options for covering expenses you didn’t plan for — and the possible risks they entail.

My Open Wallet warns that avoiding not-quite-emergency expenses for too long can make them grow into costly emergencies.

Evolving Personal Finance shares a story that illustrates how unexpected expenses can quickly derail your financial goals.

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Want a discount on a big-ticket purchase? Just ask

Filed under: Credit Cards General on December 3, 2013 @ 3:22 pm

Are you clipping coupons to save a few cents here and there, but missing the chance to save big by not asking for a discount on major purchases?

Recently, I was shopping for a sectional sofa to go in our newly remodeled living room. One day, I saw a coupon code for 25 percent off pop up on the West Elm website. I waited a few days to buy, and the coupon code had expired.

In the meantime, the couch had gone on sale, but the discount wasn’t quite as high as it would have been with the code. I called customer service, explained the situation and asked if there was any other coupon code I could get. The rep offered to credit me an additional 20 percent back to my credit card after I bought the couch.

On top of the sale price, I saved more than $400 just by asking, which added up to almost 40 percent off the retail price. If you’re going to put energy into trying to save a few bucks, it makes sense to focus your energy on big purchases, where you have the chance to save a bundle.

Here are some tips for getting discounts on big-ticket items:

  1. Do some scouting. If you can plan for a big purchase, you’re likely to get a better price. For example, if you know you want to buy a certain item but don’t need it now, ask a store associate when it might be going on sale, recommends personal finance blog Squawkfox. At the beginning of our remodel, I talked to an Ikea employee and learned that the store regularly has 20-percent-off kitchen sales and that one was coming up soon. We ended up saving $1,000 on our cabinets.
  1. Be nice. When you ask about getting a deal, it helps to be friendly and relaxed about it. Chat with the store employee or manager and don’t demand or even expect to get a special price. That’s what I did when I called about my sectional, and the employee was more than happy to help me save money.
  1. Price match guarantee? Ask for more. Many retailers have price matching programs, but they might not be advertised. Many stores will not just match, but will beat a competitor’s price by 5 percent or 10 percent, according to the frugality blog Southern Savers. But you might have to ask.
  1. Embrace imperfection. If there’s something wrong with an item, but you want it anyway, retailers will often knock a percentage off the price. I once got a great deal on some lawn chairs that were scratched just by asking a store employee, who called a manager. If you spot an already-discounted item in a store’s scratch-and-dent section, you often can get an additional 10 percent or so off if you request it, according to the personal finance blog LenPenzo.com.
  1. Pay attention to commissions. One more tip from LenPenzo.com: Find out which places pay their sales associates on commission. Shop around first to see what prices other retailers are offering, then go to the store that pays commissions and try to make a deal. The employee may be willing to cut you a bargain to close the sale.
  1. Forgot to ask for a discount? It might not be too late. WiseBread.com recommends keeping your eye out for sales after you purchase a big-ticket item. If you see the same item on sale at the store where you purchased it, or even another store, you can go back and ask for a refund of the difference. Also, don’t forget that some credit cards have price protection, which offers you money back if an item you bought goes on sale within a certain amount of time after you bought it. These programs often require the price to drop by a certain amount — and you’re more likely to hit that amount with a large purchase.
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