A Low-Cost Option for Home Security

For you homeowners out there, how many of you protect your home with a monitoring system? Do you sign a contract for it? If so, you’re getting ripped off in a big way.

Alarm monitoring companies (along with cell phone providers, gyms and many others) love to handcuff you to a two or three-year contract so they don’t have to work to earn your business month after month. They often charge high fees — as much as $45 a month plus installation — for providing something that costs them about $3 a month. It’s their way of ensuring their bottom line for years to come.

How would you like a cheaper alternative that not only offers lower costs, but also easy installation, wireless protection, and a 60-day money back guarantee?

The company is called SimpliSafe. For $15 a month, they provide wireless cellular monitoring, which means you don’t need a land line telephone. The original equipment costs as low as $200, depending on the extra sensors and remotes you order. Installation is easy even for those who aren’t handy — the unit talks to you and walks you through the steps for setup. It comes pre-programmed and as their website says, “No tools required – just peel and stick.”

The best part about SimpliSafe is that they don’t require a contract. Through great customer service and the quality of their monitoring service, they’ve built a solid reputation with their customers who remain with them month after month.

One drawback of SimpliSafe is that they don’t offer integrated smoke and fire monitoring with their systems. For this type of protection you’d have to go with a more robust, professionally installed system.

When looking for an alarm monitoring company, the first question you should ask is whether they require a contract. If so, hang up and try the next company. You want to pay about $15 a month, but never more than $20. And make sure the company uses a standard called “U.L. Certified monitoring.”

Beware any offers like “$99 installation.” While upfront costs might be a little lower with these offers, they’ll eat up your wallet every month with higher ongoing fees.

This might also be a great time to finally ditch that old land line you never use!

Photo by familyhomesecurity.com

Smart Ways to Use Your Tax Refund

Tax season is upon us. Over the coming weeks, millions of Americans will submit their 1040s and other documents to the IRS. Some will have to pony up for their tax bill. But for those of us lucky enough to be getting a refund (small or large), what’s the best thing to do with it?

That depends on your situation. All You lists 10 smart ways to spend your tax refund:

1. Set up a rainy-day fund

2. Fight credit card debt

3. Refinance your home

4. Pad your nest egg

5. Go green to save

6. Put it away for college

7. Splurge — smartly

8. Invest in your health

9. Take a class

10. Give it away

These are all great options for dealing with your refund. I’m sure if you got creative you could think of other uses as well.

For the beginner just starting out, I recommend setting aside $1,000 in an emergency fund before you do anything else. Don’t do anything crazy with that money — just park it in an online savings account. This is so important because unexpected expenses pop up in life. Cars break down. You or a child could get sick and incur hospital bills. You might be faced with unemployment one day. Drawing on your emergency fund in these situations is a much better option than relying on credit cards with 15% interest or more. Read more about building an emergency fund here.

A couple years ago my wife and I received a pretty nice size refund that we weren’t expecting. It was fairly early in our marriage and we were just starting to get our finances in order. We knew the importance of having an emergency fund, but a costly car repair months earlier all but wiped out our savings. So that year we used our refund to rebuild our emergency fund.

If you already have a sizable emergency fund, focus on paying off high-interest debt. This includes credit cards and private student loans. Only after you have done this should you consider any of the other options above.

I like the idea of investing in yourself by taking a class or improving your health. The article mentions joining a gym, but I think a good pair of running shoes is a better buy. The outdoors is all the gym you need if you’re creative.

Some of these options might not sound particularly exotic — paying off credit card debt, for example, isn’t the most glamorous thing to do. But it will put you in a much better position. Success in personal finance often requires you to choose the “dull” option even if you are tempted otherwise.

This year we’re also getting a refund, but it will be somewhat smaller than prior years. I plan to use it to open a Roth IRA at Vanguard. Whatever you do with your refund, use it as an opportunity to better yourself or your situation.

Photo by JD Hancock

Final Markdowns: Why That Bargain Price is Not Such a Bargain

In the midst of this recession, more consumers have become price-sensitive as they’re faced with job losses, pay cuts and higher prices for the goods and services they’re used to buying. In response, retailers have tinkered with their strategies to get us to spend more than we intended.

Moneyland reports that stores are barraging us with misleading prices and signage claiming certain products are a screaming deal, when really they’re just offered at the same old prices. While the article focuses primarily on the grocery industry, this trend is evident in almost all sectors.

Department stores immediately come to mind. Next time you’re inside one, take a look at several different price tags. You’ll notice a grossly inflated original price and a sign on the rack above — 60% off. Often, you’ll get an extra 15% off an item when using a store credit card. Retailers purposely inflate the initial price, then “reduce” it so you’ll think you are getting a deal.

J.C. Penney is attempting to shed the industry’s image with the roll-out of their new pricing strategy this month. They noticed that the majority of their merchandise was selling at a discount of 50% or greater, while only 1% was selling at full price. So they decided to simplify things by reducing the listed prices 40% on average and moving to even pricing ($20 instead of $19.99). They’re eliminating almost all sales and junk mail, and are hoping this leads to greater trust from customers. I’m not sure if this will bring more people in the door, but I applaud J.C. Penney for bucking the industry trend and striving for simplicity.

A common misconception among shoppers is that larger size packages mean better value. Researchers found that the larger sizes sometimes cost more than buying several smaller-sized items. One example:

In one store, the “big value” sized stain remover actually cost $5 or so more than the cost of three smaller stain remover containers that added up to weigh the same as the single larger-sized container.

What you want to look at is the unit price. This is your key in the battle against the retailers. At retailers that don’t have unit prices, such as clothing stores, ignore the inflated original price. Look solely at the final price, and consider whether that is a fair price to pay for an item. Would you buy it if it wasn’t on sale?

For those with smart phones, there are several apps you can use to compare prices among stores. My favorite is ShopSavvy, which is available on both the Android Market and iTunes Store for free. It allows you to scan bar codes and QR codes, then see if the product is offered at a better price online or at a nearby store.

Traditional retailers are getting desperate for business amid increased competition from online retailers. This means they will continue to play games with you to get you to buy more and spend more. By using unit pricing and ignoring original prices, you can fight back and find a deal that’s really a deal.

Photo by xrrr

Save on Your Next Fill-Up

In May 2011, the average price of a gallon of gas reached a three-year high, at nearly $4 a gallon. It then fell for seven months in a row, until rising again this month to $3.52.

It used to be that the price of gas rose and fell with American demand. Now that countries like China, India and Brazil are stepping up demand, prices are dependent on an increasing number of global factors. This can leave the American consumer feeling helpless about the price of fuel.

I have some tips that will reduce the impact of high gas prices on your wallet.

1. Make sure your tires are properly inflated. This is probably the most important thing you can do to get better gas mileage. This also reduces wear on your tires, helping them last longer. If you have a spare tire, check that one too. Depending on your vehicle, you can find the recommended pressure on a sticker in the glove box, on the door frame, or in the owner’s manual. Important: don’t use the pressure listed on the tire itself — this is the maximum pressure the tire can handle. It may or may not be the optimal pressure for your vehicle.

2. Remove extra items from your vehicle. Those old textbooks and hockey gear in the trunk? They could be costing you extra for gas. The heavier your vehicle, the harder your engine has to work and the more gas it requires. Remove all items you don’t regularly use to make your vehicle as light as possible. This includes luggage carriers and bike racks not in use, which not only add weight but also increase wind resistance.

3. Change oil and other fluids at recommended intervals. Engine oil is one of the most important fluids under the hood. It lubricates various engine components, helps prevent corrosion, and cleans the engine. Although you’ll probably be changing the oil most frequently, it’s also important to change other fluids as recommended by the owner’s manual. Keeping up with fluid changes helps your engine run efficiently and prevents problems later on.

4. Use Gasbuddy. This is my go-to website to find the best gas prices in my area. They also have an app for those with smart phones. On Gasbuddy, enter your zip code and get an up-to-date list of the best user-submitted prices. Other useful features on this site include an interactive gas price map and a trip cost calculator.

5. Change your driving habits. Braking hard, accelerating quickly and driving above 70 mph all contribute to below-average fuel economy. I’m a slow driver by nature. Driving through town, I try to maintain a constant speed and won’t accelerate more than necessary. As soon as I see a stoplight ahead turning yellow, I let off the accelerator and coast to the light. On interstates, I try to stay below 70 mph and set the cruise control when possible. The key to getting good gas mileage is steady driving. Steady acceleration, steady breaking, and steady speeds.

Photo by Svadilfari

Is Cooking at Home Still a Bargain?

According to Daily Finance, the price of groceries rose between 4.25% and 4.75% in 2011. The cost of eating out rose only half that amount — 2 to 2.5%. The article states that high unemployment and low wages continue to lead more people to eat at home. Increased demand for groceries last year led to higher-than-normal price increases (typically 2.9% a year).

Given these numbers, it’s a good time to ask: Is eating at home still cheaper?

Some restaurants such as Olive Garden, Starbucks and Taco Bell, are adding menu options to appeal to the price-conscious and drive business during slow times of day. Olive Garden is revamping its menu to offer lower-priced options, renovating some of its restaurants, and changing its ad campaign all in an attempt to refresh its brand. Starbucks is adding alcohol at some locations while Taco Bell is experimenting with breakfast. All this at a time when some grocery staples, such as milk and beef, rose 9.2% and 11.5%, respectively, in 2011.

Restaurants are also experiencing increasing food costs, but are often forced to absorb the increase or look elsewhere to cut costs:

If restaurants pass along all their cost increases to consumers, it will make them less competitive.

Restaurants are in an interesting bind. On one side they’re facing higher food costs, and at the same time they’re facing consumers who increasingly expect a deal. I don’t envy restaurant managers who have to make some tough decisions this year about how to cut costs while still offering a quality product.

Back on the grocery side, what can you do to save at the store? Recently I wrote about 7 ways to spend less on groceries, and followed it up with 3 more ways to save.  With some forethought and a little planning, it’s possible to blunt the impact of higher prices on your wallet. One of my suggestions was to give store brands a try. Recently at the store, I bought three different generic items and saved 60% versus the national brands. This tip alone can produce substantial savings.

Even with higher grocery prices, eating at home remains a bargain. Last time I ate at Olive Garden, the cheapest entrée on the menu was about $12. After tax and tip it was $15. I could instead take that $15 and buy enough food for two full dinners with leftovers for my wife and I at the grocery store. When comparing the number of meals you get for $15, it’s Restaurant: 1, Grocery Store: 6. Not even close.

The USDA predicts that grocery prices will increase 2.5% to 3.5% in 2012. While this is much closer to the average, prices are still headed up. What this means is that you’ll have to be more creative and find ways to save that work for you.

There are, of course, reasons you might still choose to eat out. Maybe you want some time to talk with your family without worrying about putting dinner on the table, or maybe you just want out of the house. But in pure dollars and cents, eating at home still beats going out.

Photo by ReneS

Best Time to Buy Airline Tickets: Six Weeks Before Your Trip

People often think the best time to buy airline tickets is the moment you decide to take a trip — in other words, as early as possible. But according to a new study by Airlines Reporting Corp., the best time to book your flight for domestic travel within the U.S. is six weeks before departure. They provide a neat graph of average ticket prices based on how many days in advance you book.

For this study, data from millions of flights from 2008 through the end of 2011 was used. At about 13 weeks before departure, ticket prices begin to fall, and continue their steady downward trend until six weeks out. By waiting to book six weeks before travel, you can save almost 6% on the average cost of a ticket.

Although six weeks out is where you’ll find the lowest average fare, it isn’t necessarily the only time you’ll find deals.

We’re not advising people to purchase tickets only at this time during the cycle as there is no guarantee they will receive the lowest price of the year; it is just what the data indicates and we have seen this pattern over the last four years.

My suggestion is to start shopping about 10 weeks before your flight. Set up fare alerts at sites like Kayak.com, which will notify you of any price drops.

The cheapest day to fly? Wednesday, according to Farecompare.com. The first flight Wednesday morning is often the best deal, although it requires waking up earlier than you might like. Tuesday and Saturday are also good days to fly. Avoid Friday and Sunday — the most expensive days. As for when should you book your tickets, Tuesdays at 3pm Eastern often provides the best deals.

Photo by flightsimulator.hubpages.com

Do-It-Yourself a Clear Trend for 2012

2012 is the year of DIY. This according to FOX Business, which cites a study showing 46% of Americans will exercise on their own rather than at a gym and 59% will pamper themselves at home rather than at a salon.

More people are skipping the pros and instead opting to tackle everyday challenges themselves. From broken thermostats and slow computers to vacations, going it alone can save money while building your confidence in your own abilities.

Keeping life simple and saving money are two reasons people choose DIY over hiring a professional.

People think, ‘I need to keep life simple.’ We are seeing that manifest in everything we do and how we look at life…there’s definitely a trend toward needing to slow down.

Part of keeping it simple involves trimming the fat from our budgets, and this includes cutting out things like gym memberships and salon visits. In the midst of the Great Recession, people are looking to get back to basics. One way to do this is to teach yourself things like how to speed up your computer, trim your own hair and even think about a “stay-cation,” where you stay close to home on vacation and find ways to entertain yourself that cost little money.

I’m a DIYer by nature. Not just because I’m thrifty, but because I like the challenge. Some ways I’ve saved money while learning a new skill include:

  • Changing my own oil. This might sound onerous at first. I admit the first time I was under the car I had no idea what I was looking at. After consulting some YouTube videos I had a better idea and was able to complete the task. It took me over an hour the first time, but after that I steadily reduced my time to about 30 minutes. The total cost was about $25 — $5 for a filter and $20 for some quality oil. Changing oil yourself can also save you time. When’s the last time you took your car to a mechanic and were out in 30 minutes?
  • Working on my own computer. There have been times when my computer needed a new fan or additional memory, but I had no idea how to install these things. So what did I do? I opened the lid and poked around a little (with the power disconnected, of course.) It wasn’t long until I had the new parts installed and my computer was up and running again. It’s also helpful to download some basic free software to help your computer run smoothly. I recommend avast! Antivirus, Spybot Search & Destroy and Malwarebytes. Be sure to keep these updated regularly.
  • Wash clothes myself instead of dry cleaning. The majority of what we wear can be washed in a regular washing machine. There are some exceptions such as suits and dresses, but for the most part you’ll save big money by washing and ironing everything you can at home. If you’re not sure, check the tag for instructions.

These are only a few examples of activities I’ve found to be worthwhile in terms of savings and developing new skills. Over the years as I’ve committed to being a DIYer whenever possible, I’ve become more confident in my ability to be self-sufficient.

Next time you think about hiring a professional, consider what you may be able to do yourself. You might learn something new and have fun while doing it.

Photo by bestmoneysavingtips.com