Beating Broke

Personal Finance from the Broke Perspective

Looking for More Ways to Save? Try Asking for Discounts

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There are plenty of ways to save on a daily basis–clipping coupons, resisting the urge to buy something, packing your lunch instead of eating out, etc.  There are many ways to live a more frugal life, and chances are, you incorporate the ways that are easy.  You know, the ones that don’t cause you to change your lifestyle much.  Things like giving up cable and getting streaming through your Xbox instead.  That’s fairly easy and doesn’t change your lifestyle.

Another easy way to save that doesn’t change your lifestyle is to ask for discounts.  Have you tried it?

Asking is surprisingly easy, and even more surprising is how often you actually get the discount.  You just have to get up the nerve to ask the first time; once someone says yes, you’ll gain confidence, and it’ll be easier to ask next time.

Ask for the DiscountWant proof that asking is as easy as I say?

Credit Card Fees

A few years ago, I made an online payment to my credit card on the day it was due, which was a Saturday.  The web stated that any payment made on the weekend wouldn’t post until the next business day.  Yep, my on time payment was counted late, and I was charged a $25 late fee.

I called the company and asked them to remove the late charge.  They did immediately.  Why?  Two reasons.  First, I asked.  Second, I never make late payments, so they rewarded my good payment history by removing the late payment.  I’ve had this happen to me 3 times in about 10 years of credit card usage.  Each time I called and they removed the charge.

Credit Card Interest

We’re paying down debt, and one thing that slowed our progress was our credit card APR of 13.99%.  I called to ask to have the rate reduced.  I had to talk to a supervisor, but she lowered our rate to 9.99%, and she gave me enough reward points to cover the cost of our annual fee.  I saved a few hundred dollars right there in about 10 minutes, just by asking.  (But when I got an offer to move my balance to a 0% APR card a few months later, you better believe I did it.)

Grocery Store Purchases

Asking for discounts isn’t limited to credit cards.  If I see something at the grocery store that is at the sell by date, I’ll ask someone in that department to discount it.  I’m only successful here about 50% of the time, but still, that’s half the time that I save more than I would if I hadn’t asked!

Garage Sales & Craigslist

I love shopping garage sales in the summertime.  If things are already priced dirt cheap, I don’t haggle, but if the price is too expensive, I have no problem asking for a lower price.  Most of the time people will say yes because they just want to get rid of their stuff.

Likewise, people on Craigslist expect you to ask for a lower price than they have listed.  Just don’t get ridiculous with the amount you ask.  That can be insulting for the seller and usually won’t lead to a deal.

These are just a few examples of how I’ve saved by asking for a discount.  However, any time I think asking might lead to a discount, I ask.

What was your most successful discount you got just by asking?

Propaganda Alert: Visa Direct Deposit Prepaid

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There I was driving home from work, when an ad on the radio catches my attention.  It was an ad for a Visa Direct Deposit Prepaid card.  Apparently not satisfied with a plethora of prepaid cards that are terrible for users (some are O.K., just not most), Visa would now like you to believe that it’s the next best thing to sliced bread to have your paycheck direct deposited to a prepaid visa card.  Yeah, you read that right.

Prepaid Direct Deposit

The radio ad is the voice of a woman, and she talks about how she has her paycheck direct deposited to a Visa prepaid card.  She goes on to talk about how she doesn’t have to drive all the way downtown and stand in a line at her bank to cash the check.  Not content to simply portray the card as a time saver, the ad goes on for the woman to say that because she’s not driving all the way downtown and standing in line, she now has so much more time with her daughter.  Now, the prepaid direct deposit card is not only a time saver, but a family bringer-togetherer.  No, that’s not an actual word/phrase.  I don’t care.

I have a friend from college that used to make fun of infomercials by saying that all they really did was demonstrate how terribly impossible common everyday tasks can be and then show you a miraculous new gadget to “fix” that impossibility. The problem is that most of those every day tasks aren’t all that impossible.  Most able-bodied humans can do them easily without any help from the gadget.  It loses a little something without his “demonstration” of the whole situation.  Obviously, the tactic works though, or we wouldn’t have those infomercials.

Welcome to the Infomercial-ization of Prepaid Cards

Not that we haven’t seen some of this done before.  Heck, the level of celebrity endorsements of prepaid cards with outrageous fees is still amazing to me.  But, this goes a level further.  They aren’t just banking (see what I did there?) on your needing a card with Justin Bieber’s face on it anymore.  No, they’re going right for your heartstrings.  After all, what parent among us doesn’t desire to spend more time with our children?  And this card can deliver it to you!  (You should read that last sentence in your best Billy Mays voice.  R.I.P. Billy.)  In fact, maybe they need the Sham-Wow guy to do the next voice-over for a commercial!

Visa Direct Deposit Prepaid : Solution to a Problem that Doesn’t Exist

Visa Direct Deposit Prepaid Card

Much like those infomercials, the problem that they claim the card fixes just doesn’t exist.  Direct deposit isn’t a new service.  Most employers offer it.  In fact, most actually require it now.  It’s just easier for them.  No lost checks to try and track down.  No delay in mailing a check from a payroll service.  And, most of the time, if they direct deposit the check, it gets deposited into a checking account.  And, do you know what most of those checking accounts have attached to them as a service?  A debit card!  It’s exactly like a prepaid visa card, but without most of the fees!  Mine has no fees.  I’m not sure there are many places that do have fees, in fact.

Maybe I’m wrong.  Maybe there’s a whole population of the country who’ve been waiting patiently for someone to come along and solve this very problem.  Maybe they still bank at an institution that keeps their account records on old green ledger books.  If that’s so, I’d like to introduce them to the amazing egg shell separator that I’ve created.  Yes, it looks exactly like the lip of a mixing bowl.  But, it doesn’t have the added bulk of the bowl!  It’s just a convenient shard sized device that helps you separate your egg shells without having to have the whole mixing bowl there!  Yes, I came up with the idea when the bowl I was cracking eggs into suddenly grew heavy in my arm and fell to the ground, breaking into lots of small pieces.  And one of those pieces was the prototype for the amazing egg shell separator!

What do you think?  Am I wrong?  Was there a need for a product like this?  Or is Visa just pulling on emotional strings to get more cards in peoples’ wallets?

original img credit: classic visa (the inception of the “we’ve got you covered” campaign) : london underground ad (1988) by torbakhopper, on Flickr

Living on What We Earn: A Learning Process

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For the last three years, my husband and I have had a very low income, well under the median income level of the average American family.  This was a result of my decision to launch a freelance writing career and my husband finishing his Ph.D.

We live in the suburbs of Chicago, so living expenses aren’t low.  Simply put, we couldn’t live on what we earned the last three years, which is why we incurred credit card and student loan debt and went through our $12,000 emergency fund.

Things Should Be Looking Up, But. . .

Now, however, the tide is changing, and our income is increasing.  My husband has a post-doc position, and my freelance business is growing.

We now are almost at the median income level of the American family in 2009, which was $60,088 according to the U.S. Census Bureau.  While this should afford us some comfort financially, it doesn’t because we are still cleaning up the financial mess from the past.

Preet Banerjee, author of the website, Where Does All My Money Go, in a recent speaking engagement, classified the ability to incur debt as the bank allowing you to borrow money from your future self.  As he says, “One day you will be your future self, and you won’t be happy.”

This is where we are at.  Three years ago when we took on student loan debt and credit card debt, we were borrowing from our future selves.  The selves we are now, and as Banerjee says, we aren’t happy.

Avoiding Mistakes of the Past

My husband and I both feel that we are in an important phase of our financial life.  If we can get through this period of paying down debt and growing our income without incurring any more debt, we should be in a comfortable financial position a few years from now, ideally debt free and with an even greater income.

However, that means a few more years of struggling now.

For instance, we are facing $2,000 in car repairs, and we just don’t have the money now.  A few years ago we would have put the expense on our credit card, but we refuse to go that route anymore.  Instead, we are scrimping and saving for the repairs, and meanwhile, I’m trying to walk rather than drive to buy us more time until we need to make the repairs.

I find it a bit humorous that credit card use allows people to fool themselves into thinking they have more money than they do.

Using credit cards now would help us float through for another year or so until our income increases greatly, but we won’t do that again.  We are living on what we earn and paying down debt even though it isn’t a comfortable process.  We are done borrowing from our future selves.

Banerjee puts it succinctly when he says, ” Think of borrowing money today as negotiating a pay cut with your future self.”  He also asks, “How much money do you want to pay to spend your earnings earlier?” i.e. pay interest on borrowed money?

Our answer is clear.  We aren’t going to negotiate any pay cuts with our future selves.  We are struggling now, so our future selves can have a more comfortable life.