It’s the Little Things

I have a confession to make.

I, the biggest cheapskate on earth, overspent this month. (Well, my husband is partially to blame too.)

And I’m not talking just a little overspending. I’m talking a lot of overage here. It’s not overage on a larger-than-life, Owning Mahowny level. We will survive, pay our bills, keep a roof over our heads. But we spent more than is comfortable for my husband and I.

Where did we go wrong? Our credit card statement had a few clues. (We use an American Airlines Mastercard and pay it off every month to get frequent-flier miles. They come in handy when you live 12 hours from relatives.)

There were some large charges on there. Electric bill, phone bill, a big charge from Babies R Us from when we bought the expensive – yet absolutely necessary - car seat for our 2-year-old son, who at 32 pounds and 36 inches tall is likely going to become an NFL linebacker. But those big dings weren’t the problem.

It was the little things that made up the bulk of the bill. $5 for breakfast at Sonic. $20 from when we all went to Subway for dinner one night. A $40 charge at Target for my friends’ baby shower presents. At the time, they all seemed so insignificant…but added up, they amounted to a big deal. A REALLY big deal.

Obviously, something has to be done. But what? This is where my husband and I diverge in our schools of thought. He’s of the opinion that we should each set a monthly limit for discretionary spending and keep a running total in our heads of how much we’ve spent. To me, this is a recipe for disaster. All those Sonic breakfasts and Starbucks treats tend to run together, and by the time you realize you’ve gone over…it’s too late.

My proposed solution: Get two prepaid debit cards, like these, and load them each month with the monthly allotment. When your money is gone, it’s gone. No more gingerbread lattes, McFlurries, or new outfits until the month is over. End of story. Even though there is an initial fee for each card, they can be reloaded free if you use the direct deposit feature.

“Why not just keep an envelope full of cash?” asked my hubby.

For many reasons: 1. I’m an unlucky person. If a thief is going to rip someone off, it will probably be me. And if you get robbed, your cash is as good as gone. 2. I tend to overspend when I have cash in my pocket. Because it’s not coming out of a bank or credit account, it just doesn’t feel real to me. 3. I lose things frequently.

What do you think is the best way to control discretionary spending, and why?

Lesson in Frugality: Always Check for a Warranty

Well, the estimate for the air-conditioning repair came to roughly $400. I had the company order the part and I was waiting on them to call me back with a new repair date, when something popped into my head: Our house is less than 2 years old. Surely that cooling system has to be under warranty.

I contacted the builder. Apparently, there had been problems with some of his other houses caused by overfilling the AC unit with refrigerant. He offered to have his guy come and fix it free of charge. Which would be great…except the other AC company had already ordered the part for us.

I explained the situation. He offered to pay $250 towards the other company’s repair. I left a message with the original air-conditioning company. I’m hoping they’ll let me off the hook. Surely they can use that part on another customer’s repair somewhere down the road.

And the lesson in all this? ALWAYS, ALWAYS see if your product has a warranty before you call the repair guy. Worst case scenario, we go with the original repair company and end up paying only $150…but if I had checked for a warranty before calling them, we would have been out nothing at all. And nothing is a lot better than $150. 

I’ll update when I get a response from the repair company.

Update: The cost is going to be less than originally thought. I managed to talk the first AC repair company out of charging me for the part – it turns out that they did NOT special order a part for me, but instead were planning on using a stocked part. So that was good. I then called my builder, who said he could get his AC guy to come out at no charge to me. Then he called back – his AC guy could not come out until Monday, and it’s supposed to be warm this weekend. So considering the fact that we have 2 kids, he decided to pay for the first AC repair company to fix it today, minus the $69 service charge.

I was impressed with the way the builder handled the situation, when many would have just said, Not my problem, and left us in the cold (or the heat, so to speak). If anyone out there is looking for a builder in the Dallas-Fort Worth area, check these guys out. Quality built homes and, as I found out today, they stand behind their product.

More Air-Conditioning Chronicles

Remember how I said that our AC problems were due to a dirty filter? Yeah, not so much.

Shortly after writing the post about the air conditioner, the blower quit working again. I immediately called the AC guys, and one has been here for the past two hours tinkering with things. Turns out there was too much refrigerant in the outside unit, causing the coils to freeze, which in turn caused the blower to work too hard, thus burning out the motor. See the nice domino effect? He’s going to have to leave in a little while and get a part and return this evening to finish up.

I have no idea what the bill is going to be, but we’ll likely be able to swing it without going into debt, which is always good. Even so, I sense a belt-tightening period coming on. Our car insurance note is going to be due soon as well.

Hourly Wage: A Great Way to Quantify your Frugal Efforts

Do you ever wonder how much value you’re getting out of your money-saving strategies, like shopping sales or line-drying your clothes? Have you ever been in the midst of making banana bread from soon-to-be-rotten bananas and wondered, “Is this REALLY worth it?”

There’s a way to figure it out. I call it the Hourly Wage Concept. Essentially, it’s a way to calculate the worthiness of any money-saving project. I can’t take credit for it, though – it was first written about in the Tightwad Gazette, an awesome newsletter (and later, a series of books) about living on the cheap. (Side note: If you do not have this book, I recommend buying it used at a local store or on Amazon. Why buy and not check out from the library? Because you will refer to it over and over. I consult mine at least weekly, sometimes daily.)

To calculate the hourly wage of a money-saving project, first figure out how much that project is going to cost you. Example: At our last house, my husband and I ordered and installed a yardful of sod ourselves. We paid $350 for the sod and its delivery.

Then, calculate how much the more convenient alternative would be. To have the sod laid by a landscaping company would have cost about $600 total, including materials.

Finally, determine the time needed to complete the more frugal option. It took my husband and I three hours of backbreaking work on a Saturday to install the sod.

To get the hourly wage, subtract the cost of the frugal option from the cost of the more convenient choice, and then divide by the hours devoted to the frugal option. $600 minus $350 is $250. Divided by 3 hours, that works out to an “hourly wage” of about $83.33. Since neither of us had a weekend job that paid more than $83 per hour, it was totally worth it to install the sod ourselves.

Sometimes you’ll find that your hourly wage is not high enough to bother with a particular project. For example: I sometimes make banana bread to use up rotting bananas, as mentioned above. But the bananas cost me about 39 cents total, and making the bread requires about 25 minutes of hands-on time. Do I devote 25 minutes of my time to baking, so as not to waste 39 cents? For me, the answer is no. There are other, more profitable projects, such as vegetable gardening, that I could spend that half-hour on. So when I find myself with rotting bananas (which isn’t often), I either let them rot, or put them in the freezer. The bananas can then be thawed and made into bread at a later date, when I don’t have any other projects to complete, or when my family just WANTS some banana bread.

Give the hourly wage concept a go and see what it turns up for you. You may be surprised.

We Can Live Without This

It’s amazing how money-saving ideas can present themselves. For many years, air-conditioning costs have been a pet peeve of mine. Living through the ungodly hot Texas summers – and having a spouse who will MELT if the thermostat is not set at a cool 73 – hamper my ability to lower our bill by any significant amount.

Yesterday evening, however, our central air-conditioning unit decided to die on us. Well, it didn’t die exactly; the blower part that brings the cool air into the house quit working. The outside unit, a less-than-two-year-old Trane, works fine. We flipped circuit breakers, consulted owner’s manuals, but failed to correct the problem. So we did the only thing we could – opened the windows and turned on the fans. We’re living out our last cool days of spring down here, so the effect was actually not too bad. The air was a little more humid, for sure, but otherwise totally livable.

That night, my curtains blowing in the breeze, I got to thinking. Did we really NEED air conditioning in April? Are we really hot, or do we just need the air to circulate a bit more? And just how much could we save by flipping that little thermostat switch to “off”?

Plenty, it turns out. According to this man’s very helpful site, I’m spending about $130 a month to run my AC unit (based on the assumption that it runs about 10 hours a day, which I think is pretty on target). If I could knock that down by half, to 5 hours a day, I’d cut my cooling costs to $65.

Now, don’t get me wrong. I’m not about to sell my unit on Craigslist. There is a very definite need for air conditioning here in Texas, especially in the dead of summer, when high temps can actually kill you. I realize that in July, I’ll run my unit quite a bit, probably more than I’m doing now. But a $65 savings is $65 in my pocket. And if I can cut down on my AC time during those few weeks that we call “fall” and “spring” around here, that’s a few hundred a year saved. That’s enough for a few months’ worth of diapers for my two sons, or extra money to pay down our mortgage, or – dare I say it? – a haircut for myself.

As I write this, the AC is still not on. I’m going to re-open the windows in a few minutes because we’re heading toward high noon. (The air conditioning unit, by the way, was fine; it was a dirty air filter that was causing the blower to stop working. Lesson learned: change your filter monthly.)

Can you go air-conditioning-free in your neck of the woods? If not, how long can you go without it during the year?