Costs of a Luscious Lawn

As Spring has crept up on me and it is time to start working on some outdoor projects. One of the most pressing is the dirt and weed patch that is lovingly called my back yard. It is a mess and far from the fun and functional space I need.

To address the problem I've started with a little research. Starting with no clue about cultivating a grassy yard I have learned that in my part of the country there are two options: burmuda or fescue. Burmuda grows like a weed and is very tolerant of the hot sunny climate and better suited to lower amounts of watering. On the downside, burmuda is totally brown 5 months out of the year and never the soft carpet of green I would ideally grow. Fescue on the other hand is an attractive green color year round and can be made to flourish. Its weakness is that it is best suited to shade and requires very regular watering.

Fescue depends so much on regular watering that the local garden center recommended it only if we were willing to install a sprinkler system and run it 4+ days a week. My frugality, moderate as it may be, prevents me from ever seriously considering a sprinkler system or signing up for massive water bills just for the sake of a better shade of green. After facing water restrictions from drought last summer I am also weary to be so wasteful. Thus, I feel I am left with burmuda as my only real option for my yard.

Now I also have to determine how I want to approach "installing" the grass (I'm an engineer, not a gardener). The two basic options are to seed the lawn or buy sod. With each choice there are a number of secondary choices.

Surface seeding involves tilling the whole yard and adding lime and compost. As another option, I could seed the yard with a special "plug" planting device. What should I do about aeration? On the upside, seed is relatively inexpensive, ~$150 would cover the whole yard. Unfortunately each step in the process requires buying extra products and renting equipment that are costly instead. Finally, none of this comes with any guarantee of results.

If I choose to sod the yard there are is a different slate of challenges. The largest of which is the upfront cost of the sod which would run a minimum of $720 even if I choose to install it myself. Self installation of sod is again without a guarantee of results, but it has a benefit of far fewer complications and no special equipment required.

I've also considered putting the whole process in the hands of an expert. The companies I have called will charge about $40 a month for application of an assortment of fertilizers and weed killers. Lime application is $33 once per year. Profession seeding or sodding of the back yard would run over $1,000 for either option, but seeding is cheaper and will condition the soil in addition to just adding grass.

For now I'm stuck in decision paralysis. None of the available options really meet my budget constraints or my original idea of a luscious green yard all year round. I am currently leaning toward buying sod and installing it myself. It would serve as a trade off for me to provide the labor but pay extra to simplify and streamline the process. I am open to all comments and suggestions. How much is a gorgeous lawn worth and what route would you take to get it?

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More Ways Your Brain Tricks You

Today I came across a great article about more ways your brain tricks you into making bad financial decisions.  The article, Why You're a Big Sucker, explains how a few blind spots in cause us to make bad consumer decisions and cost us money.

Two examples resonated with me personally.  The first is how the word FREE tricks us into doing some very stupid things.  In short, when a marketer or sales person is giving you something for free there is always a catch.  In my case, I called a toll free number advertised on the radio to collect my "free" trip to Las Vegas.  Of course, I found out when the marketing materials arrived there was indeed a free trip, except for the $29.99 handling fee, the $79.99 conditional cancellation fee, and the mandatory 2 hour time share presentation.  Oh, I also forgot that my wife and I could only collect our plane tickets if we were flying from a designated airport (all on the West coast) or were willing to pay a $200 travel destination upgrade to allow us to fly out of Atlanta (still a 3.5 hour drive from our house).  I also learned that by giving out my person information I landed myself on direct mailing list for every scam under the sun; I was a big sucker.

The next example that hit home is the idea that prices are relative to your surroundings.  When I am in Best Buy looking at televisions, the $1,500 42" LCD TV seems like an absolute bargain when it is put up next to the $2,700 50" LCD and the $3,300 55" Plasma.  A sneaky merchant will add a moderately priced set into a lineup of pricey sets and then tack on a "free bonus."  Of course, $1,500 for a TV is a lot more expensive when considered in a vacuum, but when it is sitting next to a whole row of more expensive options it can seem like a great deal.  Amusement park food also comes to mind when I think about the relative cost of available options.  When it costs $8 for a hamburger and $4 for a 20oz Coke a frugal person will pick the $4 hot dog and a $2 bottled water.  The situation has induced you to spend way too much money, but still get the illusion of being responsible with your money.  In other words, be sure to keep costs in their true perspective and keep the situational bias at bay.

I am regularly fascinated with the ideas behind Behavioral Finance.  A few days ago I wrote another article on the topic that you should check out as well titled, Your Brain Makes Building Wealth Hard.  Thanks for reading.

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Car Insurance: Deductibles & More

Three years ago when I got my BA degree it was time for me to get my car insurance under my own name. For the sake of comfort and simplicity I stayed with the same insurer that my parents have used as long as I've been alive, State Farm. I also kept the exact same coverage my parents had selected.

Now, after gaining a great deal more financial literacy I think it is time to revisit my car insurance. A little research gave me all of the information I need. First we have a 1999 Chevy Lumina (Kelly Blue Book Private Party value $2,880) and a 2007 Dodge Caliber (Kelly Blue Book Private Party value $10,995). Second, I just turned 25 and should now qualify for lower rates. Third, neither my wife or I have ever had an accident that was turned in to our insurance company.

Our current coverage has all of the basics such as liability, uninsured motorist, and medical payment coverage. We also carry comprehensive on the Caliber (required because of the car loan). Under no circumstances would I recommend skipping any of these coverages, and generally I would buy the highest payout offered.

We also have a few extras like towing and trip interruption coverage. Unfortunately I've goofed up and paid once each for a locksmith and a tow because I didn't realize I had these coverages. We also have roadside assistance for both cars, the Lumina is $3 a month through State Farm, and the Caliber is covered under the manufacturer's warranty. I'm undecided about paying for these coverages. Why should I insure against a risk that will cost somewhere in the range of $50-250. I should be able to pay that out of pocket (aka emergency fund) if it is needed.

The last thing that I learned is that I have very low deductibles. In fact, for the comprehensive I have ZERO deductible and for collision I have the lowest available, $250. When I was first starting out in the "real world" it made more sense to have these low deductibles. I didn't have any savings and even a small problem would hurt my cash situation badly. Now, I basically self insure by having $1,000+ in an online savings account. The math tells me that I should raise these deductibles to at least $500 but maybe even $1,000.

By raising my deductibles and dropping "extra" coverage (which I accidentally paid out of pocket twice already), I would save money on my regular payments. I also learned that by being billed monthly I pay a few dollars extra as a processing fee. In total I can reduce my monthly car insurance bill from $137.00 down to $738.00 twice annually. A $14 a month savings isn't much, but over time (and with a little luck on the road) it could add up.

I haven't decided for sure to make the changes. Reducing the monthly bill about 10% but in exchange doubling my risk exposure still isn't clear cut to me. So, now I am looking for comments and advice about what to do. When I make a decisions Aspire 2 Wealth subscribers will be the first to know. Also, let this post be a reminder for everyone else to take a few minutes and double check your insurance coverage.

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Dress to Impress

Over the last year and a half I have started traveling for business every couple of months. Usually on these trips I am visiting a contractor which does business for my company. Ultimately my role is to perform an audit or provide oversight into how well they are executing their contractual duties. I have also starting giving briefings to high level managers and decision makers. In other words, at times my job requires me to put forth a professional, credible persona.

A large part of that professionalism is dressing the part. In my normal work environment we don't have a dress code. As an unspoken rule, shorts and sandals are a bit too casual except on special occasions, but day-to-day a tee shirt and blue jeans is perfectly acceptable. I am sometime teased by friends and family because I almost always wear the same thing whether at work or at home: a collared polo-style shirt and blue jeans. When I travel or have a presentation to give that outfit does not give the impression I need to present.

For those situations I currently wear a pair of black slacks, a solid color button-up shirt, and a tie. My entire "dress" wardrobe consists of one pair of dress pants, about four button-up shirts, and less than a half dozen ties. In other words, I can get through a week of business travel and then I am out of fresh options. The problem is that I am finding that in some situations I am still a tad under dressed.

A particular weakness in my current plan is that I know my dress shoes are not up to snuff. I bought them for $30 at WalMart. They are black. They are simple. They also look like I bought them at WalMart... My shoes are clearly due for an upgrade.

Next, in cold weather, or really anytime mother nature is not cooperating, I also look like a schmuck. At issue here is that I only have one real jacket, and it is completely casual. It is a decent jacket for walking around town, but it is more at home on a camping trip than in a board room. Because I am from the South the jacket also is not up to the insane weather conditions I have encountered during my travels this winter (a high temp of -6 is NOT a temperate climate). Thus, I need a better selection of outerwear that is classy and able to stand up to all types of weather.

My last big hole in my professional wardrobe is my briefcase. Again from WalMart for about $30, I bought a messenger bag / soft side brief case. It is made out of nylon and looks more at home on a college campus than by my side during a "power lunch." To top it all off, back in January when I took a trip, the shoulder strap broke as I was walking through the Cincinnati airport. In order to slog through the airport with all of my stuff I really need a bag with a shoulder strap.

A few days ago I was about to buy a new strap for the ailing bag. Then I saw that my options were either pay $18 for a decent padded strap, pay $12 for another crap piece of nylon with plastic hardware and no padding, or worse yet buy a strap of neon green or rainbow color. Rather than throw good money after bad I started looking for a replacement briefcase.

Today I popped into the luggage store at the local mall to see what I could find. I was immediately put off by the $300-400 cases they had filling their shelves. The sales clerk tried to help me out but when I said my price range was $60-100 she just laughed. I was ready to leave but she then told me to feel free to dig through some bags that were behind the counter and lined up below a display case. There I found some treasures. Ultimately I selected a bag that was listed as a Kenneth Cole case new for 2001 (like I care for a classic black briefcase what year it was "in style"), and it had been marked down from $250 to $179 to $139 to $99 and finally down to $79!

I still agonized about the price for a while before I realized that it was just barely more than I paid for my old WalMart bag plus one replacement strap. I decided that it was time to buy a quality product that would hold up for years (it even has a lifetime manufacturer warranty) and project the type of image that is expected of me for important meetings and business travel. This is one of those cases where spending a little money now to make the right impression could pay massive dividends with raises and promotions down the line. Now, if only I can find the same kind of deal on the rest of my professional wardrobe as I did on that case so I will be totally ready to dress to impress.

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New Way to Bank Extra Cash

Today I am taking off for a quick three day / two night business trip.  I don't travel that often, but every couple of months I need to attend an out town meeting or drop in with a supplier.  As a part of my quest to squeeze a little more money out of my budget I am going to try and use these business trips as a way to increase my income.

How can I turn my travel into extra money?  First, I signed up for all of the frequent traveler accounts that I may use while on the road.  My employer lets its employees keep the rewards they rack up for personal use.  For the first couple of trips I wastefully failed to claim these benefits.  I now have accounts with each of the major airlines that service my local airport and a selection of hotel chains that I will use for lodging too.  In fact, with only three business trips and two night of personal hotel stays I have nearly earned enough points to get a free hotel stay, worth $60, by simply doing things I would do anyway.  Using these programs I will earn something of real value as I schlep around for work.

The second way I can put money back in my pocket from business travel is to use my daily spending account wisely.  Rather than be forced to collect receipts for every little purchase while I am out of town, I am given a fixed amount of money to spend per day.  This money, typically called a "per diem" allotment, is intended to cover my food, tips, and miscellaneous expenses I incur.  While this amount is not exorbitant it is certainly more than I need if I spend my money wisely.  A typical per diem can be anywhere from $30-75 per day depending on the type of trip.  Even at $30 a day I can eat pretty well in almost any city and pocket the extra.  In the past I have let this potentially lucrative extra income go to waste by viewing my business trips as an excuse to let loose from my normal budget and "eat like a king."  I would order a $20 steak for dinner and skip the hotel's continental breakfast, while not even thinking about the splurge as wasteful.  Of course, I would only order like that at home, on my dime, for a special occation.

It is important that I remain ethical in how I use my travel dollars.  Like with taxes, I want to claim all that I am rightfully entitled without bending any rules or abusing the system.  For example, it may be in my best interest to fly on an airline that is within my favorite frequent flier program, but it would be unethical to force my employer to pay more for a ticket just so I can maximize my personal gain.  It would also be unethical for me to accept free meals from a client or even worse to solicit those meals in order to pocket my per diem cash.  As it should be with all things it will be ethics first and frugality second.

From now on, it will be like a game to see how much extra cash I will have left at the end of the trip.  It should take some of the sting out of being away from my lovely wife (who hates when I travel) and sleeping in an unfamiliar bed.  Wish me luck and safe travels.  Thanks for reading.

On another note, today the Festival of Frugality #115 went live over at Broke Grad Student.  One of my posts, Frugality Making a Come Back, was featured.  If you have some time head over that way to check out the carnival.

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Break the Spending Cycle

Just like being on a diet, being frugal seems to go in cycles.  One month we may get our ship going in the right direction, and BAM, the next month we totally drift off course.  In the months leading up to buying our house we saved hard, almost 50% of our income.  For three weeks after we closed, we went into a buying spree that left us with $4,000 of debt.  Some of these purchases were legitimate needs, but much of it was not.  We spent money to celebrate our milestone ($400 for a self thrown house warming party anyone?) and rebel against our months of restricted spending (how about a flat screen TV?).  We went from spending 50% of our income to spending 200% of our income in an instant.

By starting this blog I took the first steps in reigning back in the excess that accompanied home ownership.  Today I am taking another step to try and address some of the recurring expenses that sneaked their way into the budget.  By addressing regular monthly bills I will make a lasting impression on my budget.  Rather than require my will power to hold up next month as if this were a spending diet, I've trimmed my lifestyle instead.  To continue the weight loss analogy, what I did today is like starting an exercise routine rather than some fad two-week juice diet.

The first bill I trimmed is the $41 a month land-line telephone bill.  The most basic telephone hook up from AT&T is $16 and change per month.  Next we add another $9 to add the 2-Option package for Call Waiting and Caller ID.  My wife deems it absolutely necessary to have the ability to screen calls and insists we have Caller ID.  Call Waiting is almost useless but it comes as a package deal.  We also have $2.99 for long distance service which to my knowledge has never been used.  Finally there is an assortment of taxes and fees that bring the total up to $41.

To go about reducing this bill I had very few options.  One would be to convince my wife that we don't need Caller ID.  I was unsuccessful in this task so I moved on.  I did some research and learned that AT&T is currently offering an online-only long distance package that is FREE.  That's right, no charge at all, and a fairly reasonable $0.12 per minute.  Since we never use this except for maybe in the event of an emergency this is great.  It will knock $4.52 including taxes off of our bill.  Next month we should be charged only $36 for telephone service.

The next bill to go about reducing is the satellite TV.   At present it runs $81 a month for the top tier service with two premium channels, High Def programming, and a DVR.  We currently get a $27 credit each month that covers the HD service and the DVR, but that credit will go away in August so the the bill will jump to $108 a month.  That is just too much to pay for TV.  We hardly watch the premium channels so that is the first place to start.  Dropping those will reduce the bill $15 + tax or down to about $65.  For a while I was watching Showtime frequently for several of their series, but lately these shows have been out of the lineup.  Dexter, Weeds, and Californication are great, but I'm not sure if they are worth $16 a month.  All of them will eventually be available from Netflix so today I am going to call and get rid of the premiums.

It may not be a lot but with a couple of phone calls I have trimmed a bit more than $20 a month from my budget.  I can now allocate the extra money to paying down my debt just a little bit faster.  If you factor in the interest savings it will cut a full month off of my repayment plan.  It will be a great day when I am finally free of my consumer debt, and this little action will bring me that much closer.

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Frugality Making a Come Back?

While reading through my long list of online news sources I found an interesting article that I felt merited some further analysis and discussion.  The article Why America Has Too Many Stores from Slate.com talks about overbuilding and dropping consumer spending in the retail sector.  In real dollars, after adjusting for inflation, sales were down over 2007 for the first time in years.  At the same time, strip malls and shopping plazas have sprouted up all over the cityscape (and Main Street USA too).

I can certainly see this trend in our neck of the woods.  My wife started working a part time retail job at a brand new upscale development when it opened back in December.  This complex has about 60 high end stores like Lucky Jeans, J.Crew, and Anthropologie.  While visiting my in-laws over the weekend we noticed that a new collection of big box stores anchored by a Super Target and Circuit City that popped up a few miles from their house too.  There were also several other large retail projects along the inter-state that we drove past during our trip which have all been completed in the last two and half years since I started regularly driving the route to their house.  I'm sure that something has to give, either the consumer gives in to the temptation or there will be a massive overstock of retail space. 

Aside from making me reluctant to sink any cash into commercial or retail focused REITs, the ultimate take away from the piece was a question of whether frugality might be due for a resurgence.   The popularity of personal finance blogs and the host of books rail against consumerism makes me think there may be something of a sea change coming in the spending habits of many Americans.  The Freegan movement seems to be an extreme anti-consumerism response that even seems to be gaining ground (and press coverage). 

The article seems to doubt the staying power of the trend in reduced retail buying stating, "The eleva­tion of frugality into a virtue seems likely to last about as long as modern recessions do—about eight months."  What struck me most about this quote is the idea of frugality as a virtue which certainly fits with the current trend I've seen in the blog-o-sphere.  The Boy Scouts (I'm an  Eagle Scout) may have something with the inclusion of "Thrifty" in the Scout Law.  I fully support the spreading frugality and thrift and indeed elevating it to the level of a virtue.

While I don't see a sweeping change that will fundamentally change the wider economy, an eight month breather seems too conservative an estimate of the impact of these changes.  If an additional 10% of the population increased their cash savings rate (which is near zero) up to 10% it would decrease GDP by as much as $93.8 billion a year.  That is only 0.7% of the total economy but it isn't a trivial sum either.  The survivors of the Depression were fundamentally changed for a lifetime, and while I certainly don't want to see that type of suffering ever again, I hope that some of Gen X and Gen Y can permanently incorporate frugality into our lifestyle.

As always, comments are welcomed.      

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