Is iPhone 4S worth the money?

iPhone 4S with a 2 year contract costing $199 dollars – is it worth?

For people with cell phone - but do you need internet on it?

Everyone has a cell phone - now a mandatory utility. Even a smart phone is somewhat getting universal. With an iPhone, you need to get an extra data plan. Limited data plans can be bought at $15 per month or $360 for two years, which comes to be less than 50 cents a day for the internet. So do you think having mobile internet is worth 50 cents or day?

Money saving apps

There is tons of money saving apps such as;

·        Amazon Price Checker You can compare price and read review of product by scanning UPC code, snapping picture of the product or by just searching. Usually, Amazon has huge discount on the product and sometime their reviews help you avoid bad products.

·        Living Social, Groupon, ScoutMob All discount website have instant deals that can find discounts based on your location. So, why pay extra $10 for sushi (that you would definitely get).

·        Other Apps. There are tons of other apps that check low prices for products in local store, shop for lowest gas price etc.

Digital camera replacement

IPhone 4S 8 megapixel camera is good as many entry-level point and shoot cameras. As a bonus, you always have a decent camera.     

My Debt Roundup – September 2011

Last time I blogged about money was more than nine months ago. In my estimate then, I would have had debt reduction by $2,000 and be in sub 10,000 debt level. Not close enough. Then, I thought my debt would have decreased slowly but instead I find it increased by about $4,000 to 16,021. So what did I do to increase it? These are my major expenses. I was quite a social traveler this year – and I don’t regret this expense at all. Next, I spent on home improvement items such as new furnishing, bedding, etc – I am ok with this expense – time for me to grow up. Next I spent around $600+ on food per month. I feel this is somewhat high for a single man to spend  per month on food. So, next step is to reduce my food budget. I also feel my debt increase is somewhat due to lack of blogging. Blogging provides a constant reminder to be financially discplined. So here again, without making any projections etc –towards the freedom from debt. 

My Debt Roundup – December 2010

My debt is now at $12,712 down $ 248 from $12,960 a  month ago. At the rate based on the status quo, it will take me until March of 2015 to pay off my current debt - assuming I don't incur any more debts, have similar living expenses, and have stagnant income level. Earlier, my rosy estimates projected myself being debt free by February 2011, which definitely looks impossible, baring any minor miracle. In last few months, I have not been able to pay off my debt as I anticipated. However, my resolution is strong and I will do whatever I can to pay off   this burden ASAP. 

Why shouldn’t you get a store credit card?

I always restrained myself from signing up a store card to save 10% off or get a lower interest rate on financing. However recently, I signed up for a store credit card, which is not store-brand visa or mastercard.  I signed up because it saved me few dollars on a big purchase.  Now, I am stuck with that store credit card because I can’t use it anywhere except that store -- also the APR is too high to use it on other regular purchases.

This new store credit card has single handedly knocked off dozens of points from my credit scores.

This is how your store credit card hurts your finances.

• Even before signing up, a new credit inquiry is added to your credit report, lowering your credit scores.
• After account is open, this new account lowers the average age of your credit accounts further lowering your credit scores.
• If you make a big purchase (since you got discount), the ratio for used credit increases, increasing your credit utilization and again lowering your credit score.
• Your interest increases after an introductory period. So, a purchase with future interest could cost you even more.
• Normally, people tend to overbuy when given a discounted purchase. You end up paying more for things you don’t really want and definitely don’t need. 

Image based on photo by stevendepolo

My Debt Roundup – November 2010

This month I reduced my debt by $42 to 12,960. I still don’t have roommate for some personal reason that I don’t want to discuss here. Besides that, my main unexpected expense this month was related to healthcare. I have a decent health insurance provided to me by my employer. Still, I had to pay $700 out my pocket for something because my insurance company decided it should go under my deductible for this year.

I don’t want to get into current healthcare debate. However, I don’t understand why costs of healthcare are not transparent at the beginning or prior to receiving the care. Normally, you go to health professionals and get treated for ailments without having any idea for what is going to cost you. Even you get estimated cost, you have no idea how much you will be ultimately responsible. For non-emergency ailments, knowing the accurate cost prior to any procedure would help you decide to treat, wait, or shop around.

In this age of iphones/blackberries and 1-800 numbers, can’t we legislate (or?) for health insurance providers to give us an estimated cost (with margin of error) for requested procedure as well as comparative prices. This will not only save money for patients but also save millions for insurance companies. People may decide that they will go with a relatively new Dr. Smith for $500 rather than going with Dr. Jones for $2,000, who happens to be recommended by their friend. If we decide to treat (certain) healthcare products as an economic commodities then why not really treat them like one?

Image based on photo by CarbonNYC

My Debt Roundup – October 2010

69 dollars! This month my debt decreased just by just $69 to $-13,002. It's sort of depressing that the money I make from work is just sustainable income - enough to pay my rent, eat, and buy minor knick knacks. This month, I didn't buy any new gadgets or had any major expense. Only difference these last few months was the lack of a roommate. Living by myself is nice but I realize that dividing my rent and utilities with someone will be helpful towards paying off my debt.

Image based on photo by fdecomite

How to split check at a restaurant?

Many restaurants in the United States wouldn't split check according to the chair/person but instead, bill the entire table. How to split the check then?

Easiest option is to do evenly. However, people ordering less would have to bear the cost of people ordering more. With this model, people also tend to over order because the cost is shared by everyone.

Another way is to make everyone responsible for their own share and pay what they owe voluntarily. However, this voluntary method needs a slight improvement. For example, I asked guests in my cousin's birthday party to pay the check voluntarily but still got stuck with one thirds of the bill when all I ordered was a drink. How?

People tend to underpay. It's not because they want to cheat but they simply "forget" to add that extra drink, something else they had, appetizer they shared and/or tax/tip they owe.

So here's my "cross-out method" for paying check in a restaurant. this should work well for a large group. Here's how.

1. Find the shared items and evenly divide the cost. Cross out shared items while doing so. Examples are shared appetizers, shared costs such as birthday boy/girl's dinner & drinks. Write down the "individual shared cost" with tax and tip and divide by number of people. Ask everyone to add the cost to their payment, even though they didn't have anything. Always highlight percentage of automatically added tip (gratuity). Often tips of 18%-20% are automatically added in check for a large group. This avoids paying the tip twice and importantly, people can't tip less than what's automatically added in the check.
2. Ask everyone to go over the check and cross out items they consumed and paying for. Ask them to pay "individual shared cost" plus their individual share with tax/tip.
3. If there are any remaining uncrossed items, ask people to see if they forget to add any items. If nobody ordered those items and you are certain that the extra items are error, go and talk to the server and get it removed. People make mistakes. The crossing out items is essential to isolate those extra items people forget or to isolate unintentional error (hopefully) by your server.
4. Splitting the cost after a wonderful meal is awkward. However, for your own financial health and to maintain a fair relationship, it's necessary.  Even after following these steps, if you are the organizer, be prepared to chip a few extra bucks.

Image based on Avlxyz

My Debt Roundup – September 2010

My debt is now $13, 071. This is reduction of just  $910. Like the last month, I had another big purchase, lens for the camera. The lens was desirable (can't say absolutely needed) for my new project. I am focused on the new project, but I have not earned a single penny from it. Hopefully soon, but realistically not for at least few months to a year. My additional big expenses is mainly due to lack of a roommate. Financially, it make sense for me to get a roommate, but I am not sure if I desire one right now. I am enjoying having the apartment to myself (most of the time).

PS. I know that I need to get back to updating this blog more often. Only because I see a big correlation between me being active in this blog and my expenditure. 


Image adapted from Alancleaver

My Debt Roundup – August 2010

The debt stands at $ 13, 991, which is reduction of just $810. This month, I had the big purchase. I bought the camera that I wanted for a long time . Even at 0% interest, I feel the burden of the debt. However, I thought about buying the camera for long and hard. I take it as investment and don’t regret buying it. My roommate also moved out this month increasing the financial burden. I am having difficulty in trusting someone else to be roommate as of now. So, I am doing what I normally do this in situation, which is procrastinate. Everything seems negative here, but I am focusing on a new project and hopefully it will get me some income soon in future.

Image adapted from Quazie

My Debt Roundup – July 2010

This is a late, a very late update indeed. My debt stands at $ 14, 801. I finally paid off my Amex credit card which at one point had more than 15K on it. Okay I have to admit that I balance transferred about 5K to another credit card with a lower interest. However, I still feel good seeing $0 balance on my Amex. I feel like I have achieved something when as the matter of fact I just put my finances to order. Now, I have 2 credit cards remaining with around 10K and 4K in balance. I am going to go payoff 10K first because it has higher interest than the other. If everything goes as planned, I should be debtfree by February/March of next year. Wish me luck.

Save and buy or get 0% financing and buy?

I have been wanting to buy a Nikon D90 DSLR for nearly a year. I know that when we want something, we convince ourselves with bunch of excuses on why we want to buy. I thought about it a lot and came to a decision that I will eventually buy it. However, I didn’t want to get in more debt by buying another expensive item. So, my family suggested that I start a saving account for the camera? They even gave me some gift money to jumpstart the saving. Since I have already cut most of unnecessary expenses from budget to pay off my debt, I don’t have any major places for saving. At best, I can hope to save enough money by end of the year. However, recently I saw that Amazon has 0% one year financing for Nikon D90 DSLR. Should make sense I get it with financing (which means more debt) or should I wait (which means not being able to use it for 1 year)? Rationally, if I am going to buy something after a year, it makes sense to buy it interest free now. It also make sense to pay my debt off with money I will be using to buy the camera (since I'm paying interest). On the other side, we humans are not completely rational and I believe that if I buy now I would not save later. I also think that not buying this camera is some sort of test of my self control. I am still undecided. For time being, it’s out-of-stock in Amazon.

Debt Settlement 101

I have been advised by a quite few well wishers about reducing my (then) $30,000 debt through a debt settlement firms. Most of the debt settlement firms suggest stopping payment to credit card bills for about four months and instead divert a monthly payment to another account. After 120 days of non-payment, banks are required by the federal law to write-off the debt (so that it can’t inflate their assets). For a fee, a debt settlement firm will negotiate a settlement with your creditors using your deposited money for lower amount than you owe.

The process of negotiating with creditors for a payment schedule at a lower interest rate and/or settled debt with (lump sum) with lower amount than the total balance is known as “debt settlement” or “debt negotiation” or “debt resolution”.

Sounds too good to be true! Indeed, since this will lower your credit scores because;

• The creditor will mark the account delinquent due to non-payment.
• Even after debt is settled, the credit report will show "settled for less than full balance" or "legally settled for less than full balance". This will remain on your credit report for 7½ years and further lower your credit scores.

Additional reasons for not taking debt settlement route are;

• You will also be put on the creditor’s internal black list for life.
• There is also no 100% guarantee of a settlement. Creditor can get a legal judgment against you or sell/assign the debt to a collection agent. In that case, the creditor/agent has the right to collect the entire balance with interest.

Debt settlement sounds like a nice idea before I got the facts. Even if the debt settlement is successful, I will still end up paying the price with a lower credit score. So, unless you want to ruin your credit, I don’t suggest you to take this route of “debt settlement” or “debt negotiation” or “debt resolution” or whatever they call it.

Disciplined debt payment and blogging

I have noticed that since I stopped regularly writing about my debt or issue concerning debt on my blog, my spending went up gradually. I have blogged very less about money and debt last three months. In the same time period, I got more over-budget notification from Mint.com (see review here) than entire last year. I believe blogging about my debt and related financial issues has served me as a reminder to be cautious about my financial decision.

Indeed, one of the most popular and oldest therapeutic self-help is keeping a daily journal/diary. The act of writing gives an individual benefit of organizing and channeling out their thoughts, and over time reach some sort of resolution. Blog are evolution in that type of writing where we can share our words with (potentially) worldwide audience (all amateur therapists) and get instantaneous feedback.

I should definitely be more disciplined about my blogging if being a regular blogger could help me be more careful about my finances. Additional perk is an expressive therapy without paying a dime.

My Debt Roundup – June 2010

Apologize for late reporting on my side. My current debt as of this month is -16,211. Since my new job, I am seeing on average of $1,500 in debt reduction. Being a geeky debtor, I couldn't help but plug in my debt payment for last year and get estimate on how long it would take to pay off. According to the trend line (adjusted after taking my new job), I will be debt free somewhere around April 2011. Indeed this is all contingent upon my current income level and my financial discipline. Wish me luck.

No-Vacation Nation = United States

The United States is the only economy in the world that DOES NOT guarantee its workers paid vacation. I guess there is no concept of work-life balance here, unless work is your entire life.

See 
Statutory minimum Vacation by Country (Wiki) (Even China has 11 days of minimum leave)
Center for Economic and Policy Research's No-Vacation Nation (PDF)

Higher education - a financial mistake?

Now, a college degree is similar to a high school degree a generation ago.  Despite that, many college grads are not getting good jobs to offset earnings lost while attending the college and also typically graduate with a student debt. The average debt range from $ 20,000 in a public university to $33,000 in a private one according to Project student loan, which is about $2 500 to $4 000 a semester. College gives education, first taste of independence as well as responsibilities. It is sort of transition to the adulthood from the childhood. It also gives us the basic educational credential to get into most careers. So, even college is expensive, there is no doubt in my mind that it's necessary. My question is what about higher education after college?

Some of my friends decided to work right after graduating from college. While others, such as me, opted out for full-time graduate degrees. We rationalized that a graduate degree will translate into better jobs and more money. Some friends in the workforce even teased us that we are still in school to avoid real life responsibilities or couldn't find good enough jobs. After a full time graduate school for years, I am making same money as my cousin, who graduated from a college a year ago. Most of my friends who are working already have saved up money to put down-payment for a house, have paid off their student and car loans. Most of them also went back to grad school part time and will be finishing up their graduate degrees. Right now, I have a graduate degree but no work experience or savings. In contrast, my friends have work experience, some savings and partially completed graduate work (if they wanted). I understand that not everything is about money. My graduate education gave me knowledge and additional credentials in form of a degree. However, this extra education seems like a bad financial decision on my part. With the graduate degree, I will probably make similar money as my friends eventually, but it seems that I have I lost significant income during that period. However, another side of argument is that an advanced degree will lead to quicker rise to the top. Hence, a graduate degree in theory should make up for lost income (and more) over time. Let’s see, time will tell. 

My Debt Roundup – May 2010

My debt is at $17,784, a reduction of $1, 448 from last month. Compared to last few months, my debt repayment has slightly reduced. I know I am spending more money than before but really don’t know on what exact items. At this rate of repayment, I still need more than ONE year to be completely debt free (that’s summer of next year). I really wanted to be debt free by end of 2010. Help me! Any ideas?    

My Debt Roundup - April 2010

This month my debt moved to the teens for the first time, and stands at $19, 232. Compared to last month when I reduced my debt by $2, 456, this month my debt reduction is considerably lower at $ 1, 618. I spent considerably more money on groceries and eating/drinking out this month. Looking at my Mint.com account, which tracks my credit and debit cards spending, I spent about $250 more on eating/drinking out and $100 more on groceries than what I did last few months. I must have spent a few more dollars of cash here and there as well which have not been accounted. This shows how easy it is for me to go over budget and spend more than what I planned. It just takes a few dollars at a time.  

My Debt Roundup - March 2010

This month my debt was reduced by $ 2, 456 to $20, 850. A few posts earlier, I wrote about changing jobs. It happened this month and finally I got my first paycheck after 2 months. The pay looked better in the offer letter but translated into just a couple of hundred dollars more in the actual paycheck. It shows we (maybe just I) generally anticipate higher future income. The expectations are not necessarily bad but racking up credit card debts on an anticipation of higher income isn’t a smart move. My debt payments look still farther after getting a new job. Even if I just spend money on rent and eat PBJ sandwiches every meal, it would still take me more than a year to pay off my debts.

How much does it cost to live?

Last week a friend and I had a spirited discussion on how much money we need to live comfortably (without any extravagance). Our back of the envelop calculation on cost to living in any decent neighborhoods in the world for a family of four is shared here. 

Rent or Mortgage = $1500 to $2500

Rent or mortgage in any decent neighborhoods in the world cost at least grand or more for a three to four bedroom apartment or house. The rents are considerably cheaper in some parts of developing world but the neighborhood may not be desirable. Similarly, a rural location in the United States maybe cheap but may lack certain amenities or employment opportunities.

Health = $600 to $1200 for 4 people ($150 to $300 per person)

If you are lucky to be born as a citizen of a country that provides you with a free decent health care, congratulations! However, a lot of places, such as the united States need you to buy a health insurance. Some places, there may not be have a good alternative but to save up for rainy sick days.

Education = $2000 to 3000 for two kids ($1000 to $ 1500 per kid)

Some places such as the United States have a free education till the high school. However, you are partially paying for it through a local tax. Everyone needs to save up for collosal future college bills. Even if college education is free in your country may not influence your kid who wants to study in a private American or other world-class foreign student. Beside that, education generally also include cost for extra lessons, supplies and more,

Food = $600 to $1000 

Food cost somewhat depends on what kind of meal you eat. The cost may get considerably high if you eat high quality local/organic ingredients or eat out regularly.  

Transportation = $600 to $1000 ($300 to $500 per adult)

Driving a car (car payment, insurance, maintenance, gas) or take train, bus or cab (fare) for family adds up.

Household & miscellaneous = $500 to $ 1000

All household and miscellaneous needs such as furniture (upgrades and maintenance), household maintenance, gadgets, gifts, unexpected fees and items, movies, entertainment are bundled up here.

Pocket change = $400 to $ $800 ($100 to $200 per person)

Everyone needs a couple of dollars of pocket change every day.

Vacation = $400 to $800 

A week worth of vacation every year for a family of four will at least cost $4000 to $5000 with airfare, car, hotel, restaurant, activities etc. If you do it twice, then double the cost. 

Lower estimate = $ 5, 600 per month or 67,200 per year*

Upper estimate = $11,300 per month or 135,600 per year*

*Sadly, these incomes needed are after tax income, which means it needs to be 30% or more than what’s given here.

Indeed as someone said, “balancing the act between the cost of living and the cost of earning - is the art of surviving!”