Archive for November, 2008

Drugstore Deals: Getting the party started

November 24th, 2008

As economic conditions worsen, more and more people are getting into coupons and frugality in general. But a lot of people get overwhelmed just trying to figure out where to get started.  I realized this when Shreela, a reader that found this blog from one of my posts on Slickdeals, left this comment:

Hi, I’m subbing to your blog; I found you at SlickDeals.com from a thread about Spanish newspapers having coupons (Houston).

I’m trying to relearn couponing. My mother couponed and rebated, and occasionally got paid to shop, or got things free, but mostly just got reduced prices. She tried getting me into couponing when I was in my 20s, but I wasn’t that interested in it then.

Now I’m doing the homemaker thing, and have been buying generic for a hubby that prefers name-brand. It seems most of his name-brand preference is in his head, but not all of it, because sometimes I can taste the difference between name-brand and generic too 8^)

So I found SlickDeals after searching/clicking around, and it’s pretty overwhelming just to get around the huge forums lol, but I’m slowly learning my way around, and subbing/sticky’ing threads to come back to.

My first plans are to relearn couponing, since the internet wasn’t big when I was taught; and learning how to use CVS’s EBC — I ordered my card, so I have time to study while waiting for it.

My intro comment mentioned learning CVS’s ECBs and waiting on my EC card. But after reading a few other blog posts here, I started an account with Walgreens too. Now I’m off to SlickDeals again to sub to some instructional Walgreens Register Rewards threads, thanks.

Comments like this are exactly why I enjoy blogging – it allows me to share my obsessive-compulsive tendencies for the amusement and benefit of others. So as a service to Shreela and others like her, let me share a few of my thoughts about getting started in drugstore deals and coupons:

  1. Manage your expectations. Rome was not built in a day, and neither was the incredible stockpile of random stuff many of us have acquired through our dealing and couponing. It takes time to gain the experience and knowledge to walk out of a store with a cart full of stuff for a stack of coupons and some pocket change. Don’t get discouraged if you can’t match the exploits of some of the boasters on SlickDeals or in other forums. Just remind yourself that if you got stuff you will use for less than what you would have otherwise paid, you are coming out ahead. Also remind yourself that a good number of the people on SD are probably exaggerating anyway!
  2. You don’t need to buy ten copies of the newspaper every week for the coupons. In fact, I don’t use newspaper coupons every much at all. Why? Part of it is the expense of buying the newspapers ($1.75 each in Houston, ouch!), and part of it is the time and hassle of keeping up with the coupons themselves. Unless someone gives me their inserts or I find a stash of free Spanish language newspapers with coupons, I typically just use the printable manufacturer and store coupons from the internet for my deals. As many items as there are that are advertised as free after rebate/Register Rewards/Extra Care Bucks, you can do very well without using a single manufacturer coupon. I’m sure you could get more with coupons, but a lot of times it isn’t worth it to me. The only exception is I will periodically order coupons from The Coupon Clippers for upcoming sales I am aware of and know I’ll be buying.
  3. You don’t have to do every deal. Due to my obsessive-compulsive nature, I still struggle with this. However, if you are a guy living alone do you really need tampons, even if they were free? Or another ten tubes of toothpaste when you already have a cabinet with 100 more? Or is it worthwhile to run all around town to find the $1.99 tube of lip balm that is free this week? There are times when you just have to tell yourself the deal isn’t worth chasing and move on.
  4. Learn from the best sources. There are a number of great free sources for learning about deals. I most often frequent the Drugstore forum at SlickDeals, although there are forums at HotCouponWorld and AFullCup as well that are very informative. There you can usually find drugstore ads weeks in advance, and often other users will match up deals with known newspaper and internet printable coupons. At SlickDeals you have the option to “subscribe” to your favorite threads, and I always subscribe to the weekly Walgreens and CVS threads so I don’t have to go searching for them every time I visit. Note: Fatwallet used to have a grocery coupon forum, but those dirty bastards closed it down long ago, keeping with their long tradition of sucking.
  5. Remember you are just being a smart shopper, no matter what any store employee or manager thinks. For whatever reason, some store employees seem to think that anyone trying to use coupons or get good deals is trying to scam the store. I can’t tell you how many times I have had a cashier try to reject a coupon claiming they can’t take the coupon because it would make the product too cheap (duh, why do you think I’m using the coupon?). As long as you are using legitimate coupons (i.e., not copies or fakes) and abiding by the terms of their advertisement, you are doing nothing wrong. Stores will be reimbursed for any coupons presented for items purchased in their stores, so it does not hurt the store at all for you to use manufacturer coupons. Likewise, store coupons are normally issued by corporate and for internal reporting purposes do not count against an individual store’s performance measures, meaning the store manager will be compensated the same whether you use your coupons or not. As someone noted on SlickDeals, coupons are merely another form of payment, so just because your receipt has a total of 17 cents doesn’t mean that is all the store is being compensated for the product you purchased.

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Posted in CVS, Tips, Walgreens

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How to deduct 529 losses from your taxes

November 21st, 2008

I found this very interesting article on Marketwatch.com discussing the little known option of deducting losses on 529 plans. It is an interesting concept, and is quite logical.

Here’s the rundown: losses on a 529 are deductible to the extent they exceed 2% of your adjusted gross income. To be able to claim the loss, you would have to close all of your 529 accounts (the IRS views all of the accounts of a particular type as being one even though they may be held with different institutions) and withdraw the money and not reinvest it for at least 61 days.

Example: a married couple with an AGI of $100,000 has a $30,000 loss on their 529. $28,000 of that would be deductible ($30k less $100k*2%), resulting in a tax savings of $7,000 assuming a 25% marginal tax rate.

The idea works because 529s are funded with after-tax dollars (unlike 401ks and IRAs), and taxes and penalties only apply to withdrawals of EARNINGS not used for qualified purposes. If your account has taken a loss, there should be no earnings to tax. Because the contributions were previously taxed, you are allowed to deduct the loss on those contributions if they are realized.

Of course if you live in a state where you can deduct contributions from your state income tax return, this becomes a lot more complicated and you should consult a good accountant. You should also consult an accountant if you may be subject to the alternative minimum tax, as this would not qualify as an AMT deduction.

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Posted in College Savings, Taxes

Act now to manage your 2008 income tax return

November 17th, 2008

Attention campers! Your 2008 federal income tax return is due April 15, 2009. Start making your last minute preparations now!!!

Think I’m a bit premature in this warning? I think not. Although your return may not be due for another five months, your window for making last minute moves to manage your tax burden for the year is coming to a close on December 31, just a few short weeks away. For the most part, once we are in 2009 there is little you can do to reduce the taxes due on your 2008 return.

So what can you do to reduce the taxes due on your return? Here’s a short list.

1. Be aware of the tax law changes for this year. This will require a little bit of research, but I will share a few items that are of interest to me, many of which were cramped into the massive bailout bill approved a little more than a month ago.

  • The sales tax deduction is back! You can choose to deduct either your state and local income taxes or your sales taxes on your return, but not both. The sales tax deduction was brought back a few years ago but had expired at the end of 2007 before it was included in the bailout bill. For those of us in states that don’t have an income tax, this is a huge break. For my family here in Texas, the deduction is about $1,700 for 2008 since our combined state and local sales tax is 8.25% (if we were itemizing).
  • For the first time I can remember, there are extra deductions available for people who do not itemize. The one that will apply to the most people is that a married couple filing jointly can now deduct up to $1,000 for property taxes paid ($500 for single filers) and add that amount to the standard deduction. I’m not sure how many people will benefit from it since those who would pay property tax usually also have a mortgage and thus a mortgage interest deduction, but for those with small or paid-off mortgages this could be quite beneficial. Thankfully we fall into this category since our mortgage interest only amounts to about $7,000 a year.
  • There were also changes to rules for claiming casualty losses in federally declared disaster areas. If you had a casualty loss due to a federally declared disaster in 2008, you only have to reduce the amount of your deduction by $100 (normal casualty loss rules require a reduction of both $100 and 10% of your Adjusted Gross Income). Additionally, this deduction can also be taken if you don’t itemize by simply adding the amount of the casualty loss deduction to your standard deduction amount. We had a few thousand dollars worth of damage from Hurricane Ike that our insurance doesn’t cover (stupid windstorm deductible), so again this is a benefit to us since the deduction would normally be wiped out by the 10% AGI reduction.

2. Max out those 401(k) plans! Yes, it probably stings just a little to do so after the massive losses most of us have seen, but consider that if you believe it will eventually go back up you are buying in when prices are at their lowest. Also remember that the more you contribute to your 401(k) the more money you are shielding from the blood-sucking IRS.

3. Consider selling off some losers in your stock portfolio before year-end. Almost all of us have stock that has lost us money this year. If you sell before the end of the year, you can use up to $3000 of the loss to offset other income lessening your tax burden. I’ll discuss it in more detail later this week, but if you have large losses in your 529 plans or Roth IRAs, you may be able to sell and claim those losses (net of a 2% of AGI reduction) as itemized deductions (note: if you plan to take the standard deduction, this doesn’t help you).

4. Either speed up or delay your other deductible expenses. This one requires a little more planning. I’ve discussed before about my tactic of bunching deductions, whereby you try to lump your deductible expenses in alternating years. For instance, last year I made all the charitable contributions I anticipated making in 2008 in the month of December 2007 (I believe in tithing my income to my church, so I have a pretty good idea that I will be donating and how much the donation will be) and also paid my property tax for 2008 before the end of 2007. This year (2008) I have not made any property tax payments (although I will make a $1,000 payment before the end of the year since I can increase my standard deduction) and I have not made any charitable contributions (remember, I made my anticipated contributions for this year in 2007). I have minimized my deductible expenses in this year so I can pay them out and claim them on next year’s return, maximizing the benefit of the standard deduction this year and maximizing the sum of my itemized deductions next year. Come January 2009, I will be paying the remainder of my property tax due and sending all of the household items I no longer want off to Goodwill and will happily claim the deductions on my 2009 return.

With the explanation of bunching deductions out of the way, let’s get back to the main topic at hand. If you are going to itemize for 2008, make sure you incur all the deductible expenses you can before year-end. That would include things like property tax payments, charitable contributions, and mortgage interest (you are typically allowed to pay one month in advance to claim the interest on your taxes, so go ahead and send in that January payment before year-end). If you are in a position where you can deduct your medical expenses (this is typically subject to a reduction of 7.5%), go ahead and incur as many of those expenses as you can as well.  If you are planning a major purchase like a car, consider making the purchase before year-end since the sales tax on some big ticket items can be added to the sales tax deduction amount in the estimation tables (of course, you can always use your actual sales tax paid if you feel like going to the trouble of adding it up).

These are just a few things to think about with regards to your taxes. Of course, you should consult your own financial advisor or accountant before making any moves for tax purposes. Although I am an accountant, I am not a tax expert, and even if I were everyone’s situation if different. In any case, good luck in achieving the most patriotic of goals an American can have: legally avoiding taxes!

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Posted in Taxes

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How much is a cell phone number worth?

November 14th, 2008

That’s the question I am asking myself at this point. I am currently with Sprint and my wife is on AT&T, and I was looking into porting my number over to AT&T and then putting the two lines on a share plan. My current monthly charge through Sprint alone is $38.49 plus tax, my wife’s monthly charge through AT&T is $30.79 plus tax. By combining the lines under a share plan, the cost would be $56.19 plus tax, a savings of $13.09 a month. Sounds great – sign me up!

Oops, there is a wrinkle in the story. Our cell numbers are in two different area codes in different states, and AT&T cannot combine the two lines with numbers based in different markets under the same share plan. If I wanted to do this through AT&T, one of us would have to get a new number. I don’t want to give up my number since I’ve been using it for about 7.5 years now, and my wife doesn’t want to give up her number because she’s used that one even longer and her family can call her cell from a landline without incurring long distance charges.

I was reading on Hustler $$$ Blog some hustling that is possible with Sprint to get freebies, so there is the possibility that I could convince them to give me free unlimited data (among other things) which would bring my bill down to $30.79 a month, meaning we would only be paying $5.39 more a month than having a share plan. The other difference is that we would each have our own separate pools of 450 minutes each (we’d only get 700 total on a share plan through AT&T) and I’d get to keep my data plan which wouldn’t be included in the share plan price. We don’t normally use that many minutes a month so that isn’t a big deal, but I do like the data plan.

So here’s the question: is keeping my old number, plus the convenience of the extra but seldomly used minutes and the data plan, worth the additional $5.39 a month (or put another way, $64.68 a year)?

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Posted in Savings, Tips

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Cutting Costs: My Dish Network Bill

November 13th, 2008

As evidenced by my last post on changing electric contracts, I’ve started looking at our monthly bills to see where we can cut costs and save some money. After effectively saving about $60 a month changing electric providers (after the one-time $69.99 early termination fee charged by my current provider), I set my sights on the satelite TV bill. We signed up with Dish Network prior to the start of football season last year, and at that point with all of the new customer promos and discounts we were paying about $30 a month. Since then all of the discounts expired and they raised the rate on our core package (and took away NFL Network from our tier, commie bastards!) , plus we decided that we needed to add the local channels, so now our bill is $47.99 a month before tax.

Looking at their website, I saw they were now offering an all-HD package that includes most of the channels we watch for $24.99 a month, with the local channels being $5.00 more. Seeing this would be $18.00 a month less than what I’m currently paying, I called to change my programming package only to be told that the all HD package was available to new, first-time customers only. In disbelief I asked to speak to a supervisor who indicated the same, and after checking the website more closely I see that is indeed in the terms of the offer. Although I’m still under contract until February, I told him that I was looking to cut costs which is why I wanted the all-HD package to lead him into a discussion on how we could bring the bill down. He of course at first tried to explore the idea of downgrading service which died quickly when I told him the main channels we watch are ESPN and ESPN2. I then asked the question that since my current package was the minimum that met my needs was there any way to reduce the price on that package. After a couple of minutes he came back offering to apply a discount of $5 per month for 10 months to my bill with no contract extension or change in programming. Seeing that I couldn’t really go anywhere until February anyway, I happily said yes and was on my way. Total time to save $50 was 14 minutes including hold time, plus about half an hour to review the all-HD package that I ended up not being eligible to get anyway.

One interesting thing the supervisor noted was that they were planning to have all of their channels available in HD by February 2009, at which time they plan to begin offering HD-only packages to existing customers. He couldn’t say whether they will have the same price points on the all-HD packages they are currently offering, but it may be a possibility to switch packages at that point.

If anyone is interested in signing up for Dish Network just send me an email and I can provide you with a referral offer for free activation, a $30 bill credit, and HBO and Starz free for 3 months. The only catch is it requires a programming commitment of 2 years and a qualifying programming purchase of $37.99 a month.

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Posted in Savings, Tips

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Time to re-evaluate your electric contract

November 11th, 2008

Here in Texas, we have this crazy thing referred to as a deregulated electrcity market. Unlike most other areas of the country where electric rates are heavily regulated by the state public service commission, here multiple providers are allowed to market electricity directly to consumers at whatever price they like, with a third party maintaining the lines and infrastructure.

Since contracts are based on current market prices, the rates fluctuate over time. For instance, in June I signed a one-year contract at a rate of $0.178 per kWh, which at that time was a very competitive rate. I had to sign because my previous contract expired and the alternative was to go to my provider’s month-to-month plan at about $0.25 per kWh.  

Since I signed my contract, the rates have come down significantly. Why? The majority of electricity is generated using natural gas, the price of which spiked over the summer and has since come crashing back down. I decided to look into whether the rates had fallen far enough to where it would make since to break my contract and pay the early termination fee of $69.95. I was shocked to find that the I could now get a two-year contract at a rate of $0.134 per kWh, a difference of $0.044 per kWh. Assuming usage of 1500 kWh per month (not a stretch in a 40 year old 2800 square foot home), my savings would be about $66 per month. In other words, I would almost completely make up for the early termination fee in the first month.

So if you were forced into a contract during this summer’s peak in electric prices, it would be a good time to re-evaluate your contract and see if breaking the contract makes since. In Texas, you can find the current offers in your area at PowerToChoose.org.

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Posted in Tips

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After a grueling campaign, America has spoken…

November 7th, 2008

A stormy period in our history is now over, and although I’m not pleased with the outcome I am hopeful that we can all move on together for the common good. You have voted, and it is official: “Ghost of Seasons Past” has won the second annual CECK pumpkin carving contest. As a reminder of what you have voted for:

#5 Ghost of Seasons Past – In memory of a fallen hero. Super was your game. Kitten was your name.

2008-5.jpg

It is uncertain at this point how our winner will govern, or if we will ever see a formal response to the dirty allegations of stencil use that were raised during the campaign. All we know is the following prepared statement from our winner:

“I would just like to thank the Super Kitten Nation for the support.”

For the record, my pumpkin was #7 “President Obama”, and only another four right wing nut jobs voted for my piece of political commentary. Here are the complete results:

1. #5 Ghost of Seasons Past – 17.5 votes

2. #6 Lucky – 6 votes

3T. #3 Mummy – 4 votes

3T. #7 President Obama – 4 votes

5. #2 Boogie Man – 3.5 votes

6T. #9 Bumpkin - 2 votes

6T. #10 Enforcer - 2 votes

6T. #11 Super Spider Pac Bat – 2 votes

9T. #1 Pumpkin Head – 1 vote

9T. #6 The X-Husband – 1 vote

11T. #4 Rocky – 0 votes

11T. #12 Les Smiles – 0 votes

Thanks to everyone for voting and congratulations to our winner!

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Posted in Off Topic

Reminder to vote! It’s not over yet!

November 3rd, 2008

Although I do stray from the topic of personal finance occasionally, I usually don’t write that much about my political views. However, considering the importance of this presidential election, I feel impressed that I should share my thoughts on the choice that we have in this election.

First off, don’t think this is decided by a long shot. Although the media has all but declared the election for Obama, the votes still have to be cast. There are many reasons to believe that the polls are wrong due to flaws in the polling process, including the massive number of new voters, the honesty of voters in responding to pollsters, voters that do not have traditional landlines, and general errors in sampling. Remember that four years ago most polls said that John Kerry was going to win, only to find George W. Bush winning at the end of the night. My point is that you shouldn’t allow the media to convince you that the outcome is already decided and to discourage you from voting. Your vote can make a difference.

Let me preface my other comments by saying I’m not overly impressed with either candidate. This is truly a lesser of evils situation. However, I have cast my vote for John McCain because I truly fear for our future under a President Obama. Here are a few of the reasons:

1. Undivided power – The beauty of our system of government is separation of powers which is intended to keep the government in check. But what happens when all three branches are controlled by the same party? There is little doubt that the Democrats will control Congress with even larger majorities, perhaps even passing the 60 member threshold in the Senate which could kill filibusters by the minority party. If Obama wins the Democrats will also control the executive branch, and considering that the next president will likely appoint at least two Supreme Court justices, it is highly likely that the Democrats will effectively control the judiciary in short order as well. That would leave no roadblocks to the Democrats enacting their radical policies, and even if there is a blacklash by the electorate in the 2010 midterm Congressional elections there is a lot of damage that can be done in a short period of time that could take generations to unwind.

2. Taxes – Sure the idea of 95% of Americans getting a tax cut sounds great, but who is to say that would actually happen? The Obama campaign can’t get it straight what the threshold for tax relief would be (Obama and Biden have been quoted at $300,000 on the high side to $120,000 on the low side), which makes me think that the threshold for those worthy of a tax cut will drop significantly after the votes have been cast. To pay for all of the new programs Obama has promised, those who actually pay taxes will see a significant tax increase. This will cause a prolonged economic slump, as those at the higher end of the spectrum lose the incentive to continue earning at such high levels, which will trickle down to the small business owners that depend on those people as customers.

3. Guns – The Democrats have for years tried to eat away at our second amendment right to bear arms, and if they control the Congress and the White House there will be little to stop gun control efforts. This could come as an outright ban or taxation to such a high level that it effectively keeps ordinary citizens from affording guns. If this happens there is little that the American people could do to defend themselves against a criminal element, or if things get too out of hand, an unjust government.

4. Defense – The Democrats have already openly discussed reducing defense spending at a time when we face so many threats to our national security. A weakened defense puts our sovereignty in jeopardy.

5. Socialism – Socialism is just wrong – period! And that is exactly what Obama is offering. Obama’s tax plan is a massive wealth redistribution scheme aimed at making the average American completely dependent upon the government for their livelihood to solidify their political power for generations to come. We are already seeing this in the proposals by the Democrats to do away with 401(k) accounts and invest those moneys in a government fund earning a 3% return. It sounds a lot like Social Security, and we all know how poorly that program has been managed. But it achieves the objective of reducing your ability to be self-sufficient and makes you more dependent on the government for survivals. Socialism has failed all over the world, and it will fail in the US as well. 

This is a very important election. I truly believe we are at a crossroads in our history, and the wrong choice here will change our nation forever. So make sure you go to the polls and cast your vote. The future of our nation may depend on it.

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Posted in News/Trends