Utilities

Money Lessons Learned From a Dysfunctional Phone System

December 28, 2011 By Jennifer Derrick 1 Comment

One of my clients (where a friend of mine also works in IT) recently upgraded their office phone system. The phone system they had was perfectly functional but, like so many people and businesses, they wanted something with more bells and whistles (and something that several of their competitors had). After taking bids, forking over the money, and getting everything installed, the new system has been nothing but trouble. It rarely works and even when it is working, it’s not able to reliably handle the call volume that they deal with. The poor IT staff has done nothing but work on this system for months and the “support” that was supposed to be provided by the seller has been unhelpful. Everyone who has to deal with it is fed up and wishing for the return of the old system.

While this hasn’t been my problem directly, I’ve certainly had to listen to my friend complain about it every single day for the last three months. In all of the complaining, I’ve picked up on a few money lessons that apply to both businesses and individuals.

The cheapest product/bidder is probably that way for a reason

Also known as, “You get what you pay for.” The company opted for the lowest bidder, as many companies and individuals do when choosing a vendor or contractor. The trouble is, the lowest bidder is usually cheap for a reason. In this case, the installation was faulty and the promised support never materialized.

The Lesson: When shopping for a contractor or vendor, do your homework. Don’t choose someone just because they’re cheap. Make certain that they will do the work you need and do it well. Find someone who takes the time to understand your unique needs, not someone who’s looking to make a quick buck. Check their references and look at some of their other jobs, if you can. Low cost is great, but if it’s going to end up costing you more in the long run to fix the resulting problems, choose another contractor.

Just because the Joneses have something doesn’t mean you need it, too

The main reason that this company opted for this particular phone system was because many of their competitors used it, too. That may seem like a flimsy reason for choosing a system, and it is. But this industry is dominated by appearances and the thinking always goes that if someone else has something and they are successful, then we will be successful if we have it, too.

The Lesson: Keeping up with the Joneses is almost always a bad idea. Whether you’re a business or an individual, buying something just because others have it is rarely a good idea. The item may not meet your particular needs, it may cost more than you can afford, and it may not be as good as the item it replaces. This is the case with phone systems, cars, houses, and anything else that you buy simply because someone else has it. The wiser action is to buy something only when you need it and do your own research to determine which product is right for you.

If you feel like something is off about a deal, you’re probably right

My friend told me before the deal was finalized that something seemed off about it. The price they were quoted was much lower than anyone else’s quote. The salesman was hard to reach and seemed to avoid phone calls. My friend recommended that they use another vendor. She was overruled by upper management and the low cost vendor was chosen, with disastrous results.

The Lesson: If something feels off in any sort of deal or financial transaction, listen to your gut and go elsewhere. Too many times I’ve tired to ignore that feeling and I’ve always been punished for it. I’ve learned through a lot of trial and error that if something feels wrong I’d better find another solution. Sure, you might miss out on something great, but the chances are that your gut is right and there’s something wrong with the offer.

Doing some research ahead of time can save a lot of trouble

Had this company taken the time to research this new system, they likely would have learned about the problems that other businesses had with the vendor. They would also have learned that this vendor does not make systems that scale well to the size of my friends’ business. Of course, they learned all of this after the fact. They didn’t do any research on their own and instead listened to the claims of the salesperson, who was in it only to make a sale.

The Lesson: Always do your research before entering into any kind of financial transaction. Make sure you know as much as you can about the provider, the terms of the deal, what other people have experienced with this provider, and make sure you read any fine print. If you have to get a lawyer involved to go over the contracts with you, do it. Make sure you know exactly what you’re getting and that the product will meet your needs and perform as promised. Never believe what a salesman tells you because they are not your friends. They are looking for a sale. Verify everything with independent sources. Doing your own research will save you a lot of headaches.

If you already have something that works well, keep it

The phone system that the company had before worked fine. It just wasn’t the latest and greatest thing. Now that they have the latest thing and it’s a disaster, everyone wants to old system back.

The Lesson: Don’t get rid of something that works perfectly well just because there’s something newer out there. It’s one of those, “Better the devil you know…” situations. Sure, your current item may not be the greatest, but you know that it works and you might even know how to fix it already. A new item is always a gamble. It might work great, but it might also be a total lemon that makes you yearn for the item you discarded. Keep what works until it stops working or until you have a justifiable need for something else.

This experience with this phone system has taught this company a lot of valuable lessons about how to hire and work with contractors. They’ve learned the hard way that upgrading for the sake of upgrading can be a risky and costly strategy. Maybe next time they’ll think twice before deciding that they need something just because the competitor up the road has it.

(Photo courtesy of Peter Kaminski)

Save Money While You Sleep

June 28, 2011 By Jennifer Derrick 3 Comments

You probably don’t think that the hours you’re sleeping can possibly cost you that much. After all, everyone’s in bed, everything is off, and no one is out shopping. But the truth is, the overnight hours can be costing you hundreds of dollars per year and you might not even realize it.

The biggest culprit is vampire power drain. All of those electronics and appliances that you think are off are still drawing power whether they’re on or not. To combat this, you can unplug everything or use power strips to make turning things off as easy as a flick of a switch. There are other money suckers at night, as well, including lights that are left on, A/C or heat units that are left running at daytime temperatures, and leaking or running plumbing fixtures. Here’s a quick routine that I go through before bed each night to make certain that my sleep time isn’t costing me any more than it has to.

Check outdoor lights

After I bring the dog in from doing her last business of the day, I quickly check to make sure I’ve turned off all the outside lights. If you like to leave an outside light on for security purposes, look into motion detectors which will only turn the light on if someone is in the yard, or look at solar options. At the very least put your outside lights on timers so they go off in the morning without you having to remember to turn them off. Outdoor lighting left burning all night, particularly floodlights, can add a pretty penny to your power bill.

Check faucets, toilets, and sprinklers (And the ice maker!)

I quickly check each sink and toilet as I pass the rooms to make sure that they are fully off and not leaking. Sometimes people in the house are guilty of not getting things all the way off and a little drip can mean a big water bill later. If I’ve been using the sprinkler outside, I check to make sure it’s off. Also check your ice maker, if you have one. I turn mine off each night. I used to leave it on, but one morning I came into the kitchen to discover that it had malfunctioned overnight, had run all night, and left an enormous puddle of water all over my kitchen floor and inside the freezer. Ever since then, I turn it off at night and when away on vacation.

Turn off lights and electronics and unplug everything

As I go room to room, I turn off all the lights and unplug unnecessary items (or flip off the power strip). I power down and unplug the computers, as well. Yes, it takes a little time to boot in the morning, but they continue to draw power even in the sleep mode. I also unplug any chargers. If the phone is charged, leaving the charger plugged in all night won’t increase the charge, it will only waste power. Once the charging is finished, I unplug the charger. I also look up and turn off any ceiling fans in unused rooms. They cool people not rooms, so using them at night is a waste of money. If you need night lights, there are LED options available that use only a tiny amount of power but give off a good glow.

Adjust the heat or A/C

In the winter, I turn the heat down to about sixty degrees overnight. Everyone is under blankets and in warm sleepwear so it doesn’t need to run full blast. In the summer, I keep the temperature around eighty during the day, but turn it down to about 75 at night. It keeps the house cooler, but since it’s night the AC doesn’t have to work as hard to keep it down. If you want to automate this chore, get a programmable thermostat.

This routine doesn’t take me but all of five minutes and it’s done as I’m heading to bed and passing each room anyway. I’ve estimated that the little bit of time I spend checking things and turning them off saves me about $30- 40 per month, or $360 or more per year. It might not seem like a lot of money, but for many people that’s a car payment, a couple of trips to the grocery store, or something fun that they wanted.

Pain Free Cost Cutting

January 11, 2011 By Jeffrey Strain 6 Comments

Over the years, I have called the cable company to reduce the amount of money my mom pays for her cable TV on a fairly regular basis. I just did it again this week and saved her $170 over a 6 month period. No matter how many times I tell my mom that she needs to do this when her cable rates increase when the promotional rate expires, she never seems to do it. There seems to be a lot of people that aren’t willing to do this. I’m not sure why since this is pain free savings.

One of the things I realised early on when getting my finances in order was that all types of cost cutting is not created equally when it comes to the pain it causes. This doesn’t seem to be intuitive to a lot of people. Many of my friends that I have helped over the years had assumed that cost cutting was the same no matter how they approached it and never considered that some ways to cut costs could be far more pain free than others. Whenever I am trying to cut costs for myself or to help others, I always go for pain free savings first.

If you want (or are forced) to cut the amount you are spending, it makes sense to start saving money where it isn’t going to cause any pain to your regular lifestyle. It is often surprising how much can be saved this way, and best of all it doesn’t entail any sacrifice. In order to do this, it’s important to understand the different cost cutting categories which exist since different categories will determine the amount of “pain” you are likely to feel.

Streamline to Pain Free Savings

When I need to cut costs, the first type I try to find is streamline cost cutting. Cost reductions found within the streamlining category are by far the best type of money saving tips to find since they cause no pain or change ones lifestyle. Streamlining means getting the exact same things you currently purchase for better price. It’s basically a tune-up of recurring expenses. Much like a car requires service over time to make sure it’s performing at its best, streamlining is doing the same with your spending by making sure that you receive the best deal for the product or services for which you are currently paying. You won’t change anything that you are currently doing or make any changes to the services you are receiving, but merely get a better deal on these.

The perfect example is my mom and her cable TV. She still is getting the exact same TV channels that she was getting before, but paying less for it. Another example of this would be refinancing your home mortgage with your current mortgage lender at a lower interest rate. Contacting your credit card company and getting a better interest rate on any credit card balance you have (studies have shown that it’s possible in some cases to have a credit card company lower the interest rate they charge simply by asking) would be another. In all these instances, the exact same service is received from the exact same institution, but the cost is reduced.

While the most obvious streamlining opportunities come from recurring services, they aren’t limited to services. It’s possible to streamline the cost of products you use on a regular basis as well. An example would be if you drink a couple of cans of cola each day and you go each week to the store to buy your supply for the next week at retail price. If you instead purchased a 3 month supply when the cola went on sale (most sales cycles come about every 3 months), you still get the same cola while reducing the cost of it.

Laziness and habit are the main nemesis of streamlining. There is a very good reason that the cable company offers a discounted price for a specific period and then raises the price once that time period ends. They know that most people are like my mom and will not call and ask for a better deal when the promotion ends. What this means is that streamlining is a never ending process that requires you to be proactive on a regular basis to make sure you are getting the best price for the things you are purchasing. The good news is that the better you get at streamlining, the more money you can save without changing your lifestyle.

Reasons Not To Have A Cell Phone

January 7, 2011 By Jeffrey Strain 15 Comments

I am probably one of the last people in the US that doesn’t have a cell phone. I don’t have a cell phone to protest in any way. I actually think there are a lot of interesting aspects to them. I have friends that keep telling me that I really need to get one so that it is easier for them to get hold of me. There isn’t an issue with money as I could easily afford one and it would fit into my budget of spending less than I earn. There are a few times a year when I think to myself that it certainly would be more convenient if I had one at that specific moment. The fact remains, however, that each time I have considered getting a phone I realize that I really don’t need or want one.

Over the years, I have gotten better and better at determining between wants and needs. I know this because I buy far less than I used to and find it much more difficult to find true needs. This wasn’t always the case. I was pretty efficient at rationalizing my wants as needs for a period of time. I think this is an issue that many people struggle with, but it certainly is much easier to make the determination between wants and needs when you know what makes you happy.

Getting cell phone isn’t simply a want versus need question in my case. While I do save money not having one and that savings allows me to do an extra week or so of traveling each year, I do have the money to get a cell phone if I want one. With this in mind, whether or not to get a cell phone becomes a question of will a cell phone provide the convenience that would make it worthwhile for me to purchase one? As I mentioned, there are always a few times each year that I think a cell phone would be really convenient (usually when I have planned to meet someone at a certain time and they aren’t there). If I only considered these inconveniences, I would almost certainly get a cell phone.

What keeps me from getting a cell phone is that I know myself well enough to know what would happen if I purchased a cell phone. I spend far too many hours already on the computer and a cell phone would mean that I would simply spend more time with a gadget rather than doing the things that make me happy. The fact is that I am much happier that people can’t call me whenever they want and that increased happiness far outweighs any inconvenience that not having a cell phone causes.

With this in mind and understanding how I would use a cell phone if I had one, I know that not having a cell phone is in my best financial interest. My feeling is that most people do not have a need for a cell phone, but society makes it quite easy for people to pretend that a cell phone is a need rather than a want. It would be very easy for me to justify needing a cell phone even if I didn’t have the money for one. I could argue that I own my own business and it is important for people to be able to get in contact with me (true — I just insist that it be done through email) to claim that a cell phone is a necessity. The fact is that just because I can justify it to others doesn’t mean that it is truly a need.

If you are currently in debt, I think that you should really evaluate your need for a cell phone. Once you determine whether or not it is truly a need, you then need to determine how much you really need to use it (my guess is very little) and the most appropriate cell phone plan for this need. If you aren’t in debt and have the money to afford a cell phone, I think it would be worthwhile to evaluate (much like I did) whether it makes you as happy as you assume it does.

Virtually everyone that I have explained the above of why I don’t have a cell phone thinks that I am absolutely nuts. Even after explaining the exact reasons why I don’t have one, they think that I am trying to make some type of protest, that I am being cheap or that I don’t understand all of the things I can do with a phone (again, one of the main reasons I don’t want one because I don’t want to be playing with it all the time). Despite the shakes of the head and the looks of disapproval, I am confident that I have made the correct decision for me. There may be a time in the future where a cell phone does become a need or a want that is worth paying for, but that is not the case as of this moment.

If you were expecting a list of reasons not to have a cell phone, here are five reasons to give up a cell phone

Leaky Toilet and Checking Utility Bills

September 16, 2010 By Wixx 1 Comment

I am sure that everyone who has ever tried to reduce their budget, whether it be to accommodate for a reduced income, or to help with debt reduction, has been told or read about cutting their utility bills. You may or may not have actually been able to shave money from your bills, but hopefully you tried. Switching to CFL bulbs, setting the thermostat lower in the winter and higher in the summer, taking shorter, cooler showers, and many other ideas should be saving you quite a bit each month.

But one of the most useful ways to ensure that your utility bills or as low as possible is to simply look at them each month. You will notice, of course, that your gas bill will be higher in the winter if you have a gas furnace. Your electric bill will be higher in the summer if you have an electric air conditioner. But what if your water bill were suddenly thirty percent higher than it was the month before? Would you know what to look for to explain this?

If this occurred in late spring or early summer, and you had added water to a swimming pool, I would not see this as an issue. If you had a child return from college for the summer, this could be explained by his or her bathing habits as well as an influx of clothes to wash. In my case, I do not have a pool in my yard, and the extra child that joined us at the beginning of the summer was a newborn. Now my wife was the one who noticed that the bill was substantially higher than the last month, and she meant to talk to me about it. She forgot. I found the problem on my own.

I was checking the progress of the construction on the house next door out my bathroom window, and as I turned to exit the bathroom, my field of vision caught something. There was motion in the water residing in the bowl of the toilet. Some of you probably would have only noticed that the lid was not closed, but I will move on. There was a slow trickle of water running down the inside of the bowl.
I immediately jiggled the handle and then took of the top to look in the tank. My first thought was that either the handle was stuck or the chain was twisted and the flapper ball, again some of you may know it as the rubber flap thingy, was not all the way down. Neither of these were the case, and water was still seeping into the bowl. I looked it up online and read that this is the most common toilet problem and thousands of gallons are wasted due to it.

A leak into the bowl is hard to detect as the water ends up going down the sewer and not collecting into easily seen pools on the floor. Also there are no drips to be heard as the water runs down the inside of the bowl. The tank will have to fill itself back up as the water goes out, but it is so slow that most of the time you will not hear it. The do it yourself websites that I found said to put dark food coloring in the tank and wait ten minutes or so to see if the color ends up in the bowl to detect such a leak. I decided that since I could see the ripples in the water, it was safe to skip this step.

The next step that I found after checking the chain and handle was to replace the rubber flapping thingy. They call it a flapper ball, but whatever. A new one can be anywhere from a cheap piece of most likely junk at $2.79, up to a bulkier thicker looking heavy-duty model for almost $8. These were the prices that I found at my local hardware store. I did not replace the flapper ball, because I am a money saving rebel.

I turned off the valve on the water line going into the tank. It is usually found on a small pipe sticking out of the wall right next to the toilet. Then I held the handle open until all of the water drained out of the tank. Using a couple of paper towels or shop clothes, wipe the flapper ball as well as the opening into the bowl that the ball fits in. The leak into the bowl is caused by the ball not being properly seated into the hole, thus allowing water to escape the tank and cost you money. Around the opening where the flapper ball sits was a layer of black slimy gunk, which is why I used a towel and not my hand to clean it. Once the gunk was removed, I opened the valve, let the tank refill and inspected for leaks. Now would not be a bad time to try the food coloring trick.

If the flapper ball is torn or very thin and worn out, it will need to be replaced. If it continues to leak after cleaning the valve and the seal (the flapper ball is the seal), you may need to replace it as well. The bottom line is that you may still have to spend a few dollars if you are not as lucky as I was, but identifying the leak and stopping it saved us $10 on the water bill. If I had not noticed the leak when I did, and if my wife never remembered to tell me that the bill suddenly got higher, we could literally have been putting $10 down the toilet every month for quite a while. As soon as I put the top on the tank, I immediately went to check the other toilet for a similar leak. My wife did remember to tell me about the rising bill when I bragged to her that I found and fixed the leak while her and the kids were at the pool.

Make Your House Save Money While You’re on Vacation

August 6, 2010 By Jennifer Derrick 1 Comment

Many people don’t realize that going on vacation can be a money saving exercise. If you’re careful, you can save enough money to offset some of the cost of your vacation. How does this work? While you’re not at home, your house is still spending money unless you make it stop. Here are some tips to make your house save money while you’re away.

Turn off and unplug everything that’s not critical

Unless it’s keeping things alive like a fish tank or keeping food from spoiling like a refrigerator, it can be turned off. Things like TV’s, cable boxes, and other electronics draw power as long as they’re plugged in, even if they aren’t on. Unplug them from the wall or turn off any power strips they’re connected to. (Bonus: You help prevent damage in the event of storms or electrical surges while you are away.) Double check outside lights, ceiling fans, alarm clocks and other easy to miss power suckers before you leave. Leave your answering machine and phone plugged in, though, so you get your messages, and leave a couple of lamps on timers for security.

Turn off the hot water heater

Find the breaker and pull it, or turn it off manually at the unit. You don’t need hot water while you’re on vacation, yet the water heater keeps on heating whether you’re there to enjoy it or not. Water heaters draw a lot of power, so one that’s completely turned off will save you big money.

Turn off the heat or AC, if you can

If you travel during temperate weather, you can probably turn off the heat or AC altogether. However, if you travel during periods of cold, you’ll need to leave the heat on to prevent frozen pipes. During extremely hot weather, you’ll need to leave the AC on to prevent things like medications, house plants, and food in the pantry from becoming too warm and spoiling/dying. However, you can turn the heat/AC way up or down to levels you wouldn’t like if you were home, thus saving at least some money.

Turn off the water

Turn off your water, either at the main shut off valve in your home or out at the meter. If you have any leaky faucets or toilets, they won’t drip while you’re gone and waste money (get them fixed when you get home, though). Also, if you do have a pipe burst or an ice maker go nuts, you won’t have nearly the cleanup problem (or the bill) that you would had the water been left on.

The special case of the refrigerator/freezer

If you’re going to be gone for several weeks, it may be worth it to turn off the refrigerator/freezer. Empty it completely and defrost it before you go to prevent unpleasant smells and water spills when you get home. Be aware that a refrigerator takes 24-48 hours to cool completely, so you may have to eat out for a couple of days until you can shop and bring your food home to a fridge that’s a safe temperature. If you’re only going to be gone for a week or so, the effort involved probably isn’t worth it. Do turn off your ice maker, though, to prevent it from making ice the whole time you’re gone or going haywire and leaking all over everything.

Use up all your perishables before you leave

Nothing wastes money faster than food that spoils and goes uneaten. Anything that will expire before you return needs to get eaten, put in the freezer, or taken with you. Plan meals during the week before you leave to make certain all your perishables get used.

Shut all blinds and curtains

Not only does this provide security, it keeps heat and cold out (or in, depending on the season), meaning your AC/heater won’t have to work as hard if you need to leave it on.

The simple act of not being home and using power and water saves a lot of money. However, you can save a lot more by using these simple ideas. We do all of these things before we leave on trips and over a week we usually save at least $50-100, depending on the season. That’s enough to pay for a night at a hotel or some meals out. You might save more if you have a bigger home or live in a less favorable climate than we do. We come home to much lower power and water bills, and that makes a vacation all the sweeter.