The Addison Cafe

The other night I forfeited 2 hrs of my life by watching Indiana Jones and the Kingdom of Awfulness.  It was over acted, over plotted, and over effected (IMO). Even though I regret watching it, fortunately I don’t have a guilty conscience about how much I spent on it.  I went to Blockbuster to see what they had in stock and noticed that Indiana Jones was available. However, Blockbuster was recently kind enough to jack up their new release prices to 5 bucks.  So I pulled out the new G1 phone (shameless plug, see below post) and quickly did a search of Redbox.com to see if they had the movie in stock, which they did. For those of you that don’t know, Redbox is a relatively new way of getting dvds. It has been around for a year or two now but a lot of people still haven’t heard of it. Essentially, it is like a vending machine full of dvds. Most of them sit outside of a McDonalds, Safeway, Albertsons, etc. The best way to describe what it looks like is…a red box. Fancy that.

Here’s how it works:  All the dvds in the machine are new or recent releases. They are all 1 night rentals. And best of all, they are all only 1 dollar. If you procrastinate returning your dvd, it will charge you 1 dollar a day until you return it or until it has been 25 days, at which point it stops charging you and you get to keep the dvd. So if you manage to return it the next day, you will be saving 4 bucks on every rental compared to Blockbuster (that’s 80% off!). No membership required, no paperwork, no nothin’. Just a new way to rent movies and save some money while you are at it. Enjoy! 

Remember that high school crush that would send butterflies to your stomach? Not being able to sleep at night? Or the impossibility of focusing on anything else? Well, at 27, I am going through it all over again. Except this time, it is over a phone.  Enter the G1, a new smartphone collaboration between T-Mobile, HTC, and of course, the all-powerful Google. Finally, a genuine iPhone competitor has arrived.  Is it better than the iPhone? Yes and no. Setting biases aside, I would say they are on par with one another, each one has a feature or two that the other doesn’t have.  However, they both have huge, glorious touchscreens, 3g networking, and an application store where you can download incredible applications to your phone (these are the only 2 phones with access to a custom store that I know of).

How are they different? Well I won’t bore you with technical details; you can find a million of those online. But keeping in mind that this blog is finance related, there is one major difference I wanted to bring up: the price.  The purchase price is actually pretty comparable with the G1 being set at $179 and the iPhone at $199 (that is the new customer price with a 2 year subscription).  The difference comes in the monthly plan.

For my family plan with T-mobile, we have 700 shared minutes, 400 texts each, unlimited nights, weekends, and in-network calls, and on my line I have unlimited data. All for $90 a month.  For a similar plan on AT&T, that would be $130, without any text messages (although both lines would have data instead of one).  So by using T-mobile, I am saving $40 x 24months = $960 over the course of the 2 yr contract. Almost a thousand bucks for the same service! (AT&T won’t let you just add 400 texts on a family plan, you need to add unlimited which would be an extra $30 per month…an additional $720 over the 2 years).

Did I mention the G1 will scan a barcode on a product you want to buy and find you the cheapest price online or locally? Or you can hold the phone to a speaker and it will identify the song being played and offer you the chance to buy it on the spot? Those are a couple of my favorite applications… I could go on forever, but you can go here if you want to learn more. I just wanted to take a moment and share the love.

I try to always be on the lookout for ways to save big amounts of money. For instance, if you take the time to shop around, you can usually save money on things like car insurance, clothes, or furniture.  However, there is one eye-gouging expense that I have yet to find a cheap alternative to: the haircut.

For girls, it can cost as much as an extra car payment 4 times a year! Guys are another story. Guys on the other hand, only cost about 20 bucks a year. How does that work? 20 bucks is how much a baseball cap costs. In case you don’t want to want to go the hat route and you are wondering what it might cost, I used to pay 15 dollars per cut (that is the bottom end).  I have since forsaken the barber shop, gathered my courage like a man, and (gulp) let my wife start cutting my hair. Guys, for less than 40 dollars you can pick up a pair of clippers and do it yourself or have your wife or friend do it. If you botch it like the kid in the picture, revert back to plan A (the hat).

Ladies, I understand longer hair is harder to manage and you want to look nice. But is there a cheaper way to do it? I heard in college that Cool Aid can dye hair, will that work? If anyone out there has a money saving secret in regards to hair cutting, I am all ears (pardon the pun).

A quick story regarding haircuts…one of my friends has his wife cut his hair as well. Except that one time she forgot to put the blade guard on and ended up buzzing a strip down to the scalp like the kid in the picture. Rather than shave his whole head, he simply buzzed a symmetrical strip to match on the other side. The moral of the story is that if you decide to do it yourself, you might need a good sense of humor…

A couple of months ago I received a comment from a member that I wanted to respond to because I think her statement applies to a lot of us, or at least it will someday. This member wrote:

“You know how they say that “40 is the new 30.” Well, maybe we can say that if we are diligently working to improve our health, improve our thinking and living. However, when it comes to investing, saving, retirement the 40 something’s aren’t where they should be and I sometimes have the feeling that I am going to work until I’m way past 50 to take care of basic needs for food, clothing and shelter. I think lots of Americans are in the same situation. I’m a saver, an investor, but I still feel that life is passing by so quickly and I may not be in a good place to retire and enjoy life. There is a feeling of insecurity although we may be doing all the right things. . .”

There are two types of people (how many times have we heard that, ha); those we save/invest in their future and those who don’t.  Warning: If you are the type of person who doesn’t save or plan, watch out. Someday you will realize the mistake you made and at that point it will most likely be too late. I know one person who always spent every dime he made, bought new cars, etc…He is now 70, still working (even though his body will barely let him) and he is buried in debt. Nobody wants to claim bankruptcy at 70.  Another good example is a close friend of mine. She recently called me excited because she finally paid off years of credit card debt. While that is great news, the down side is that she has nothing to show for the last 10 years of work.

However, the above quote affirms the reality that even when we do save, often times we still don’t feel that secure. Houses burn down, people get cancer, and dogs get sick (read previous posts for more on that one). Life is not easy. Contrary to what Hollywood tells us and promises of the American dream, the majority of us struggle on some level, at some point in time.  Not to mention that the older we get, the harder it is to overcome obstacles and the shorter amount of time we have to save. I feel odd bringing this up now, since at 27 I still have that deceptive “invincible” feeling, but I am certainly not getting younger (are your joints supposed to ache at 27 when you get up in the morning??).  I wanted to list 3 important things you can do to help offset worries about the future:

1. Have an emergency fund. You’ve probably heard that before, but we never know what will happen to us. Will you have your job tomorrow? Lose your house? Get sick? Experts recommend saving 3-6 months of living expenses in case of emergency. This seems like common sense, but sadly most Americans don’t even have 500 bucks saved.
2. Get supplemental insurance. Companies like Aflac (I have heard amazing stories from their customers) let you choose what you want to insure yourself against. Cancer, pregnancy, accidents, hospital stays, etc.  It is relatively inexpensive and can save TONS of money in the long run. I must confess I don’t currently have any supplemental insurance but it is something I should look into.
3. See a financial advisor. To a lot of people that sounds daunting. Like only people who own yachts and have personal lawyers and CPAs could have a financial advisor. Nothing is further from the truth. This is one of the most critical things you can do to help ensure a sound financial future for yourself.  I started seeing one at 22 when I made 8 bucks an hour and could barely save anything. Most advisors give you a no-cost consultation as well (I only pay 40 bucks a year for the one I use, and I make a lot more than that on my investments, at least until recently!). Just tell them how much you want to have and what age you want to have it at and they will run all the numbers and help you put a plan in place. We are privileged to have in-house advisors at Addison Avenue who are available by branch or phone. If you have never talked to an advisor before, there is no better time to start than today. (877-Addison or request a consultation online here)

Prepare for your future now. You never know what tomorrow holds.

“The sky is falling.” That was the line that made Chicken Little famous. After an acorn fell and hit him on the head (in the original story), he thought the world was coming to an end. That is the same thing that a lot of people are crying right now. With the stock market down, banks (note: I said banks) going under, and the government fighting over what to do, it is understandable that there is concern in the public eye.

However, there are some things that should give us peace of mind. For instance, the government seems to have learned from past recessions and depressions and have created certain safeguards to help prevent against a major market crash. An example of this would be what they call “circuit breakers”. If everyone starts to panic and sell and the market drops too drastically (below a pre-determined amount), the system will simply shut down for a period of time to guard against a collapse.

There is another important key to having peace of mind during this period of economic hardship: credit unions.  Most credit unions have had the common sense to not underwrite bad loans out of greed. We have continued to put people first, instead of our own pockets. Without getting into the accounting and financial jargon, I will dumb it down by saying that Addison Avenue is doing VERY good.  If you belong to Addison Avenue, you can sleep well at night.

The sky might be falling in some neighborhoods, but not in ours.