Your Next Cell Phone- Contract Versus Buying Outright

So unfortunately, the Frugal Rock Household just encountered the first unexpected large expense of 2016. My cell phone has been on it's last leg for a bit now. It's battery life has been waning for a while and would unexpectedly shut down when the charge was lower than 30%. Being a frugal lady, I just kept a charger on hand so that it was never low. In November, it fell out of an open pocket while biking and cracked the screen- but still worked! So I soldiered on- than recently I dropped it AGAIN (I know I'm still kicking myself) and this time the screen is truly done for.

I was not looking forward to this new phone purchase- I clearly have been putting it off for a while. I thought long and hard about going without a smart phone as I like the idea of being less attached to my electronics and the time-waster internet sites like Pinterest, Facebook, Buzzfeed, etc. There are days that between work and home, all I feel that I have done has been stare at screens. While I seriously considered going back to 1995 and living without my smart phone; traveling for work and the need to check emails pretty consistently between meetings during my day led me to realize that my dream of being smart phone free was likely unrealistic. (Sigh)

I am a fan of the iPhone and so if I needed a new smart phone, wanted to keep all of my apps and contacts easily transferable. The big question for me was whether to a do contract of purchase the phone outright. Now we often don't think about this- but when you purchase a phone through a carrier it is often highly subsidized by the carrier. Most cell phones are expensive- which in a way makes sense when you think about all the things we now expect our phone to do. Our mini pocket computers make calls, but they do much more than that now. Cell phone companies and producers, like Apple, market the next big change in phones in a way that leaves many consumers rushing out to get the next phone.

To make the purchase more palatable to consumers, they will charge you an upgrade cost and tack on an additional monthly payment to your bill. This makes it much easier to manage for monthly payments- and helps consumers avoid noticing how much their phone actually costs. This is a time tested marketing trick used by car dealerships, furniture stores and the shopping network. $30 a month doesn't seem bad, but really it's a payment plan for your phone. To give you some perspective, the current base IPhone model, the 5s, with the smallest amount of memory, retails for $450, other phone varieties can sell for between $600-800 to purchase outright.

 Now does buying it outright save you money in the long run? Short answer is: it might. The answer varies depending on your carrier. As an AT&T user, they no longer do contracts, so I didn't have to worry about the need to avoid signing another contract. If I was with another carrier, I would have been even more likely to buy outright to avoid having to get locked into another round of contracts for services I may not need. By buying outright I did avoid a phone upgrade charge, but this amount, while saved money, was pretty small- I believe our sales person said $20.

Being aware of how much you are actually spending is one of the first steps towards being a good consumer. It also gave me a different perspective on taking care of my phone. I probably shouldn't feel this way- but I will likely take care of my phone differently thinking of spending hundreds for it, as opposed to just a few bucks a month.

Introducing: A Frugal Household Rule of Frugality:

If you can't buy it outright- you can't afford it. Yup- if you can't see spending $600 outright for a cell phone, due to draining a bank account, I would hold off on that new phone. Now there may be reasons to re-sign a contract or do a payment plan depending on your plan and your phone company's current specials. You may get a deal that way depending on the carrier/time of year, BUT if buying it outright would create a hardship for your monthly finances, it's time to reprioritize, possibly buy a cheaper phone or wait to upgrade.

 Have you ever bought a phone outright or found a good deal on a cell phone? Would you ever consider purchasing your next phone outright?

 



Get Your Green's- Can Veggie Gardening Save You Cash?

                                       

Me: It's March 1st- that means it's time to think gardening!

Mr. Frugal Rock: Wait, what?! In the snow?

Last summer, I had my first raised vegetable garden...with some mistakes. One thing I learned that broccoli isn't easy to grow well. From one avid gardener, I was told that I watered them too much- from another I heard that I planted too soon. Seems like every gardener has an opinion. Either way, I'm hoping for a rematch this summer: Mrs. Frugal Rock versus broccoli. I did learn that zucchini, and beans do well- not to mention beets and radishes. Even two watermelon grew...much to my surprise..

So why start thinking about summer gardens now? First of all, spring is coming fast. To help reduce costs, I grow seedlings indoors starting 30-60 days before they need to be planted outdoors. Buying seed packets only costs less than 2 bucks for a lot of seeds. It's also easier to find greater variety of what type of plants or vegetables you want to grow. In the summer months, if you go to a big box store, they may have 1-2 varieties of cucumbers, but online there are TONS of different seed varieties to choose from. Don't want to grow indoors? You can always purchase plants from any garden store in May or June, but prepare for a higher price.

Here in the Midwest, where the Frugal Rock calls it home, May 15 is the general rule of thumb (green thumb hopefully) for outside planting. That means March 15 is my first day of indoor planting for anything that needs a long germination time. Last year, while I grew a lot of veggies, I didn't pay any attention to the actual quantity grown or how much was saved on groceries during the summer months. Anecdotally, I believe that we saved funds during the summer months, based on what felt like lower grocery bills but alas, scientific it was not! At the very least, it was nice to grow food for ourselves confident that they were free of pesticides, but this year I'll have my spreadsheets ready to go to see how much it cost versus saved. I love me some spreadsheets!

On a side note, for anyone out there with gardening interest, I use the square foot gardening method to maximize my growing space. This technique is where you plant each vegetable in it's own square foot of space (some veggies like carrots you plant 10-15 in a square, where others take up the whole square, or even multiples). I had an eight by eight space last year, and this year, I'm hoping to drastically expand that. It didn't take too much convincing of Mr. Frugal Rock to get rid of more of our grass for garden space. We have been slowly decreasing our grass space since moving into our home by adding a patio/pergola, some bushes and a raspberry patch, but I love of the idea of eliminating mowing, and using our yard space for our very own garden.

Here's the list of veggies I want to grow this year:

Tomato's (hope to make salsa this year)

Jalapenos

Onions

Beans

Radishes

Beets

Zucchini

Lettuce (a few varieties)

Carrots

Peppers ( a few other varieties)

Eggplant
Yellow/butternut squash

I plan to keep track of my spending all the way through, from the seeds I germinate, to the plants I buy. What I'm hoping to learn is whether the amount of vegetables I grow offsets my costs. Basically, if I grow enough that it saves me enough to justify the costs. Now of course there are other reasons that I began to enjoy gardening other than just trying to save money. I love spending time outdoors in the summer months and have always felt most content when working outside. The physical exercise is a bonus too, but I'm curious if an argument can also be made to garden for food to save money. Get ready for some veggie gardening- Frugal Rock style- as I try and answer the question, can a veggie garden save you money??

PS. I literally jut saw this garden bean tunnel online, and I'm in love!

Ways I Cheap Out and Blame It on My Parents

Recently, I was doing some reminiscing with Mr. Frugal Rock and was waxing romantic (rambling) about my childhood when I mentioned something that my family did that I thought was totally (or mostly) a funny quirk about 80's and 90's families- like everyone wearing the same clothes in family pictures, or the desire for beanie babies. Some weird items must have been in the water that made us all go collectively crazy about these things... BUT it turns out it was just a funny, frugal quirk about MY family. Frugality was a household norm when I was a kid, and it's not a surprise that this imprinted on me (Thanks mom and dad!!). 

What happened to all the
beanie babies? Does everyone have
a hidden stash in their attic? Is there
a beanie graveyard somewhere?

I love me some research and I have been noticing more studies lately about kids and how they learn about money- both the good and the bad, and how it impacts behavior. Research has begun, unsurprisingly, to demonstrate that high debt loads of parents shows a correlation with poor child development and behavioral concerns. A recent paper, documented that this appears to be the case with what the study called 'unsecured' debt, or credit card debts (as opposed to home/student loans). Families who had a lot of credit card related debt, presumably have higher stress levels, which can result in impact on their children. This could be due to a lot of reasons- maybe parents with higher debt loads, are also working multiple jobs resulting in more time away from their families- but either way, the important take away is that money habits, even debt load, impacts children more than we think!

From looking online, it appears that more research can be done on the positive role of parental behavior on teaching kids about $$. While there are a lot of 'curriculum' ideas of activities to do with your kids around money, my gut is that it's the day-to-day interactions and behaviors that will help the most in teaching kids to be frugal adults!

While the Frugal Rock household, doesn't have any Frugal Pebbles (kiddos), I did round up my favorite financial lessons from my childhood of ways I learned about money- without knowing I was learning about money.

1. Avoiding Entitlement Traps

My parents would take us to the budget night at the theater ($2 Tuesdays, ya'll), but my siblings and I learned early that we would have to smuggle in cans of soda/candy if you wanted a snack. I learned fast that a sweat shirt held more soda cans, and that you should always wait until the movie started to pop the top (of the soda can that is). I still have been known to bring snacks to the theatre on the rare occasion Mr. Frugal and I go to the movies, much to his embarrassment probably. #noshame

#raisenetsorbust

Now I'm not advocating that you teach your kids to smuggle contraband or that you begin too, however there is value in teaching kids that just because something is available, doesn't mean they have to have it. This is true, even if you can afford it. Delaying gratification is a great life skill, no matter the age! We learned early to shop for deals, go on nights when events are more affordable, and that buying in bulk was cheaper than buying individually. A lot of lessons in one evening of family fun.

2. Saving is NOT optional

Birthday money? Graduation gifts? Christmas money from the grandparents? All great things, but there was a rule for as long as I can remember that 1/2 of the money was mine to do what I saw fit. I could spend all of it at the dollar store or candy store if my little heart desired but the other half went to my savings account. Non-negotiable- from birth through my teenage years. Even if it was $20, $10 went into the bank. Until I started doing the research for this post- I never realized how much of my personal finance skills was learned behavior! While the Frugal Rock Household is not at a 50% savings rate (see this post on our retirement savings habits if you're curious) but it's still a goal that I have. A common trend among early retirement folks is the high savings rates of 50%+ so I hope to move more in that direction.

3. Re-use: The Art of Hand Me Downs

My parents were into re-using before it was a trend. They really sold us on the fact that hand-me downs were cool and that they could save you money. I'm not sure how they convinced us of this- maybe it was the idea that all three of my sisters and I would pool all of our clothes in the same closet or that we got to 'shop' each others dresses for different events. Shoes and accessories could be purchased, but my parents would give us a deal- we could re-wear an already bought dress (often originally bought for over a $100) and they would pass along part of the savings of not needing to buy a new dress to us often about $40. If we declined, they were willing to take us out and purchase a new one, but no extra spending money for you! I distinctly remember wearing the hand-me down or thrift-ed dress and pocketing the cash.

 

In hindsight, this was a perfect strategy not only to keep the clothing costs of three teenage females in check, but it also taught a great lesson in the value of re-using what you already have. By passing along some of the savings, it made the benefit more real to us. To this day, I am much more likely to shop my closet when I have a big event coming up. I find myself looking forward to the challenge of whether I can pair something I already own in a new way, rather than purchasing something new.

So how do you teach your own family about finances? Looking back are there any money skills you learned without even realizing it?