Farnoosh Torabi's Blog, page 55

Study: Feeling Sad Will Cost You

[image error]There’s an intuitive link between mood and finances. For example, it’s pretty obvious that having limited resources can make you blue, but a recent study finds the inverse is also true, that being sad can lead to less money.

Researchers at the Harvard Kennedy School of Government and Columbia University conducted a study to see what kinds of financial decisions participants would make when exposed to depressive stimuli. After showing participants sad videos, the researchers observed they made financial decisions reflecting what’s called “present bias,” or in other words, they made choices that would have positive effects in the short term but cost in the long run.

In the report, published in Psychological Science, the researchers explain, “These experiments, combining methods from psychology and economics, revealed that the sadder person is not necessarily the wiser person when it comes to financial choices…Instead, compared with neutral emotion, sadness — and not just any negative emotion — made people more myopic, and therefore willing to forgo greater future gains in return for instant gratification.”

Some advice?

Sleep On It

Hold off until you’re of sound mind before making any serious financial decisions. Most likely, whatever it is – it can wait. If not, seek the advice of a professional for major decisions, family or friends if it’s minor. Overall the benefit of an outside opinion should help you see past the immediate benefits and toward the bigger picture.

Keep Checking in Check

In a previous story, we discussed ways to spend less that and some bear repeating when it comes to delaying gratification. For starters, budgeting apps Mint, MoneyWise and iWallet  can help set financial goals and stick to them no matter your mood. They come equipped with alerts you can program to stop you from acting outside of your goals.

Carry Cash

Next, carrying cash may be inconvenient — but that’s the point. Retail therapy is a crux and common spending mistake. To avoid it, Go to your bank’s ATM once a week and take out enough money for your weekly spending. It’ll make you think twice about each and every purchase, so you’ll limit splurging when you find yourself in a sudden funk. Ultimately, studies show we save up to 20% when adopting a cash diet.

CBS: Black Friday Strategies

This morning I stopped by the CBS Early Show with some Black Friday shopping strategies to make the hectic day just a bit easier.

Devise a Game Plan

As we know, it’s important to plan a budget, make a list and stick to it. But beyond that, there are other tricks to spending smart and efficiently. For example, invest a little bit of time to learn the store’s layout in advance. The more time you spend wandering around looking for this year’s hot Elmo, the more likely you’ll find more random items to throw in your cart. Retailers like Wal-mart, Target and Home Depot offer in-store floor plans as an added feature to their free mobile apps. Also, zero in on items that are truly deals – and nix the others (more on that in a second). Finally – and perhaps, most importantly – limit your distractions by leaving the kids at home with a sitter.

What to Buy

Some electronics will see steep discounts on Black Friday, specifically tablets. In years past, HDTVs were the hot item. This year it’s the iPad, Kindle, Nook and Samsung Galaxy, among others. Other items worth placing on the BUY list: winter accessories, video games, DVD’s and must-have items that are likely to sell out the closer you approach Christmas. Also: consider brands that rarely offer discounts except for on Black Friday – such as Apple and Dyson, whose offering a rare 25% off all its fancy-shmancy vacuum lines.

Bank on Your Smartphone 

There are some great apps, including Red Laser and Shop Savvy, which can help you compare prices on the spot, so no need to drive around town looking for the best deals. When you scan a barcode, the app searches for competing prices at neighboring stores. Find a better deal somewhere else and ask the floor manager to offer you a price match.

Save With Discounted Gift Cards

Save an extra 10-25% by purchasing discounted gift cards through sites like Gift Card Rescue and Plastic Jungle, which guarantee the face value of discounted cards sold on their sites.

Gift a Daily Deal

Head to Groupon, Living Social and other daily deal sites to purchase the gift of an experience (restaurant, travel, etc.) at a substantial discount. And while you’re online – don’t forget to take advantage of exclusive offers available on retailers’ Twitter and Facebook pages. “Like” or follow a retailer and you may learn about some additional deals and discounts.

What NOT to Buy

Stay away from high-end electronics. Name brand TVs for example aren’t at their best price this time of the year. Better to wait until  January and February after the annual Consumer Electronics Show when retailers typically unload the previous season’s inventory at a fraction of the price. Toys will also be marked lower as we approach Christmas, though if your child is holding his breath for something in particular, snatch it when you can. Another no-no on Black Friday: jewelry and watches. Gold prices are currently sky-high and you can usually find better jewelry offers in the spring. Finally, when it comes to apparel, shopping site Deal News estimates there will be about 27% more clothing deals come Cyber Monday, so wait if you can for more selections.

Door Busters? Eh…

You know as well as I that door busters are just meant to lure us into stores. You may have your heart set on getting that 80″ HGTV for $200, but it’ll likely be gone by the time you get there. Not that I’m saying you shouldn’t try, but unless you’re willing to ditch your family early on Thanksgiving night (as stores like Wal-mart & Target are opening up in the late evening) – and put up a possible elbow fight – don’t be disappointed if you face slim pickin’s.

 

6 Gifts Your Guy Will Hate

Picking out the right holiday gifts for loved ones is challenging enough, but when it comes to the man in your life, finding that “special something” can be especially tricky. Here’s a list of gifts that your man will, most likely, hate. Read more here.

As always, we want to hear from you. What are some gifts you regret getting your guy? Connect with me on Twitter @Farnoosh, and use the Hashtag #FinFit.

Unexpected Health Care Benefits

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Discounted yoga and massage? Free screenings and classes? Subsidies for LASIK and teeth whitening? Sounds too good to be true — but actually, there are a multitude of health insurance benefits available to members designed with preventative health and wellness in mind.

Additionally, under the Affordable Care Act effective in 2014,  employers will be able to reward employees who participate in wellness programs (and penalize those who don’t).  So even if you can’t — or aren’t — taking advantage of these benefits currently, expect to see changes in the coming years.

Even now, you may be surprised what’s covered under select plans:

Discounted Massages 

A one-hour, stress-busting orthopedic or therapeutic massage at Massachusetts Blue Cross Blue Shield participating facility Boston Bodyworker is normally $115, but the 25% insurance discount makes it $86. No documentation of any medical condition is necessary to get coverage.  Check with your health insurance company to find out if you have similar benefits.

Gym Reimbursements

More than 60% of large companies, and a quarter of small companies, offer some form of reimbursement or discount on gym memberships.  For example United Health Care plans include a 10-50% discount on specific health club memberships. If your gym costs $60 a month, a half-off discount will save you $30 each month.

Free Yoga

Blue Cross Blue Sheild and Oxford are two health insurance companies with wellness programs that have a way to get reimbursed for fitness — specifically yoga — and the forms can be downloaded directly from their site.

Discounted Acupuncture

More and more insurance companies are covering acupuncture these days but if you don’t have benefits, you may have what’s called an “affinity program”. This is an arrangement your insurance company has with certain acupuncturists to offer members discounted treatments (usually 20-40% discounts off regular price).

Weight Loss Programs

Though coverage for programs like Weight Watchers and Jenny Craig are not the norm, expect to see this change. One benefit now available through Aetna to Kraft Foods employees, for example, offers a 30% discount on these weight losss programs, bringing the cost of one popular plan down to $139 from $199.

Gastric Bypass Surgery

If your body mass index is 40 or more, or you have health problems like respiratory issues, diabetes or high blood pressure brought on by obesity, you may qualify for coverage for a gastric bypass gastric banding surgery. Surgery costs an average $20,000, so your deductible could be $500 and if your co-pay is 30% (or, around $6,000), you’ll pay about one-third of the cost.

‘Lifestyle’ Reimbursements

Look for free classes and screenings like health and nutrition classes, blood pressure screenings, bone density screenings, BMI measurements (Body Mass Index), and more.  Under Blue Cross Blue Shileld’s “Fit & Healthy” lifestyle benefit that includes flexible spending, LASIK eye surgery, teeth whitening (as long as the service is provided by a licensed dentist), toddler programs (like gym and swim programs) and even driver education can be reimbursed up to $300.

Armed with the knowledge that employers and health insurance companies are starting to recognize the benefits of preventative health and wellness, you can research what’s covered under your own plan currently, and soon-to-be benefits coming in 2014.

Photo courtesy of Flicker/Tax Credits

Retailers With Best Customer Service

[image error]The holiday season offers memorable moments with family and friends, but can also be quite stressful while checking things off our shopping list.  From lengthy lines to complicated returns, the retail experience can quickly put a damper on “the most wonderful time of the year.”

To help, research firm STELLAService has completed a report highlighting the retailers with the best online and phone customer service. Since many of us will be making purchases over the web, the survey is welcome news. As we know, it’s often best to do as much of your holiday shopping from home to save on gas, easily compare prices and avoid the headache of long lines.

The research found average delivery times of just 3.5 days, around 8 days to process a return and over-the-phone delays of less than four minutes.

 

The top five fastest shippers are Zappos.com (2.0 days), Newegg.com (2.3 days), HPShopping.com (2.5 days), Amazon.com (2.7 days), and Gap.com (2.8 days). Among the 25 sites surveyed, the average delivery time was 3.5 days.

 
For speedy post-holiday returns and refunds, the top fives retailers are Amazon.com (4.3 days), Bestbuy.com (4.7 days), LLBean.com (4.7 days), Apple.com (4.7 days), and Williams-Sonoma.com (4.7 days). On average, customers can expect to wait 8.1 days for returns and refunds.

 
On the busiest shopping weekend – Black Friday through Cyber Monday – customers can count on the following five sites for the shortest phone hold times (MM:SS): Nordstrom.com (00:18), Overstock.com (00:44), LLBean.com (00:46), Zappos.com (01:09), and Target.com (01:18). The average hold time was 03:54.

For more on how to ensure smooth online transactions this season, I spoke with STELLAService’s Director of Content Ty McMahan. Here’s some of his advice:

Hop on Live Chats and Social Media

If you’re a consumer with questions about customer service, policy and other factoids quickly, McMahan suggests skipping the customer service phone lines or trying to navigate the site, itself. To get speedy information, a little-used tool is the live chat service offered on many retailer websites. McMahan says it’s easier than navigating pages for frequently asked questions. Best yet, there are no long lines.  Twitter is another platform that often yields speedy responses to customers. “Follow your favorite retailers on social media during the holiday season,” says McMahan. “Most of them are monitoring customer relations on outlets like Twitter and sharing special deals.”

Take Advantage of Free Shipping

“Free shipping is becoming more of the rule. Don’t pay if you don’t have to,” says McMahon. Check FreeShippingDay.com for a list of participating retailers on Free Shipping Day on Dec 17. McMahan suggests adding all of your items to online shopping carts and waiting to purchase them on that day. The same goes for return shipping. “More and more companies are making the refund process really smooth by providing prepaid, adhesive shipping labels. When making a return, be sure to request one,” says McMahan. It will save you the headache of printing, taping and paying for postage.

Reserve In-Store Pick-Up

Another way to possibly avoid shipping costs is to opt for in-store pickup when checking out online. It’s a commonly overlooked service offered by major retailers including Best Buy, JC Penny and Toys “R” Us.  And it’s usually free.

Photo Courtesy,  fivehanks.

Secrets from the Garage Sale Millionaire

As the saying goes, one man’s trash is another man’s treasure, and Aaron LaPedis is living proof. Over the years he’s been so successful buying and reselling other people’s unwanted items, he’s earned the nickname The Garage Sale Millionaire and even written a book about it.  His most recent gem: photo negatives of Elvis Presley’s famous appearance on the Ed Sullivan Show — the one where Sullivan told him he couldn’t shake his hips — that he hopes to sell for six figures.

I recently visited LaPedis in his hometown of Denver to learn how to spot valuable items. Read more here.

As always, we want to hear from you. What’s your most valuable garage sale find? Connect with me on Twitter @Farnoosh and use the hashtag #finfit.

Holiday Buying Guide: Tablets

[image error]For some time the Apple iPad was the hottest tablet in town. While it still holds a majority of the market share (50.4% to be exact), competition’s been heating up with now more choices than ever.

The Microsoft Surface was released last week, making it the latest in a series of tablet devices on the market. Not to be outdone, within days Apple launched its iPad Mini. Such competition has driven prices down – good news for the 59% of consumers who’d rather receive a tablet than a laptop under their tree this year, according to a recent survey from PriceGrabber.com.

But if one of these handheld gadgets is on your holiday shopping list – whether for you or a loved one – how to determine the best buy? Here’s a crib sheet to help you compare devices.

Pick Your Price

The Apple iPad (4th generation,) Apple iPad mini, Google/Samsung Nexus 10, Google/Asus Nexus 7, Amazon Kindle Fire HD (7″), Microsoft Surface RT and Barnes & Noble Nook HD are likely to be the most popular devices this season with the iPad leading the way. The Nook, Nexus 7 and Kindle Fire are the least expensive at a starting price of $199. The iPad and Surface are the Cadillacs of the bunch with a starting prices of $499. That’s a wide range.  Leading your shopping with a comfortable price point in mind may quickly narrow down your best options. Keep in mind: what makes devices more expensive is often larger screens and Internet connectivity. Microsoft’s Surface comes with a keyboard - giving it some added value.

What’s the Need?

To better filter your options, ask yourself what you’ll most likely need (or want) a tablet for. For example, are you looking to use it for mostly reading? watching movies? surfing the web? storing data? All of the above? While a more expensive item like the iPad will cover pretty much everything, you may be able to save by opting for a tablet with fewer features. For example, the iPad 4 gives you a minimum 16GB of storage and the Nook just 8GB. The Nexus 7 and Kindle Fire don’t have rear cameras, while the Nook is the only device to have no camera at all. For the same price as the iPad, the Surface offers twice as much storage. It also has twice as much memory as most others tablets. For an e-reader and some web browsing, the Nook and Kindle might be sufficient, but if you’re interested in using your tablet like a computer or to enjoy media, the more expensive options have an advantage in storage and speed.

Consider the Experience

What also helps to differentiate the myriad devices is the general experience of ownership, the small – though not insignificant – matters of preference. For example, the less expensive devices weigh less and are smaller on average – ideal if you plan to carry it with you on-the-go. And thanks to its market share, owning an iPad means access to some 275,000 apps and tons of accessories made just for the Apple tablet. Other devices are not as adorned. These seemingly minor factors go a long way in the overall use of your device day to day.

Get an Expert Opinion

Is your head swimming with tech talk? Luckily, sites across the web like Mashable, PC World, Tech Crunch and Popular Mechanics have compiled easy comparisons and reviews of the most popular devices. Another tip: check out reviews on Youtube or take a trip to your local electronics store to see the tablets in action, side by side. Finally PriceGrabber and other price-comparison sites are useful in comparing detailed specs beyond the naked eye.

Photo Courtesy,  tribehut.

#AskFarnoosh: Online Banking Thoughts

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@danielsequeira on Twitter asks, “What are your thoughts on ING Direct-type banking?”

Hi Daniel,

Full disclosure – I have an ING account. I opened one in 2006 as a supplement to my brick and mortar bank savings account for the following reasons 1) a relatively higher savings rate, great for rainy day-type goals 2) convenience 3) difficulty to withdraw on a whim. Without physical ATMs – and for a while, without a linked debit card – it made it hard to withdraw money from the account. I’d have to make transfers to a traditional bank, which could take 3 days or longer, ensuring fewer impulsive moves. Even now that I have an ING debit card, I’ve tossed it in the junk drawer.

Years later, all these perks still prove true. My ING Orange savings account earns a whopping 0.75% per year with no fees or minimums – which is slightly better than what a brick and mortar bank account might earn these days. In general, online savings accounts top out at about 1.05%, according to Greg McBride at Bankrate.com. The average yield of a traditional savings account is around 0.08%. Check out Bankrate.com for its free search engine to find the best rates on banks in all 50 states.

All the while, I’ve maintained my accounts with physical banks, in case I need to speak with a teller or bank associate in person. “People dealing often with cash and those that want interaction with a teller should bank in person with a traditional institution. But those customers are the exception, not the rule,” says McBride.

In my opinion, by utilizing online and brick and mortar bank accounts, you get the best of both worlds.

And just FYI, ING was bought by Capital One recently and come February, its new name is Capital One 360. But not much else will change. You can learn more about the transition here.

 

5 Ways to “Trick” Yourself Into Saving

[image error]Saving money is synonymous with flossing. We know we should do it, but it pains (and bores) us to do so – and we rarely make the effort. 

So to make life easier, here are 5 ways to trick yourself into saving at least a few extra hundred dollars a year. Okay, disclaimer: This will involve establishing some ground rules, setting some limits, and safeguarding against impulse purchases. But then, you can sit back and watch your savings grow.

Sleep On It  

See something you want to buy that you didn’t plan for?  Do yourself a giant favor and go home and think about it first.  Giving yourself at least 24 hours to decide if you really have to have this item — 72 hours is even better — will ensure you’ve given this decision the kind of caution it deserves.  I’ve personally saved hundreds, if not thousands of dollars, this way and I don’t think I’ve suffered too much by delaying gratification.  Preventing impulse purchasing is a huge step towards fixing broken budgets, and for big-ticket items like cars, TV’s and appliances, I recommend turning this into a “30-day” Rule.

Browse Not

Don’t kid yourself. “I’m just browsing” can quickly turn into “Ring it up!” ” My mother would always complain that going to Costco was like burning a $100 bill (because no matter how hard she tried, she could never get out without spending less than that).  As an adult, I find the same is true whenever I decide to “browse” in my favorite clothing stores — I often walk in intending just to look, and walk out having spent $200.  Lately, I’ve saved money by making a new rule: I don’t allow myself to walk into the store at all.  I estimate I’ve cut my average monthly discretionary spending by more than half lately, by simply denying myself the opportunity.  For necessary supplies, try limiting your big shopping trips into one per month (instead of once a week).  

Make Yourself Accountable

One way to commit to your savings goals is to hold yourself accountable to something, or someone.  For example, carpooling to work or school at least once a week saves gas and is good for the environment, especially if you do it consistently.  It’s also hard to break the commitment since others depend on your participation. Same goes for consolidating and running errands once a week with a friend or family member for trips to the store, bank or post office.  Or, to save on a gym membership, why not meet-up with a buddy in the park a couple times a week?  Setting aside a time and a place to do a savings activity with another person can be a huge motivator.

Establish Rules of Thumb When Eating Out

If you eat out frequently, make some ground rules about how, and what to order to save a few bucks.  For example skip the $3 sodas and ice teas (especially if they don’t come with free refills).  Drinking water is not only better for your health, it’s an easy way to save over $30 a month if you eat lunch or dinner out more than a few times a week.   If you enjoy an adult beverage from time to time, make a commitment to never order more than one drink — or to split a bottle of wine when you’re out to dinner with friends.  Finally, a sensible cap for meals can keep spending in check — decide you’ll never go over, say, $14 dollars per entree.

Find a Free or Frugal Hobby

Leisure activities can get expensive.  If you can replace at least one pricey past-time with one that costs next to nothing, you’ll be way ahead of the game.  For example if you’re a golfer, substitute one tee time a week for a trip to a community driving range.  If you’re a movie-lover, try checking out free DVD’s at the library instead of the costly $10-15 theater experience.  Don’t give up the activities you love, of course, but do make small, occasional substitutions where you can.

Eliminate One Recurring Expense

Are you paying for premium cable channels that you rarely watch?  Do you really need call waiting, 3-way calling and all the other extras your phone company charges you for?  What about memberships to clubs? Scour your monthly bills for a few ways to make some trims, and you’ll be amazed at how quickly these small, drop-in-the-bucket savings start to add up over a year’s time. If you eliminate one $36 dollar bill, that’s almost $500 a year in savings!  A few years ago when I was paying down my own credit card debt, I eliminated my cable bill and put that money towards my balance. After a year or so when the bill was paid off, I realized I didn’t even miss cable — and now that money goes straight into savings!  

10 Ways to Save at the Dentist

Dreading a trip to the dentist? While it’s not the most exciting place to visit, our number one reason for skipping dental care, is actually cost – whether you’re insured or not – according to the American Dental Association. For example, average out-of-pocket expenses for a simple filling, according to the Consumer Reports National Research Center, is $141 dollars for those with insurance and double for those without.

Here are ten ways you can lower your dental costs, saving hundred of dollars a year on procedures. Click here to read more.

As always, we want to hear from you. What are some ways you’re saving at the dentist? Connect with me on Twitter @Farnoosh and use the hashtag #FinFit.