Single Guy High Impact Saving

This is just a quick thought, thinking ahead to summer. And by the way, this info is my take on things, your situation may vary.

For those of you owning a home, you know (or will some day) that one of the biggest costs you can have is getting a central a/c unit. The darn things are super expensive. Yet, what are you to do?

Years ago people did without a/c. In fact I grew up without it, though I lived in the mountains of PA, and it was always cool at night, so the most that would be needed to sleep at night might be a fan on occassion.

Well now I live near DC, and summer nights can be brutal, and certainly the days can be. So when I bought my house 8 years ago, and looked into a central a/c unit (yes, the system in this house was dead - that's why I got it so cheap!) the prices were more than I felt comfortable with. I had yet to build up any savings to handle a bad stretch, so I decided to do what everyone did where I grew up, look into a window a/c unit.

The cost of an a/c unit then was (I think) about $175. This could handle two rooms. I figured two of these could handle 2/3 of the house, and since there was only me and my wife, I didn't need more horsepower. Comparing this with the cost of a new central system ($3k to $5k) was a no brainer for me. And as I have come to understand, an even better decision than I realized.

I have co-workers that have new systems that have had them brake down within 3 years of installation, having to spend hundreds of dollars to fix. Then since they have a central system, they have to cool the whole house. Their bills, even with slightly higher SEER ratings on their central system (SEER is a rating for how efficient the unit is) have usually been 50% higher than my bills, and with houses my size or smaller.

One nice thing about my window units is I never worry about the cost of repair. I have yet have one break down on me, but if I do, I only need to go to the store and buy another, and they are cheaper and more efficient than they were 8 years ago!

The downsides have been few for me. Of course the window is now used by an AC unit, so you can't look out it. There is more noise from these units, though I don't feel its that bad. And to make them last longer and work better, I take them out each fall, open them and clean them out with a hose, put them back together and store them in the house.

And lastly I live by myself now (with a renter), and before with my wife. If you have a large family, this technique might not be as efficient for you.

I guess the moral of the story is to look at all the costs (a/c units - or anything else for that matter) when deciding on something expensive (or even cheap). I went the way that I was told wasn't the best, yet over that time I have saved thousands (unit costs + power bills).

(Warning: long story)

People here on the financial blogs talk about how to make the best retirement investments all the time. And one assumption is that the companies will be competent and get your money to you when the time comes. While that's probably true, let me pass along what I went through last year with these financial companies, and you can draw your own conclusions.

This started about a year ago when my prior employer contacted me indicating that I didn't have enough money in my money pension plan to keep it there on its own, and I would have to roll it over to a new account (to my current employer account or a custodial IRA - that may be the wrong term, but I think you know what I mean) The money had been there for 2 years with no problem, why it was an issue now I didn't know, but ok, I'll transfer the money.

Once I get the paperwork from the manager of my account I find I have well over the required amount to keep my funds where they are, and ask my employer about this.
I'm told the amount vested is not really that amount, actually less than the $5K required. So ok, I'll get what I can, roll it over, and life will go on. My larger current employer has 401ks available with three different fund companies, of which I am investing in two of them. I decide to roll over into funds controlled by company "A".

After getting help with the paperwork from the on site assistant from "A", I send the paperwork off to my old employer for them to write a check. About two weeks later a check arrives, for the whole amount of my money pension, not just the vested amount.
I wonder if this will actually fly, so I cross my fingers, give the check to the on site guy, and off the check goes (with a photo copy for me - and I needed it).

Being patient I wait, and wait, and wait (and almost forget about it). I was told this should take 2 weeks at most. After 6 weeks I contact the on site guy and ask him what is going on. He doesn't know and will check, and a day later contacts me indicating that the check was sent to the wrong department, but now will be going to the right location. Just give it another week. I give it two, and the money is still not showing up. I contact the guy again, and he indicates they have the money, but there is some problem, and it will be in my account in a day or two. Again, after a week no money. This time I contact my company's HR person for retirement funds. (Yeah, I know, I was too patient). This time I get the answer that they have lost the check, and can I get a new check from the other fund company?

Ugh, ok, so I call the prior company, give them the SOB story about what heppened. "Sure no problem, what was the account number?" I give them the number. I'm then asked for the amount of the prior check. At this point I wonder if they don't know and I could say anything and would they accept it???, but I decide not to test my luck. Sure enough a week later the check arrives (with the same amount as previously!). I give it to "on-site guy", and a week later the money shows up correctly in my accounts.

All's well that end's well, right? True... but I decide a month later to tempt fate. I have a small roll - over custodial IRA, and I decide I would like to have one less statement to look at.
After the fun with company "A", I try to roll this over into my funds with company "B", the other company I have a reitrement fund with at my current employer. As I start this, I find no better luck. Now company "B" insists I get papers from the original company I invested the funds with, so they can know it was a true 401k and is a proper roll over. Sounds good except my old company from 8 years earlier is no more. I try to have them get the information from the company holding the IRA currently. I mean, if this is so important, they should have the information, right? Well this company holding my roller over, call this one company "C", can't help them. This wouldn't be so absurd, except for the fact that company "B" *IS* company "C"!!!
If they think this information is needed, why the **** don't they have it themselves???

I'm about ready to give up on this, but on a lark I check with on-site guy from company "A", and he tells me the other company doesn't know the rules, and sure, they can put the money into my account. And this time he is going to double check what is happening for me. No problems from this point forward, and the money moves just fine.

If you've read this long winded story to this point, I hope you understand my "concerns" when it comes to actually getting my money when I retire. Intellectually I'm sure I'll get the money. Emotionally... thats another story.

Just a quick thought for tonight. If you don't think of things ahead of time, you may miss out on simple ways to save a few extra bucks.

What brought this to mind was a few months ago I had to replace two tires to have my car pass inspection. I tried to get a low price / decent quality tire. As I'm not Mr. Auto Fanatic, I'm not sure how I did, though I know I didn't do too bad. In any case, I remembered last time there was a tire disposal fee. I checked with my county disposal service before the tire change and found you could dump off tires for $1 each. So when the paperwork was being written up I paid attention for that, and saw they would charge $3/tire. I asked to have the tires left in my car, and then dropped them off at the dump myself for $1. Ok, not a large payoff ($4), but considering the cost (10 minutes of time & 3 extra miles of wear on car), I think it was a smart decision.

Moral of story: just think ahead to situations where you can save a few bucks easily.

Today I received in the mail evil twin of that sweet gal Ms. Housing Appreciation.

No, Ms. Tax Bill didn't arrive, but her friend Mrs. Real Estate Appraisal came. It seems my previous appraisal was a little low (actually I knew that, but I thought the system was jiggered that way). Well it came roaring back with about a 40% increase from last year. Yeah, the tax rates here are being lowered, but that ain't nearly going to compensate for this number. Live by the sword, and die by the sword I suppose.

Hopefully next time I will write something more interesting, I have too much to do tonight.

Everyone out there has ideas on how to make your money work better for you. And I have to admit some of them are good ideas, a few of which I've taken to heart. One thing is rarely mentioned, and for me, I think thats a real shame. That is learning to do things for yourself.

If you are a home owner, you live in dread of having someone come in and give you an estimate on installing windows, doors, carpeting, roof (and the list goes on). Paying handymen to do basic work is the way to the poorhouse (provided you have the time to do the work yourself). You know, doing this type of work doesn't take a genius to do. Come'on think about it, do you recall the guys that you have had come in to do the work? Were they smarter than you?

Since I've owned my house I have replaced my whole roof for $700 (Corning brand shingles, it was hard work and it is a medium sized roof), replaced my 1960 era windows with double pane / low E / argon filled windows (about $2,000 for 11 large sized windows), and replaced the front door and storm door (less than $200 for the pair on sale at Lowes - but I then went and spent $100 on a top of the line door handle!). Oh, and when I bought the house I had a handyman resquare the walls in my kitchen (after I removed the original junk cabinets), and I went and installed top of the line kitchen cabnetry myself (from Home Depot - solid hickory - about $4,000, and that included the counter top).

I didn't grow up Mr. Handyman, I was just determined to be able to do things myself. I read books on the subjects, went to demonstrations at the hardware stores, started on smaller projects to get the hang of the various tools, and just did it. The work has not always been perfect, but usuaully people can't see the mistakes unless I point them out to them.
In each case the cost of paying someone to do the work would have been multiples of what it cost me to do it.

One last piece of advice on this. If you don't have much money, start small. When I replaced the windows I did them one or two at a time. I would custom order them, pay for them at pick up two weeks later, and install them on a weekend or a holiday. Then a month or two later, another two windows would be ordered, and so it went. I finished my house in 6 months using that technique. Same for the roof. I did that over a summer, doing it in small sections as I had the energy, and the sun wasn't beating down too bad. I wasn't into killing myself, so I did what I could (usually early in the morning), then quit for the day. There's no sin to have a roof half new and half old. As long as you are going to finish it soon, it will live.

Not that this type of thing happens often to me (actually, try never), but it is likely in the near future I will get a small inheritance (guesstimate is around $5,000). In the past I would just put the money into a CD, but I have more than that already in CDs, plus ING and HSBC accounts. So I already have money available if an emergency comes up (6 months worth).

My Musings:

I have been considering setting up a Roth IRA, perhaps this could be the starting money for that.
I already put 10% into an retirement plan at work, so I don't think I need to do more there.
I could pay down my mortgage some, but its not like that is necessary. Also doing that, while good, would limit my flexibility with the money. Also, I'm at the point my payments are about 75% principle, so its not like a large payment now will make a huge difference in the overall length I will be paying out.
A plain mutual fund? At least there the money would be accessible if needed. And it hopefully would have a better return than either a CD or early payment on my mortgage.

In any case I hope this will hold off for a while but if not... I'm leaning towards a mutual fund, hopefully something low load and low turnover. Since I'm a newbie with this, where does that leave me? Some type of an index fund? I guess its time to research this more and be ready.

OK, so why did I come up with the "High Impact Saving" for the blog? Well the easiest is to say I couldn't stand coming out with "Mr. XYZ's financial blog".

Anyhow, as I read commentaries (though not here in these blogs) I see people saying "I've cut to the bone, what more can I do?" I think if you're single (or even not), you need to come up with ideas that not only save you money, but save in other ways as well. Or can save you money in multiple areas.

So what do I do that falls into this category? Well one thing is recycling. I think this is something that helps the environment, and its just plain the right thing to do. But more than that, by doing it I have much less garbage, so little in fact I stopped my garbage pickup last fall. I take the very small trash with me once every two weeks to the local transfer station on my way to work, and save myself $30/month (remember, thats after taxes)

I have some more high impact ideas (some of which I use), I'll put them on here in coming days. But in any case, when you have run out of simple ideas to save, try to come up with something that does multiple purpose saving.

Tonight I set this thing up, and tomorrow I start with ideas that have been rattling about for some time. If you plan on stopping by later, I figure to be better on giving out ideas on saving money than investing it. I know some on investing, but there are others out there that really know how to set up finances. I'm just someone who knows enough to be dangerous (to himself).

For me, my finances are some 401k(s), a pension (not vested yet ), CDs, savings bonds, stocks (just a few - DRIPs), savings (online and brick, money market & savings). Oh... and a house I bought in '98 and has tripled in value since (whew, talk about buying at the right time!)