What’s the Cheapest Way to Make Long Distance International Calls?

One of my wife’s good friends is having a destination wedding on a Carribean beach this summer.  We’re leaving our son behind with the grandparents for the trip, it’ll be the longest we’ve both been away from him since he was born.

Long Distance Parenting
Although it will be nice to relax a little without constant parenting duties on the brain, we’ll certainly miss being around the little.  My wife is planning on calling every day to check up on him and I’m looking for the cheapest way to make international calls so we don’t spend as much on our phone bill as we did on our plane tickets.

International Roaming is Expensive
I talked to our cell phone company and our phone supports CDMA Voice, GPRS Data, and GSM Voice so we’ll have coverage in the Dominican Republic.  I added the international call feature so if we have to we can call right from our cell, the downside is it costs $1.99 a minute. We could send text messages at 20 cents a piece but neither my wife’s parents nor our 2 year old son are familiar with the technology.

Do you know of any cheaper options for making interntional calls?  I thought about taking our laptop and using Skype but again there is a technology barrier with the grandparents, plus I don’t know what speed of connection we’ll have on the island.

Can You Save Me Some Money?
I’m not crazy about spending $1.99 a minute, I’m picturing the scene from National Lampoon’s European Vacation where Audrey runs up a huge phone bill while her boyfriend puts her on hold. I don’t imagine the rate calling out directly from our hotel room will be any better.

Do you know of any cheaper options for long distance international calls?

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What Should You Do With Your Money – Lessons in Personal Finance

Are you worried about doing the wrong things with your money? Do you ever avoid making a money decision because you simply don’t know which option is best?  If so, you’re in the same boat as most of us.

So how can you solve this problem?  Why not just ask hundreds of people what they would do or how they handled it?  That may sound time consuming & unrealistic until you realize that there are hundreds of people already sharing their personal finance lessons online every day.

Personal Stories
One of the things I’m discovering in our reader survey is that people just love personal stories about money.  I started thinking more about this trend and realized there are several reasons why you why get a lot out of personal stories.

Personal stories make it more intereresting.  Let’s face it, personal finance isn’t the most exciting topic on the face of the planet.  Wrapping a story around a money lesson or tip makes easier to digest.

It’s hard to find people who share their money details.  You probably don’t hear a lot of detailed personal finance situations from friends, co-workers, or family because many people are somewhat private about money matters and don’t like to share.

Money stories can can be inspiring.  It’s nice to hear about someone who quit their day job, is getting rid of their debt, or had a financial meltdown and recovered.  If they can do it, so can you!

Stories can give you ideas.  Humans can be pretty creative, reading about how other people solved a money problem can get your own wheels turning.

Action, not theory.  It’s one thing to read a book that says cut your spending or save more money.  In my opinion, it’s much more useful to read specific steps someone took to spend less money.

Learn from their mistakes.  Everyone makes mistakes.  You can try and avoid some of them by reading about the missteps others have taken and reminding yourself not to do the same.

Learn about a product or service. Many of us find new products or services through referrals from friends or family.  It’s alot easier to buy or signup for something if you already know about how someone used a product or service and what they thought of it.

Steps to Benefitting from a Money Lesson
After reading an article or tip about money the first thing you should do is determine whether the idea or method makes sense for you.  There are many variables in personal finance that can have an impact, that’s why it’s called “personal” finance.  Check several sources to see if they all come to the same conclusion on a topic and look for reasons why it may not apply to you.

After you’ve done your research the most important thing to do is take action!  It won’t do you any good to read personal stories and learn money lessons if you never do anything about it.

Take the Reader Survey
Let me know what types of personal finance topics you’d like to hear more personal stories about.  Click here to share your ideas in the reader survey.  I’d tried to address the reasons why you might decide not to take the survey.

So share your thoughts on what you could learn the most from.  Even if it’s something I don’t have experience with, I can probably find someone in the the Money Writers, Money Blog Network, or M-Network that’s had a similar situation or question.  Click here to ask us your questions or share your ideas.

I’m going to announce the first $50 winner this weekend so fill out the survey below and email me the Prize passcode for a chance to win the money.

Take the Survey – http://moneysmartlife.survey.sgizmo.com

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Direct Sales – Good Way to Make Extra Money or Fast Way to Lose Friends?

Want to make extra money while working from home?  You could join the thousands of other independent consultants, distributors or representatives that work in the direct sales industry and sell products or services directly to customers. The products are sold mainly via in-home product demonstrations, parties, and one-on-one selling.

According to the Direct Selling Association, annual sales from the direct selling industry currently exceed $100 billion. They list the benefits of a direct selling business as:

• Good way to meet and socialize with people.
• Offers flexible work schedules.
• Good way to earn extra income.
• Good way to own a business.
• Earnings are in proportion to efforts.

Direct Sales is Everywhere
Chances are you’ve either been approached by or have purchased something from one of these independent consultants. A study referenced by the Direct Selling Association estimates that 55 percent of American adults reported having, at some time, purchased goods or services from a direct selling representative.  If you have a friend that sells Mary Kay or  Pampered Chef then you know what I’m talking about.

Good for Corporations
The reason direct sales is so popular has to do not only with the benefits to the people selling it but also the benefits to the companies that make the products or services.  The sales model allows these companies a low risk, low cost method of expanding their sales force throughout the country.

It’s low risk to the company because the sales reps typically aren’t paid anything unless they make sales. The company doesn’t have to risk a bunch of money hiring a sales force, they pay out a commission only after they’ve already made money via a sale.

A direct sales model is low cost not only because companies don’t have pay salaries but also because they don’t have to offer benefits to the independent consultants.

Selling to Your Friends
So direct sales is good for businesses and good for sales reps, what’s the downside?  (I’ve never been a direct sales consultant so forgive me if I state things incorrectly but this is my understanding). People who get started in direct sales are coached to sell the product or service to their most accessible market, their family or friends. 

With products like Mary Kay you start off by having a party at your house where you invite your friends, give them free samples, and ask them to host future parties at their homes and invite other friends.  Eventually through word of mouth and the network approach of selling to a friend of a friend you build up a customer base.

Effects on Relationships?
Although direct sales has proven to be an effective selling approach, I wonder if it could also prove to be damaging to relationships.  I would imagine that not everyone will enjoy being sold to by their friends, some people may even be offended or feel “used” when asked to come to “sales party”.

There’s probably another group of people that will go along with it but inwardly feel uncomfortable.  They’ll buy from you not because they want what you’re selling but because they feel like they should.  Although they won’t say anything, the value of your friendship may decrease in their mind as they see themselves as just a sales opportunity for you.

The Real Story
As I said earlier, I’ve never been a direct sales rep so I don’t know what really goes on between friends when selling is introduced into the relationship.  What are your thoughts and experiences with direct sales?  Do you like buying products from your friends instead of the store? Do you enjoy attending or hosting sales parties?  Have you ever lost a friend or damaged a relationship because of it? 

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Your Wish is My Command – Reader Survey

The suggestions and ideas are piling in! Thanks to everyone who has completed the reader survey, I’ll definitely incorporate your suggestions and topic ideas into the site! One thing I’ve noticed so far is the wide variety of reader interests, covering them all will be a lot of fun.

Abandoned surveys
One of the things the survey software keeps track of is how many surveys were started and not completed. Every person that opens the survey and leaves right away or answers just a few questions and leaves creates what they call an “Abandoned Survey”. How sad, poor abandoned surveys 🙂 I guess these are readers that were interested in seeing what the survey was all about but decide not to give their answers. I was trying to think of reasons why people might abandon a survey:

–You don’t feel comfortable answering the questions
I didn’t put any question on there I wouldn’t feel comfortable answering anonymously but of course everyone is different. Remember, if there’s not a red star next to a question the software will let you skip it.

–You don’t want to take the time to answer.
I made almost all the questions multiple choice so that you can just breeze through the survey in no time at all. Plus I decided to give away some personal finance ebooks to everyone that completes the survey to make it worth your time. I’m also giving away money to randomly chosen readers that fill out the survey. More about that in the next section.

Prize Passcode
As I mentioned above, I’m giving away $50 to two people who fill out the survey. After you’ve completed & submitted the questions you’ll be taken to a thank you page. There’s a prize passcode on the thank you page, if you email that passcode to me, you’re entered to win the money.

Surprisingly, most people who complete the survey aren’t emailing the passcode. As of this morning only two people have sent me the passcode, which means we already have our two winners if no one else emails me one! So if you haven’t taken the survey yet, click here to fill it out and send me the prize passcode, your chances of winning look pretty good!

Survey Duration
One question I’ve gotten is when I’m going to be giving away the $50 prizes. I’ve decided to give away the first $50 soon as an early mover prize. The second $50 prize will be awarded once all the surveys are collected. Of course the odds of winning go down for the second $50 prize since there will be more names in the hat after all surveys are complete. To say thanks to the readers that fill out the survey early on, I’ll give away the fist prize soon. If you have a second, click here to fill out the survey today and send me the prize passcode so you can get your name in the first giveway.

Thanks in advance for your input!

Click Here to take the survey

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So What Do You Think? Money Smart Life – Reader Survey

I think it’s time we have “the talk”.  You know, the inevitable conversation in any relationship where one person asks the other:

• where is this going?
• how do you really feel about me?
• do you want to move in together?

Don’t worry, I’m not going to ask for the keys to your apartment. I’d simply like to know more about who you are and what you think of me and the site.

Here I’ve been spilling my personal finance guts for almost two years on this site and I feel I barely know you : )

Unlike some relationships where “the talk” is all about the feelings and ego of the instigator, this conversation is all about you. I’d like find out more about your personal finance needs and wants so I can address them here on the site.

Reader Survey
Good news!  We don’t need a 2 hour emotion filled conversation like other “relationship talks” to get to know each other. Instead I wrote out 15 simple questions for you. Almost all of them are multiple choice, I know you’re busy : )

To say thanks for your valuable time, you’ll be taken to a Personal Finance Package once you’ve completed the survey. To show my appreciation for your input, the package includes three different resources.

 * Found Money: How To Generate Quick Cash in An Emergency – 56 Page Report
 * 101 Powerful Tips for Improving Your Credit Score – 54 Pages of Tips
 * How to Setup a Family Budget – 54 Page Guide

You’ll also be given a Prize passcode on the thank you page after completing the survey.  Everyone that emails me their prize passcode (directions on the thank you page) will be entered to win $50 cash.  I’ll randomly select two people who submit their Prize Passcode to win $50.  Winners will be paid via PayPal or I can mail you a money order, your choice.

Take the Survey
I used a cool website called Survey Gizmo to put together the questions.  The survey doesn’t ask any personally identifying questions so it’s totally anonymous. Visit the survey via the link below, let me know what you think, enjoy the Personal Finance Package resources, and enter to win $50:

Survey – http://moneysmartlife.survey.sgizmo.com

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Save Money When Buying a Diamond Ring & Avoid Going into Jewelry Debt

Saving money on diamonds and shopping around for deals is not something the jewelry industry likes us consumers to think about. Their emphasis is on the “quality” of the diamonds. 

I remember when I was shopping for an engagement ring one of the sales ladies said something along the lines of, “if you really love her, why not buy this one.”  Of course that didn’t go over well with me, that was the end of my trip to that store.  The way I see it, someone’s love for another person has nothing to do with the size of a shiny pebble that was dug out of the ground.

Have you ever heard the commercial that says “Diamonds are forever”? What you don’t know is that they actually cut off part of the slogan. It actually reads

“Diamonds are forever on your credit card”. 

I had a reader email me concerned about this.  He’s looking to buy an engagement ring but is worried about going into debt to pay for it.  He asked for some ways to save money on a diamond ring.  It’s been awhile since I’ve shopped around for one but this is what I was able to turn up.

Shop for Diamonds Online
– Do your pricing research online at websites like Diamonds.com or BlueNile.com.

– If you’re comfortable spending that much money online, buy the diamond from discounters on the Internet to save some cash. My cousin bought an engagement ring online and I know both he and his fiance, now wife, were very pleased with it.

– Make sure you buy from a credible source, for example, you can check out buying a diamond ring on Amazon.com.

Buy a Cheaper Band
Although the diamond is the most expensive part of a ring, you can save some money by buying a less expensive band.  There are several ways you can do this, for example:
 
– White gold is cheaper than Platinum
– 14K gold is cheaper than 18K gold
– Buy a plain band without accent diamonds

Buy a Loose Diamond
I had a college friend who was friends with a jeweler.  They helped him buy a diamond online and then they put it in a setting for him.  The jeweler gave him a deal on the band since they were friends but the main savings came from the lower price he was able to get on the individual diamond.  Even after paying for the band he was able to save hundreds of dollars.

Buy a Lower Quality Diamond
As you start to shop for a diamond you’ll learn that the industry values them based on the stone’s clarity, color, carat, and cut.  Depending on what combination of these you choose, you could either spend a lot or save a lot of money.

Clarity – In terms of price, the higher the clarity, the higher the cost.  Here’s an example of the clarity scale, from best quality to worst:

(most $$$)FL, IF, VVS1 – VVS2, VS1-VS2, SI1-SI2, I1-I3 (cheapest)

Color – The diamond color is measured on a scale ranging from D (no color) to Z (a lot of color). In general, the less color, the more expensive the diamond.

Carat – The carat measures the weight of the diamond and is the measurement people are most familiar with.  The larger the carat, the more money you’ll pay for the diamond. Some of the typical carat sizes are
 
0.25, 0.50, 0.75, 1.00, 1.50, 2.00, …. and up

Buying a diamond with lower clarity and color ratings and a smaller carat can significantly reduce the overall price.

Pay Cash for the Ring
Buying a ring with cash has two advantages.  Remember the quote we learned earlier, “Diamonds are forever on your credit card”.  Retail jewelry stores like Zales or Helzberg offer their own credit cards you can use to buy diamonds on credit. Kind of like a car salesman, a jewelry retailer might talk you into buying a bigger ring than you can afford by talking about the low monthly payments.

Of course as we all know, the downside of monthly payments is that you’re borrowing the full purchase price and have to pay interest on the balance.  The monthly interest charges are guaranteed to add more onto the price of the diamond ring than you’d like to pay.

Credit Card Fees
Of course, credit cards cut both ways.  If you’re not shopping at a big retail jeweler that offers their own credit cards, you might get a discount for paying with cash.  The merchant has to pay a percentage of each sale to the credit card company for processing the payment.  When you’re talking expensive diamond rings those fees can add up. 

The store might be willing to knock a little off the price if you pay in cash.  It won’t be a lot but every little bit helps when you’re buying expensive jewelry.  You can put the savings towards paying your sales tax! 

Saving on Diamonds Summary
Shopping and buying online gives you access to some of the lowest prices on diamonds, just make sure you research the website and diamond before making a purchase.

Buying a lower end diamond with lower clarity / color ratings and a smaller carat will save you hundreds, even thousands, of dollars.

Only buy what you can afford and pay cash for the ring.

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A Fresh New Look Plus a New Way to Contact Me

How much money would you spend on a makeover?  I decided a while ago this site was due for a new look but didn’t want to pay the money for a site designer.  What can I say, I’m cheap : )

New Site Design
After putting up with the old look long enough I ended up buying a theme and spending many hours customizing it myself.  If I had it to do over again I probably would have just hired someone, next time I probably will.  I keep coming back to the fact that it’s sometimes better to pay an expert and find a better way to spend the time you save.

I’m sure the site could still use some improvements so let me know if you notice anything.  I’m on the search for a site logo so we’ll see how that turns out.  I’d also like to spice up the color a little, the gray is a little drab, but one thing at a time.

Tips & Contacts on Twitter
I also signed up for a service that’s designed for short, informal communication.  It’s called Twitter and can be a good way to publish quick updates that don’t warrant a full blown article.  For example, today I published a tip that’s guaranteed to help to cut down on your junk email.  Click here to see the tip on my Twitter page.

You can also contact me via Twitter if you sign up for a free account.  Once you’re signed up you can click on the Follow button under my graphic to get all my latest updates.

Needless to say, I didn’t have much time for writing this weekend since I was working on the site most of the time.  Oh well, it could have been worse, at least I didn’t have the misfortune of having my website hacked into like Get Rich Slowly and Five Cent Nickel (knock on wood).

New Site Design
Yesterday I pointed out some other money posts you could read up on, here are a few more:

– The Digerati Life reviews her Financial Progress Over The Last 10 Years.

– My Dollar Plan offers new graduates, 29 Money-Smart Tips. I should have covered some of these in my college graduate financial tips series.

– Generation X Finance takes a look at the Connection Between Your Brain and Credit Card Debt.

– Million Dollar Journey compares Fundamental and Regular Index Funds/ETF’s.

– The Suns Financial Diary is running into some bad timing in the stock market.  I know exactly what he’s talking about, it seems like the markets always go down the day after my bi-monthly automatic investments kick in.

– Brip Blap ask, make money now versus make money later?

– Lazy Man is saving money by renting movies online.

Finally, thanks to No Debt Plan for hosting last week’s festival of frugality and including my post, Save Money on Gas By Learning How to Ride the Bus.

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Weekend Reading during Site Updates

You may notice a few changes going on here and there at Money Smart Life over the weekend.  Please excuse any strange behavior on the site. 

While we’re under construction, it might be a good time to catch up on articles from some of the other personal finance networks out there:

Money Blog Network:

– Mighty Bargain Hunter –  Do you notice frugality?

– Free Money Finance – How to Invest If You Don’t Have Much Money

– No Credit Needed – Getting Rid Of Unnecessary Monthly Expenses

– Five Cent Nickel – The Parallels Between Fitness and Finance

– Consumerism Commentary – Can You Judge a Financial Adviser By Her Own Portfolio?

– Get Rich Slowly – Unit Pricing: Get More Food for Less Money

– All Financial Matters – 10 Relatively Cheap Ways to Keep Your Kids Entertained During the Summer

– Wise Bread – More Tax Credits Coming for Homebuyers?

M – Network:

The M-Network is running a series on vacation money tips:

– Plonkee Money – Backpacking Europe, Australasia or North America

– Mrs. Micah – How Not to Honeymoon (and how to!)

– Single Guy Money – Vacation Savings Account

– Cash Money Life – Vacation Off-Season to Save Money & Avoid Crowds

– My Two Dollars – Riding The Rails With Amtrak

– The Dough Roller – 5 Great Travel Reward Credit Cards

– Gather Little By Little – Low cost summer family vacations

– Moolanomy – 9 Vacation Tips and Ideas

– Paid Twice – Getting Deals on Airline Tickets

– Being Frugal – Frugal Vacation Ideas

You can also read or submit other money articles at PF Buzz, a new site for sharing personal finance articles you enjoy.

Money Life Network

The Money Life Network is a new collection of sites covering personal finance. Judging from the name, sounds like they’ll cover some of the same topics as Money Smart Life.

– Prime Time Money – All About Employee Stock Purchase Plans (ESPP)

– Milk Your Money – Do It Yourself Auto Maintenance

– Bible Money Matters – Lies and Money: What are you keeping from your spouse?

– Free From Broke – Will The Economic Stimulus Payments Have To Be Paid Back

– My Investing Blog – Education.com is Talking Financial Smarts for Kids

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Identity Theft Protection – What You Don’t Know Can Hurt You

Identity theft in the form of stolen account information is often paid for with the time you spend contacting banks and merchants to cancel fraudulent transactions.  Unfortunately there are higher financial implications for a more sinister type of identity theft that involves not just a few transactions but entire fraudulent accounts opened in your name.

Fraudulent Account Identity Theft
This type of crime can be much more damaging because identity thieves try to use a false address when they setup a fake account.  Of course this means you don’t receive any bills or other correspondence tied to the account even though it’s open in your name.

Identity Theft Costs
What you don’t know can definitely hurt you.  Bills and debt can mount up in the fraudulent account and when collection agencies finally come after their money, the thief at the fake address will be long gone.  The collection agencies will track you down since the account was opened with your personal information and give you the bill.

Ruined Credit
It’s not just the big bill you have to worry about.  The identity thief may severely damage your credit as they run up the bill, never making payments and raising red flags on your credit report.  These credit problems can have far reaching effects on your ability to take out a mortgage, personal loan, or even get auto insurance.

Lost Time
Obviously since you didn’t open the account or spend the money you’ll have to begin the process of clearing your name and handling the debts.  This process is a very time consuming and frustrating job that can take years to clear up in some cases.

Personal Information Sources
The credit card companies take a pretty big hit from identity theft costs so they provide resources to educate consumers on how to avoid it.  A cheat sheet on protecting yourself against identity theft from Visa lists the following ways that criminals get access to the personal information needed to open accounts in your name.

• Stealing unopened mail (pre-approved credit offers, bank statements, tax forms, bills)
• Access to your home (service person or “friend/family”
• Using inside sources (white collar crime)
• Social Engineering
• Lost wallet or purse
• Dumpster diving
• Online data theft

The thieves can use this information to:

• Open new bank accounts, and write bad checks.
• Establish new credit card accounts and not pay the bills.
• Set up cellular phones or utility services and run up bills.
• Obtain personal or car loans.
• Get cash advances.

Preventing Identity Theft
You can avoid some of the ways identity thieves access your information by getting a secure mailbox, shredding your documents, not giving out personal information over the phone, and keeping the minimum amount of personal information possible in your wallet or purse.

Of course you can’t protect yourself against some of sources such as white collar crime and online theft of your information from a third party. Although you can’t prevent those from happening you can make it more difficult to apply for credit with your social security number by putting a fraud alert on your credit report.

I did this after having my credit card account number stolen, anytime you apply for credit with your social security number, the merchant or financial institution is supposed to see the flag and contact you.  The one downside is that you’re unable to receive your free annual credit report online.  Instead you have to mail in a request for your report.

Monitoring your credit report is definitely a step you should take to protect yourself from identity theft.  Keeping an eye on all the lines of credit and accounts in your name can help you from getting a nasty surprise months down the road. 

Next time I’ll take a look at the form of identity theft where a person actually assumes your identity: name, driver’s license, and all. 

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Identity Theft Costs – How Much Time & Money Does ID Theft Cost the Victim?

Identity theft can take several different forms, all of which will cost you some amount of time and/or money.  There are three main types of identity theft, I’ll take a look at how you can be affected by each one, starting with the most basic and moving up to the most sinister. Each subsequent level of id theft requires more information and sophistication to pull off and also ends up costing you more time and money.

Stolen Account Information
The most basic type of identity theft is account fraud, where someone finds out your account information and uses it to buy something or take some of your money.  A common example of this is a thief using your credit card to make purchases. 

Credit Card Hijacked
One holiday season I was given the unfortunate gift of this type of identity theft.  I opened my credit card statement in January to find a bill much higher than I had expected. I discovered that someone had ordered hundreds of dollars of goods through a catalogue back in December.  I did receive that catalogue but had not ordered anything through it in years so I new something wasn’t right.

Identity Theft Discovery & Research
 This is typically how the stolen account form of id theft is discovered, a person looks at a bank statement or credit card bill and discovers purchases or withdrawals that they didn’t initiate.  Your main cost for this type of crime is mainly the time it takes to contact the authorities and businesses involved in the transactions and prove you weren’t the one behind them.

In my case I called the catalogue and my credit card company to report the problem.  They opened an investigation and I had to take an afternoon to go file a police report.  It turns out the catalogue hadn’t followed policy during the busy holiday rush.  They had allowed the huge order to be shipped to an address different than the billing address, which was an abandoned house downtown.

Identify Theft Costs
Immediately upon reporting the theft, my credit card company flagged the card and sent me a new one. After the investigation was finished Visa refunded the cost of the purchase on my card.  I wasn’t out any money, my costs were:

• Inconvenience of cancelled credit card
• Time spent corresponding with:
• Credit card company
• Merchant
• Police

Preventing Identity Theft
I never found out who placed the order or how they got ahold of my information.  Hundreds or thousands of people have accessed my credit card details over the course of my life, every time I buy something the person taking the order is provided that information.  There’s not much you can do to prevent one of these people from being dishonest and misusing your data.

The best answer is to simply monitor your financial statements for any irregular or unexpected transactions and follow up on them right away.  I did have another case where someone used my Marriott account to book hotel rooms in another state.  The problem there was I had a credit card on file, the perpetrator didn’t need to steal my card information since it was already in my profile and authorized to spend. 

Luckily I had the account setup to send me an email anytime a transaction went through. I was able to contact the hotel right away and cancel the charge but I learned the lesson, you can prevent this type of fraud by not keeping a credit card on file.  It’s not quite as convenient but it can prevent thieves from using a backdoor into this type of identity theft.

Next time I’ll talk about the second general type of identity theft and it’s costs to you.

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