Angies List Review

Angies List reviews of local contractors are written by consumers who share their positive and negative experiences on a range of home improvement services.  Angie’s List members submit ratings of contractors they’ve worked with; such as plumbers, electricians, painters, and roofers.

Angies List Trial

I first tried out Angies List when a co-worker let me login to his account and search for local painters in our area.  I had Angies List coupon codes but couldn’t find one that offered a free trial so he volunteered to let me test it out using his account.  My first step was to find painters simply by searching on the category “Painting – Exterior” and choosing painters in a 10 miles radius, as shown in the image below.  As you can see, the other search options are to look for a keyword or to search on a company’s name.

Contractor Ratings

There were 17 painters listed in the results, about half had good reviews.  Angies List has members use a rating scale of A-F; there were two F’s, one D, two C’s, four B’s, and 8 A’s.  Obviously the contractors with good ratings were the ones I wanted to research but first I was curious to see why some of them had been rated poorly.

A contractor’s overall score is made up of ratings on price, quality, responsiveness, punctuality, and professionalism.  Here’s the breakdown of one person who rated a local painter a C.  People also leave  comments explaining their ratings, this one was pretty brief but pretty much sums it up “PAINT JOB TOOK TWO WEEKS LONGER TO COMPLETE THAN ORIGINALLY PROMISED”. 

Some of the ones that rated the painter as F or D had much longer explanations.  That seemed to be the case of the majority of reviews, people that were satisfied left a brief summary but people that were unhappy went into great detail describing step by step what happened and why they were so angry.

Then I moved onto some of the companies that were rated for good service.  The interface on Angies List shows a snapshot of the latest customer reviews; the score, the date, and a blurb of the review, you can see an example below.

Reading through the feedback made me realize that the best way to use Angies List is as a screening tool.

Every person’s experince is different and I shouldn’t choose or rule out a contractor based soley on one review.

For example, the D rating you see in the screenshot was given because someone called the company for a bid for work and never got a response.

Of course, if it was a trend and lots of people were reporting the same thing you might worry but a D rating from one person that didn’t get an estimate shouldn’t rule them out. Reading through the reviews kind of reminded me of the customers I worked with on eBay.  The majority of people are fair and resonable but occassionally you run into an irrational customer with unreasonable expectations that wants to tell the whole world how bad you are even if it was just based on a misunderstanding .

Angies List Signup

After testing out the service I decided it would be worth my money so I signed up for Angies List. It’s only a two step process, first you fill out the screen below that creates your account login and let’s them know what local market you’ll be searching for contractor reviews in.

Then you enter in the age of your home and your address.  At first I wondered why they needed my address but after reading through the site I saw as part of the membership you receive a monthly Angies List magazine with home improvement and remodeling tips so they need it to deliver the magazine. 

Membership Options

Although there is no free trial for Angies List just to test it out, they do have a monthly option that’s only $4.50. I probably would have gone with that option just to try out the site but since my co-worker let me mess around with it under his login I knew what the site was all about and felt like I’d get enough value out of a longer term. The annual option gives you a 35% discount so that was the best one for me. Plus, they offer a 110% money back guarantee for the annual option if you’re not satisfied with the service. Angies List does offer an even bigger discount for terms of two, three, or four years but I wasn’t sure if I’d need it for that long, we’ll see how much use we get out of it the first year.

They do charge a one time signup fee to become a member but there are promo codes for Angies List that will waive the fee for you.

Angies List Discounts

After I logged in and looked around some more I ran across another aspect that I had overlooked, a lot of the contractors offer a small discount if you mentioned you found them via Angies List. It wasn’t anything major, maybe 5-10% off your bill but I suppose if it’s a big job that could add up.

Another thing I hadn’t noticed was the Discounts and Perks section on the site that offers coupons for deals on a variety of items. A lot of them I wouldn’t use but there were a few like discounts on travel sites such as Orbitz, Delta, Holiday Inn, and Southwest that might be useful. Some of the discounts were pretty sizable, like the 50% off of a subscription to Experian’s Triple Advantage Credit Monitoring service or 50% off newspaper subscriptions. Another one that was interesting was the ability to buy discounted movie tickets for local theaters, the only bad thing is that they mail you the tickets so you’d have to plan that out in advance. Anyhow, the whole point of the site is to find good contractors but I guess they offer these discounts to help members make sure they get their money’s worth.

Angies List Review

Overall, it seems like a good screening service to help find contractors in your area that have a history of quality work and customer satisfaction. I don’t think Angies List would be useful for people that don’t live in or near big metropolitan areas. The real value of the service is getting feedback from other consumers on a variety of contractors in your area. If there aren’t enough people in your town that use the service then there wouldn’t be many reviews and a membership wouldn’t be as effective.

However, if you live in or around a larger city I think it can be a useful service. If you decide to try it out, just make sure you use a promo code so you can wave the signup fee.

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What Would You Do If You Lost Your Job?

Losing your job is a big financial setback for multiple reasons. Not only do you lose a source of income but often times multiple benefits as well. For example, I have disability insurance, health insurance, dental insurance, and life insurance through my employer’s plan that I’d have to re-evaluate if I was let go. There are laws that help you stay insured even if you lose your job but the cost of insurance goes up considerably so you’re hit with much higher costs in addition to losing your income.

We’ve written here before about how to financially prepare for a layoff but I wanted to get some other opinions as well. As you’ve read over the past few days, Liz Pulliam Weston has been sharing some insights as a follow up to the FNBO Direct Pay Yourself First challenge. Here was my question for her on preparing for losing a job.

Question
Financial contingency plans are a good idea, especially during a recession. In addition to having an emergency fund it’s smart to think about what lifestyle changes you’d make to get by financially if you lost your job. Have you gone through that exercise yourself?  If so, what are some of the things you would change to make ends meet?

Answer
That’s a great question. I’m a big believer in financial flexibility—having a big pile of cash as well as access to plenty of credit. We have both, but I’d only access the credit in an extreme emergency.

What I’d do first is cut the luxuries. We’re fortunate to have a lot of them, but I spent many years living the frugal life, so I’m not afraid to go back there. (I don’t think I’m quite as good at stretching a buck as MSN’s Donna Freedman, but I could come close.) So there would be more car camping trips and fewer plane trips, for example; more do-it-yourselfing and fewer handyman calls; fewer dinners out and more meals at home.

Thanks to Liz for sharing her money tips over the last few days! If you want to keep up with Liz you can read her blog or her articles on MSN Money.

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Credit Score Tips You Need To Know

Your credit score is probably one of the most frequently used and misunderstood numbers in your life. Trying to figure out how to improve your credit score can be frustrating, in fact, there’s enough information about credit scores to fill a whole book!

Liz Pulliam Weston shares a little about the updated version of her book, Your Credit Score, Your Money & What’s at Stake, as a follow up to the FNBO Direct Pay Yourself First challenge.

Here was my question for Liz. Your last book, “Your Credit Score, Your Money & What’s at Stake“, is an in-depth look at how a consumer’s credit score can impact their finances. You recently came out with an updated version to address issues people are experiencing due to the recession and credit crunch.  What are the most important updates that people should be aware of regarding their credit?

Credit card companies are slashing credit limits, which can have a negative impact on your score. If you have good credit, it’s important to push back against these limit cuts.

I also recommend people start diversifying their credit, just like they diversify their investments. If all your credit cards are with a single issuer, you’re at the mercy of that issuer’s policies

Tomorrow we’ll take a look at my last question for Liz. I know a lot of people have lost their jobs or are struggling financially due to the bad economy. She shares her thoughts on what changes she would make to stretch her dollars if she suddenly lost her job.

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5 Money Rules from Liz Weston

Liz Weston helped mentor the participants in the FNBO Direct Pay Yourself First challenge as they saved money for the trip of a lifetime, to buy a house, pay off college loans, to have a baby, and save for nursing school.  Although these are all different goals, as I read through the advice that Liz offered each person I saw a trend.  Here’s the next question I had for Liz about what I saw.

Looking through your suggestions for the participants in the FNBO PYF Challenge I noticed a lot of times you provided them with metrics to help them make their decisions or set their goals.  For example:

Budgeting

• 50% of after tax income – limit basic expenses to no more than this (includes shelter, food, insurance, transportation, etc)
• 20% for savings (includes retirement & emergency fund)
• 30% for wants (clothes, vacations, dinners out)

Student Loans

• 10% of expected monthly gross income, student loan payment shouldn’t exceed this
• 2/3 first year’s salary, limit total borrowing to no more than this

I think having these numbers to guide decisions and goals makes it much easier to put good money management practices into place.  What would you say are the 5 most important money metrics that people should stick to?

Here is what Liz had to say:

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I agree—people really seem to appreciate having these benchmarks. The most important are:

1. Keep must-have expenses to 50% of after-tax income. This gives you room to save, pay down debt and still have money for fun, but too many people “overspend on their overhead” and wind up struggling. Also, limiting the essentials to half your income allows you to get through a tough time such as a layoff much more easily than if you’ve committed to higher spending.

2. Don’t borrow more for your education than you expect to make your first year out of school. There are exceptions to this rule, of course, but it ties debt to expected reward, while making sure you don’t overdose.

3. 20/4/10. When it comes to car loans, put at least 20% down, limit the loan to no more than 4 years and the payment to no more than 10% of your gross income. This will keep you from overspending on a car and from being upside down on your loan.

4. For retirement: save 10% of your income to cover the basics, 15% if you want more creature comforts, 20% if you want to retire early. (Boiled down, that’s 10% for basics, 15% for comfort, 20% for freedom.) These percentages work if you start saving by your early 30s. If you wait much longer, you have to crank up the percentages to get the same results.

5. Pay 100% of your credit card bills 100% of the time.

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Thanks to Liz for sharing those simple money metrics to help us measure how we’re doing with our money!  Tomorrow we’ll take a look at some credit score tips based on the changing credit environment in our economy.

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FNBO Direct Pay Yourself First Challenge

FNBO Direct sponsored a contest called the Pay Yourself First Challenge (PYF) during which contestants documented their attempt to save up money for a specific goal. 

The idea behind the challenge was to get people to “pay themselves first” by direct depositing their paychecks into an online savings account, then transferring only what they need into a checking account to pay the bills.

Advice from Liz Pulliam Weston

The contestants were assisted in their savings journey with tips from MSN Money financial columnist Liz Pulliam Weston.  Now that the competition is over, Liz is reflecting back on what the contestants learned about good financial habits and has generously agreed to answer a few personal finance questions for us.  As usual when writing interview questions I got a little carried away so rather than throw all the questions and her responses at you right away I’ll just publish one a day.

Good Financial Advice

Here is one of my first questions to Liz:

The people in the PYF Challenge had a unique situation that the every day person doesn’t have.  They had the world watching, so they had extra motivation to be smart with their money.  They also had access to ask you questions about their money.  For the person that doesn’t have these motivators and resources, where should they turn when they’re having a hard time aligning their financial behavior with their goals or when they have financial questions?

Here is how Liz responded:

“The Internet abounds with great resources, including saving-related blogs that have lively communities of followers. Those are great places to start. For truly individualized advice, though, you can’t beat a fee-only financial planner.”

I think Liz makes a good point; basically, you get what you pay for.  Money Smart Life and sites like it are typically run by amateurs who are trying to make sense of life’s financial puzzles.  You can often find valuable tips and insights on blogs and forums but they’re obviously not tailored to your personal situation. 

As Liz mentioned in a recent column about Suze Orman, one of the “perils of offering personal finance advice to the masses” is that “when it comes to personal finance, there is typically no single right answer”.

I agree that personal finance blogs are useful for getting ideas, raising questions, and discussing possibilities but if you want professional advice then turn to a certified financial planner (CFP).  Of course, there are CFP’s that blog about money like Jeff Rose and Kristine McKinley.  This is kind of neat, you can get a feel for them from their site and see if they’re someone you’d like to work with.

I’ll publish another Q&A with Liz tomorrow, the next one takes a look at the 5 most important numbers to be aware of in personal finance.

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Stock Market Index Cheat Sheet

The stock market indexes are names you’ve probably heard before if you follow any financial news.  Every day commentators report on the Dow being up, the S&P 500 being flat, or the Nasdaq being down; here’s a short cheat sheet on what the major indexes represent.

Domestic Market Indexes

Dow Jones Industrial Average: Also known as the DOW, the DJIA or the Dow 30, this is probably the most well known index in the world, and yet, probably the least important. Created in 1896 by Charles Dow, this index consists of 30 of the largest and most widely held individual American stocks. The financial world lives and breathes the movements of this group of stocks. In 1896, this made sense, but at this point, 30 stocks, even these 30 stocks, are just too small a sample to judge the health of the market.

S&P 500: This index consists of 500 of the largest publicly traded companies in the US. First created in 1957, this index is considered a good indicator in regards to the state of the US economy. When you hear the term index investing, the S&P is generally what people think of. Vanguard has made a living out it and chances are, if you have a 401K, you are taking advantage of it as well.

Russell 2000: This index consists of 2000 of the smallest traded American companies and is considered a barometer for this segment of the market. Started in 1984, this index has outperformed its large-cap friends since inception and is actively used by investors.

Nasdaq: The National Association of Securities Dealers Automated Quotations (Nasdaq) consists of approximately 3,800 stocks. It is the most active exchange in the world. Created in 1971, the Nasdaq was the world’s first electronic stock market. This group of stocks is loaded with most of technology’s big names, as well as many small companies that you have never heard of.

Global Market Indexes

MSCI EAFE: This is the first index we will cover that does not include US stocks. The MSCI EAFE stands for Morgan Stanley Capital International Europe, Australasia (Australia and New Zealand) and Far East. Created in 1969, this index covers 21 developed markets and is the most common foreign benchmark.

European Market Indexes

FTSE 100: The “Footsie” consists of the 100 largest companies traded on the London Stock Exchange (LSE). The index was created in 1984 and the 100 stocks represent over 80% of the overall market capitalization of the LSE.

CAC 40: This is the main French index consisting of 40 of the largest stocks in the country. Originally created in 1987, this index now trades on Euronext.

DAX: The German version with 30 blue chip stocks. Also created in 1987, this index trades on the Frankfurt Stock Exchange.

Asian Market Indexes

Nikkei 225: The Nikkei is traded on the Tokyo Stock Exchange. This index started in 1950 and is the major benchmark in Japan.

Hang Seng Index: The HSI is 45 Chinese stocks traded in Hong Kong. This index was created in 1969.

These are just a handful of the major indexes of the world, but many of the most widely discussed. It’s not an all encompassing list, for information on more of the world’s market indexes you can visit the stock market index page on Wikipedia.

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Credit Scores for College Graduates

Your credit score when you graduate from college is largely based on decisions you made while in school.  Those choices and your resulting credit history may impact some of the first things you do after graduation such as renting an apartment or buying a car.  We’ll take a look at some of the things that may have damaged your credit report and some steps you can take to get your credit on track.

Credit Score Issues

No Credit History. One of the biggest issues college graduates face is their lack of credit history. Credit reports and scores thrive on your payment history and your ability to manage your finances. If you haven’t had a mortgage, loan, or credit card that you’ve had to make payments on then lenders don’t know how you’ll handle a loan if they give you one.

Credit Card Debt. One of the most frequent vendors that setup on college campuses are credit card issuers getting you to sign up for your own credit card. This is a great start for establishing credit history if you use the card wisely, make payments on time, and do not charge more than you can afford to pay. Those who use the card to charge items they cannot afford usually leave college already in credit card debt and with poor payment history.

Student Loan Debt. Combined with credit card debt, many college grads start their new life in student loan debt. Student loans usually have deferred payments until six months after graduation, but you’re already in debt for what may amount to tens of thousands of dollars.

No Employment History. To top it all off, you may be graduating without a job. This means you don’t have the ability to make payments for any debt you have. Unfortunately, even if you have a job, your job history probably isn’t long enough to make you look like a good credit risk.

Building Credit History

Get help from Mom and Dad. Start building your credit as soon as possible. Ask Mom or Dad to add you as an authorized user for one of their credit cards. Use the card to make purchases that you can afford to pay. Then pay off the balance on a monthly basis or make payments and make them on time.

Only take on what you can manage. It’s about building a credit history, which means using the card and paying it off, not maxing the limit and burying yourself in debt that causes your credit score to plummet. If you can manage a credit card payment, then this is the first block for building a foundation. It’ll help you get approved for other types of credit such as an auto loan or furniture credit account.

Always pay on time. No matter what you are paying for—rent, car payment, credit card payment or electric bill, make your payments by the date they are due. One of the biggest factors used to calculate your credit score is your history of making payments on time.

Build an emergency fund. This won’t directly impact your credit score but having an emergency fund gives you a financial buffer you can rely on to pay bills if you lose all your income.  Paying from this fund can help prevent you from missing payments or charging up your credit card balances.

Whether you’re graduating this year or you have some time left, there are ways you can build good credit. Applying for various types of credit and loans helps to start building your credit history. Be sure that the credit you apply for and use is paid for, on or before the due date. Don’t wait to start building your credit history because you’ll need to rely on it when it comes time to get a loan for a car, house, or business.

This post on credit scores for college grads is part of a series on personal finance for college graduates.  Some of the other topics covered include auto insurance for grads, budgeting, health insurance after college, and getting started investing.

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No More Commenting on This Site

Just kidding.  Actually, I discovered this morning, thanks to Lazy Man, that comments were disabled on the site.  Looking back it appears they’ve been that way for a few days. 

I guess I should have noticed that something was wrong since I wasn’t even getting any spam comments.  Typically I get at least dozens of spam comments a day, which are screened out by filtering software.

It appears that the software went haywire and was actually blocking anyone from even attempting to leave a comment.  So sorry if you tried to leave a comment and were denied.  I think I’ve got it all figured out now, if you run into any problems you can let me know via the contact form.

Here are all the posts that have been published since the comments were disabled.  If you had any thoughts you wanted to add at the time but weren’t able, now you can comment away!

• Roth 401k Frequently Asked Questions
• Teaching Kids About Money
• Auto Insurance for College Graduates
• Don’t Know What You’ve Got Till It’s Gone
• Emergency Funds for College Graduates
• Three Big Decisions for College Grads

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Three Big Financial Decisions for College Graduates

Recent college graduates have some important money choices they have to make soon after graduation.  Some articles in the New York Times and on MSN Money Central take a look at a few of these big financial decisions.

Buy a Home vs Rent an Apartment

The subject of the New York Times article, Madison Nipp, is a recent college grad who earned a degree in financial planning.  She warns graduates to look past just the price of buying a home and to keep in mind the costs of upkeep, taxes, and insurance.  Typically young professionals are on a pretty limited income since they’re just starting out so if they base their estimated expenses on their projected mortgage payments and a bunch of other expenses crop up they could run into a cash flow shortage.

MSN Money reminds graduates that if they go the rental route they need to check into renters insurance that can provide coverage not only for stolen or damaged property but also for liability.

Of course, grads can always move back in with their parents to avoid mortgage payment, rent, or renters insurance.

Where to Find Health Insurance

How to bridge the insurance gap between graduating and getting a job that provides insurance is always a question for college grads.

MSN Money points out one thing that newly hired graduates may not be aware of, that some companies have probation periods before health insurance coverage goes into effect. That, of course, assumes a graduate has a job. In today’s economy, unless you have a degree in engineering or accounting you may be on the job hunt for a while.

Finding health insurance for college graduates means weighing the options of buying short-term health insurance, extending their parents’ coverage short-term under COBRA, or getting interim coverage through their alma mater.

How to Build or Repair Credit

Many college graduates are faced with one of two credit problems, having no credit history or having bad credit history. 

No Credit History

Madison Nipp, from the New York Times article didn’t have a credit card in college and when she went to rent an apartment after graduation the management company wouldn’t rent to her without a co-signer on the lease since she had no credit history.

Bad Credit History

There are other people that did open student credit cards in college, used them foolishly, and are now saddled with credit card debt.

Improving Credit Scores

Students with credit problems can always go to their parents for assistance, ask them to be co-signers on a lease or a line of credit.

Another option is to use secured credit cards or a secured loan to get credit in their name.  Since these secured options reduce the risk of lending, lenders are more willing to offer these forms of credit.  Once their credit score has improved, they may then be able to apply for some of the best credit cards for college graduates and young professionals.

The first step any credit troubled graduate is to get their free credit report and check on their credit history.  If they are responsible with credit and can take steps to improve their credit score then over time their credit history will become more favorable to lenders.

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Emergency Funds for College Graduates

Emergency funds are for old married people, not recent college graduates, right? Just scraping by financially is an art form perfected by many college students. Creative ways to earn extra money in college and spend as little as possible helped you make it through school.

Now that you’re leaving college and looking for a job it’s time to start thinking more long term about your finances, if you haven’t already.  Once you get that first paycheck, you’ll have every urge to spend that money on a bunch of stuff that you don’t need. Resist the urge, and start saving some cash for an emergency fund.

How Much Should You Save?
$1,000 is a good start, but eventually you should try to save up about three to six months of your monthly expenses. That sounds like a lot of money, but your basic monthly expenses would only be calculated using your bills that provide your essential living expenses such as rent, utilities, food, and transportation.  You can even suggest contributions to your emergency fund as a college graduation gift.

What Should You Use Yor Emergency Fund For?
Defining an emergency is important for knowing when to use the money in your emergency fund. It’s not an emergency that you don’t have an LCD TV, and you want one. It’s not an emergency that you want to take a trip to see your old roommate. Some people go as far to say that unexpected car repairs and house maintenance repairs should be budgeted separately from your emergency fund, because it is reasonable to believe that you will need to make car and home repairs at some point.

I am not that hardcore, but my advice is to limit yourself from using the money unless you are in a dire situation. Losing your job and unexpected medical expenses are two major reasons for using your emergency fund. These two events can destroy your financial health, and the emergency fund acts as a safeguard to prop you up while you go through a difficult situation that limits your income.

What Could Happen If You Don’t Have an Emergency Fund?
Chances are you’ll end up relying on credit cards. Many young people are taught they should own a credit card for emergencies. If you make a habit of relying on credit cards to bail you out of a bad situation, you’ll rack up more credit card debt than you can imagine; this is exactly what happened to me while I was in college.

I put car repairs, books, health expenses, shortfalls in monthly income, and other expenses on a credit card, and I walked out of school with $8,000 in credit card debt. Don’t let this happen to you whether you are in college or just graduating. It will add up quickly, and you’ll spend too much of your hard-earned money paying credit card interest.

The importance of an emergency fund is not a news flash. Personal finance experts talk about them all the time, but still, many young people fail to save for one. Don’t get caught up in the frenzy that you “need” a new car, new furniture, and new clothes. You can get those things later. Save up some money right away to safeguard yourself from disaster.

Where Should You Keep Your Emergency Fund?
A free, online savings account is my preference for parking short-term savings cash. I like the ING Direct Orange Savings account. The interest rate has dropped considerably, but it has an easy to use interface, quick transfers, and the ability to set up sub-savings accounts. You can also open an ING online checking account with a debit card to make it convenient to access your money if an emergency arises.

Luckily, deciding where to keep your emergency fund is the easy part since there are many good FDIC insured alternatives.  Here are some of the best online savings accounts:

• FNBO Direct
• HSBC Advance
• WT Direct
• Etrade Bank

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