Frugal Tuesday: Get Bumped!

Posted on June 21, 2016 by Elizabeth Vega

Life happens, and people sometimes miss their flights. The airlines know this, and so to ensure they keep their airplanes full, they sometimes oversell their flights. But if everyone happens to have a good day and arrive at the airport on time, the airline faces the problem of having more people holding paid-for tickets than they have seats to put them in. Being willing to take a later flight saves the airline the trouble of having to deny passage to travelers who might not be as happy to wait as I usually am.

When I lived in Los Angeles, I visited family in Portland three times a year. And every single time, my first order of business at the airport was to check with the gate agent to see whether the flight was overbooked and if it was, to volunteer to give up my seat in exchange for compensation. My preferred airline, Southwest, has a compensation policy of giving you credit for your ticket price + $100 if you are delayed by less than 2 hours, or and additional $300 if you are delayed by 2 hours or more. The credit is good for travel within one year.

Within the last year, we’ve had some unexpected flights: Mr. Vega flew to another state for the funeral of a good friend’s loved one, and when we bought our bus, we traveled by plane to pick it up in Indianapolis. So even though we don’t have travel plans for the immediate future, I still volunteered to give up my seat when I had to travel for business last week, and my offer was accepted. I was put on a direct flight five hours later (we live 15 minutes from the airport, so I was able to go back home), and still reached my destination on time. Now we have a few hundred dollars in airline credit in case any emergencies come up, and if they don’t, we might finally take that weekend getaway to NOLA we’ve been talking about ever since we moved to Texas!

EDIT 6/21/16: AND I just got four drink tickets in the mail from Southwest, with a nice letter thanking me for being so accommodating! That never happened before! Our weekend getaway is looking better and better…

Have you ever volunteered to give up your seat on a flight? How was the experience for you? Would you do it again?

That Time We Bought a Bus

Posted on June 5, 2016 by Elizabeth Vega

We’re not sure when the idea formed… Some friends of ours bought a 15-passenger for less than $3, 000 van at the Texas State Surplus store, and we were pretty taken with the idea of getting a well-running vehicle for such a good price. Another friend bought a used Airstream, fixed it up, and made it her primary residence on a piece of rental property just outside a state park. We’ve watched a lot of Tiny House Nation. However it happened, we got the idea of buying a school bus and converting it into an RV/ guest house.

And then we got on eBay.

And a couple of weeks later, we had flown to Indianapolis, where Ron Garrett at MacAllister Transportation facilitated our descent into total bus madness. Seriously, if you are considering buying a bus, this is the guy to see: when Something Unexpected happened, Ron went so far beyond the call of duty to make things right that I’m not going to write about it, because it was done entirely on his own time and on his own dime, and he didn’t have to do any of it. But I can safely say that he’s going to do everything in his power to make sure you drive away happy in your new-to-you bus, like we did.

1300 miles (and two chiropractic appointments later!), our new bus was home, which I’m sure thrilled the neighbors…. Although maybe it’s not an issue, because the people on one side have a little food truck in their driveway, and there’s a reclaimed ambulance on the other side. One friend who visited says our street looked like an Emoji Village! We’re planning on building a driveway/RV pad to park it in the back yard, but record-breaking rains in central Texas over the past several weeks have soaked the ground and postponed our ability to begin that project. In the meantime, the bus is parked in an inexpensive local storage lot, because no matter how cool we think it is, the big yellow bus was a bit of an eyesore in our front driveway! Still, we got such a good deal that we could store it for two years and still come out ahead of what it would have cost to buy it locally!

It’s been registered, titled, and insured in Texas, and that stuff will all be much less expensive after we’ve converted it into a bona fide RV. Even with no seats, it’s still considered a commercial passenger vehicle until we’ve made some changes. Stay tuned over the next several months, as we gut the inside, paint the outside, and begin the work of transforming our bus into a safe and stylish recreational vehicle!

What’s the biggest DIY project you’ve tackled?

Our January 2016 Budget

Posted on January 4, 2016 by Elizabeth Vega

I created my first budget about ten years ago from a template I found in Dave Ramsey‘s book The Total Money Makeover, and after years of practice, it’s become habit for me to make a new budget every month. I get asked on a regular basis to help people set up their budgets. I’ve been able to sit with a few friends, but time and distance prohibit me from helping individually every person who asks. Every household is different, so every budget needs to be different, too. Also, it’s important for me to say here that I am not a financial planner or adviser, and that everyone needs to be accountable for making informed choices about their own money. That said, since it can sometimes be helpful to get an idea of what other people are spending on and saving for, we have decided to share our budget. I’m showing where our money goes as a percentage of our take-home pay, both to maintain some privacy and also because it’s more practical: Regardless of the dollar amounts, it’s a good idea to try and save some money each month, meet your basic needs, have a little fun if you can afford to, and return something, however small, to the communities and organizations you care about.

Here’s how it breaks down this month for us:

Giving 3%. This category is on the small side this month. Not being religious, we don’t tithe, and we only have one gift-giving occasion in January. The balance of this category will go into donation boxes of non-profit institutions we visit this month. We also make an effort to contribute to charitable organizations and relief efforts throughout the year, and volunteer some time to causes we support.
Emergency Fund 10%. Our Emergency Fund is currently big enough for us to survive for about four months with no other income. While that felt comfortable for us when we had one spouse with a full-time job, and one with several part-time and freelance income streams, now that we are down (for the time being) to one partner with one full-time job and a very little bit of part-time work, we are working toward having a year’s worth of expenses set aside for emergencies. By my calculations, at the rate we are able to save, it would take us about six years to reach that number! Because we anticipate returning to our 2+ income status in a couple of years (thereby returning to a smaller Emergency Fund), we’ll probably never hit our temporary goal, but we’re aiming to set aside 10% of everything we bring home in the meantime.
Tax & Insurance Fund 10%. We maintain a separate account where we amortize our annual term life and auto insurance premiums, and set aside money to pay taxes on any 1099 income.
Mortgage 25%. Our only debt is this 30-year fixed-rate loan, and we made a 20% down payment to avoid PMI. If we don’t pay anything extra, the payment (including principle and interest as well as escrow for property tax and insurance) is a quarter of our current take-home pay. We REALLY wanted a 15-year mortgage, but if we had done that, our currently reduced income would be more of a crisis than an inconvenience, so I guess we made the choice that was better for us. Still, we’re planning to get it paid off just as soon as we can.
Utilities 3%. This includes electric, water, natural gas, sewer and trash pickup. We are constantly looking for ways to reduce our usage, and hope to continue to see this number go down.
Mobile phones 3%. Our mobile phones are recent-release smart phones with high-usage packages. Admittedly an indulgence, we switched providers last year to save about $250/year over what we used to pay, and this expense would be the second cut we made in a financial crisis (the first is coming up below).
Home Improvement 2%. The Home Improvement Fund is one of the last budget categories we pay into right now. We are making continuous minor improvements at the Little Hippie House, and hoping to save enough to replace the aging roof, remodel the bathroom & kitchen, tear down a load-bearing wall, and install new floors. That all could take quite a while, but we’ll keep chipping away at it, as our finances allow.
Cable/Internet 2%. Cable would be the first thing to go in the event of a financial crisis, and I suppose our internet would have to slow down a lot if things got tight (or maybe not: Google Fiber is slowly making its way into our neighborhood). But it’s another indulgence we’re comfortable with for now.
Transportation 1%. Our transportation expenses will be ridiculously low this month, in part to one of us being a stay-at-home spouse, and the other one working just a few miles from home. Having paid-for cars that won’t need servicing, inspections, or registration in January helps a lot, too! (Remember, though, that our car insurance falls into another category… this number would double if we included it here)
Food 11%. Food is the big budgetary challenge for us this month, but we’re determined to make it work. When our income is bigger, we normally spend about double what we’ve allotted for January! This month, we’re planning to minimize meals out, work our way through the frozen holiday leftovers, and take advantage of our upcoming small winter garden harvest. In addition to feeding ourselves this month, it’s my hope to use 5-10% of our weekly food budget to build our home food store… I really love going to our little chest freezer for a gallon of milk or to our garage for a jar of peanut butter instead of having to run to the market when things run out!
Pet Care 1%. This category this month consists entirely of canned food for our two cats. We have more than enough kitty litter and dry food to get through the month, and their annual veterinary visits aren’t until March.
Clothing 2%. We aren’t planning any clothing purchases this month, but we’re setting a little aside so we can do a Big Shop in the Spring.
Entertainment 3%. Entertainment is the one area where we consistently underspend! Every month, it’s a challenge to get ourselves out to the movies, a play, or to hear some live music. We’re still working on that, for the sake of balance.
Personal Care 9%. Our Personal Care budget should really be called “MY Personal Care budget,” as Mr.Vega gets an inexpensive haircut every other month or so, and is in the process of growing an Epic Beard, so we no longer buy him razors or shaving cream. Because I’m in the process of Changing Looks, hairwise, this month, this category is more than double what it usually is.
Education 6%. Even community college costs something, at least for now: there are a lot of political promises being made on the campaign trail to change that. That will be lovely if it happens, but in the meantime about 6% of January’s pay will go for tuition.
Vacation 7%. Last summer, we went to a five-day music & arts festival that we just loved. It’s time to buy tickets for the next one, and because it’s an out-of-town camping trip, we count the tickets as a travel expense, rather than “entertainment” (and this part is a little weird, but because the event is limited-capacity, tickets are sold lottery-style, with each person allowed to request a maximum of two tickets. We each put in for two, and if we get all four, we’ll sell the extra pair at face value and recoup half of our expense. But we’re sending payment for four tickets in January, so that is what we have to budget for).
Professional Development 2%. My new job will reimburse me for this training after I complete it this Spring, but registration is first-come-first serve, which is why I’ll be paying for it this month.

So there you have it: our January budget, with every dollar accounted for. There’s plenty of room for improvement, but we’re not unhappy with it. Feel free to share in the comments how different it is from (or similar to) yours… I’m always curious to learn how other people are doing it.

When Plans go Awry

Posted on February 8, 2015 by Elizabeth Vega

Last month, we were supposed to fly back to California to attend the wedding of one of our dearest friends. We felt very fortunate that many of our close friends were also on the guest list, so that we would be able to see many loved ones all at once. Our newest niece was born a few months ago, and we were looking forward to meeting her, as well. The flights had been booked and hotel rooms reserved months in advance.

And then I got sick.

Not just a little sick, either… I was running a temperature, my sinus cavities and ears were filled with fluid, I had a cough, and my throat felt like it was on fire. The doctor at the Urgent Care clinic sent me home with some powerful antibiotics and orders to stay in bed. There was no way I was getting on an airplane. What happened next is going to read like an advertisement for the companies we used, but we got such terrific service across the board that they earned the good word-of-mouth!

Fortunately, we had booked our flight using our Southwest Airlines Rapid Reward points, and there was no penalty for canceling the trip. All the points went back into our account. Our hotels had been booked through Hotels.com, and canceling by 6pm local time the day before meant that we wouldn’t have to pay a dime for the rooms we had reserved. Except that I didn’t throw in the towel until about 9pm local time. Mr Vega called customer service and explained the situation… And they let us cancel for free even though we were late! We had reserved our weeklong car rental through Hotwire.com, who also allowed us to cancel without penalty. Finally, we had each gotten some new clothes to wear to the wedding… which we returned, unworn, to the department stores where we bought them.

All in all, our canceled trip cost us… nothing.

I wish I could say that it was all due to my fantastic travel savvy, but the truth is, in a few cases, we were just lucky. To keep costs down, I frequently bid on and pre-pay for non-refundable rental cars at the name-your-own price sites, or reserve hotel rooms that come with very low rates and no-cancellation policies. To us, those are acceptable risks that we take in order to get the savings. This time, the travel gods (or the cancellation gods) were with us.

But in addition to taking extra vitamins in the hopes of making sure that we never have to miss another trip, you can bet I’m going to read the fine print from now on when we book our travel, just to make sure we could get out of it if we needed to.