Free Tivo

Vintage TV set, pt. 2
Image by Marcin Wichary via Flickr

TV is causing problems in my life.

We watch too much TV. Often, we’re only watching because there’s a crappy show in between two shows we do want to watch.   In the winter–during the new seasons–my son has wrestling practice 4 or 5 nights per week, which means I miss the new shows I like.     We recently downgraded our service provider, so there’s no functional guide button in the house.

That all makes me sad.

Then I found out that Tivo’s lifetime service is attached to the unit.  If you sell a unit with lifetime service, you can transfer the service to the buyer.   You can’t, however, transfer the service to a new box.   That means that everyone who upgrades and sells their old box is selling the lifetime service with it.  If you don’t mind having older equipment, you can pick up a used box with full lifetime service for less than the cost of a new box.

After reading Erica’s method of finding 750 extra hours per year, we decided to give it a shot.  We are taking back control of our TV. No more rushing home to catch a new episode.   No more mindlessly channel-surfing to kill time between good shows.  No more commercials.   And a guide!  I like having a guide button.

I started shopping.  My goal was to get a Series 2 Tivo with full lifetime service for about $100 before shipping.  I came close a few times, but always lost the auction, in the end.  I wasn’t in a hurry, and I didn’t actually have the money budgeted, so it was good to lose.

Then, a friend found himself in a situation that didn’t work with a Tivo and decided to sell his heavily upgraded, heavily accessorized Tivo HD for $100 + shipping.  A quick call to my wife resulted in just one objection:  Where were we getting the money? We don’t have an opportunity fund, yet and I needed to take advantage of this quick if we were going to get it.

I decided to make it free.

When I automated all of our bills, I rounded up. If a bill was for $63.50, I paid $64.   If a bill wasn’t exactly consistent, I paid enough to cover the higher amount.   For example, I didn’t have a text messaging plan on my cell phone until December.  Before that, I’d get about a dozen texts each month, so I budgeted for paying for the texts.   If I didn’t get the texts, I’d get a credit on my bill.   I never lowered the automated payment.   All of my bills were set up like that.   My insurance company dropped my rates, but I left the payment alone.   I slowly started accumulating a credit on a number of bills. My intention was to skip a month when the billed amount got to $0, and apply the money to debt.  It was just a mind-game to play with myself to make the debt easier to pay.

I flipped through the bills, looking at the credits.   I adjusted the payments to match the bills this month and found more than enough to buy the Tivo.   This is a purchase that doesn’t influence my budget in any way.   Almost.   This unit doesn’t have lifetime service, so I will be paying for the monthly fee, but that’s been more than balanced out by  reducing our television service.

This is a recently-high-end model for free, as far as my budget is concerned.   I used money that wasn’t even on the table before I went looking for it.  It’s like searching the couch cushions for money to catch a movie.

Now,  I’ll have control of my TV–with a strong measure of convenience to boot–for $13 per month.  The time savings is yet-to-be-determined.

A free Tivo simply because I rounded my bills up when I automated last year.   That’s a pain-free opportunity fund.

Update: After I wrote this, I found out that I dropped the ball in budgeting for child-care now that summer is here and my oldest won’t be in school.   These costs are going up $350 per month.   I spent an hour scavenging the couch cushions of my budget this week.   I had to adjust some savings and repayment goals, but I’ve effectively paid for a summer worth of care for my boy the same way.  Free.

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The Virtues of Blow Money

When we initially developed our budget, we built it tight.  Every penny was accounted for and had a place to go.  I was so proud.

Money, money

Money, money

Unfortunately, there were some problems with habitual–even compulsive–shopping in our house.   The change from “whatever we wanted” to “it’s not budgeted” was too much, too fast.

After a few months of arguments, we agreed to set up a “blow money” line item in the budget.   That’s money that is absolutely unaccountable. When a purchase comes out of that fund, no questions are allowed.   Whether it’s a new pair of shoes for her, or a new book for me, nobody gets to fight over it.   Sometimes, it’s a nice dinner out, other times it’s another gadget for the entertainment center.   It’s never a problem.

This provides two major benefits.

First, it balances the feeling of sacrifice.   If my wife never gets to buy anything, while at the same time, she’s watching our friends and neighbors flaunt their rampant consumerism, it makes her feel like she is giving up the good life.   We aren’t lacking for anything, but the trappings of middle-class “success” can be expensive.    Having an opportunity to participate in that horrible rat-race lessens the feeling that we are missing out.    Rationally, we know that the right thing is not to spend that money, but emotionally, it’s a necessity.

Second, it’s a safety valve.   Our finances are under tight control, which can cause pressure.   Finances are, after all, one of the leading causes of divorce.   Having a way to release that pressure makes everyone happier.    Habitual shoppers experience shopping the same way drug addicts experience their “high”.  That includes withdrawal.   The safety valve turns this from a “cold turkey” method of quitting to a weaning of the addiction.

Another minor benefit is that the blow money can serve as an opportunity fund to bridge the gap between the discretionary budget and a desired purchase. Last week, we ran across a curio cabinet that exactly matches our living room, but we didn’t have it budgeted.   Out comes the blow money, which, combined a portion of the discretionary budget and some negotiating, made the new cabinet affordable, without busting the budget.

This isn’t a system that works for everybody, but it keeps us on track.

How do you handle the stresses of a household budget?

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Budget Lesson, Part 8

This is a continuation of the budget series. See these posts for the history of this series.

This time, I’m looking at our discretionary budget. These are the things that don’t have a fixed cost. Any individual item is largely optional, and, ultimately, we don’t track these purchases closely. At the beginning of the month, I pull this money out of the bank in cash, except for 1 category. When the discretionary budget is gone, it’s gone.

  • Groceries/Dining  – At the beginning of the week, we sit down with a meal planner and (Can you guess?) plan our meals.  The planner we use has a weekly calendar with a checklist below each day to build the grocery list.  At the bottom of the page is another checklist for staples that don’t apply to a specific day’s meal, like milk or snacks.   We build the list, then transfer it to another sheet, broken out by grocery department.  That keeps me from having to criss-cross the store.   I make one lap.  When I go to the store, I only bring that week’s grocery budget in cash,  so I keep close track of how much is going into the cart.    Recently, we’ve gotten so good at making our meals cheaply from scratch that I reduced our monthly food budget by $50.   I enjoy good food, so I wouldn’t reduce this budget item if it was a sacrifice in quality.   For example, the Rainbow Foods store-brand chips actually taste better than Lay’s for half of the price.    We stock up when things are on sale and cook creatively.   Sometimes, if time has been too tight to make a meal plan, we eat solely from the pantry for a week, buying nothing but bread and milk.   By sticking to the list, and not fearing the store’s brand, we are able to feed our family of 5 1/2 for $450 per month and still eat well.
  • Discretionary  – This is for the random things that come up, and some of the not-so-random.   Toiletries, activity fees, admissions, and fund-raisers all come out of this fund.  At the end of the month, whatever is left gets tucked into a box and forgotten.   When the box gets full, it goes to the bank to be applied to debt. There isn’t a lot to cut here, since this line-item is only $200.
  • Baby stuff  – This category is continually shrinking.   Our middle kid is recently potty-trained and our youngest is trying.   There is no baby food and no formula, just 1 pack of diapers every month.   In 6 months, this category will be eliminated.
  • Gas/oil  – This is the single category that isn’t cash-based.   It makes no sense to take the kids out of the car to pay inside, especially in the winter.    Also, all of the temptation is inside. It’s much better to spend the money at the pump.    There isn’t much we can do to reduce this, at the moment.   Our next car won’t be a full-sized pickup, but we are several years from that purchase.    We’ve started clipping oil-change coupons to keep this down to the minimum amount possible.
  • Clothes  – We only allocate $15 per month for clothes.   In a good month, we don’t spend it.   We can’t eliminate it completely, because things do come up.   Over the summer, I’m hoping to completely leave it alone to save up for a new(used) winter jacket for our older daughter, who doesn’t get hand-me-downs.
  • Blow Money  – This is the safety valve.  It can’t get reduced and still work.

We’ve now addressed out entire budget, including what we can do and have done to keep our costs under control.  Looking back, I don’t see too many cuts I’ve missed.

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It’s My Fault So Stop Me Now

One of my biggest problems with maintaining a goal is follow-through.    Three weeks or six months into pursuing a goal, it becomes incredibly easy to rationalize setbacks.    If my back hurts, it’s easy to skip some sit-ups.  If a custom knife maker offers me a good deal, it’s easy to drop a significant part of my discretionary budget on a really nice knife.   The rationalizations come pouring in when I see a good deal on Amazon.   “I need to read that book” or  “I’ve been waiting for the move forever.”  The excuses don’t matter.  As long as they are coming in, I will eventually cave to my inner impulse demon.   How do I avoid that?

I try to make myself accountable to as many people as possible. At the beginning of the year, I posted my 30 Day Projects here, for the world to see.    I post updates on a regular basis.   Admitting my failure with the sit-ups was surprisingly difficult.   I made myself accountable and fell short.  That’s hard.  Thankfully, none of you came around with a sjambok to make me regret my slip-up.   When I was doing push-ups, my wife was more than willing to let me know when I slipped into bad form to try to squeeze out a few more before I collapsed.   I count on that.

I count on my wife to help me stay on the right path.  Eliminating our debt is easily the longest goal either of us have ever set for ourselves.   Mutual support and mutual accountability are our main methods to maintain that goal.   It is, after all, a marathon, not a sprint.   When I want to buy more cookware, she reminds me that we already have something to serve the purpose.    When she wants to buy the kids new jammies, I remind her that they have more than can fit in their dressers already.    Neither of us are afraid to tell the other to return bad purchases to the store if it’s not in our budget.  When we go shopping, we go through everything in the cart before we get to the checkout, to decide if we really need everything we picked up.   We support each other.

If I couldn’t make myself accountable to my wife, my family, my friends, and–last, but certainly not least–the three people reading this, I would fold in the face of my marshaled rationalizations and leave my goals in the oft-regretted gutter.   Thanks for that.

How do you keep yourself on track?

Update:  This post has been included in the Money Hackers Carnival.