Multi-Level Marketing (MLM) Can Be a Drain on Your Wallet

Consumerism Commentary had a timely blog post on friends who are Multi-Level Marketers and sell their Tastefully Simple, Pampered Chef, and Mary Kay wares in social situations. Just a few days prior, I attended a small Mary Kay “party” at a good friend’s house — she was the host, and an acquaintance of hers conducted the evening. In order to protect the contents of my wallet, I usually avoid these things like the plague. That does say something about my willpower, but also speaks to the sales skills of the multi-level marketer.

It was three of us and the marketer, and we snacked on puff pastry appetizers, chips and salsa, and some wine. I and my two other friends are all mothers of 1-year-old children, so having some “mommy time” is always a good idea.

There was no hard sell, but the MLM salesperson was very proud of her line and explained a lot about each product as we were led through a skincare regimen. Afterward, we were encouraged to provide her with contact information for 5 other people in order to “win” a makeup-application brush, which we did (sorry, IRL friends).

In the end, I walked away with $80 in Mary Kay products — cleanser, moisturizer, primer and foundation. Does it make it any better than I paid by check rather than credit card? Slightly. Did I spend the least money of the three of us? Absolutely.

At least I demonstrated minimal restraint — right?

Appropriate Pitches and Inappropriate Tactics

While I try to avoid the all-out “parties,” I always fail when it comes to the food-related sales in the office, which are generally school fundraisers for co-workers’ children.

First of all, there’s the Girl Scout cookie sales. While most troops sell around the same time in my area, they tend to overlap. And if I buy from one person, I feel morally obligated to buy from everyone (but honestly, I just love my Samoas). This happens twice a year, I believe.

Then there are Easter candy sales, specialty foods sales (think cheese, crackers and smoked meats), and holiday gift-wrap sales. These I don’t mind so much, either, because a portion of the money goes toward the schools. And Mr. Not-So-Frugal just loves him some sticks of pepperoni.

One of the commenters on Consumerism Commentary mentioned she was forced to endure a sales pitch in the middle of a bachelorette party — it was worked in, supposedly with the blessing of the bride-to-be. Now that’s sneaky — and inappropriate, in my book.

I’ll continue to minimize the number of MLM pitches I attend, because I almost always wind up buying something. But there was that one time I walked away from a PartyLite even with nothing but freebies…

READERS: Do you feel pressured to buy something when you attend these parties? Or do you leave empty-handed and guilt-free?

Hunger Games: Hot or Hype?

Hunger Games advertisements are EVERYWHERE. Trailer commercials permeate my TV and online viewing, and it seemed like out of nowhere, everyone was talking the movie. The books were flying out of stores. Some people, including a few friends of mine, bought the entire trilogy (The Hunger Games, Catching Fire, and Mockingjay), then gleefully passed them from person to person.

Playing off the hype, print publications and news shows have worked the phrase “Hunger Games” into far too many headlines and stories. Please, make it stop.

I’ll admit that I’ve read Suzanne Collins’ The Hunger Games — accidentally. I picked up a free advance copy a few years ago, not realizing it was a young adult novel. I did read it, and thought it was good. But I also realized it was more of a political treatise on the haves vs. have-nots, and big government vs. the “little people.” I later put the book into my donate pile and soon, it was gone. I didn’t discuss it with anyone, since it didn’t really make that much of an impression on me.

All of a sudden, I hear they’re making it into a movie. Really? This little novel is becoming a big-budget film? Ridiculous, but hey, Hollywood is on the young-adult-book bandwagon.

Then the advertisements started, and the best-selling book became an even bigger seller. Hunger Games-related merchandise flew off the shelves (and continues to do so) at teenybopper stores like Hot Topic. The movie’s stars are doing press on every morning, afternoon, and late-night show.

Incredibly, the Hunger Games movie has been a boon to investors, too — CNNMoney.com claims that stocks even tangentially related to the Hunger Games empire have seen great gains, including the Lionsgate movie studio and book publisher Scholastic.

The film itself made $155 million in its opening weekend, an incredible take and the third-best opening of all time.

What’s next? Titantic 3D, of course. With all of the media oversaturation, my heart just can’t go on. I’m going to go hide in a book and hope it doesn’t become a movie.

Fix-It Friday: Installing a Digital Thermostat

After installation, but before touch-up.

After sitting on the floor of a closet for two years, the digital thermostat is finally installed. I was tired of our inaccurate, old-school thermometer and wanted something more precise. Of course, I was also in it for the money-saving potential, too.

The idea of messing with wiring in our house didn’t exactly appeal to me, but I figured it would only be a few tiny wires. Worst-case scenario, there are a ton of wires to connect. I’ve rewired entire rooms from scratch, so how hard could it be?

The Process

First, I had to remove the current non-digital thermostat, which was attached in three different layers: the cover, a middle portion containing the actual thermostat, and the base anchored to the wall. There were a lot of screws.

Once I unscrewed the middle portion, I saw that I was in luck. There were only three wires: two connected to the thermostat, and one that was just hanging there, exposed. It should have been wrapped in electrical tape and tucked away from the thermostat unit. I noted which wire corresponded to which terminal points (labeled with letters of the alphabet), disconnected the two wires, and removed the base. Now I had a clean wall with a few screw holes and a set of three wires.

The new digital thermostat installation kit included very easy-to-read directions that said, in a nutshell, to mount the base using the provided screws and connect the existing wires to the same letters on the new terminal points. I think I hooked up a “B” and a “V”, tucked away the now-wrapped-with-black-electrical-tape third wire, and snapped the thermostat and then the cover into place. Easy-peasy.

From my garage, I took a bit of spackle and filled in the old screw holes. I also had leftover wall paint and touched up the part of the wall showing the old paint job, and it looks like new.

What I like best about the digital thermostat is that I can program it for four different temperatures each day — wake, leave for the day, come home, and sleep — with one set for Monday-Friday and another set for Saturday and Sunday. What I did notice is that I need to keep the thermostat set at 75-76 degrees at night to stay comfortably warm on the colder days, probably because the thermostat location is in a hallway next to the kitchen, where it tends to be warmer than the rest of the house.

It’s nice to not have to worry about turning down the thermostat in the morning before leaving for work. I’m looking forward to seeing if the digital thermostat helps lower our utility bills. I’ll try to compare our next bill to the same time period last year, but since we’ve been having a very warm spell, it probably won’t be a good indicator of improvement.

Papers: What to Shred and What to Keep

When it comes to shredding, I like to think I’m up there with the best of them. Every piece of junk mail, every credit card balance transfer, every scrap of paper with our name and address — all of our personal information goes through our shredder. Financial information is at the top of the “to-shred” list.

The problem is that I have two large piles of papers left to be shredded, thanks to a recently emptying of my old, plastic “file cabinet.” Utility bills from 5 years ago? Unnecessary. Store receipts from 3 years ago? Sayonara. Credit card statements from 8 years ago? Why do I still have you?

In this electronic age, is there really a need to keep paper statements, receipts or paystubs? Turns out that there’s some paperwork that you should hang onto for a few years.

 

What to Keep

Tax Returns: Liz Weston recommends filing away tax returns and the associated forms for 7 years — that’s how long Uncle Sam can take to audit you. If you’ve submitted a fraudulent tax return, there’s no cap on the audit time.

Loan Paperwork: If you have a year-end summary, you can ditch the periodic statements. Also keep loan payoff notices indefinitely.

Investment Statements: Same as for loan paperwork — hang on to the monthly or quarterly statements until you get a year-end summary, then toss others. Keep the year-end paperwork until you’ve withdrawn all the money in your investments.

Receipts for Major Purchases: You may need these for insurance purposes if you’re claiming a loss or damage through a policy.

Home Improvement Paperwork: Knowing how much you spent on renovations/upgrades can help add to your home’s price, should you decide to put it up for sale.

Insurance Policies: Hold on to these for as long as the policy is in effect, if not longer. I like to file away previous homeowners and automobile policies for comparison purposes, to make sure the coverage matches up from year to year.

Personal ID Documents: Birth certificates, marriage certificates, divorce papers, old IDs.

 

What to Shred

Old Receipts: Once you’ve reconciled receipts to credit card statements or checking accounts, throw those suckers in the shredder. Exception: Receipts for major purchases, as outlined above. We mainly have receipts for our debit-card purchases, such as groceries or gas.

Bank and Credit Card Statements: From now on, I’m only going to keep one year worth of statements. Which might be overkill, since I can access years of statements online through the credit card companies. Our bank has gone “paperless” and no longer send account statements, so that’s fewer documents to store and shred.

Utility and Phone Bills: I’m only filing a few months’ worth of these, in case I need to dispute a charge. Again, digital statements are all available through my online accounts.

Paystubs: If they’re over a year old and you have your W-2 form showing income for the year, chuck your paystubs.

 

Shredding can be a stress-buster. SHRED! DESTROY! ELIMINATE! Sure, the machine is doing all of the destroying, but it’s sort of satisfying to watch a whole piece of paper become confetti.

I just wish I’d started sooner. Back to shredding credit card statements from 2004!

Want to Earn Interest on Your Money? Good Luck With That

The other day, a friend asked me how she can earn higher interest on her money in the short-term.

My reaction? I laughed.

Maybe that wasn’t the right response, but the sentiment would have been the same if I told her it’s nearly impossible right now, unless you want to take a risk. And like me, she’s the financially conservative type. You can gamble on the stock market — which does seem to be on an upward tick — for now — but there’s no guarantee you won’t lose your investment, never mind actually make a buck or two.

Interest rates on savings accounts and certificates of deposit are so minuscule, they’re almost non-existent. I remember getting 5.5% interest on a 180-day CD a few years ago, but you’ll be lucky to get 1% on a 2-year CD. And those online banks everyone was heralding a few years ago? Same thing. Now that Capital One’s buying up famed Internet bank ING Direct, fahgeddaboudit!

 

Our Current Interest Rates

Interest rates at banks are laughable right now. Here’s a quick breakdown of the interest we’re “earning” at our community brick-and-mortar bank (the rates are compounded daily):

Checking: .30%

Savings: .39%

Youth Account: .45%

 

So what is a cautious investor to do? If I wanted to lock up our cash in a 2-year CD (certificate of deposit), it’d earn a paltry 1.095%. Five years? 1.735%. Money market accounts aren’t doing much better, and novice investors aren’t going to be comfortable with ETFs and REITs.

The only thing left is gambling on the stock market, and you have to hold those investments for a year or be subject to higher taxes because of short-term gains — which could negate any profit you’ve made.

In a nutshell? There’s really no surefire way to earn high interest on short-term investments. At least, not for conservative investors like myself and my friend.

Are your bank’s interest rates so low that they make you want to cry? Where are you putting your money these day so it earns some interest?

Blasting Away Our Consumer Debt

We e-filed our federal tax return on Wednesday, February 22 using the IRS’ Free Fillable Forms — and received our refund on March 1. We got back a nice chunk of change — although I know many of my fellow personal finance bloggers abhor the idea of getting a big tax refund.

There was no doubt about what to do with 1/3 of the tax refund: pay down our credit card debt, which has been lingering for a year following the arrival of Baby Frugalista. While initially the bulk of it was from the hospital bills from her birth, the rest came from the accrual of months of buying baby-related items and things we wanted for our home following our down-to-the-wire upstairs bedroom renovation around the time she was born. Coupled with an extended 6-month-long maternity leave, with less than 2/3 of my pay coming from disability/family leave insurance for 12 of those 24 weeks (the other 12 were unpaid), the debt started adding up.

We’ve been paying a good amount toward the debt each month, but by continually making purchases, we kept winding up back where we started. To remedy this, I put a moratorium on purchases and tossed $2,000 at the credit card debt, eliminating the balance on a credit card with a 6.24% interest rate on purchases. That leaves $2,300 in debt, split between two other credit cards, both at a 0% balance-transfer rate. One card’s 0% interest rate expires in June, and the other in December. The earlier one will be paid off next.

What about the other 2/3 of the tax refund, you ask? It’s in our savings account, and a portion of it will be used to fund our upstairs bathroom renovation. We’re doing one room at a time to minimize our cash outlay.

Paying off that credit card felt great. I can’t wait to get back to our pre-baby state of no consumer debt!