Money To Live

September 24, 2009

Renting a ZipCar

Filed under: Uncategorized — by moneytolive @ 6:56 pm

For various reasons that I did not anticipate, I ended up in Seattle without my car. It is here now, thanks to my generous parents who drove it all the way from Texas.

Before I had my car though, I needed to get around Seattle to

  • look at apartments
  • go to job interviews
  • transport my stuff between friends’ apartments

Seattle has wonderful public transportation, but it is still sometimes easier to have a car. That’s where ZipCar comes in.

ZipCar is a private company that buys/rents parking spaces around big cities and parks cars there. The cars are wirelessly connected to a computer system that tracks their locations and decides when to lock and unlock the doors.

If I want to rent a ZipCar, this is what happens:

  1. I make a reservation online.
  2. I go to the car’s location and tap my “Zip Card” on the dashboard. The doors unlock.
  3. I hop in and drive away.

For occasional driving, ZipCar is an affordable option.

The fee for not returning a car is pretty stiff: $50 for being even a few minutes late. Obviously, for the system to work, people need to be able to count on a car being available when it is reserved. In a large city, though, traffic can be slow and sometimes unpredictable. I would hate to be late because I underestimated how long traffic would take.

This relatively large penalty creates the dilemma of whether or not to reserve the car for extra time. Initially, my impulse was to just add on an extra hour to each reservation (at an additional cost of $9-10 per reservation). But, that is equivalent to using ZipCar 5 times and being late exactly once. When in reality, maybe I wouldn’t have been late at all.

With my last two rentals, I added an extra hour to each, and each time, I returned the car 1.5 hours early – so I wasted almost $30.

On the other hand, while apartment hunting, I extended my rental by an hour in order to fill out a rental application. It is very easy to extend a reservation with a cell phone, as long as no one else has the car reserved already. If I had not been able to extend the reservation, I would have had to return the car, and then return to the apartment later that day or the following day – possibly missing my spot in line for the apartment.

A rational analysis of my past ZipCar rentals would say that it is better to just reserve the car for the expected time and to occasionally deal with late penalties. Despite having a Ph. D. in Applied math, I readily admit I sometimes do not make rational decisions.

Would you reserve the extra time with a ZipCar? Are there other situations where you’ve faced a similar decision?

September 17, 2009

Childhood lessons about money

Filed under: Uncategorized — by moneytolive @ 1:20 am

Not infrequently, I read something about teaching money skills to kids. Since I do not have kids, I understand that some people may think I have no authority to talk on the subject. Having once been a kid, though, I can talk about my experiences learning about personal finances.

I have two distinct memories of when I learned something about money from my mom.

Back in the ’80s, my elementary school offered “spirit sweatshirts” for the price of $20. I came home and asked my mom for $20. She pulled out her check book and wrote a check for $100. She gave me the check and a note to my teacher saying something like this: “I’d like to buy one sweatshirt for Katy and four sweatshirts for other children in the school whose families cannot afford to buy them.”

I was so proud when I took the check and note into school the next day. It’s funny – I have no memory of the sweatshirt itself, only the act of charity I saw.

In the ’90s, my mom came into an inheritance and invested it in the stock market. I remember her reading the Wall Street Journal. She showed me how to read the opening and closing prices of stocks. I’m really glad she did that because otherwise, I might not know that once upon a time Yahoo! did not provide data on stock prices, and this information had to be found in a newspaper.

For a few days, I felt very important looking up quotes of my favorite companies in the WSJ.

In a recent conversation with my parents, I remembered a time when my dad scared me to death because of money. I had played Solitaire on the computer and “lost” a lot of money. I asked my dad if I would have to pay the money (several thousands of dollars), and he said “yes.” I was very sad and talked to my mom, who explained the situation to me. Maybe that’s why I don’t like gambling.

September 9, 2009

Renting an apartment

Filed under: Uncategorized — by moneytolive @ 5:00 am

It is a lot more difficult to get an apartment when your monthly income is $250 than when your monthly income is $9K.

Potential landlords may say something like this:

  • “Your income is xx?!?!?!?”
  • “Maybe your parents could co-sign the lease.”
  • “You only worked for 6 months? That’s not a long enough work history.”
  • “I need to see official bank statements to ensure that you are not committing identity theft.”

While looking for an apartment in Seattle, I ran into one obstacle. My regular paycheck is now very small, in fact not even one third of what I will be paying in rent each month. This regular income is/will be augmented through some other part time work (that pays well hourly but is not guaranteed). Potential landlords tend not to like the sound of that.

But I did find an apartment that I think I will be very happy in (great location, on the right bus route, and stainless steel appliances). Despite the low salary, there were several things going in my favor:

  • I have significant savings.
  • Two people offered to co-sign my lease if I needed a guarantor.

Without those resources, it may have been a lot more difficult to get into an apartment that I liked. Without the savings, I do not think I would have passed a background/credit check; I probably still would have been ok because I could get someone to co-sign my lease.

In my recent move to Seattle, I only brought two suitcases, a laptop bag, and a bag pack. I left many, many things behind, including my checkbook. As I talked with potential landlords, not only did I have to report very little income, but also that I have to pay by money order. The potential landlords did not seem to mind money orders at all.

The USPS issues money orders up to $1,000, and it is easy to get three money orders a day. It is possible to get more than three a day, but more ID is required. To secure my apartment, I had to put down $2,200 (first, last, and a deposit). After ordering the three money orders at the post office, the friendly postal employee asked if I wanted cash back on my debit card transaction. I laughed and said “no.” She laughed and said,  “There’s nothing left!”

September 3, 2009

Who does that?

Filed under: Uncategorized — by moneytolive @ 12:32 am

Most personal finance books aimed at 20-somethings talk about Alice and Betty. Alice saved money every year in her 20s and then stopped at her 30th birthday. Betty started saving in her 30s and saved until retirement. Who has more money in the end? Surprisingly, Alice (due to the magic of compound interest). But who is Alice?

Whenever I see these examples, I wonder why someone would stop saving – especially someone who had saved so diligently. Who is that person?

It’s me!

Today I took a half-time AmeriCorps position that pays less than $4 per hour. Though my savings rate will take a nose dive, my goal is to continue saving something. I am very excited about this opportunity, and I will tell you more about it as it develops – I start in a few weeks.

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