What Can $10 Buy?

A lot in a garage sale!

And to think that we did not plan on going... but since we were up on our usual regular waking time on Saturday, we went.

Here's what we bought last Saturday at our community garage sale:

• $1 Dress - Satin cotton cloth
  
• $3 Speakers - Brand new. Still wrapped in plastic.
  
• $1 Business Card Scanner - Brand new. CD was not yet opened.
  
• $1 Web Camera 
  
• $1 ClipArt CDs - Woo hoo!!! 5 CDs. Published 1996… just don't use the images of people because the hair and fashion style gives away the age! 
  
• $3 Tennis Racket Bag - This was the most expensive item. The man knew how to sales talk!

That's my kind of garage sales - go early, nice cool weather, great buys, finish quickly. We were back home by 9:30 am.

How about you? What has been the best stuff your $10 bought you in garage sales?

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Do You Live Where Gas Price is High?

When we relocated to Boise, Idaho in June 2003, gasoline was $1.50 per gallon. More than 5 years later today, gas price is at about $4 per gallon (167% increase) . That is about 50 cents per year increase. (In Philippine peso, that would be about PHP20 increase per year in the gas price.)

Take a look at this gas price analysis per US county from New Jersey Gas Prices and see if you live where it is the highest:


Now in the Philippines, that is another story. I forgot how much gas price was when we left in 2003 but my brother thinks it was PHP29 then (or PHP120 per gallon or $3 per gallon). Look at how much it is now - PHP62 per liter (~100% increase). That would be PHP248 per gallon (or roughly $6 per gallon)!

Wow... although the Philippine gas price increase is less than the US (100% vs 167%), the "absolute" amount is higher ($6 vs $4) by 50%(in 2008)-100% (in 2003). I did know this until now and I feel sad because our folks back home are being hit by a double whammy - lesser disposable income and higher gas price.

With the gas price rising, the rest of the basic commodities rise in price too. In the Philippines, Ben and Sarah Horton (remember them from a previous post?) blogged last April 29 about the Cost of Necessities. When I have time, I would like to put those Philippine prices side by side the US prices. That should be interesting...

I also looked at some fastfood prices in the Philippines:
- Jolibee's Sulit Sarap RiceMeals A which consists of 5 pieces of Shanghai Rolls and 1 cup of rice costs PHP39.
- Wendy's Chili Rice - my favorite meal now costs PHP38. It increased by about 100% too since we left in 2003 (PHP20).

Everything has gone up. A LOT. Depressing to think about.

So, why don't we all have a frugal week-end and probably plan of ways we can help our relatives, friends and kababayans back home!

Meanwhile, here's EGGONOMICS that was sent through our high school batch e-group about how we can probably effect a lower gas price through our own small ways.

Any gas-saving tip you'd like to share?

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Xoom In!!!

A few months back, Gladys, a Filipino friend here in Austin emailed me asking how I was sending money to the Philippines. I told her about the Bank of the Philippine Islands Express Remittance Corporation (BPI or BPI ERC, in short). While writing my response though, I was faced with the incomplete logic of my reasoning. That's when I decided to try Xoom - and it convinced me to change services.

First, about BPI ERC services... This is what my response to her extolling its virtues:

I use the remittance procedure. BPI here is not a bank, so they accept the money as remittances and not as deposits.

I noticed that they recently went back to $7 per remittance -maybe because the PHP has appreciated vs the USD recently. I think there are a couple of cheaper alternatives but I did not look into them further because I set up the distribution of the money in the Philippines either by transferring funds or filling an remittance card online.

What I mean is I send 1 amount for $7 into BPI Express Remittance Corp into my account in the Philippines. Then, through online banking monthly (for free :)!), I split the amount to various accounts - other BPI accounts or for those who have no BPI accounts, we set up BPI remittance cards (they call it EMO card but I forgot what the acronym stands for). This way, everything is traceable - which we need because some of the amount we send there, we declare for deductions in our US tax return.

If the person/s you are sending to do not have BPI accounts or they do not need that, I remember reading that you can do a delivery to the person as well. But you'll have to research that since I have no experience on it.

Meanwhile, here are some tips:
1. Wells Fargo or Washington Mutual have accounts that provides free money orders, cashiers checks, etc. I like that because instead of me withdrawing cash and then having to go buy money order somewhere else (2 steps), I can just directly ask them to give me a money order (1 step). Also, it's safer that way since I do not have to carry cash.

2. At first, I was sending the check and form to BPI SF through USPS Registered mail (~ $10). After a few tries of that, I just sent them first class ($0.41). What I just needed to do was as much as possible, drop them directly at the USPS drop boxes (instead of leaving them for the postman to pick up).

3. The remittance takes about 1 week. So you have to factor that in vs when you want the money available.

Also, if you need it faster, there are other alternatives - I have heard of xoom and western union but have not tried them. I have tried wiring through Washington Mutual since I don't have to pay for the outgoing wire fee ($25) and I only have to pay for the receiving wire charged by BPI ($25). I know that Wells Fargo has a new "product" similar to this but not sure if it is available here in Austin ( I got the flier in the LA Philippines Consulate Office).

Then I tried Xoom (and with just one look, my heart went boom! as in the song...) Seriously, here are my reasons why I changed over to Xoom:

1. Xoom's remittance fee is not significantly different from BPI ERC. BPI ERC charges $7 while Xoom charged as low as $3.50 to as high as $60.

For our purposes though, we were only paying a maximum of $7.99 which is very reasonable compared to BPI ERC's $7.

Take note that the middle row is for Value Service (where Xoom will debit from your checking account; which means the funds should be available and this is basically a cash transaction) while the right row is for Standard Service (where Xoom will debit from your credit card; which means in case you do not have available funds yet, you can use this service). I would say use only the Standard Service in extreme cases of emergency because it is very expensive and it also means you don't have sufficient funds - so should you be remitting money in the first place?

Also, in comparison to Western Union that I mentioned in my email response, it seems that Xoom was much much cheaper compared to Western Union for the cash transactions.



2. Remittance time is faster for Xoom (within 24 hours) vs BPI ERC's 1-2 weeks due to the mailing.

The first time you send through Xoom, your source account (bank checking account) will be validated first. Xoom will tell you that the validation will take time (I think like a week). Mine took just a weekend to be validated.

The next time I sent through Xoom, it knew me/my account already, so there were no long forms need to be filled out. Once I hit the SEND button, it actually takes about 15 hours for Xoom to transfer to my recipient account!


3. Convenient processing for Xoom (online) vs BPI ERC (need to get a money order, fill out a form, mail it, etc.)

This is a no-brainer. I don't have to make a trip to town to do these - go to the bank for the money order, fill out the form, put in an envelope, put a stamp on the envelope, snail mail it - which could easily be half-day. I do the process online in less than 5 minutes!

Did you notice the additional benefits that Xoom has? Faster, Better (more convenient), Cheap(er or equally cheap). That sounds familiar? Now where did I hear that? Oh, from my other life, my Intel life....

Of course, this review is not complete without mentioning the downside. There are 2 that I see:
1. Online transactions can be risky (as snail mailing it can be risky as well). Having Norton Firewall and Internet Security up and running is helpful. This is true for all online financial services.

2. Xoom's conversion rate is typically lower by about 80 centavos to a dollar. So, if you are sending $100, that could be PHP 80 less with Xoom.

For me, the benefits of Xoom exceeds these downsides. I have now used Xoom thrice already and so far, so good!


If you are ready to try Xoom, here are the 4 Steps to send money using them and my own tips:
Step 1: Select a country and enter an amount to send

On your first send, you will only be allowed to send $1000 due to Xoom's Consumer Protection Policy and US Federal Regulations. Then there is 60-day waiting period before the limit can be increased. You can see your current sending limit on the right side of the screen once you have logged into your account.

I first sent on May 23 and my limit was $1000. Today >60 days later, my limit has been bumped up to $2500.

Step 2: Choose how your recipient will receive funds

You can choose Cash Pick-up, Home Delivery or Direct to Bank Deposit.

I actually remit to my own BPI account. Then I make the online transfers from my BPI account to the various recipients (other BPI accounts or BPI EMO cards).

Xoom also has ties with many Philippine reputable banks and establishments; for example, Metrobank, Banco De Oro, Equitable PCI, Cebuana Lhuiller, One Network Bank, etc.

Xoom can deliver to persons as well (not just bank/accounts). So this is good for those whose recipients are in the smaller towns.

Step 3: Choose a payment method and confirm your money transfer

This is where you will choose whether you will pay from your checking account (Value Service) or from your credit card/PayPal (Standard Service).

Step 4: Notify your recipient that their money is on the way

You can add the email addresses of those who need to be notified. 3 email addresses are accepted.


To know even more than what I have mentioned above, check out the Xoom website.

Once you've opened an account, come back and leave me a comment so I'll know who have tried it out. Then, I will personally give you one more useful tip!

So go ahead and give Xoom a try!

UPDATE: Tin emailed me about 2 other possibilities and I investigated it some:
PNBRemit - Has lower fees if remitted to a PNB account or Global Filipino Card (GFC, which is like BPI's EMO card I mentioned earlier). If not, the fee is $10.

Paypal Philippines- This is not very clear but here's what I got from another blogger: If your Paypal is linked to a Philippine debit/credit card, the fee is $5. There is a UnionBank Eon card that does not incur any fees.

If you have experiences on any of these - Xoom, PNBRemit and Paypal - leave a comment here, please!

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Austin vs Boise Taxes

When we were looking at houses in Austin last year, we liked the much lower prices of the houses - ~$100/sqft for Austin vs ~$142/sqft for Boise. What shocked us though was that the Austin property taxes were much higher at 2-3% of appraised value versus Boise property taxes of 1.205 (2006 rate).

However, we needed to consider that Texas has no state income tax. So we were curious how the higher Austin property taxes would compare to the lower Boise property taxes PLUS Idaho state income tax of 1%-7.8%.

Here's a comparison:
Boise Property Taxes and State Income Tax
a. Assumed House Appraised Value = 300000 (300000 - 89000 (2007 exemption)) * 1.205%
Property Taxes = 2500
Assumed Income = 100000
State Income Tax = 7800
TOTAL Taxes = 10300

b. House Appraised Value = 400000
Property Taxes = 3700
Assumed Income = 100000
State Income Tax = 7800
TOTAL Taxes = 11500

Austin Property Taxes assuming worse case at 3%
a. Assumed House Appraised Value = 300000
Property Taxes = 9000

b. Assumed House Appraised Value = 400000
Property Taxes = 12000

CONCLUSIONS:
- For a 300K house, Austin taxes is lower by about 1000.
- For a 400K house, Austin taxes is higher by about 500.
- The higher the appraised value of the house, the higher the Austin taxes. However, at the 300K-400K house price range, the difference is not significant (but of course, I did not apply any statistics to it!)
- The higher the income, the higher the total Boise taxes. Since the ID state income tax rate is a large multiplier, this would have a significant effect to the total taxes in Boise.

Also, this is not an apple-to-apple comparison because a 300K house in Boise would be about 2100 sqft while it would be a 3000 sqft house in Austin. (I've got to say though that the finishing workmanship of the Boise houses are definitely better than over here.)

All in all, I think we did okay on the Austin house since the total tax did not change significantly and we also have more room! Moreover, there is also a possibility that the Austin property taxes in the Hays county would be decreasing on a yearly basis until it "stabilizes" at the 2% level. I look forward to those days!

Meanwhile, I hope this gives you an idea on what to look out for when considering out-of-state relocation!

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More on Waiver of Escrow

A couple of considerations before you decide to waive escrow:

1. Escrow Waiver Fee -
There will or will not be a fee associated with the waiver of escrow - depending on your contract. In our case, there was supposedly an escrow waiver fee of $800. However looking at our Settlement Statement, there was no item pertaining or even remotely related to the escrow waiver fee.

Anyway, I wanted to point out that this was our first time to learn about being able to do a waiver of escrow that we were so excited about the possibilities. Thus, we did not have the present-mindedness to see if we can negotiate waiving (redundant?) the escrow waiver fee. The good thing is that it seems that we were not charged an escrow waiver fee at all!

2. Your Responsibilities (if you do a waiver of escrow)-
Obviously, aside from paying the non-escrowed items directly and in a timely manner, the lender may require you to provide them with:
- evidence of your payment of the non-escrowed items
- evidence that your insurance is still in force and at the required coverage levels

3. Escrow Reestablishment by Lender -
The lender could re-establish an escrow if these happens:
- you do not pay any of the non-escrowed items in a timely manner
- you do not provide evidences of payment of the non-escrowed items.
- you are in default under the terms of your loan document
Again, depending on your lender's contract, there could be more stipulations on when they can re-establish an escrow account for you.

I am curious though if it is myself who gets tired of managing the non-escrowed items - if and how I can ask the lender to reestablish an escrow account for us? How much would they charge to reestablish an escrow account?

Something that I could dig on more later. But if you know the answer, let us know!

Meanwhile, do the above considerations frighten you against managing the non-escrowed items on your own? Or do they confirm your decision not to manage them yourself? Share your thoughts!

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You Don't Have to Escrow your Property Taxes

One lesson I learned from our recent house purchase is that you have the option to do a waiver of escrow for property taxes and insurance items. By doing this, you are avoiding the opportunity cost associated with those monthly escrow payments and instead use the equivalent non-escrow amounts to grow it to your advantage (instead of the lender enjoying the interest on it.)

You see, your monthly house payment is typically composed of:
- mortgage (and private mortgage insurance if loan is >80%)
- real estate/property taxes
- hazard/homeowner's insurance premiums
- flood/wind insurance premiums

The last 3 are escrow items and if you did have them escrowed, you will be including the estimated amounts for these escrow items in the payments you send to the lender on a monthly basis. However, these escrow items are only due (to the state or the insurance companies) once a year. Property taxes are due in October in Texas (other states may have different schedules but it is still due annually or biannually). Insurance is due a year after you purchase the house. See my point? Escrow payments are collected monthly from you, while actual payments are done annually by the lender to the "service provider".

What that means is that the lender is earning interest from your monthly escrow payments. That gain is on top of the loan interest that you are paying within the mortgage payment. Depending on how much your escrow payments are, the additional escrow interest could be significant.

You can do a waiver of escrow on these and manage them yourself. So instead of the lender taking advantage of this, you are actually the one gaining interest on the equivalent non-escrow amounts.

Why should you take on the headache of managing the equivalent non-escrow amounts yourself? Again, it boils down to what you think your time is worth vs the amount you will be earning for yourself.

Of course, this method does not have its RISKS:
1. You can use the equivalent non-escrow amount for something else.
You really have to be disciplined about saving and growing the amount that was supposed to be escrowed. The good thing is that there are many ways to do this.

One of the most common being - Open a high interest account (money market account or CD or some other more aggressive investments) and do a direct deposit to it on a regular basis. This way, it becomes self-managing and you don't have to spend time transferring from one account to another or from avoiding spending the amount (if you did not create a separate account). (I'll share some more details on how we do it in a future post. Be on the look-out for that!)

2. You can miss the payments to the "service providers".
You will have to manage the payments yourself - know when it is due, send the payment on time, etc. For these payments that come once a year, the state and the insurance companies are pretty good on sending your the estimates and bills. That should be a good reminder for these once a year payments.

And... you should not have to worry about not having the $ to pay for them if you were doing the disciplined saving that we mentioned previously, right???

So do you think it's worth your time to manage the equivalent non-escrow amounts on your own? Do the math! If it shows something significant enough for you, ask yourself - "Do I have the disciple, time and inclination to do manage the equivalent escrow amounts?" If the answer is yes, then go on, do the waiver of escrow and do it yourself! You can do it, too!

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Potential Savings of $600 in Property Taxes

Just got our "2008 Notice of Appraised Value" from the Hays Central Appraisal District stating that our Total Estimated Taxes (property taxes) is $11,634 based on an appraised value of $407,250 and total tax rate of 2.91%.

I learned from one of my favorite blogs (of a local Austin realtor) that "If the appraised value is higher than the amount you’ve recently paid to purchase the home, bring your Settlement Statement showing what you actually paid, and they’ll lower the value to the price you paid without a fuss." The Crossland Team

Takeaways here for ordinary people like me (non-realtors):
1. The Settlement Statement being referred to here is one of the documents you signed during closing. So dig it up from wherever you stuffed it!
2. Key operative term here is "recently purchased"... since the tax year starts on January 1 (2008), then I am guessing that the previous month or quarter does qualify for being "recently purchased". The good thing for is that we bought the house on December 17, 2007 (by the way, buying the house at this timeframe has its advantages too, but I'll reserve that for a future story".

So, since what we paid for the house versus the Appraised Value is lower, we could potentially save about $600 from property taxes. Yoohoo!!! Hays Central Appraisal District - here I come!

How about you? Have you checked your 2008 Appraised Value already?

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Of Rollover, Roth and JTWROS

Seems like it was just yesterday when we moved to the US and we had no penny to our name. We were going to depend on Al's first salary which was about 3-4 weeks away. So it was good to have a credit card then :) to buy our food and gas until he got his first salary.

That was about 5 years ago. Today, it is good to know that we have started our "retirement" savings. (I say "retirement" because with what we envision to be doing in our "sunset" years does not look like typical retirement. But anyhow, that is a different story.) It is challenging though to "manage" these retirement accounts. Here's how we are managing our retirement account:

- 401K (pre-tax contribution, tax-deferred earnings, Fidelity)- Putting away the maximum that the employer is matching. AMD matches 50% of up to 6% employee's 401K contribution. Al is putting 6% there but is actually saving 9% since AMD matches 3%. The good thing is that the AMD match is immediately vested!

- Rollover IRA (Individual Retirement Account) (pre-tax contribution, tax-deferred earnings, Fidelity) - When we got out of Micron, our 401ks with Fidelity continued but we had the opportunity to move them into Rollover IRAs for better flexibility (wider* selection (as in thousands) of mutual funds, stocks etc vs 5-10 mutual funds only). The good thing about it is that Fidelity is not charging account fees for these Rollover IRAs this year! Fidelity is also known for its great website and service, so we figured we could stay with them on the Rollover IRA so we have a basis of comparison with the other accounts we opened with the cheaper Omnium/TD Ameritrade.

- Roth IRA (post-tax contribution, tax-free earnings, Omnium/TD Ameritrade)- We qualify for a Roth - yehey!!! We decided to follow the Sound Mind Investing Upgrading method (www.soundmindinvesting.com) and this brokerage has the best deal - pay $99/year (for the 1st account, $49 for the next accounts) for unlimited* online mutual fund transactions which is key for the method.

- JTWROS (post-tax contribution, taxable earnings, Omnium/TD Ameritrade) - Joint Tenants with Rights of Survivorship - we are open to this account being a retirement account or perhaps a mid-term dream account. We're still researching how to best invest this but since this is a taxable account, we are leaning towards doing buy and hold of stocks or mutual funds. That way, we don't pay taxes on these investments until we sell, and then at the relatively lower long-term capital gains rate. So this account may be less active and the holdings are there for the long haul.

To get to which retirement (or non-retirement)account, which brokerage, which investments and how much... Had to do lots of research on the internet - the brokerage's website, Sound Mind Investing website. Had to pick up the phone and make calls to the brokerages as well to get more information or clarification from them. Had to discuss and agree with Dear Husband Al on the accounts, amounts, brokerages, investments, etc.

It's a long process for me but I feel more comfortable in our decision making process and having some rudimentary knowledge on what we are getting into.

All these means nothing though if we get enslaved by the money and the power. Earthly treasure is nice but let us not be deceived and rely on it. Our lives are in the hands of the God. He knows the number of our hair and the number of our days. It is on the Lord Jesus Christ on whom we should rely on. He is the Almighty and the Faithful!

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"Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also." - Matthew 6;19-21

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Lessons from the Unemployed

A few weeks back, I went to a Test Drive of the Project Management course at the St Edward's Professional Education Center. I overheard another attendee talking about funding to the course. I was pleasantly surprised that there is such an entity - WorkSource.

So off I went to research WorkSource and indeed they could fund the course, if I was eligible. So how does one become eligible? Two ways:

1. You have to be a "Dislocated Worker". (ie, you should be receiving Unemployment Insurance) OR...
2. You have to be "Economically Disadvantaged". (ie, you should be receiving Food Stamps)

I checked the rules on both for Texas and immediately ruled out the 2nd one since I do not qualify. This is despite encouragements from the WorkSource coordinator who said the Deparment of Human Services would probably give me an amount that is "retarded" - something like $10. Hmmm, tempting but it is not right to go this route.

I pursued the 1st one since the TX rules showed that:
"If you quit to move with your husband or wife, you may be able to receive benefits after a disqualification of 6 to 25 weeks. This is a disqualification of both time and money, because we must subtract the number of disqualified weeks from your total benefits."

So, I first called TX WorkForce - but since I have not worked in TX yet and all my previous income was in ID, they adviced me to file my claim in ID. So I called ID Works and filed my claim...which eventually got declined since my "reason for leaving was personal in nature and did not arise from any aspect of the work she was performing. It cannot be concluded that claimant quit with good cause connected with the employment." In other words, I quit voluntarily (instead of being layed off or losing my job without any fault of my own or something like that). I guessed that this was going to be the decision since Idaho is currently bearing the brunt of the Micron lay-offs, so how could I compete with that? "Unfortunately" for me, ID does not have the same rules as TX as I mentioned above.

I did not stop there...I emailed the course instructor and the St Edwards course coordinator for possible attendance to the course in exchange to temporary work. Course instructor could not help though since all the administration and money goes to St Edwards. As for St Edwards, they had "no opening" and the only thing they could recommend is to get a loan. (What? And get indebted to some bank? Dave Ramsey does not like that :) )

Bottomline, no funding for me for the Project Management course.

So I sent the course instructor another email saying:
"Although going to class is great, I believe though that there are other ways of learning/improving on project management skills.

So... I'm looking for opportunities to improve my project management skills - actual projects to work on with coaching/mentoring on the side. I know you mentioned during the Test Drive session that you prefer certified people to work with you. However if you do have some projects that you need extra hands to work on them, perhaps you can tap me. :)

Still waiting for his response but I am not holding my breath... if he does get in touch, that will be swell!

Meanwhile, my goal within April is to polish my resume towards the PMP cert application, join the PMI Austin and self-study towards the exam. My tentative target for taking the Exam is May.

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