In the past several months, the top 4 major carriers, Verizon, AT&T, T-Mobile and Sprint have either begun offering unlimited minute cell phone plans or reducing the price of their existing plan (Sprint). What does this mean for the customer? Well, it is the first sign that prices will come down and overage charges may be a thing of the past. While Sprint had unlimited service for $199/month and had been testing it in select markets for $119/month, it wasn’t until the top 2 carriers, Verizon and AT&T, announced plans to offer unlimited minutes plans that the war was on. Soon after, T-Mobile joined the fray and Sprint dropped the price on their unlimited plan. Another regional carrier, US Cellular, followed as well. The country’s fifth largest carrier, Alltel, does not yet offer unlimited calling, but with their MyCircle plans, most customers can get virtually unlimited minutes for less money.

For those of you living in cities like Tampa, Pittsburgh, San Francisco or Dallas, there are regional carriers such as Cricket and MetroPCS that have been offering unlimited minutes plans for some time. In the past, these companies main demographic was people in urban areas whose credit wasn't great and would have to put a $150-$200 deposit down with the other companies just to get a phone. However, both have been trying to expand their markets to draw customers away from the larger companies. Perhaps it was these companies expansions into new markets such as Las Vegas, Oklahoma City (Cricket), Detroit and Los Angeles (MetroPCS) that prompted Verizon and AT&T to react. Or maybe it was just a natural evolution of the business as companies try to retain customers that are demanding more from their carriers and are less likely to stay loyal if they are unhappy with their service.

So how did Cricket and MetroPCS react to the big 4 getting into the unlimited minutes game? They slashed their rates to $50/month and offered more. Of course, while MetroPCS and Cricket are far cheaper than any of the big 4, they are only available in select markets and you cannot roam out of those markets without an extra charge. But if you don’t travel often and you live in these areas, they are a great bargain, especially MetroPCS family plans, which you can get your service for as low as $25 per month for each phone.

With prices coming down on cell phone service and unlimited minutes, is it only a matter of time before the cell phone becomes the only phone for most people?

Tip the Server Too!

Posted by Dave W. | Monday, May 12, 2008 | ,, 0 comments |

As a follow up to the post I wrote on tipping pizza delivery drivers, I caught an article that relates to tipping servers in restaurants.  It’s from Thomas A. Mason at titled Why Should You Tip?  Here are some of the things Mason points out that many people might not know regarding servers:

  • Hourly wages are typically significantly less in the service industry, because tips are considered part of the servers income. Your server does pay income taxes. In absence of proper documentation of tips, the government will look at the servers food and beverage sales and base their taxable tip income on a percent of it. So if you do not tip the server, it has actually cost the server money to serve you. 
  • Believe it or not, servers do not always get a paycheck.  Sometimes, because of the taxes they pay and/or deductions, servers must pay in to the company rather than get a check.
  • Your server has to tip too. It is very common for a waiter or waitress to have to tip out their supporting staff, ie; the bartender, buss person, food runners and others.  Bartenders may have to tip out their bar backs.  These tips are based often on the sales of the server, so if you don’t tip them, in addition to the 8% the government gets they often have to shell out money to the support staff putting them further in the hole.  Sometimes the support staff is tipped a percent of the servers tips.  So not tipping the server is the same as not tipping any of the hard working support staff in the restaurant.
Servers do a lot of work that they are not tipped on also. It is called side work and it is work that is done for no more than their hourly rate. Side work usually involves cleaning the restaurant, stocking supplies and getting the store ready for the next shifts business. Side work can be time consuming and at times physically straining.

The author makes some very good points, which most people don’t know and are I know are accurate from personal experience. When I served I made good money. However, I tipped out the busperson 10% of the cash I made and the bartender 10% on all alcohol sales. Since they have to claim tips too, it seems like double taxation, but that’s another post altogether. If someone ran up a large bar tap and tipped poorly, I could potentially be waiting on them for free since my money would go directly to the bartender. Because of having to claim tips on a certain percentage of cash sales (at least 10%), many times, I would be forced to claim MORE than what I actually made because the majority of sales were credit card sales, which I had to claim 100% of the tips.

Regarding the sidework issue, one thing the author says but doesn’t make clear is how much less servers’ base pay is. In Pennsylvania, they are paid $2.83/hour plus tips. So if they are doing sidework and have no tables, they only get paid $2.83/hour. Would you work for $2.83/hour? Probably not.

Think about these things the next time you go out to eat. Bad food? Don’t take it out on the server, they didn’t cook it. Bad service? See a manager; most managers will be more than willing to take care of any problems.

Saving with the Redbox

Posted by Dave W. | Friday, May 02, 2008 | ,, 0 comments |

My wife and I live in the outer edges of the suburbs where there is still farmland. At our grocery store we recently got something which was a pretty cool thing but is old news for many. Redbox.

For those who don’t know, Redbox is a dvd rental kiosk where you put in your credit or debit card and rent any of the new releases available for $1 per night, with no late fees. As someone who doesn’t rent a lot of movies, the price is right. I got rid of Showtime when they canceled Dead Like Me and The Chris Isaak Show. I dumped my Blockbuster Online membership when I kept a movie for 3 months without mailing it back (total cost: $53.97). The other nice thing about Redbox is that you can return your DVD to any Redbox location. So if I’m heading over to my mother-in-law’s house or to work, I don’t have to go out of my way and can drop it off at the local grocery store there.

Here’s a piece of useless trivia I stumbled upon: The first place redbox was installed in was several McDonald’s in the Denver area. Redbox is partially owned by McDonald’s and Coinstar; they each own 47% of the company and have surpassed Blockbuster in number of outlets.

Reading the Paper Edition

Posted by Dave W. | Thursday, May 01, 2008 | , 0 comments |

Yesterday I got to do something I rarely get to do, read the newspaper. An actual newspaper, that is, not just catching an article online. Newspapers appear to be a dying breed, with online media and television being the primary way to get news today. I got to read 2 good articles worth noting.

The first, from the Philadelphia Daily News, called Let us Pay: Struggling with Soaring costs of Food, Fuel, Rent, talks about the struggles of people meeting their daily living expenses. A staffer at a local church speaks about how the economy has changed the members of her congregation: “I remember when I came, we had the conversation of ‘What are we going to do for “them,” for those in need?’ ” Eileen Jones of the First Presbyterian Church in Germantown said. “But with the way the economic status is now, it’s no longer them - it’s us. There are people in our congregation that need the help of our food cupboard, and they’re embarrassed to ask.”

And as one person put it when talking about their bakery business being slower than usual: “You can’t run your car on chocolate mousse.” With gas at over $3.50 a gallon, people are making choices with their discretionary spending. Buy a cake or put gas in the car? Maybe buy food for the dinner table or put gas in the car? As someone who has worked in the gasoline business for many years, I have been on the receiving end of many irate customers complaining about rising gas prices. However, what I’ve seen over the past several years as prices have risen, the complaints have went from being directed at the poor clerk or merchant that makes the same profit regardless of gas prices to venting about the oil companies that are raking in the profits. Customers now seem to understand that it is not the fault of the local gas station. That doesn’t change the fact though that, especially in the suburbs, even going to the grocery store requires a car. It’s a simple equation for many: No gas, no car. No car, no job. No job, no food on the table or money for rent/mortgage.

Along with this article was a Q&A of with Bruce Rader, an assistant finance professor at Temple University. One of the questions struck a chord with me:

Q: Do people’s salaries typically reflect what’s going on in the economy?

A: That’s what eventually should happen. We haven’t seen that in a while, though, especially for the middle class. We might see that pressure. I think the Fed has to worry about this rise in oil and food prices feeding over into the rest of the economy. People are demanding higher wages so they can meet their costs. No one wants to have a lower cost of living.

This is because on Tuesday, I received my letter with my new salary, which will be in my paycheck this week. I was rewarded with a 1.5% raise (woo-hoo!), which not only does not cover the cost of living, it doesn’t even cover the increase in the cost of medical benefits that I received January 1st.  Amazing how the cost of benefits always promptly hits your paycheck, but you are basically taking a paycut for the first several months of the year until the raise kicks in (if you even get a raise, which I didn’t get for 2 years at my job prior to this). When I read the letter, my reaction was “I’ll be sure not to spend all the money in one place.” Which prompted the comment from our office’s admin: “Yeah, that seems to be the general reaction from everybody.”

It seems we have all been beaten down by the economy, resigned to shrinking wages and higher costs of everything.