Monday, March 27, 2006

You Don’t Want Our Credit Card? You Must Not Speak English!

Author: Nick
Category: Money

Lately Chase has been sending me credit card offers of average quality but in massive quantities. They must be absolutely astonished that I haven’t responded to any of their offers! In fact, they’re so shocked at my lack of interest in their cards that they’ve determined I need a translator…

El Chase-o Application-o

Sorry, Chase, but I’m only fluent in Awesome, and you’re not speaking my language.

Thursday, March 23, 2006

Bloggin’ On Up, Part 2: Hello New Host!

Author: Nick
Category: Money
Topics: ,

Bloggin’ on up! (Bloggin’ on up.) To the east side. (To the east side.) We finally got a deee-cent website.

In the first part of this series, I shared my raging disgust with Blogger and my desire to move Funny Munny to a quality web hosting service. I shared my reasons for moving (including the need for better quality and cooler web toys) and my reasons for not moving sooner (like the cost issue and the whole trouble of setting things up). Today, it’s time to start with step two of the conversion process: procrastinating for a few weeks and then giving up on the whole thing. Hahaha, just kidding. Step two involves finding a good hosting service that can handle the sheer awesomeness that is Funny Munny.

Super-Hard Terms You Should Know

While you can learn just about all the technology terms you’ll need to know from this Weebl & Bob cartoon, I’ll give you a few more just to get you started on the road to web hosting honor and glory!

  • Disk Storage. Usually given in Megabytes (MB) or Gigglebytes (GB), this is the measure of how much total garbage quality content you can fit on your blog. If you’re planning a mostly text blog, you might be able to last years on just a few dozen MB. But if you want to include fancy things like pictures and podcasts and decorative woodworking, you’ll want a whole bunch more MBs or maybe even some GBs.
  • Bandwidth. It’s one thing to have a website sitting somewhere on the internet, and it’s a whole ‘nother thing for people to be able to view your website on their computer boxes. When people access your content, they are using your bandwidth. Bandwidth is usually measured in the same MB and GB units as disk storage, but you’ll typically need a whole lot more bandwidth if you intend to have more than one viewer.
  • MySQL. MySQL? YourSQL? OurSQL? Whatever you call it, you will probably need this. It’s the platform on which your website’s database will run. What’s that? You don’t think you need a database? Okay, so maybe you’re not planning to inventory your socks and ties, but databases are what keep the internet from becoming a mess of text files. Your blog software will likely require a database in which to store all of your information–your blog post text, your categories, your links to Funny Munny, etc.
  • POP/IMAP/Webmail. There are many names for it, but they all mean the same thing: e-mail. If you’ll be running your site on, you’ll be able to set up e-mail accounts like and Note that e-mail forwarding is different–it only forwards e-mails destined for your website addresses to another address you specify. You’ll probably want at least one addresses because it helps you look more professional than using a GMail or Yahoo! or AOL e-mail account.
  • Domains/subdomains. A lot of cheap web hosting services limit the number of ways you can subdivide your allocated disk storage and bandwidth among different domain names. If a hosting service says you can host three domains with one account, that means you can split up your resources and pretend you have three separate accounts. Alternately, there are subdomains which allow you to do things like My advice: find a service that provides you with the option of hosting multiple domains in case you ever decide to start a second or third or fourth website; that way, you can just use your existing space to host it at no additional cost (except for the new domain name).
  • Perl, PHP, CGI, SSI… The funny looking acronym parade begins! Most of these are either web programming languages in which blog software is usually written (PHP is probably the most commonly used) or various protocols needed to support those languages (like CGI and SSI). Any webhost worth its salt will have all of these along with pre-installed scripts that will make it easy for you to generate a basic setup. You’ll want Perl because there are some really nifty scripts out there written only in Perl.
  • FTP. If a web host does not allow you to upload to your website via FTP (File Transfer Protocol), run–don’t walk–to another service. You will absolutely need this to get started. While sophisticated blogging software will provide you with automated web-based forms to help you upload your content (including text, pictures, and various multimedia), FTP is the easiest way to get access to your web storage. If you see “anonymous FTP,” this isn’t something you need unless you have plans to allow anyone to upload stuff to your webspace. There are people who use anonymous FTP, but we’re not one of them.
  • UNIX shell. It is increasingly common that you’ll see this is an available feature in web hosting packages. While you can run a highly successful website without ever once using your UNIX shell access, it can be extremely helpful for more advanced purposes. The UNIX shell provides you with a command-line interface to tons of useful tools for monitoring and tweaking your website. Again, you can do everything you’ll need with FTP and web-based scripts, but a UNIX shell just gives you a bit of extra power over your web hosting experience.

There are plenty of other terms you’ll see web hosts throw at you, but these are the ones you should really be interested in.

What To Look For in a Web Hosting Service

Now that we understand the vocabulary, let’s apply it to our search for a web hosting service. So just what does our future web host need to have in order to support our cool-tastic website?

  • Stuff that lets you do what you need to do. If you’re looking to set up a blog on your own hosting service, you’ll need to make sure it has the basics. You’ll need disk storage (even super-cheap services come with 100+ MB nowadays, but you may wish to secure a few GB or more for the future); lots of bandwidth (while you won’t know just how much you’ll need until you really need it, I’d recommend 10 GB a month minimum with the ability to increase if you need to); acronymic tools like PHP, MySQL, FTP, CGI, SSI, POP/IMAP, and maybe UNIX; multiple hosted domains (subdomains wouldn’t hurt, either); and a web-based control panel to help you run everything (the most popular being Cpanel, but there are many nice ones available). If you have these things, you’ll be able to accomplish just about everything you can imagine doing with your website.
  • A domain name. Many web hosting services will include a free one-year domain name registration with your web hosting purchase. That’s because domain names are dirt cheap now. Even if your host doesn’t give you a domain, you can purchase one from somewhere like Yahoo! or GoDaddy for just a few bucks a year. Do not settle for a website address like All the fun toys in the world (your website) won’t help you become friends with the neighborhood kids if your house (your website address) is an ugly piece of junk borrowed from someone else.
  • Quality service. Most services provide only e-mail support for your questions and problems, and that’s probably the best you can hope for without spending a ton of extra money. That e-mail support should be 24x7x365, though even if a host advertises this, you’ll have no way of knowing their turnaround time and helpfulness until you experience your first problem. Or maybe you do! Trying Googling for reviews of your potential web hosting service and check out the online forum for discussing webhosts at WebHostingTalk. Keep in mind as you’re reading reviews of web hosting services that most people generally only post “reviews” when they want to complain about a service. Every web hosting service in the world will have issues; but for every person who complains that they have the world’s worst web host, there are probably ten people who have absolutely no problems with it. Be sure to read their specific complaints and look for patterns that might point to a real problem with the web hosting company.
  • A good price. How much should you pay for your web hosting? You can use the calculator found at to compare various plans and their prices. Some decent plans start as low as $1 a month, while dedicated services can run hundreds of dollars a month. While a ridiculously low price can indicate shoddy service, you won’t want to pay more than you need to for your hosting. Most blogs of mild to moderate popularity can get by with a service that costs under $8 a month. I’ve personally used services that cost anywhere from $2 a month (and still do!) to $15 a month (but that was years ago when hosting was really expensive).
  • A money-back guarantee. This is absolutely required. At a minimum, your host should offer a full return of your money within the first 30 days (60-90 is much better, though). Every so often, somebody will get really screwed over by a hosting service, and it’s usually obvious within the first week or two. A money-back guarantee with no strings attached is a must no matter how reputable your hosting provider is. I’ve never needed to use such a guarantee, but it’s reassuring to know it’s there. These come pretty much standard from most hosts now, so pass by anyone who doesn’t offer one.
  • Room to grow. Hopefully your website will become a big success before long, but that means you’ll probably need things like extra storage space and especially extra bandwidth. You’ll want a host that will upgrade your account to a bigger (though more costly) hosting option on demand. A few hosting services now go as far as to automatically increase your account’s limits over time. Just be sure that you have a way to expand if you need to so you don’t necessarily have to pack up and move to a new host when you hit the limits of your old one.
  • The depth of their own website. It pains me to say this, but anyone with half a brain can run their own web hosting service. In fact, there are many people with only half a brain that do! You can tell the real professionals from the wannabe resellers by the quality of their own website. Navigate through your potential host’s pages. Look at their design and the tools they offer. Does your web host have its own public support forum? (This is a major, major plus in my book since it offers current hostees the opportunity to share their experiences with those shopping around.) Also take a look at their jobs/careers page. If there isn’t one, you’re likely looking at a one-man reselling operation which can have iffy quality (depending on who the real hosting service is). If there is one, check out what they’re offering their employees. Heck, make a fake job inquiry if you like! If your web host has happy employees who are paid well and enjoy their job, this will benefit you a thousand times over if you host your website with them.

There is one other extremely important thing to consider when selecting a host–something the hosts themselves won’t mention to you… until they’re shutting you down for it. Since your web hosting space will reside on a machine used by many other hostees, you’ll be sharing the machine’s resources with others. No hosting plan will mention a limitation on CPU usage, but it’s one thing you can’t have unlimited amounts of unless you’re on your own server. CPU is a little trickier to measure, and while most hosts have a limit on how much you can use, very few will actually tell you what it is until you reach it. One host I’m looking at likes for each of its hostees to stay below 60 CPU minutes per day. That means your webpages, scripts, and whatever else you’ve got going on should not be keeping the server’s computing component busy for more than 1/24 of the time. Unlike disk space and bandwidth which you’ll know how much you’re using based on how big your files are, you won’t know how much CPU your stuff uses until it actually runs. Both fortunately and unfortunately, most hosts take a “shoot first, ask questions later” approach to CPU-intensive hostees. If you have a script running in your space that’s tying up the CPU, you can stay well under your disk and bandwidth limits and still have your website suspended for CPU usage. While most hosted sites will never have to worry about overutilizing the CPU, if your site gets taken offline because your host says you’re using too much CPU, you’re in for a world of hurt because it can be very difficult to find the culprit.

I’ll talk more on avoiding CPU overutilization in an upcoming part of the series.

The Contenders

I’ve gone through about a hundred potential hosts looking for the things I mentioned in the list above. Some didn’t have the basics down. Others had too many bad reviews or obvious problems with customer service. Some may have been terrific services, but their own websites turned me off for one reason or another. In the end, I picked out the three web hosting providers who will compete to become… America’s… Next… Top… Model… I mean… Web… Host.

DreamhostA lot of personal finance bloggers swear by these guys (though I sometimes question their motivation for doing so; more on that in a bit). Does their service really live up to the name?

The Good

  • Price. If you visit Dreamhost’s website, you’ll see that their basic plan starts at just under $8 a month. I suspect, however, that very few people actually pay that amount their first year of hosting with Dreamhost. That’s because there are numerous e-coupons around that knock the cost of your first year of hosting to nearly nothing.
  • So much stuff! The basic Dreamhost plan comes with 20 GB of storage and 1,000 GB of monthly bandwidth. In addition, Dreamhost automatically increases your storage by 160 MB and monthly bandwidth by 8 GB every week! They also include all the required tools a blogger will need, and they even throw in a free one-year domain registration and allow you to subdivide your space into an unlimited number of websites. This is easily one of the best price-to-stuff ratios I’ve seen from a webhost.
  • Their website. The basic front page of Dreamhost’s own website is, well, basic. The really good stuff lies deeper in the website; they have their own support wiki that anyone can edit as well as a public discussion forum. They also seem to give their employees a nice place to work.
  • Lengthy money-back guarantee. It’s worth mentioning in its own bullet point that Dreamhost offers a 97-day money-back guarantee. This is about triple the standard money-back period. From what I’ve read, people have had little or no problem getting their money back from Dreamhost when they wanted to.

The Bad

  • Price. Oops, I’m crazy! No, you’re not misreading; I put “Price” in both the good and the bad. While you might get your first year of Dreamhosting for next to nothing, the second and subsequent years will likely cost you at least $120/year. That’s because there are no known coupons for hosting renewals. Some people report success with free domain registration renewal, and a few people have gotten gift certificate codes ranging from $10-40 when they threatened to leave Dreamhost, but you should plan to cough up the regular price from the start of year two onward if you stick with Dreamhost.
  • Sneaky referrals. This is a good thing once you’re actually hosted by Dreamhost, but it’s really bad when you’re outside looking in. Many web hosting providers allow hostees to make money by referring new customers to them. Dreamhost makes the referral process too easy. Anyone with a Dreamhost account can generate a plain-English coupon code that will get a new customer X number of dollars off their first year–money that goes straight to the referring web host. Rarely do I see such generated codes come with the disclaimers that 1) the code belongs to them and will automatically make them a big chunk of money if you use it, and 2) it’s not even the best code out there! Indeed, the 777 code (a non-referral code given out by Dreamhost itself) yields the best discount.
  • So much stuff! Okay, I’ve really got to stop duplicating my good items in the bad list. When you consider all the stuff that Dreamhost offers, you can see two problems. First, if everyone hosting with Dreamhost used every last MB of space and bandwidth, Dreamhost would go bankrupt overnight. They are offering all that stuff to you in the hopes that you won’t use very much of it! Second, all that stuff for so little money suggests they might not be using the best quality equipment and communication services on their end. Still, this is all speculation, and you really can’t know about the service unless you talk to people who use it…
  • Reviews. As you can expect, there are plenty of people with bad things to say about Dreamhost. The two big criticisms seem to reflect recent disappointments with their customer service and operating speed. Browse through Dreamhost’s own forums and you’ll find plenty of people upset that their troubles have not been handled for hours or even days. There are also plenty of people who will point out that Dreamhost is likely overselling their services. That means they’re trying to cram as many customers into their hosting resources as possible (and them some!).

LunarpagesA little bit newer than Dreamhost, Lunarpages is the shared hosting spin-off of web services goliath Add2Net.

The Good

  • Quality of service. Out of the three candidates, Lunarpages’ customers seem to have the most positive things to say about their experiences. These guys also have their own public support forums. These forums seem a little more interactive and friendly than the other web hosting forums I’ve read. In short, it looks like Lunarpages has a lot of very happy clients.
  • Their website. Absolutely the best website of the three candidates. Information is presented in a very organized, attractive manner. I’m a little disappointed by their job listings page, but the Lunarpages employees who have posted on the forums seem to be happy where they work.
  • Their stuff. Lunarpages’ basic plan offers a more realistic but still generous package of space (5GB) and bandwidth (400 GB/month) along with just about all of the standard tools. Telephone support during regular business hours is included on all Lunarpages plans (something Dreamhost’s basic plan sorely lacks). A few features are noticeably absent from Lunarpages’ basic plan including ASP and JSP support (though that’s not something I or most bloggers would need) as well as one critical option that’s worth its own bullet point in The Bad section below.
  • Price. At $6.95 a month, a first-year plan with Lunarpages will run far more than one with Dreamhost. Starting with year two, Lunarpages’ price drops below Dreamhost’s regular price, so the difference would even out after a few years with Lunarpages. To me, a steady price over the life of service says that Lunarpages is looking more to service existing customers than to snatch up as many new ones as possible even at the risk of overselling.

The Bad

  • The DDoS attacks. A few months ago, Lunarpages experienced some devastating deliberate denial of service (DDoS) attacks that severely impacted their web hosting services for lengthy periods of time. Lunarpages says it has since installed extra protection against such attacks, and it does seem that the DDoSes have instead turned to other web hosting services. While not Lunarpages’ fault, it still leaves a bit of a bad taste in my mouth.
  • Shorter money-back guarantee. You only have 30 days to ask for your money back if you’re not satisfied with Lunarpages’ services. While you would think that’s plenty of time to evaluate a web host, you’d be surprised what kind of problems can crop up in months two and three.
  • No UNIX shell!!! This is a big minus for me. While I don’t need access to a UNIX shell, I really want the extra control over my web hosting experience that one would provide. I can understand why Lunarpages doesn’t provide one–it’s a security risk, so extra (i.e. more expensive) measures must be taken to operate one.

HostgatorA relatively new player on the web hosting field, Hostgator has quickly earned a reputation as a top service provider.

The Good

  • Reviews. I’ve read a lot of reviews by customers who are thrilled with their Hostgator experience–at least as many as I have for Lunarpages.
  • Brains. From reading Hostgator’s support forums, I got the feeling that they have a lot of brainpower on their staff. The responses I’ve seen to people’s questions and problems have all been intelligent and thoughtful.
  • Top-notch phone support. One-upping Lunarpages, Hostgator offers 24x7x365 phone support as well as the ability to obtain support through the conventional methods (e-mails and trouble tickets) as well as less conventional means (AIM messaging, for instance).

The Bad

  • Their stuff and price. If you take a look at Hostgator’s hosting plans page, you’ll see something a little upsetting. Their most basic plan, called “Hatchling,” only runs $6.95 a month; however, there are a few things missing from this plan that makes Lunarpages’ $6.95 plan stand out more. First, the uptime is only promised to be 99.5%, so an outage of up to 3.5 hours per month would be acceptable under this plan. Second, this plan limits you to hosting just one domain per account. If you’re planning to subdivide your space (as I am), this is a big limitation. Hostgator’s next plan up, called “Baby,” runs $9.95/month. It tops Lunarpages by offering unlimited domain hosting per account (Lunarpages’ limits to 10 per $6.95 account), but it doesn’t crack Lunarpages’ space and bandwidth offering.
  • Shorter money-back guarantee. Like Lunarpages, you only have 30 days to get your cash back from Hostgator if you’re unhappy. Really, for their prices and quality of service, I don’t think either Lunarpages of Hostgator should have any trouble matching Dreamhost’s 97-day promise.
  • No UNIX shell!!! Again, you don’t need it, and I don’t need it, but I want it… a lot. For $9.95 a month, Hostgator should have thrown this in for free.
  • Their website. It’s not ugly or anything, but it’s the least attractive of the three candidates’ sites. It is functional and gets the job done, but some people are impressed with pretty designs. I’ll try not to let this affect my decision too much.


I actually changed my mind between all three of these hosts at least twice just while writing up this article. In the end, I had to go with Dreamhost. While it seems they may be overselling their services, I’ve seen no such evidence of that from the other bloggers I read who I know are hosted by Dreamhost. And while I would’ve liked some sort of telephone support like Lunarpages and Hostgator offer, Dreamhost’s full UNIX shell is too much for my inner geek to resist. I’ve seen some positive efforts in the forums by Dreamhost’s tech team to improve connection speeds for those who have had problems. So I’ll give Dreamhost a try confident that I’ll have no problem getting my money back within 97 days if I’m unhappy.

In case you’re curious, Lunarpages is my first runner up should Dreamhost not be able to fulfill its duties as Miss USA. (Heh, I can picture a little server wearing a tiara and an evening gown. That’s kinda hot, don’t you think?)

Off I go to place my order! Next time, I’ll share my experiences with setting up shop at my new host. In a later part of the series, I’ll also post my strategies for domain name selection. Oops, I guess I better start thinking about one of those. I wonder if is taken…

Monday, March 20, 2006

Bloggin’ On Up, Part 1: So Long Blogger!

Author: Nick
Category: Money
Topics: ,

Well I’m bloggin’ on up! (Bloggin’ on up!) To the east side! (To the east side!) To a deee-luxe web server in the skyyyyyyy.

While Funny Munny is only a few months old, I feel that it’s already outgrown Blogger. Ever since I read Jonathan’s story about moving MyMoneyBlog from Blogger, I’ve been debating the move to a paid web host; but now the arguments for the move outweigh the arguments against. Just what are those arguments? I’m not going to tell you!

Hmm, this post came to a rather sudden conclusion…

Okay, then I am going to tell you! You’re so lucky!

Why Should Funny Munny Move to a Web Host?

  • Because Blogger = Pffft! Once Google acquired Blogger, the consensus was that Blogger would receive the Golden Touch of Google and it would become the most awesome piece of bloggy goodness in the whole wide world. That was three years ago, and Blogger has yet to be touched by the angels of Mountain View, California. For goodness sake, it doesn’t have basic blogging concepts like categories and trackback support. On top of that, blogs hosted at Blog*Spot have the nasty habit of breaking whenever somebody sneezes. Of course, what do you expect of free, ad-less blog hosting? Still, the quality of Blogger and Blog*Spot, even at no cost to me, is just too low below my junk tolerance threshold to be ignored any longer.
  • Professionalism Demands It! While I’ll admit this blog is not quite the epitome of professionalism, it is the epitome of awesomeness, and such awesomeness needs lots of open space, fun toys, and a balanced diet of cool stuff in order to thrive. As, I just can’t help but feel a little trapped. Sure there are a ton of high-quality, professional bloggers who use Blog*Spot, but for each one of them, there are 50 more “LIKE OMG I SAW A CUTE BOY 2DAY AND HE SAID HI TO ME AND OMG OMG OMG” right beside them.
  • I Need Cooler Toys (And A Bigger Toy Chest). Blogger’s customizable layouts are pretty nice, and I was perfectly happy with mine until the last couple of weeks. I tried adding a couple of extra features to my sidebar and I couldn’t get them working in Blogger. It was simple stuff that should have worked effortlessly, too! Then I started doing a few posts with HTML tables; don’t even get me started about what Blogger did with those tables. And for reasons unknown, my sidebar contents now hang out at the bottom of the page in Internet Explorer. In short, I need a flexible web host that will let me do the cool things I can do with Perl, PHP, Ruby on Rails, and all the other nifty stuff that makes the internet so pretty.
  • Other Projects. I’ve been running websites that I built from scratch for years. I’m no stranger to HTML, CSS, and all the different web programming languages out there. At present, I have a number of websites hosted by a number of different free and paid services. I’d like to consolidate all of them into a single service that gives me a big chunk of space and bandwidth that can be divided into many different websites (each with its own URL). Having such a setup might also convince me to start a few projects I’ve been putting off for a while.
  • It’s Now Or Never! If I stay with Blog*Spot much longer, it would become increasingly difficult to transition away from it in the future. And while I may not have reached the commonly used threshold for leaving Blogger (whatever that threshold may be), once I do reach that level, it might be impossible for me to leave without starting over completely.

With all of these reasons for leaving Blogger behind, you must be curious why I haven’t done it already!

Why Shouldn’t Funny Munny Move to a Web Host?

  • It Costs Money. Bingo! Reason numero uno why people are using Blogger and Blog*Spot instead of any one of the thousands of top-notch web hosting services out there: such services aren’t free! In fact, some can be downright expensive. While you can find a dirt cheap web host that will give you a tiny thimble full of space and bandwidth through a straw, it’s gonna cost at least a couple bucks a month just to match Blog*Spot’s sub-par level of service. Quality web hosting with lots of space and bandwidth accompanied by satisfactory service can run anywhere from $2 to $200 a month, maybe even more! Sure, advertising revenue can help offset the costs, but plenty of people aren’t yet at the point where their ad money would completely cover their operating expenses. Still, many people (myself included) are more concerned with providing good content to the general public rather than making a quick buck (though doing both at the same time certainly wouldn’t hurt).
  • More Trouble Than It’s Worth? This Blogger blog was relatively easy to set up. It’s pretty easy to maintain, and I’ve added a few nice features without too much trouble. This is perfect for millions of people who use Blogger and Blog*Spot, and it did the trick for me for a while. But now it doesn’t, so it’s time for me to move on. Moving on, however, isn’t as simple as hopping on a covered wagon to the next town. Unless I start over from scratch (which I don’t plan to do), it’ll take some elbow grease to get this blog transferred over to a different web host. Fortunately, there are plenty of resources available online to help make the transition a little easier, and I’ll be discussing some of them as I go along.
  • So Many Hosts! If there’s one thing the world doesn’t need more of, it’s web hosts. I estimate there are at least 74 different web hosting services for each person in the world. So how is someone supposed to choose from the roughly 444 billion web hosts out there? Is one host better than another? How about customer service? Am I getting the best value for my money? All those questions were enough to keep me from shopping around… at least until now. I’ll be dedicating an entire part of this series to selecting a web host.
  • Even Without Starting Over, It’s Two Steps Back. I equate the change from Blogger to a new web host to buying a new baseball glove. The old one may be dirty and falling apart, but you’ve got it broken in just how you like it. A new glove will take some getting used to, but the change will likely be worth it in the end. My biggest concern with leaving Blog*Spot is maintaining my current audience. I don’t want to lose any of you six! Seriously, while there are some simple ways for letting your audience know that you’ve moved, it often requires some sort of action to be taken by your audience to follow you. Using a service like FeedBurner helps with the move because people who put your blog in their RSS reader won’t need to do a thing to find your new feed; you can change the location in your FeedBurner profile and it will automatically propogate to the rest of the world.
  • Maybe Blogger and Blog*Spot Aren’t So Bad… Boy, how many times have I thought these words? Sure, they’re not the best free blog host out there, but it did help me start this blog, and it’s still here three months later! If you’re thinking about dabbling in a little blogging, I’d probably recommend giving this place a try. Just keep an eye on your progress, know when it’s time to jump ship, and make sure you have a life jacket handy.

I’ve already been researching potential web hosting services, and I believe I’ve reached a final decision that I’ll carry out within the next day or so. It’ll take a while to transition, so I’ll be continuing this series right here at for now. Be sure to join me for the second part of “Bloggin’ On Up” where I’ll discuss how to pick the best web host for you. (Now where did I put that dart board…)

For now, I’ll leave you former and never Blog*Spot bloggers with these questions: Who’s your web hosting provider? How’s their service? And how hard was the transition for you (if you had one)?

Thursday, March 16, 2006

What $300,000 Will Buy You In… Rockville, MD

Author: Nick
Category: Money

JLP over at AllThingsFinancial commented on the price of homes in Houston, TX–specifically, how much house $300,000 will buy you.

Then Jim at Blueprint for Financial Prosperity detailed what $300,000 gets you in Howard County, MD–just one county over from me! Not surprising, you’ll get more for your money in Houston.

So what does $300,000 get you in Rockville, MD, a northern suburb of our nation’s capital? Obviously it’s the best deal out of all of them: you get a magic invisible house!

Invisible House!!!

Indeed, $300k will get you an empty plot of land in Rockville, MD. And as you move closer to Washington, DC, $300k won’t even get you a mailbox.

Wednesday, March 15, 2006

Automatic Bill-Pay Saves You Time and Money… Until the Knife Slips

Author: Nick
Category: Money

Seeking assistant for world famous knife-throwing act. Earn big bucks for standing very, very still. Excellent benefits including health, dental, and 401(k). BYO life insurance.

Sign up for auto bill-pay today. We’ll credit you with $20 if you activate auto bill-pay on your account. We’ll automatically debit your checking account each month for the amount of your balance. Never worry about paying your bills again!

At first glance, these two advertisements seem to be completely different. At second and third glance, they still appear unrelated in any way. In fact, you could fill a room with Harvard PhDs and 500 gallons of Red Bull, and weeks could pass before anyone sees the connection between the two ads.

Fortunately for you, I have a PhD in awesomeness. It was granted to me by the University of Cool.

So what in the name of Benjamin Bernanke am I getting at? Quite simple: I might sooner try the knife-throwing job before signing up for auto bill-pay.

I’ve really gone off my rocker this time, haven’t I?! Here come the men in white coats to take me to a “special room.” But before you add the label “psychotic” to my RSS feed in your reader, hear me out! Allow me to explain why I equate automatic bill-pay to being at the pointy end of a knife-throwing act.

The Tragedy of Jill: The Woman Addicted to Auto Bill-Pay

Consider this hypothetical situation involving a young woman named Jill. Jill rents an apartment in the city and has a nice job. She used to pay her monthly bills the old-fashioned way–a check, an envelope, and a stamp. Then one day Al Gore invented the internet and she found that she could pay all her bills online. At first, Jill set up a manual bill-pay system with her bank so that she could input the values from her paper bills by hand each month and have her bank handle the payments. Then Jill got promoted at work and suddenly found herself short on time. Seeing an opportunity to save 30 minutes a month, Jill signed up for automatic bill-pay for all of her bills. Now everything would be automatically debited from her checking account. For the sake of simplicity, let’s say these are her accounts and that they’re all set to auto bill-pay somewhere near the end of each month…

Payee Monthly charge ($) Fee structure
Rent 1,500.00 Fixed
Car lease 400.00 Fixed
Home phone 40.00 Base + long distance minutes
Cell phone 50.00 Base + extra minutes
Gas ~150.00 Varies
Electricity ~150.00 Varies
Water ~20.00 Varies
Credit card #1 ??? Varies
Credit card #2 ??? Varies
Gym membership 30.00 Fixed

On an average month, Jill will have $2,340 plus her credit card balances automatically debited from her checking account. In a situation like this, unless Jill meticulously monitors her accounts (which she just doesn’t have the time to do), she stands to get burned in one of several ways.

Way Jill Loses #1: Keep the checking account loaded with money. Most people have low- or no-interest checking accounts for their everyday use. So if Jill puts $1,000 in a checking account that earns zero interest, it’s going to stay $1,000 unless Jill adds her own money or remove it. Any money Jill puts in such an account is really losing interest that it could be earning in a high-yield savings account (>4.00% APY). Jill can pretty much ensure her bills will be auto-paid with no problem by keeping, oh, $10,000 in her checking account at all times. While there are a few higher-yielding checking accounts out there, Jill probably doesn’t have one. So Jill probably misses out on $400 or more in interest each year when she keeps her checking account balance that high.

Way Jill REALLY Loses #2: Ballpark the checking account balance each month. Remember that Jill needs an average of $2,340 each month to pay her non-credit card bills. Perhaps Jill pays slightly more attention to her spending and adjusts her monthly checking account balance accordingly. If Jill estimates she put $1,500 on her credit cards this month, she might transfer only enough to her checking account to bring the balance to about $4,000. That should be enough to cover all of her bills.

But what if Jill’s math is a little off? What if there’s a particularly cold month that doubles her average gas bill, and she goes on a short trip and greatly exceeds her cell phone minute allotment, and her rent goes up $100 but she forgot it started this month, and she forgot about that $250 charge to her credit card she made on her trip? Jill ballparks her checking account balance based on the previous month but underestimates by, say, $300. Depending on the order in which her bills are debited, she faces at least a couple of overdraft fees from her bank that will set her back $10-30 each. And if Jill doesn’t have overdraft protection, she instead faces eviction, repossession, utility disconnection, dings on her credit report, and flabby arms due to a cancelled gym membership.

Chances are that situations #1 and #2 can be avoided by taking the middle road. If $4,000 would just barely pay the bills and $10,000 would always cover them, Jill could simply keep her balance at $7,000 or so and both her her risk of running the checking account dry and her missed interest earnings drop.

Way Jill REALLY REALLY Loses #3: Auto bill-pay is always on time, even if you’re not. Jill only half-learned her lesson from situations #1 and #2. She now keeps her checking account balance around $5,500 a month just in case. Sadly, Jill doesn’t bother to reactivate her gym membership, and she quickly becomes out of shape. She puts on 100 pounds and one day gets hit by a bus that she just couldn’t outrun. She makes it through okay, but she’s stuck in the hospital for about five weeks. Her family flies out to visit her, but nobody thinks about her finances since she’ll only be away from them for a little over a month. “She has auto bill-pay,” Jill’s mother comments. “Everything’ll be just fine!”

Jill leaves the hospital and returns home only to find her car gone, all of her utilities off, and Fair Isaac himself standing in her doorway with a baseball bat ready to bust her credit score down to 400. As it turns out, she was in the hospital for two cycles of auto bill-pay. The first went through just fine, but only the rent got paid at the end of month two. Or maybe Jill set up overdraft protection, and while everything was paid, she now has $300 in overdraft fees.

Way Jill Loses For All of Eternity #4: Getting your bills paid until the end of time. Flash forward 30 years. Jill retires with a comfortable nest egg, and with the advent of the super-duper-internet, Jill’s bills will never go unpaid because the auto bill-pay finds her money no matter where it is. On her 148th birthday, Jill dies unexpectedly… but nobody notices. You see, all of Jill’s friends and family are already in cryogenic freezing, so when she passes away in the quiet of her apartment, there’s nobody around to miss her. Not even her auto bill-pay misses her as it effortlessly continues to draw money from her bank account to cover her rent and other bills month after month, year after year. It’s not until her bank accounts hit zero 43 years later that anyone bothers to come looking for Jill. She’s buried on the moon where her gravestone reads, “Jill, 1975-20??, FICO 250.”

And if you think something like situation #4 can’t happen, think again.

Is Auto Bill-Pay Right For Me?

To me, auto bill-pay doesn’t seem to be worth the seconds or minutes one might save. What if, for example, you ran across some fraudulent charges on your credit card or calls you didn’t make on your cell phone bill? You might be expecting your auto bill-pay to take $30 out of your checking account, but a few fraudulent charges and you could end up with a bill many times larger than normal. If you’re using a manual bill-pay system, you’ll have a chance to go “Wait, why is my phone bill $1,300?” before you actually pay that amount. With auto bill-pay, unless there is some sort of control system in place that alerts you to larger-than-usual bills, you’ll have to deal with the company to get your money back after they already have it.

Let’s go back to the knife-throwing assistant metaphor. Just like many knife-throwing assistants who last their whole career without a single split hair, you might go your entire life on auto bill-pay without experiencing any of Jill’s troubles. Or you might have a small auto bill-pay mishap here and there that won’t affect you too much, much like the retired knife-throwing assistants out there who continue to lead normal, fulfilling, eight-fingered lives. But why risk a slip of the knife–a $1,300 auto-paid cell phone bill that could cause bounced checks, missed payments, and credit nightmares?

Still, I can see the appeal in not having to deal with bills each month. I know some people who take an entire day each month just to handle their finances, and bill paying can easily take up half that time. In theory, auto bill-pay should be okay for strictly fixed charges–rent, mortgages, and anything else where the price won’t fluctuate due to extra usage.

Just make sure to have a friend check up on you every so often.