cutting expenses

Cut These 9 Expenses in One Year to Get a 10-Day Hawaii Vacation

Carrie Kirby — Tue, 10 Apr 2018 08:30:10 +0000

Would you like to escape to the Hawaiian islands for a vacation this year? Well, who wouldn't? Tropical breezes, mai tais, snorkeling, waterfalls … once you start thinking about it, you're probably ready to pack up and go right now.

Except for that whole money thing. A 10-day vacation in Hawaii would cost around $5,000, for a typical trip for two. And you don't have it.

Well, mark your calendar for departure one year from today. Here's a 12-month savings road map that will make that Hawaiian vacation a reality. (See also: 15 Ways to Save During a Hawaii Vacation)

The breakdown

There is practically no upper limit on what you could spend on a vacation, but by my research, you could have a nice trip for two to the islands spending $1,300 for airfare, $2,100 for lodging, $1,000 for food, and $600 for a rental car and gas. That's $5,000.

How to save $5,000 in one year

Here are some low-hanging fruit ideas for cutting $5,000 from your spending this year. You don't even have to do all of them! Pick about five of these cutbacks to get your savings total up to $5,000.

1. Get a better phone plan: $600

You may be paying up to $100 a month on for an "unlimited" data plan — $1,200 a year. But that's not necessary.

The first thing you should do is log into your account and see how much data you're actually using. If you're only using two gigabytes of data each month — or if you could learn to reduce your data usage by taking advantage of Wi-Fi networks — you could switch to a Boost Mobile plan that charges $35 for three gigs, or try Ting, which charges by usage. Ting claims its average customer pays just $23 a month.

Even if you need unlimited data, there are budget providers out there that offer coverage pretty similar to the big brands. Boost's unlimited talk and data plan is only $50.

2. Drop the TV plan: $388

The average cable TV package, with about 239 channels, has an introductory price of $72.62 per month, according to CableTV.com. But once your promotional period is over and you add specialty channels, you could be paying close to $200 a month.

What would you miss if you replaced cable with a $20 digital antenna and a Netflix plan ($7.99 to $13.99 per month)?

Many families find they wouldn't miss much. Sports fanatics are an exception, and whether you can use a workaround depends on your level of involvement. You can get a package from streaming service Sling that includes the NFL Network, ESPN, and Fox Sports 1 for just $35 a month. I get my baseball fix by paying $19.99 a year for the At Bat app, which allows me to listen to streaming radio broadcasts. My husband watches his NFL team after the Sunday games are over, using NFL Game Pass, at $49.99 a year.

If you replace a $73 cable subscription with a $14 Netflix subscription and a $25 Sling subscription, you'll get much of the same programming for $39 a month.

3. Brown bag it: $1,500

Eating out for lunch every workday at a fast casual restaurant runs at least $10 per person, which is $50 a week, or $2,500 a year.

Won't you feel sad when your co-workers head out for lunch and you're stuck eating at your desk? Not if you put in a little effort to pack delicious lunches. One really easy way to pack a lunch is to simply package leftovers from dinner as you clean up. But even if you punt on planning and bring yourself pre-made salads, gourmet frozen burritos, or a can of soup, you'll still be saving time and money over restaurant meals.

Be generous and budget $4 per packed lunch, and you're still only at $20 a week, a $30 savings over eating out. It's also a good idea to get out of the office to eat. If the weather's good, invite co-workers to a picnic in the park.

4. Quit the gym: $700

Two-thirds of people with gym memberships never go to the gym, according to Statistic Brain. Two! Thirds!

The average cost of a gym membership is $58. If you're one of those people who is paying for the luxury of planning to go to the gym, definitely quit this minute. If you actually use your gym, consider whether you could work out at home or in the neighborhood for free. There are an awful lot of fitness classes on YouTube nowadays.

5. Drink tap water: $1,000

Let's say you consume three bottled beverages a day, whether that's cans of soda, bottles of water, or flavored iced tea. Quenching your thirst is costing at least $3 a day, or $1,095 a year.

Instead, spend $30 a year on Brita filters to make sure your home or office water is delicious, $20 on a nice reusable water bottle, and you'll never be thirsty, even when on the go. You'll even be able to pat yourself on the back for being nicer to the earth.

6. Change your coffee habit: $600

We're all sick of hearing about how spending $5 on lattés every day is ruining our financial futures. And maybe you were only spending $3 a day at the coffee shop anyway. But if you're spending that much every weekday, that still comes out to $780 a year.

Here's a little secret: With a small upfront investment, you can make coffee at home or in your office that tastes better than most of the flat whites you've been buying. Try using a French press, a simple pour-over, or, my favorite, an Aeropress.

You can make great coffee at home for 60 cents a cup, factoring in the cost of quality beans and even the electricity and water you use. If you'd rather use a single-serving machine, those prepackaged cups cost about 70 cents to $1 apiece — still a significant savings over $2 to $3 for a brewed coffee at a shop.

As for foam, this year I invested in a fancy milk frother for about $80. And I'm still hundreds of dollars ahead.

7. Cut back on carousing: $2,000

I found the ultimate buzzkill online: the Alcohol Spending Calculator. Punch in the number of times you go out per week, the number of drinks you have, and the average cost of a drink, and it'll tell you how much you're pouring down the drain each year.

For instance, going out three times a week, having three drinks each time, at an average cost of $10 per drink, and you're looking at $4,680 per year.

I'm not a total party pooper, so instead of banning booze, I'll suggest you cut back to one night out per week, find ways to save money at bars, plus have a rotating night in with friends once per week, for an average weekly booze bill of $50, or $2,600 per year.

8. Do your own nails: $1,000

The average woman who gets her nails done every two weeks spends over $1,200 a year on those mani/pedis. Fortunately, you can learn to do a professional-looking manicure at home with just a few tools. Even if you splurge and spend $200 a year on manicure tools and polish, you're saving big.

Or do this one thing

Do you smoke? If so, do we have a deal for you! You don't have to quit cable, bars, Starbucks, or the nail salon. You can simply ...

9. Stop smoking: $5,000

Cigarettes cost between $5 and $14 a pack, depending on how much your state tacks on in taxes. The Quit Now calculator can show you how much you would save if you stopped smoking, based on how many cigarettes you smoke a day and your local price. Giving up a pack-a-day habit in one of the more expensive states could save you $5,000 in a year, with just that one change. (If you quit smoking in addition to the money-saving ideas above, invest the savings and you'll bankroll annual vacations for years to come.)

Like this article? Pin it!

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways New Parents Can Manage Debt

Ashley Eneriz — Thu, 15 Mar 2018 09:00:07 +0000

Bringing a new little one into your family is an exciting time, but it can also be stressful if you have to juggle new baby expenses on top of debt repayment. Don't get overwhelmed. These tips will help you to pay off debt faster so you can enjoy your baby's first moments without so much stress. (See also: 7 Signs You're Financially Ready to Start a Family)

1. Don't add to your debt burden

Babies can be costly, especially when you're buying diapers and formula weekly. Be as cost-effective as possible when shopping for your new bundle of joy. Do your best to pay for diapers, baby food, and formula out of your normal grocery budget. This may mean juggling some of the normal things you buy to fit in an extra $25 to $50 each week.

That can feel like a stretch, but it doesn't have to be a drastic one. It might just mean you eat a rice and bean meal once per week, or eat only chicken instead of steak and fish. You won't have to make this grocery trade forever, it's just a means to an end.

As far as baby gear and clothes go, buy used or use hand-me-downs when possible. The first six months of your baby's life go fast, and items like swings, baby wraps, bath tubs, and rockers are not needed after that time frame, so don't waste your money. Any baby items that require strict safety regulations — like car seats — should be bought new. (See also: 8 Things You Definitely Don't Need for a Baby)

2. Don't be afraid to ask for help

There is no shame in admitting to family members and close friends that you are working hard to pay off debt and raise a baby. They might be able to take care of the baby one or two days a week so you can go to work, or they might have a lead for someone who is looking to hire out a side job. Many times, parents or grandparents are happy to have you over once a week for dinner, which can save you a small amount on your grocery bill.

Outside of your family and friends, check to see if you are qualified for WIC benefits or food stamps. Furthermore, if your debt is a federal student loan, you might be able to lower your payments based on your income.

3. Refinance and rebalance your debts

Write down all of your debts and their APRs. Are you getting the best deal for them, or are you throwing your money away on high interest rates?

If your credit score is healthy, try refinancing your auto loan, student loan, or mortgage to an arrangement with more favorable terms. The difference from a lower monthly payment can go toward expenses you need for your new baby.

If you're struggling with credit card debt, consider moving that balance to a balance transfer credit card with a promotional 0 percent APR. During that promotional window — typically between six and 21 months — interest does not accrue. This can be a tremendously effective way to pay down debt while saving on interest, especially considering that typical credit card rates can exceed 16 percent. Just be sure to pay the balance off in full before the promotional APR ends and the normal rate kicks in.

4. Try to survive on one income

Another strategy to tackle debt before and after the baby comes is to try to live on one income. Devoting one income to living expenses and the other income to debt repayment can quickly reduce the debt you owe. It takes a lot of sacrifice and budget cuts, but you will get out of your debt situation faster.

After debt is repaid, one parent can choose to stay home with the baby, which might be a better option financially than paying for child care. Or, both parents can keep working and continue to practice living on one income to supercharge their emergency fund and retirement savings. (See also: How to Go From Two Incomes to One)

5. Make drastic cuts

What drastic cuts can you make during this period of your life? Huge budget cuts are not fun, but they don't have to be permanent changes. Can you sell an extra household vehicle and get by with one? Could you sell some of your clothes, gadgets, or furniture? Can you cut your cable subscription for a while? Could you do a spending ban on anything that isn't an absolute necessity? (See also: Becoming a One-Car Family: 5 Points to Consider)

These options aren't for everyone, but talk them over with your partner to figure out how you can get serious about your debt repayment. Remember that it is better to go extremes now and pay off your debt so you can enjoy growing your family with the comfort of being debt-free.

Like this article? Pin it!

This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Easiest Ways to Catch Up on Retirement Savings Later in Life

Aja McClanahan — Tue, 16 Jan 2018 10:00:06 +0000

According to a survey by the Employee Benefit Research Institute, three in 10 workers report that preparing for retirement causes them emotional distress. Why? Well, because most people feel they are sorely behind when it comes to retirement savings.

The Economic Policy Institute reports that baby boomer families, on average, have just a little over $160,000 saved for retirement. With longer life spans, inflation, and increasing health care costs, it's possible that many retirees won't have enough to comfortably sustain their retirements.

If you feel behind with your retirement savings, you may be panicking. However, there's hope for you. If you're open to suggestions, a few smart moves will help you catch up on savings even late in the game. (See also: 7 Retirement Planning Steps Late Starters Must Make)

1. Change your mindset

One of the best ways to take the pressure off catching up with retirement savings is to change your mindset.

Rob Hill, owner of financial advisory firm R. Hill Enterprises, Inc., helps people plan for retirement and other stages of life. He says that in order to catch up with your savings, you need to first be more flexible with your idea of retirement. "The first thing I would suggest is not looking at retirement as an age, but rather a financial position," he says.

Hill explains that focus can ease anxiety and make a catch-up goal more feasible for some. He explains, "The goal of retirement is not a pile of assets, it is cash flow that makes retirement possible."

If you look at retirement in this light, you may discover you have more retirement runway than you thought and that building up your nest egg is a little more possible.

2. Make catch-up contributions

If you're over 50 years old, you can contribute more than usual to your 401(k). For 2018, employees within the age guidelines can contribute $18,500 plus a catch-up contribution of $6,000, for a total of $24,500. This approach can be even more helpful if your employer offers a match.

Kevin Ward, of Park Elm Investment Advisors, notes another way to save: an IRA — either a traditional IRA or a Roth IRA. "Aside from your employer-sponsored plan, you can save $5,500 in an IRA," he says. "For those over 50, there is an additional catch-up contribution of $1,000, for a total of $6,500." (See also: 6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future)

3. Contribute to a health savings account (HSA)

Though HSAs were created as savings vehicles for health care expenses, there are some tax advantages and treatments that can make this type of account a supplemental retirement option. In order for you to open an HSA, you must have a qualified health care plan, like a high deductible health plan (HDHP).

Shobin Uralil, founder of HSA management platform Lively, says placing money in an HSA has many benefits and "loopholes" that make this a great addition for retirement savings.

"You can save pretax money and then use pretax dollars to pay for qualified out-of-pocket medical expenses," he says. "After the age of 65, you can use HSA funds for anything you want, not just qualified out-of-pocket medical expenses."

It's also worth noting that HSAs have no mandatory distributions in retirement so you can save into your 70s, 80s, and beyond. This is helpful for anyone behind on retirement saving and needing more time to save. (See also: How an HSA Could Help Your Retirement)

4. Be frugal

You might be excited about the idea of saving more money, but wondering how you'll actually achieve those higher savings rates. Your best bet is to reduce your current lifestyle expenses. Of course, you'll want to adjust your spending to a level that is comfortable for you. But keep in mind the ultimate goal of having enough money to support your retirement.

The options for saving money are unlimited. With some creativity and motivation, you should be able to find some frugal habits that will help you make your savings goals — everything from downsizing your home, to eating out only once per month. (See also: 6 Ways You Can Cut Costs Right Before You Retire)

5. Postpone collecting Social Security

This is another strategy that can help you earn more income during retirement. The Social Security Administration reports that postponing Social Security benefits past your full retirement age can boost future payments by up to 8 percent for every year the income is deferred until age 70.

Tom Foster, national spokesperson at MassMutual, works with financial advisers and employers to educate them about 401(k) plans. He recommends postponing Social Security benefits because the returns are pretty significant if you can hold off. He notes, "Few investment strategies net such a return, never mind one with a guarantee." (See also: 6 Smart Ways to Boost Your Social Security Payout Before Retirement)

6. Keep working

A 2013 Georgetown University study estimates that there will be as many as 55 million job openings by 2020 due to baby boomers retiring and leaving the workforce. So the chances are, there will be plenty of demand for those who want to stick around and work longer.

Fortunately, we live in a wonderful time where the internet allows people to work longer, under flexible conditions from almost anywhere in the world. If you can keep working longer, it will add to your potential to save up even more money. (See also: 4 Creative Remote Jobs That Can Supplement Your Retirement Income)

7. Keep investing

It used to be that people drastically reduced their investment portfolios in anticipation of their "golden years." In order to reduce the risk of losing the principal amount of their savings, a retiree might be prompted to go with a very conservative investing strategy by keeping their assets in cash, bonds, or a combination of both.

Nowadays, people are living and working longer and may be able to invest and save more aggressively for longer periods of time.

Cliff Caplan, CFP at Neponset Valley Financial Partners, suggests that people needing to save more should continue to invest for growth. "Establish and continually fund a growth-oriented account that can benefit from lower long-term capital gains treatment," he says. "Dollar cost averaging can also be used to reduce volatility in a portfolio." (See also: 7 Reasons to Invest in Stocks Past Age 50)

Like this article? Pin it!

This article is from Aja McClanahan of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

First Rule of Financial Wins: Avoid Losses

Tim Lemke — Tue, 14 Nov 2017 09:31:09 +0000

The task of accumulating wealth and ensuring long-term financial security is often discussed alongside the idea of winning. And while it's fine to think of financial planning this way, it may be just as important to simply avoid losing. Smart investing involves looking for gains over time, but also escaping costly losses when the market goes down. Let's take a look at some ways we can "win" financially simply by avoiding losses.

1. Avoid overpriced stocks

The last thing you want is to buy a stock and immediately see it take a dive. If you are a young investor with a long time horizon, you can usually get away with putting your money in the market at any time. But it is important for anyone to avoid buying stocks when they are overvalued and perhaps due for a correction.

It's tempting to buy a stock if shares have been moving upward, because we all like to invest in companies that are doing well. At a certain point, however, share prices can be too high based on the company's earnings. It's important to learn the basics of how to tell if a stock is fairly valued.

A price-to-earnings ratio is an important consideration in valuing a stock. A P/E ratio is the share price divided by earnings-per-share (EPS). A P/E of more than 25 is on the high side, though P/Es vary by industry. Take time to learn what typical P/E ratios are for the sector you're looking to invest in.

Another rule of thumb to keep in mind: If a stock has been consistently setting new 52-week highs, it may be due for a pullback.

If a company's share prices seem overvalued, it's wise to practice patience or look elsewhere for better value. This will decrease your likelihood of losing money on the investment.

2. Know when to cut your losses

One common piece of investing advice is to stay the course and avoid panicking when shares of stock fall. This is sensible, but it should be balanced with an awareness of when to cut your losses.

There's a fine line between being patient and sticking with a dud investment for too long. It's OK to stick with an investment if the company's underlying financials are still strong, but if the company is seeing shrinking profit margins and revenues, or has completely lost its competitive advantage, it may be time to cut and run. In particular, hanging onto investments during major market downturns can result in massive losses that will take years to recover from. Some financial advisers suggest selling an investment if it drops more than 10 percent in a short amount of time. (See also: 10 Signs a Stock Is About to Tank)

3. Be truly diversified

Most investors know to avoid investing in too much of one thing. Diversification of investments is a key way to avoid a big loss. But sometimes, it's possible to think you are diversified when you aren't. For example, you may think you are diversifying your portfolio by investing in both U.S. based and international stocks. But have you considered that many U.S. companies already have a huge presence internationally? And even if you think you are diversified with various investments and asset classes, many investments still perform similarly, meaning that you're not as diversified as you think.

Financial advisers have varying thoughts on the ideal way to diversify. Of course, everyone's portfolio will differ depending on their age, risk tolerance, and projected retirement year. But the basic tenet applies: Don't be too invested in one area.

4. Watch out for investment fees

When you buy and sell stocks and other investments, you'll likely be stuck paying a variety of fees. There are transaction costs for every trade, and maintenance fees and other costs for mutual funds and ETFs. These are costs that are taken out of money you invest, so you not only lose money immediately, but lose out on its potential gains. This can add up to thousands of dollars in the long run.

Savvy investors know how to invest well while avoiding high costs. Discount brokerages such as Fidelity and Scottrade allow you to buy and sell stocks for as little as $4.95 per trade. Mutual fund companies including Vanguard, T. Rowe Price, and others have become more cognizant of fees, and are increasingly offering funds with super-low expense ratios. (Generally speaking, it's best look for funds that charge less than 1 percent for expenses.)

Keep your costs low when you invest, and you'll find that avoiding these "losses" can boost your gains.

5. Understand when the markets may be due for a dip

It's very difficult to time the stock market, and for young investors, it's a good idea to just invest as soon as you can. But it's also possible to avoid big losses by recognizing when the markets may be due for a correction. If it seems like stocks are priced too high based on their earnings, that's one bad sign. A slowdown in economic growth is another, and you should be wary of a spike in inflation and interest rates, too. It's also worth noting if companies are downgrading their earnings predictions for the upcoming quarter, as that could be a sign that business executives are pessimistic. If you recognize any or all of these signs, it may be worth waiting a while before investing too heavily.

Like this article? Pin it!

This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Financial Resolutions You Can Conquer Before New Year's

Kentin Waits — Mon, 06 Nov 2017 08:00:06 +0000

The new year is right around the corner and with it, a whole new set of resolutions. But why wait? There's still time to reshape your financial life before the ball drops and the Champagne toasts begin. Here are 10 financial resolutions you can conquer before New Year's.

1. Clarify your money goals

Success will always be elusive if you don't define it. Get specific about the goals you want to accomplish in the short-term (within the next year) and the long-term (beyond three years). Do you want to pay off credit card debt in the next six months? Do you want to save for a down payment on a home in five years? Write down each objective and include the mini-milestones you need to hit along the way.

2. Build a budget

Don't let the word "budget" strike fear in your heart. The best ones are simple, realistic, and flexible. With your short and long-term goals in mind, develop a budget that accurately reflects your income and expenses. Refine as you go; some variable expense categories can be reduced and others may need to be expanded. (See also: Build a Better Budget in 5 Minutes Flat)

3. Cut your spending by 5 percent

Look for ways to cut your spending by just 5 percent starting next month. Can you finally cancel that unused gym membership? Switch to a cheaper cellphone plan? Brown-bag your lunch three days a week? All of the above? The percent you save is less important that simply being able to consciously change your spending habits. (See also: Boost Your Savings With This Easy Budgeting System)

4. Don't incur any new consumer debt

More debt means more interest, more stress, and fewer options in the new year. Put the credit cards on ice. Switch to cash if it helps control your spending. (See also: 11 Good Money Habits That Will Keep You Out of Debt)

5. Prioritize (and attack!) existing debt

Once you've cut your spending 5 percent, funnel the extra money toward paying down debt. But be strategic: Prioritize what you owe based on the interest rate and attack the highest interest debt first. (See also: 5-Day Debt Reduction Plan: Pay It Off)

6. Open an IRA

Whether you choose a traditional or Roth, an individual retirement account can provide valuable tax advantages that make saving for retirement easier and much more effective. Start now. If you're under age 50, you can contribute a maximum of $5,500 in 2017. (See also: 5 Retirement Accounts You Don't Need a Ton of Money to Open )

7. Start building an emergency fund

Life is unpredictable. Having an emergency fund large enough to cover three to six months' worth of living expenses is a smart strategy. It can help you weather a layoff, cover an uninsured medical expense, or deal with an urgent household repair. Not sure how to begin? Explore some simple ways to build an emergency fund from $0.

8. Start saving your change

Every time you pay for something with cash, pocket the change and save it. Stash all those coins in empty coffee cans or Mason jars. At the end of the year, you'll likely have a few hundred dollars to bulk up your emergency fund or IRA. (See also: Spare Change Apps — Are They Worth It?)

9. Get serious about a side hustle

There are two ways to improve your financial position: spend less or make more. And if you really want to shake things up, do both. Brainstorm ways to earn extra income outside your 9-to-5 job. The cash can be used to pay down debt or invest. (See also: 14 Best Side Jobs For Fast Cash)

10. Try shopping secondhand

This resolution may surprise you, but I'm a firm believer in the power of thrift-shopping. Buying quality goods secondhand can save you thousands over the course of a year. Expand your consumer horizons and make paying retail your method of last resort. (See also: 31 Reasons I'm in Love With Thrift Shopping)

Like this article? Pin it!

This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Where to Find Emergency Funds When You Don't Have an Emergency Fund

Emily Guy Birken — Thu, 07 Sep 2017 08:01:05 +0000

Establishing an emergency fund is the first and most important step in taking control of your finances. This fund makes it possible for you to weather a financial crisis — anything from a big car repair or medical bill to losing your job. (See also: A Step-by-Step Guide to Creating Your Emergency Fund)

But what if you don't have an emergency fund? Or you have only just started building it when an emergency strikes? Or you have been hit with back-to-back hardships that your emergency fund can't handle? How do you find money in an emergency when there's nothing but cobwebs in your "emergency fund?"

Before you assume that dealing with such a situation is basically a hopeless case, remember that your ability to handle an emergency is not limited to the size your emergency fund. Here are several places you can find emergency funds when you don't have an emergency fund. (See also: 10 Ways to Prevent an Emergency From Driving You Into Debt)

1. Your own budget

One of the fastest ways to find some emergency cash in your budget is to cut your costs to the bone. Take a look at what you normally spend on groceries, entertainment, gas, and utilities. You may be surprised to find that there is enough money in your monthly budget to cover your emergency if you are willing to eat nothing but peanut butter and jelly, say no to happy hour with your friends, turn off the A/C, take the bus, and switch off your cellphone data plan for a month. This might not sound like much fun, but it will be well worth the short-term discomfort if you can use the savings to solve your emergency. (See also: Are You Spending Too Much on "Normal" Expenses?)

As a bonus, you could extend your cost-cutting to last a few weeks after you've taken care of your emergency, and use the freed-up cash to refill (or start) your emergency fund. That will make it much less likely you'll have to deal with this kind of deprivation the next time an emergency crops up.

2. Your stuff

It's very easy for us to forget just how much money is sitting in our homes in the form of all of our stuff. When you are facing an emergency, it can become clear that a lot of the stuff you own doesn't actually add anything to your life.

A financial emergency is a good time to sell some of the things you have kept but don't actually need. Craiglist, eBay, and Facebook groups are all excellent options for maximizing your profit if you have some time available before you need the cash. If your emergency has a quick deadline, however, you can take your valuables to a consignment or pawnshop.

3. Your monthly due dates

If your emergency is one you could financially handle if you just had a little more time, it may be worth your while to call your landlord, utility companies, and creditors to see if they would be willing to push back your due date for this month's bills. You may or may not be able to convince them all to accept a delayed payment this month, but it doesn't hurt to ask.

4. Your withholdings

If you regularly get a large tax refund every spring, you could potentially get hold of that money before April 15 by adjusting your withholdings on your W-4 form at work. Doing this, you may see more money in your very next paycheck.

Use the IRS online withholding calculator to figure out exactly what your withholding should be. Once you've adjusted your withholding, you can keep it at the adjusted amount for the rest of the year and save the difference in your emergency fund.

5. Your employer

Depending on your workplace, you may be able to take an advance on your future salary to help you cover a financial emergency. If you work for a small company where your boss is the final authority, you will need to appeal directly to him or her for your advance. If you work in a larger or corporate environment, you will need to discuss the possibility of an advance with your human resources department.

Be prepared to explain why you need the money, which may feel awkward. But your boss will want to know that the advance isn't enabling a problem behavior, such as gambling or substance abuse, and you do need to give some background so they will understand that this is a one-time emergency.

You can also expect to fill out some paperwork, which will specify the payback schedule and what will happen in the event you leave the job before the advance has been paid off. In most cases, the payback schedule will mean that you receive a reduced paycheck for a few pay periods until you have paid back the advance, although you may be able to negotiate for future overtime in exchange for the advance.

6. Borrowing money

There are several ways to borrow money that can help get you through a financial emergency, although they all have different costs that you need to consider before signing on the dotted line:

A loan from a friend or family member

Borrowing money from someone you know can be a relationship land mine, which is why so many people are leery of asking for that kind of help.

It is possible to borrow money from a loved one, but you must be prepared to handle it like a business transaction and actually use a promissory note. This legal agreement will spell out the specifics of payment dates, interest, and other loan details.

Peer-to-peer lending

The modern world has made it possible to borrow small amounts of money through peer-to-peer lending platforms like Lending Club and Prosper. To successfully borrow money from a peer-to-peer platform, you will generally need a credit score of about 660 or above, and you will need a checking account, since your loan will be deposited to it, and your payments will be automatically debited from it.

Generally, these loans have a maximum lending period of 36 months. There is no penalty for paying off your loan early, however, so a peer-to-peer loan may be an excellent choice for someone who needs money quickly but whose situation will stabilize soon afterward. (See also: 5 Times Personal Loans May Be Better Than Credit Cards)

An emergency overdraft from your bank

Your bank may be able to extend you an emergency overdraft if your emergency occurs within a few days of payday and the amount you need does not exceed your usual payday deposit. Explain the situation to your bank and request an overdraft for the amount you will need to cover your emergency — but don't forget to ask what overdraft fees you can expect to pay. If your bank approves this course of action and their overdraft fees are reasonable, this could be a relatively inexpensive way to get the money you need.

Take a loan from your 401(k)

Though it's generally not a great idea to borrow from your 401(k) for a financial emergency, it is a good idea for you to know what your rights are in regards to such a loan. (See also: 5 Questions to Ask Before You Borrow From Your Retirement Account)

The IRS allows you to access a portion (generally the lesser of 50 percent or $50,000) of your retirement plan money tax-free for an emergency. If you do take such a loan, the law requires you to repay the amount you accessed, plus interest — which you are paying to yourself, meaning you are helping to restore at least some of the growth you lost by taking the loan.

Loan rules specify a five-year amortization repayment schedule, but there are no prepayment penalties if you would like to rebuild your account quicker. In addition, many plans will allow you to make repayments through payroll deduction, in the same way you make normal contributions.

One caveat: If you leave (or lose) your job before paying back the loan, it will be considered an early distribution, which will mean that you owe the 10 percent early withdrawal penalty and tax on your loan.

Take a tax-free rollover from your IRA

While the IRS does not allow investors to take loans from their IRA accounts, a 60-day tax-free rollover allows you to access the money you have in your IRA in case of an emergency. Such a rollover lets you take money out of your IRA with no taxes or penalties, provided you put the money back in that or another IRA within 60 calendar days. If you fail to replace the money within that time frame, it will be considered an early withdrawal and you will have to pay income taxes on the money and a 10 percent penalty.

In addition, it's important to note that there is what's known as the one-year rule. You can only do such a tax-free rollover once within any 12-month period.

Emergencies are never convenient

Like death, taxes, and childbirth, financial emergencies don't like to arrive when it's convenient. The key to being able to handle financial emergencies is flexibility. If you are willing and able to make changes to your habits, respectfully ask for help, borrow mindfully, or reduce your spending, you can get to the other side of any emergency with your finances intact. (See also: 8 Ways to Decide if It's a "Fund-Worthy" Emergency)

Like this article? Pin it!

This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5-Day Debt Reduction Plan: Search and Destroy

Mikey Rox — Wed, 08 Jun 2016 10:30:07 +0000

[Editor's Note: This is part three of a five-part series on debt reduction. To read more, see the rest of the 5-Day Debt Reduction Plan.]

Some people give up on the idea of paying off debt because they think they don't earn enough money. Yes, life can be expensive, especially when wages don't keep pace with the cost of living. We're all victims of the tough economy, but this doesn't mean we can't win the war against consumer debt.

If you talk with anyone who's successfully paid off debt, you'll likely notice a common thread: Commitment. While these folks may not be rich or have a ton of money, what they do have is an air-tight spending plan, and they know exactly where their money is going.

You Need a Budget

To get a handle on debt, you first have to get a handle on your budget and monitor your spending. Like adding up your debt, you'll need to write it all down rather than relying on your own estimates. There's a good chance that you're spending more than you think you are in many categories. In fact, "financial advisers who press clients to tally their spending say the numbers are often at least 20% higher than the individuals had thought," according to the Wall Street Journal.

Coming up with a budget isn't hard. It's simply a matter of identifying your fixed and variable expenses. The good news is that with modern technology, you don't have to budget the old-fashioned way with a pen and paper. There are plenty of apps and software programs that simplify budgeting, and many are free to download. For example:

Mint
Pocket Guard
Good Budget
Mvelopes
Home Budget
Level Money
Spendee
...and many more, including a simple spreadsheet.

These apps are effective because they allow you track income and expenses, and you're able to see what you're spending on a daily, weekly, or monthly basis. Some budgeting apps also include pie charts and graphs so you know the percentage of your income that's spent in different categories. When you see where your money goes, it's easier to identify areas where you need to cut back.

Tracking Your Expenses

It can be hard to account for every cent when you first begin, but if you're following along with the series, on Day Two you collected all of your recent credit card statements, which is a good place to start. If you're at a loss for spending details, go ahead and make estimates now, and create a spending book and track every penny you spend (every one!) for a month. You can update the estimates you make today afterward.

Group your expenses into two categories: Fixed and Variable. Fixed means you can't change it (immediately). For example, these might include your mortgage, car payments, and insurance. The other expenses are variable, which means that you can adjust them easily, for example groceries, dining, and even subscriptions like Hulu or Netflix (you can cancel them or lower the subscription level at any time).

If you're overspending on a fixed monthly expense like a house or car, you can't get rid of those expenses overnight. But depending on how much debt you're in, how quickly you want to get out of it, and whether you've suddenly realized you've been living outside of your means, you should consider downsizing or even moving to a different city.

But in the meantime, take a hard look at your variable expenses and start cutting.

Keep Your Goals Attainable

As we saw in Day 2: Add It Up, if you want to get rid of your $10,000 in credit card debt in two years, you'll need to allocate $500 per month toward debt repayment. If you're currently paying $200 a month, rework your budget to free up an additional $300 every month. This breaks down to about $75 per week.

Here are some ideas about how you can drum up that extra cash.

Reduce your weekly grocery budget. You can save money by skipping the brand names and buying generic and by planning meals based on the weekly sales. Use a credit card that offers rewards for groceries and always bring a list and stick to it!

Cut back on entertainment. If you're currently spending $40 a week on entertainment, which might include movies, dinner, and drinks with friends, scale back to $30 a week. Something as simple as ordering water instead of a soda or iced tea can save you $5-$10 each week.

Increase Your Income

The other part of your budget includes the money you have coming in. The more you make, the more you can allocate to your debt reduction. Often it's easier to get a side gig to get the extra money than to cut costs. Here are ways you can increase your income (make sure you're putting in all that extra money into your credit card payments!).

Ask for a raise. Consider whether it's an appropriate time to ask for a raise. Has the company been doing well? Have you been with the company for a while and have gotten positive feedback regarding your performance? Don't be shy. The worse that can happen is your boss will say "no."

Get a side job. There's a whole online gig economy out there. Find something you can do. Do it.

Sell your stuff. We all have things sitting in our garage or the back of the closet that haven't seen the light of day in years. Go through them and see what you can sell. Better yet, if you're crafty, start making stuff to sell.

Debt Management Resources

Like this article? Pin it!

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Monthly Bills You Can Slash

Camilla Cheung — Fri, 06 Jan 2012 11:24:18 +0000

Bills! Bills! Bills! Sometimes it seems as if everyone’s got their fingers in the pie when it comes to your hard-earned money. Electric bills, water bills, cable, cell phone bills, doctor’s visits — the cost-of-living expenses never seem to end. However, if you’re smart about it, you can work the system and save some money on these so-called necessary expenses. (See also: 6 Tips to Shrink Your Bills Every Year)

1. Cell Phone Plans

Do you really need that $80-a-month smartphone plan with unlimited data? Unless you work in social media or your smartphone is essential for your job (in which case, consider asking your company to provide a cell phone plan or look into writing it off on your taxes if you’re self-employed), most people don’t need a smartphone. I’ve lost track of the number of people I’ve heard complaining about the abysmal state of their finances and all the debt they have yet to pay off, and yet they are still paying for two iPhone plans per household. What if you saved yourself $40 a month and put that money towards paying down your debt? Consider a far less expensive family plan where calls between family phones are free. You may even be able to share with family members even if you don’t live in the same household.

2. Internet

If the extent of your Internet usage is surfing the Internet, streaming Netflix movies, and sending emails, look into your Internet plan to see if you really need super-high-speed Internet. Your internet service provider might have a lower-speed plan that is sufficient for your needs but may save you $20 a month or more. Even one of the slower Internet speeds may be more than enough to stream movies and music — you may want to give it a try.

By the way, if you were getting an introductory deal on your Internet that is expiring, call your provider and suggest (politely) that you want to cancel your service unless they can offer you a better price. You never know, they might extend the deal for you or slash a few bucks off your monthly bill.

3. Landline Phones

If you have a good cell phone plan, consider canceling your landline service. Alternatively, look into one of the Internet-based phone systems like Costco’s Ooma system, Vonage, or Magic Jack. These VoIP phone systems feel just like landlines, have 911 support, offer inexpensive long-distance calls, and often cost just a few bucks a month (though there may be an upfront cost for the hardware). Personally, I use Google Voice, which is free (but doesn’t offer 911 support), which I have connected via my router to a phone in my home — it works just like a landline and doesn’t cost a penny.

4. Cable TV

I don’t have cable TV, and I don’t miss it. I can stream almost everything I want to watch through Internet sites like Hulu and Netflix, from sports to my favorite TV shows. If you must have TV, consider switching to basic cable and bundling your TV service with your Internet and phone services for a better deal.

5. Energy Bills

You can make significant savings in your energy bills by being more energy-efficient in your home. Your water heater and furnace are probably the biggest energy guzzlers. Insulate your water heater and turn down the house thermostat by a couple of degrees. Do laundry using cold water — your clothes will last longer, and you’ll save energy. If you’re buying a new appliance, look for the Energy Star logo, and see if you can get a rebate from your local water or electric company for getting a more efficient appliance. Oh, and your city may even pay you to let them cart away your old cruddy fridge, too (or you could sell it on Craigslist).

6. Doctor’s Bills

If you have health insurance and you receive a bill from a medical provider, don’t just blindly send a check. They may have neglected to bill your insurance or sent you a bill “by accident.” For instance, I received a bill from the California Prenatal Screening Program — they assumed I didn’t have health insurance until I provided proof, even though I was tested through my doctor’s office (which has my insurance information). Be sure you know how much your co-pays should be according to your insurance plan, and when in doubt, call to clear up any misunderstanding.

By the way, going to your routine check-ups at your doctor or dentist is an important way to maintain your health and avoid bigger expenses in the long run. You don’t want an unfilled cavity to turn into a root canal, which means more pain and more money.

7. Coffee

If you spend $3.50 on a latte every day, that adds up to $1277.50 a year. At those prices, you could have an espresso machine at home and still save money! Save the coffee shop for special occasions, or limit yourself to once a week. Meanwhile, invest in a good-quality coffee maker at home for your morning java fix.

8. Groceries

The grocery bill is a significant chunk of your income every month. I’ll be the first to admit that I am not as diligent at finding bargains as I’d like. This year, my resolution is to clip coupons, look for deals, and to shrink my grocery budget by 20%. My first step is to create a coupon folder in which to store coupons so that I can find them when I need them.

There are other things you can try too. Buy less meat and eat more vegetables; both your body and your wallet will thank you. Try growing, canning, and pickling your own produce. Cook from scratch instead of buying pre-seasoned or prepackaged foods. Buy generic brands.

9. Household Necessities

Almost anything can be cleaned up with baking soda and vinegar, which are cheap and natural alternatives to pricier commercial cleaners. Good for tasks including scrubbing baked-on food off dishes, cleaning the oven, washing windows, fending off ants, cleaning silver, and brightening laundry, these two basics will have you pretty much set. As for other household necessities such as paper towels, over-the-counter medicines, trash bags, and toilet paper, opt for the generic brand and/or buy in bulk.

10. Credit Cards

Not everyone can handle having a credit card. If you can, be sure to pay off your balance every month to avoid being charged interest. If you’re the forgetful type, consider setting up automatic payments through your bank (just be sure you have enough money in your account to pay your bill, or you’ll be charged by your bank too). Don’t get a credit card that you have to pay a yearly premium for — there are lots of free options that offer cash back, points, or other bonuses. By the way, if your credit card offers cash back, you may have to claim your cash back bonus in the mail. Be sure to do that to avoid losing the money you’ve earned. If you can handle the temptation of having that plastic card in your pocket, credit cards can work in your favor and actually earn you money.

In general, setting up automatic payment for all of your bills is a good idea, as long as you're sure you'll have the money in your account. You'll save on postage and avoid late fees if you forget to pay a bill. Also, some of your bills may be payable by credit card. If you pay your bills by credit card, and set your credit card to be paid off in full automatically, you can earn cash back on your bills too.

How do you keep your expenses down every month?

This article is from Camilla Cheung of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Business Owners Share Tips for Saving Money

Ken Kaufman — Mon, 21 Nov 2011 18:46:52 +0000

Link:

http://www.theopenappcenter.com/save-money/10-business-owners-share-tips-saving-...

Cutting costs and saving money are always on the minds of business owners and entrepreneurs. While it may seem like there is only so much you can do to trim your spending, the following opportunities for saving money come straight from the trenches.

Money-Saving Mentality

“We’ve worked hard to develop a culture of monitoring, discussing and exploring new ways to make our finances do the most for us in terms of driving strategic and tactical needs,” said Tony Lael, co-founder of Corelytics. “It all starts with asking the easy questions: Is there another, more creative way to be doing this that is more cost effective? Is this cost driving a strategic mission to help us hit tactical priorities? Everything goes through that filter first and it all starts at the top with company management.”

Labor Costs and Productivity

Regardless of industry, labor costs are the first or second largest expense incurred by almost all companies. Are you getting as much as you can from the money you spend on payroll? The owner of an engineering and consulting business was able to reduce overtime while still getting projects done on time.

"We found several of our employees were working extra hours to make extra money," she said. "They didn't think the company cared because there was always work to be done. So, we made sure employees knew that all overtime had to be approved in advance and reinforced with managers the need to only approve overtime when absolutely necessary." Her business has reduced overtime to almost nothing in a matter of weeks.

"Holding employees responsible for call-backs to resolve poor craftsmanship has saved a lot of money," according to Tyler Hawkins, owner and president of Xavier Paint Contracting. "Our foremen are now more inclined to finish the job correctly the first time."

Alan Davis, president of i5Services, has had success hiring younger, less-expensive employees. "There are very talented, skilled young people that can be found for lower salaries. The trick is to balance them with senior talent that can properly manage and train them."

Office Space

Scaling back or even eliminating a physical office is one of the common tips for saving money from the cost-cutting business owners interviewed.

Cary Snowden, president of Square Compass, decided to try a virtual/home office test case for three months. "Our three-month experiment turned into a six-month experiment, then a year. We are now three years into a virtual office scenario and have saved a minimum of $42,000 dollars."

Office sharing is another common trend employed to cut rent/lease expenses. Randy Chipman, who owns Custom Security and Sound, located his office in a building that was half empty. "I'm on a month-to-month arrangement in a building with excess space," Chipman said. "I have a private, furnished office with access to phone, fax, copier, internet and utilities all included."

Vendor Relationships

One business owner approached his vendors with what he could afford to pay. "Most accepted the reduced prices and extended payment terms to help us through a tough time," he said. Melinda Emerson has saved a lot of money on shipping. "I think we often default to more popular shipping companies when a click-and-ship account with USPS works just fine and costs less in many cases," she said.

Anita Campbell, CEO of SmallBizTrends.com, finds she can save a lot of money in her business by training her employees to take ownership of software development time. When someone on Anita's team finds a bug or problem, she teaches them to "… first investigate and troubleshoot on their own, in case it turns out to be a simple issue they can resolve. If it's not, then they are required to gather as much information as possible and lay it out in writing clearly with screenshots if necessary to explain it. This saves expensive developer time, which can cost three-figures per hour."

Trading services can be a very comfortable way to save cash flow. Bill Attinger, CEO of ActSeed, has found success bartering, “… some cross-marketing services with a number of other companies, which has enabled us to keep our marketing and advertising budget in check while still gaining traction in our visibility.” By focusing on these reciprocal promotions with other organizations that catered to the same target audience, Bill has helped his company save money on what would otherwise have been an expensive PR initiative.

Taxes

One business owner discovered after 10 years she had the wrong CPA doing her taxes. "I've learned there is a big difference in CPAs after thinking they were all created equal," she said. "Those who are well versed on tax law changes, legal case histories and what is being challenged in courts and the outcomes are in a position to offer the business owner very creative tax strategies for consideration, which can lead to some significant cost savings for our business this year."

Money-Saving Goals

What does your business really need to accomplish the goals and objectives you have for it? Once you know what your business needs, find the most cost-efficient way to fill those needs. An honest assessment of these questions will empower business owners everywhere, regardless of industry and size, to spend only what is necessary. Undoubtedly this will not only give your business its best chance to survive, but it will instill in you and your team the cost-saving attributes upon which great companies are built.

Like this article? Pin it!

AMEX Blurb:

This article originally appeared on the

OPEN App Center

. Visit

www.theopenappcenter.com

for more information and resources for streamlining and growing your business.

This article is from Ken Kaufman of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways To Reduce Business Travel Expenses

Barbara Weltman — Sun, 20 Nov 2011 22:32:47 +0000

Link:

http://www.openforum.com/

After payroll, travel expenses are the second most controllable business expense. Learn to reduce business travel expenses, and you can save your company money and increase the bottom line.

Travel Selectively

One of the easiest ways to reduce business travel expenses is not to incur them. Thanks to videoconferencing or other Web-based technologies, you may find it possible to meet with prospects and business associates without having to travel.

But still, travel is an inevitable need for most businesses at some time or another. When it is a necessity, explore your options. Look for travel discounts and skip the luxuries. Would you (or your employees) be willing to drive instead of fly? Can you schedule trips during the off-season for additional savings?

And, see if you can strategize travel plans to hit several locations in the most cost-effective and time-saving way. It may make sense, for example, to combine what could have been two or three separate trips into one, hopping from location to location.

Make Your Own Travel Arrangements

There are many online options to help you make inexpensive travel arrangements, from reduced ticket prices to low-cost hotels and budget car rentals. Use discount sites, online travel agencies and meta-search engines to book your own travel. And take advantage of savings opportunities like frequent flyer miles, discount plans and other promotions from airlines, hotel chains and car rental companies.

Monitor Your Travel Expenses

The best way reduce business travel expenses is to know exactly what you’re spending. Always check multiple places and consider alternatives before locking in your plans.

Keep track of expenses and make sure employees are properly accounting for their costs. If your company does extensive travel, use business credit cards that give cash back or generous (and easily usable) frequent flyer miles to save money over time.
Sometimes an extra night's stay may save money through cheaper airfare. If travel days are flexible, always look for prices within a day or two of your target travel days.
Downgrade from business to coach, which can be a big cost saver. In cities with more than one airport, check which one offers the better fares.
Re-check prices after you’ve booked when using a retailer that guarantees you the "best price."

Maximize Write-Offs

Tax deductions are another way to save money. For instance, every dollar you deduct can save you 25 cents if you’re in the 25 percent tax bracket. But you must follow strict rules in the tax law if you want to deduct your travel expenses. Keep good records of each trip in accordance with tax rules (recordkeeping for business travel expenses is explained in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses.

If your employees travel on company business, be sure to use an “accountable plan” to reimburse their costs. This can help to avoid treating reimbursements as compensation to employees and save the company payroll taxes that would otherwise be due on such compensation. Accountable plans are explained in the same IRS publication mentioned above.

The bottom line is: A little effort can go a long way to reduce business travel expenses without harming your business activities.

AMEX Blurb:

This article originally appeared on the OPEN App Center. Visit www.theopenappcenter.com for more information and resources for streamlining and growing your business.

This article is from Barbara Weltman of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Tips to Shrink Your Bills Every Year

Carlos Portocarrero — Thu, 20 Oct 2011 10:36:15 +0000

Everyone wants to make more money — it’s exciting to think of what you can do with some extra cash. But it’s a lot easier to reduce your bills than it is to make more money. I recently cut $120 from my monthly expenses by doing an annual bill audit, and it only took a few hours of work.

A bill audit means you commit to taking a look at your bills once a year and finding ways to maximize where your money is going.

I just finished my own audit, and here are six tips that will help make things go smoothly.

1. Schedule It

This one is crucial — you won’t get it done unless you schedule it. A one-off bill audit is great, but the real savings come from doing this every year. Set an annual reminder in your calendar program of choice, and then get to work.

If you have a day or time of the year that you sit down and do “paperwork,” then add this to the list. Tax time is a good way to remember since you’re looking at all the money you’ve made. (See also: 5 Things Tax Preparers Should Tell You)

2. Itemize

Take a close look at your bills. Don’t just write down the amount you’re paying every month — that’s useless. You need to know what’s inside that bill.

How much is your cable-box rental costing you? What about HBO?
How much is texting costing you? What about overages?
Are you paying for insurance coverage you don’t need anymore?

I found out I could cut roadside assistance because I have AAA now. The point is to look at the details so you can determine if you need every specific line item. Odds are you’ll find something in there you can chuck.

3. Figure Out Your History

How much have you used the stuff you just itemized? Take a look at the past three months (you can find all this online, more likely than not) or so to see what your usage looks like.

How many Netflix movies did you really watch? How many minutes did you use up on your cell phone? Texts? What about data?

Put all this stuff into a spreadsheet and then look and see if there is a cheaper plan you can sign up for that better suits your actual needs, not what you think you need.

Be careful, though — you don’t want to sign up for a lesser plan only to get dinged with overage charges down the line. Pick one that covers you in case your usage bumps up a little.

4. Get Quotes

Thanks to the Internet, this is easy. Insurance companies will let you create and save quotes in minutes. For cell phones, cable, and Internet plans, just browse the different sites, and you should be able to get an idea of what it will cost you to change your plan.

You might be eligible for extra savings if you actually call, so keep that in mind too.

5. Read the Fine Print

If a deal looks too good to be true, it probably is. Make sure you read all the fine print. I switched to a crazy-cheap T-Mobile plan, but it's crazy cheap because they won’t give me any discounts on new phones. I’m OK with that, but some people won’t be.

Know exactly what you’re getting into before you make the jump.

6. Call

I hate talking on the phone, but sometimes this is only way to get certain deals. It’s also a great way to get all your questions answered. I switched my cell phone plan on the phone and at the end of the switch, the customer service representative offered to take an extra $10 off my monthly bill to try some new service they were offering.

After finding out the exact details (read the fine print!), I signed up and set a reminder to kill the plan in two years so I don’t get charged. Calling is how I found out about the insurance coverage I no longer needed. I hate calling, but I like saving more.

This article is from Carlos Portocarrero of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The 4 Most Common Unnecessary "Needs"

David Ning — Wed, 02 Mar 2011 13:00:12 +0000

Whenever I work with people on cutting their expenses, the easiest part is always at the beginning when we start slashing all their unnecessary spending habits. The need to cut those out of the budget is obvious. But once we move on to expenses that are deemed "necessities," then the hard work begins.

It's not that those expenses are impossible to eliminate because they truly are necessities. The difficulty lies with trying to convince an individual that even what seems like a need can sometimes be eliminated. From all the budgets that I've looked at, here are four of the most common "needs" that are really not that necessary. (See also: 7 Monthly Expenses We Don't Realize We Don't Need)

1. Over-Buying on Real Needs

We can argue that none of these are actually necessities, but in our society, we probably need a house, a car, a washer and dryer, and at least one TV set.

Okay, I get it.

But how much are you spending on everything you think you need? You need a house to live comfortably, but it doesn't mean that you need a huge house with rooms that you seldom go into. You need a car to get to work, but that doesn't mean getting a new lease on a car every three years. You need many other things, but when you overindulge on features, then it's just living in luxury.

2. Wants You Think Are Needs

Of course, there's the age-old problem of believing that everything is a need when it's really a want. Sometimes people feel that keeping up with their peer group is a need, while others will feel that time is such a need that they don't even spend the few minutes a day to clip coupons (come on now, is your time worth THAT MUCH?). These may be true needs in some unique situations, but is that the real reason why you are spending more than you should?

3. Believing Everything You Already Have Is a Need

One major reason why lifestyle inflation is so dangerous is because it's very easy to get used to a luxurious lifestyle. As my parents always said, "You won't miss any expenses you never incurred, but once you are used to the level of spending, it's hard to downsize." At one time or another, you likely shared a bedroom, but once you are used to having your own, it's difficult to go back. You never had an office in your house, but once you set one up, you don't want to settle for working on the kitchen counter. There was a time when the weight of your TV practically implied on your wealth, since the bigger it was, the more awesome things were. Nowadays, you need them to be as light as possible. Can you go back to that old TV?

4. Self-Created Needs

Quite often, we need a product because we got something else that requires it. A classic example is batteries. You need them because you got a brand new gaming console, but is the entertainment system really necessary? What about your smartphone? If you bought a low-end cell phone instead of that luxury smartphone, you might not need to pay that ridiculously expensive battery-replacement fee.

And what about buying a Blu-ray player because you got a new LCD TV? Your excuse to buy the DVD player was exactly the same!

Whenever you are thinking about cutting your expenses, scrutinize every line item. Chances are good that if you think about that expense enough, you will realize that almost nothing is really a "need," which will help you cut down your spending rapidly. This worked for everyone I've helped, and I'm sure it will work for you too.

This article is from David Ning of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Beyond Debt-Free: Getting By in the New Economy

Kentin Waits — Thu, 20 Jan 2011 14:00:12 +0000

For most Americans, the pinnacle of financial independence centers on some vague notion of living debt-free. This debt-free life comes either through amazing feats of financial discipline during our working years, or as a final hard-won reward in retirement. But with an economy in turmoil, the specter of increased taxes looming as state and federal government deficits mushroom, and jobs becoming more and more temporary, is living debt-free even enough anymore?

We all know the pitfalls of consumer debt, and we all strive for that sweet moment when we make our final mortgage payment. But beyond the fundamental lessons of living debt-free, how can we leverage our work, our income, and our knowledge to truly stay ahead of what appears to be an ever-more precarious financial curve? I assert that becoming debt-free is just the first in a series of steps necessary to survive in the new American economy. Here are some other points to consider:

1. Ruthlessly Examine Expenditures

Face it: Putting the credit cards on ice isn’t enough anymore. We can work to avoid debt night and day and still be hit with some unforeseen event that levels our plans. A layoff, an uninsured medical emergency, or an accident can put us back at square one (or worse) financially. Staying ahead means saving more, and saving more means carefully examining every expenditure we make, becoming savvier to nefarious marketing influences and plugging the leaks in our financial lives. Ask yourself: Is this purchase essential? Does it support my larger financial efforts, or is it simply a black hole?

2. Activate Your Passive Assets

We work so hard to afford our homes and cars, but really put no demands on those assets themselves. Why shouldn’t our largest purchases be income-producing capital investments too? As most people’s biggest purchase and highest monthly expense, homes should be put to work. Is there a room you can rent out? Could the basement or attic become a permanent separate rental unit? And your automobile — would a truck serve you better and let you accomplish more (and more cheaply) by avoiding moving or delivery expenses? Could it become a means to launch and support a small side business?

3. Leverage All Types of Capital

Capital comes in all shapes and sizes. Living beyond debt-free means appreciating and leveraging social capital (your professional network, your friends, and your neighbors), knowledge capital (your skills and expertise), and time capital. How can each of these help you add to your income or reduce your expenses?

4. Rethink Industry and Marketing Forces

America runs on consumer spending, and most consumer spending is fueled by debt. Understand how the house of cards is built and carefully step away from the card table. Though the larger economic forces at play may be unchangeable, understanding how to not get caught in the worst of it is the key to success. Simplify your life where you can and become an ambassador for simplicity and frugality for your friends and family. Recalibrating expectations during birthdays, holidays, vacations, etc. can go a long way toward a saner and smarter financial existence.

5. Differentiate Needs and Wants

Reevaluating your ideas about needs and luxuries (sometimes ruthlessly) is probably part of what helped you become debt-free in the first place. Continuing to separate needs vs. wants and keeping your eye on the larger luxuries of freedom and security is still key.

6. Become a Micro-Entrepreneur

You are more than your day job. Your skills and time can be leveraged in new and creative ways to add to your income and help you be less vulnerable to the whims of larger economic forces. What skills from your primary job can be applied as a free agent part-time? What talents do you have that might translate into freelance work?

7. Embrace Independence and Local Interdependence

In an economy built on consumer unrest and dissatisfaction, independence and self-sufficiency are subversive concepts. Realizing how little you need through careful examination, thoughtful consideration, and efficient living is nothing short of revolutionary. Try growing a portion of your own food — it’s local, organic, and virtually free. Share it with your neighbors. Learn to lend and borrow; return everything in better shape that you received it. Turn your neighbors into friends, and see how much we all already have and how independence (and friendly interdependence) can create small liberations.

As we adjust to life mid-recession and realize that the economy is much more fragile than most of us ever understood, debt-free living may become the newest marker of success and a baseline for even more personal financial security. Though harder to attain, maybe this marker of restraint, financial mindfulness, community engagement, and simple living will be how we forge ahead and collectively change the industries and practices that brought us to the edge.

This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Ways Convenience is Screwing Your Finances

David Ning — Wed, 17 Nov 2010 14:00:12 +0000

Our collective hunger for more is great, motivating us to keep pushing the limits and never settling for the status quo. Because of this desire, we've found ways to make everything from finding the nearest gas station to staying in touch with a distant relative easier and easier, but all that convenience comes at a cost too.

The U.S. median income in 1900 was $438 a year, and it shot up to $23,602 by 1999. You might look at this 5389% increase and say "WOW. Life has got to be good." Yet, life isn't all that great right now. We are barely recovering from a recession (most say we are still in it), and everybody from the government to our schools to our neighbors are having a tough time making ends meet.

I know there was inflation, but that's hardly the whole problem. Here are a few reasons why we can't seem to keep our budgets in check even though we keep getting huge raises. (See also: If Budgeting Isn't Fun, You're Doing It Wrong)

House Services

I'm guilty of this one, because I love my house cleaner. She comes every three weeks, and she makes everything sparkling clean. There's nothing I couldn't do myself of course, but if I can spend time sitting on the couch watching TV and doing nothing, why should I actually exercise and work?

Cell Phones

I have an eight-month-old daughter named Sara, and I can't wait for the day when I have to deny her request for a cell phone. My excuse will be "But you don't need a cell phone..." I wonder what her response will be when she realizes that I have one, and I actually don't need it either.

Extra TVs

It's common nowadays for a household to have two, three, or even four TVs in the house. Of course, each one has got to be hooked up to paid TV service too, right? Oh, I need to watch TV when I take a bath, for god's sake. What else would I be doing when my house cleaners are cleaning? (See also: 8 Alternatives to Cable TV That Will Keep You Entertained)

Cars

We love brand new cars, especially with all those options that signifiicantly add to the cost. Premium sound, a sun roof, a navigation system, heated and electronic seats, V6 turbo, and performance packages are all necessary, because you know, how else will we be able to get to work?

Eating Out

I love eating out, and I'm a good tipper too. If I cook at home, how will all those waiters/waitresses survive? Not paying for the markup of the dining service is only good for my own family's budget.

Diapers

Why would I need to wash anything when I can just replace it? Wipe and throw them away. The trash man will collect them, and I'm saving money because I'm sure my house cleaner would want to be paid extra if I asked her to wash diapers too.

Post-it Notes

It's not like I can use anything reuseable, like my computer, to remember appointments.

Credit Cards

I can see why a small population of people won't like credit cards, but I bet most people won't spend more with that convenience. I mean, why would anyone buy more things when they always have money available? Why would anyone buy more when credit card companies send countless marketing materials to get us to buy more, travel more, and do more?

Back in the 1900, a pound of butter might have set you back a quarter. Nowadays, it probably costs $3 for the same thing. That's inflation, but our income more than made up for that. On the other hand, people washed their clothes by hand back then, costing almost nothing. Nowadays, a washer costs $600 dollars and a dryer costs another $600, not to mention that many of us end up all going to the dry cleaners anyway.

Convenience is great, but watch your wallets before you conveniently lose your fortune.

This article is from David Ning of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Reasons Why Keeping Your "Latte Factor" Will Help You Save Money

Xin Lu — Fri, 16 Apr 2010 14:00:03 +0000

"The Latte Factor" is a term referring to the small expenditures that you make every day that could add up to huge savings over time. This concept was popularized by David Bach in his book The Automatic Millionaire (affiliate link) and now there are many articles that tell you that saving just $5 a day on coffee will make you a millionaire. The math behind these articles is sound, but should you give up your little indulgences? Here are a few reasons why keeping your "latte factor" will help you save.

It is a small price to pay for happiness.

My husband's latte factor is bubble milk tea. Every week he gets one because it makes him happy. When I started dating him I actually told him that his milk tea fix is costing him hundreds of dollars a year. Needless to say he was not pleased and argued that he saves enough money to justify such a small expenditure. After I thought about it, I actually agreed with him.

He works hard for his money and he deserves to get this one small thing that costs less than $5 a week. I believe that saving money should not be a punishment, so when you deprive yourself of a tiny expense that makes you happy, the whole exercise of saving money will become a negative experience. When we experience negative emotions we are more likely to give up on an endeavor, so if your latte factor gives you a cheap dose of happiness then it is worth keeping.

You can save more elsewhere.

If my husband did cut out his milk tea habit then we would have a few hundred dollars more a year, but that pales in comparison to how much we saved when we asked for a rent reduction and refinanced our mortgage. If you really want to keep your small indulgences then you should try to save on the big things. How many lattes can you buy if you cut out cable TV and watched shows online instead? There are many ways you can save without sacrificing anything in your lifestyle, and I think those things should be done before you stop going to Starbucks.

Reward yourself for saving.

Ultimately, money is meant to be spent. I think it is a good idea to keep your latte factor as a reward for saving money. For example, if you hit your savings goal for the month then there is no reason not to enjoy a little bit of your money. If you keep your small luxuries as a reminder to save money, then they will work out to be positive reinforcement.

The concept that saving a little every day will add up to a lot over time is definitely sound. However, the fallacy in the idea that "eliminating the latte factor will make you a millionaire" is that those who cut out their morning coffee or newspaper usually do not save that money at all. More often than not I have seen people who stopped spending on little things blow the "savings" on something bigger. As long as you are committed to saving consistently, you can build up your nest egg and still keep the small expenditures that enhance your life.

What is your "latte factor"? Have you attempted to cut it out to save money?

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: