I Shop My Car Insurance Rates Every 6 Months

If one thing ranks among the top 10 list of things I like to do the least, that thing would be shopping for car insurance. However, as a budget and financial counselor, shopping auto insurance rates is a necessity when it comes to practicing what I preach. Because I tell my clients to shop for better rates at each renewal, I have to demonstrate the same dedication in my own financial life and do the same. In my case, my policy renews every six months, and since my current policy was set to expire on July 18, it was time for me to put my money where my mouth is -- quite literally.

Credit History and Car Insurance Premiums
One thing I learned in this latest round of automobile insurance shopping is that credit scores and premium determinations go together like peanut butter and jelly. Long gone are the days of my driving record being the primary factor that my insurance company uses when quoting my rate. Nowadays, insurance companies use two things when quoting my premiums: my credit score, filtered through a proprietary risk assessment metric, alongside my insurance score.

Credit Score
According to CBS News, the best credit score to have is anything above 720. Folks with scores below this range are considered higher insurance risks -- and being higher risk isn't a good thing. High-risk clients are likely to pay as much as 25 to 50 percent higher premiums than drivers with credit scores of 720 or higher are.

Why is this? Simply put (as referenced in a Drive Steady info graphic), individuals who are more responsible with money are considered to be more inclined to be responsible on the road, more likely to make timely payments and are proven to have fewer traffic violations than sub-par credit drivers.

Insurance Scores
My insurance score is the assessment of how likely I will be to file an insurance claim, and is a big factor in my premium determination. This is a three-digit number (ranging from 150 to 900) that insurance companies use to assess your driving risk, based on your history on the road and a variety of market demographics. The good news is that having a good insurance score, saves money.

Shopping for Insurance
Knowing what I now know about these scores, I also knew that I could log on to my Credit Karma account (free) and attain both my credit score and my insurance score before I started shopping. This would give me a better idea of where I would fall in the insurance game -- and give me a clear indication if it would be worth it to shop around at all.

Thankfully, I had a credit score of 770 and an insurance score of nearly 800. This put me in an optimal category to go shopping for rates.

Using this information, I obtained three different automobile insurance quotes, using the discounts I had in place with my current insurance company as well as any other proprietary discounts offered by the competing companies. In the end, I wound up switching policies, thanks to a $70 monthly drop in my premium payments (saving me $840 per year).

Of course, if I had a client who didn't have stellar scores, I might tell them to drop out of the insurance shopping race at each renewal, until they had rehabilitated their credit. However, I'd take it on a case by case basis.

Regardless, doing my homework before shopping for a new policy wound up saving me big bucks in the end, and it might do the same for you.


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I Was Wasting $587 a Year on Service Fees

Service fees. These annoying little add-ons are hidden charges that merchants sneak into contracts, agreements and fine print. It allows them to raise prices without really raising prices.
Perhaps the most deceptive thing about these seemingly nominal fees is that they will come back and bite you where it hurts later on. Trust me on this one. When it came to service fees, I learned the hard way. I took some time to read the fine print and nixed four costly service fees from my budget for good, and found out that my nominal cuts saved my family a pretty penny.

Not So Free Checking
I used to have "free" checking with my bank that was totally, 100 percent free. And while my old bank claimed a free checking continuance with the release of new terms and conditions in January, once I reviewed the fine print, I found that if I didn't continuously keep $5,000 in that account, I would be dinged a $5 monthly "maintenance fee". This news was enough to make me kiss my big bank goodbye and switch to a credit union, where free checking means free checking.
Annual savings: $60
 
ATM Fees
ATM fees are probably the sneakiest of all fees in my book. Not only would I be charged a fee for using another bank's ATM, my bank would charge me a fee on top of this. After doing the math, I found that the average $1.25 service charge from competing banks in addition to the $3.00 service fee my bank charged for "cheating" on them added up to a handsome sum. I nixed my weekly ATM visits for entertainment and grocery expenses and used my debit card cash back option at a retail location to withdraw my cash. Now, even if all I go into the store for is a package of gum, I get my cash, sans service fees.
Annual savings: $221
 
Online Bill Pay
In theory, online bill pay is great. If you use it, you have no hassles with paper, you don't have to buy stamps and you never forget a bill. However, I found out that merchants like my insurance company, my power company and even my water company were tacking on service fees like crazy each time I opted to pay my bills on their website.

My insurance company charged me a $1.50 "paperless fee." My utility company charged me $2.25 each time I paid online. My water provider charged me $3.00 every time I paid my bill on their website.

So what could I do if I still wanted to go paperless and pay without fees? Call it in. Now, as my bills come in I call my payment information in to each merchant and pay that bill with my cash back credit card. Then, 21-days later, I pay off my cash back credit card with my cash back debit card, essentially earning back all of my extorted service fees in just a few months. Now, I earn money by paying my bills, and I'm not getting fleeced by outrageous fees.
Annual savings: $81
Annual earnings: $73.68
 
Entertainment
My family is full of movie buffs. And since I get coupons, special offers and am part of our local theater's rewards program, we can take in a host of summer blockbusters on the cheap. However, I no longer use Fandango as part of our movie afternoon ritual. I used to love the idea of buying my tickets before heading to the theater to avoid the line. However, I loved it less when I found out that Fandango was charging me a $1.25 per ticket convenience fee.

With five people going to the movies two or three times a month, I was paying as much as $18.75 for "convenience."

I nixed it altogether and opted for the ticket kiosk in front of the theater instead. This way, I had the best of both worlds; no long lines, no hassles and no fees.
Annual savings: $225
 
When I did the math, I found out that cutting these four service fees alone saved me $587 a year. Now, I'm going back through my financial life with a fine tooth comb once more to see what other service fees are draining my hard-earned cash. Because if I learned anything from this simple exercise, I learned that service fees will most certainly nickel and dime you to death.




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How I saved $18,000 a year (and my sanity) by living frugally

I equate making a commitment to saving money and frugal living the same way I would tell someone to look at a fitness plan: no pain, no gain. It's hard work to go from fabulous to frugal. Well, at least it was for me.

When I first started the journey to living a frugal life, it wasn't without a few self-centered, Oscar-worthy temper tantrums. However, over time, not only did living a frugal life become easier, it became more rewarding. Over the past three years I learned how to save money, how to spend smarter and how to enrich my life in three unique ways.

No. 1: I Ditched the Second Car
Several years ago, we had two cars and two car payments. My husband's Honda, which came with a $400 a month payment and my Dodge Durango, which was costing us an additional $500 a month. I ditched my Dodge and began carpooling with my husband back and forth to work. Not only did this save me $6,000 a year in car payments (and even more in interest payments), but it slashed our car maintenance bills, gas bills and insurance bills to boot.

And while only having one car can be a little inconvenient at times, I can say that by having to taxi the kids around or being forced to travel with my husband for an hour or two each day has led to some great chats and additional quality time that we were missing out on before.
Savings: $9,200 a year
Personal benefit: Improved family time and communication.
 
No. 2: I Changed How I Used Credit
Instead of making minimum payments on a variety of cards, I paid off my debt and downsized my wallet to only two credit cards. We have MasterCard with a $10,000 limit, and a VISA with a $20,000 limit.

The MasterCard is a cash back rewards card. I use this card to pay my monthly bills and receive 1 percent cash back on all of my purchases. I pay this car off on the 21^st of each month with a cash back rewards debit card -- for which I earn an additional 1 percent cash back.

I keep the Visa in a fireproof safe and only use it for emergencies. This method of paying my bills with one card and paying that card off each month keeps feeding my credit report positive items while helping me earn money just for paying my bills. I don't know about you, but I call that a win/win.

In addition to downsizing my wallet, I also downsized my life. I only buy what I need, and what we have enough cash in the bank to buy outright. I don't use credit on a whim anymore. I'm not "finance happy". My minimalistic, penny-pinching lifestyle has saved us a lot of money over the last few years.
How much money, you ask?

Savings: $4,500 a year
Cash back earnings: $1,800
Personal Benefit: Less stress, no fights and less clutter.
 
No. 3: I Became a Couponing Freak
I am no extreme couponer --by any stretch of the imagination --, but I started using coupons in a not-so-extreme-but-still-powerful way about a year ago. Each week, I download grocery coupons from E-bates and Coupons.com that I can print and cut with ease. I match these coupons to the sale items at my local market via flyer and a handy dandy iPhone app. From here, I make my meal plan and then my list. This alone saves me a bunch of money.

From here, I combine my manufacturer coupons with my in store coupons and double my savings, giving me an opportunity to double dip or "stack" my coupons for even bigger savings.
Savings: $2,600 a year
Personal benefit: Money I can use to buy things for my family.
 
Was it difficult to make these large cuts to my budget and change up my lifestyle? At first, it felt impossible. In all honesty, I think I would have preferred a root canal. However, once I made the commitment and stuck with it, my family has been rewarded with more money to spend on vacations, extra quality time and have money for more things we need -- like college for my twins. Today, if you were to ask me whether or not my savings was worth the pain, I'd say, "No question. I gained far more than I was pained." Because $18,000 of extra cash a year and a happy family is more than even I could have hoped for.

How have you transitioned into a frugal lifestyle?
 
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5 Ways to Give Your Credit a Facelift

From the day I began working in college admissions, to the second I started helping distressed real estate clients and all the way up until my last financial crisis client a week ago, I have seen some credit reports that would curl your hair. And despite the fact that my depiction of consumer credit might sound bleak and dismal, it is (in fact) anything but.

Credit is cyclical. Your credit score rises and falls based on your spending habits. And whether you realize it or not, it is much easier to rehabilitate your credit than what you might think at first glance. If you want to go from zero to hero on your credit report, all you have to do is make a few right moves, sprinkle in a little consistency and add a dash of patience.

Know Your Balances
A major contributing factor to your credit score is how much revolving credit you have versus how much revolving credit you use.

I tell my credit challenged clients to keep their revolving credit usage below 10 percent.
For example, if a client has a credit card with a limit of $300, a personal loan for $5,000 and another credit card with a $500 limit, that client should never have a balance higher than $580 between those three accounts. And yes, collection accounts and judgments make up a large part of this. I tell my clients to settle these accounts if they are under four years old.

Naturally, as you improve your credit and, as are able to qualify for higher credit lines, this becomes an easier ratio to hit. But if you are carrying a balance threshold over 10 percent, the best thing you can do is put a maniacal focus on paying your debt down quickly.

Pay It Off Each Month, Every Month
I tell my clients that while it is perfectly acceptable to have more than one credit card, they need to focus on using only one card at a time. I also instruct my clients to pay off that card in full before the grace period expires (usually between 21 to 30 days).

A big part of your credit score is comprised of how many cards (and loans) have balances on them, in addition to how high those balances are. The fewer you use, the better your score.

Let Good Debt Sit
Old debt is not necessarily bad debt. In fact, leaving old (but good) debt on your credit report can boost your credit more than you might think. Old (but good) debt establishes a solid payment history to creditors. And since your credit report is made up of not only how much debt you have now, but how much debt you have had (and paid off responsibly) in the past, aged accounts with a good payment history account for a lot.

I tell my clients to leave all positive data on their credit report alone, and only focus on the less than stellar items.

Stay On Top of Your Credit
You can't fix items on your credit report if you don't know what your credit report says on a regular basis, but credit monitoring solutions can feel like a waste of money. While it's important to monitor your credit reports, it is entirely possible to do it yourself, using a few tricks and helpful reminders.
I tell my clients to order one credit report each quarter from the free annual credit report website. For example, in January, I have my clients order their Trans Union report. Then, in May they would order their Experian report. Finally, in September, my clients order their Equifax report. Since most bureaus report similar data, this is a cheap and effective method to monitor your credit on you own. However, in order to do this on a regular basis, you have to set up reminders.

I use my Outlook calendar to set up regular, recurring reminders for me to practice what I preach. Since I handle most of my personal finance matters on Saturdays, setting up a recurring message to check these items on the first Saturday of each month works just fine for me.

To monitor scores in addition to reports, I direct my clients to the Credit Karma website, and tell them to sign up for a free account. From here I instruct them to set up a monthly reminder to update their credit scores -- and yes, I do the same. Keeping up with your credit makes a big difference, and helps you avoid costly errors and erroneous mistakes.

Weigh Savings Versus Debt
Some of my clients try to bite off more than they can chew financially by simultaneously chowing down on their debt while trying to put more money in the bank. Instead of focusing on saving more now, figure out how much it's costing you to toss money away on interest and focus on your high-interest debt instead of boosting a low-yield savings.

For example, if you have a car payment sitting at 12 percent APR, start plugging money toward your car in order to get the balance down. Then, after six months of good payment history, try refinancing to a lower rate.

What you save in interest today is money you can put in your savings much sooner than waiting to pay off debt and save at the same time. Don't waste money to save money. That's just silly.
The primary ingredient for a good credit score is month after month of plain vanilla on-time payments -- and paying more than the minimum each month is also a plus. If you follow these five steps, they will lead you to credit success in two to three years, no matter how bad your credit might look right now.




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6 ways I make frugality more fun

Frugal living is to successful dieting as Snickers bars are to diet failure. Okay, perhaps my analogy is not quite that bleak or dreary in real life, but you get the idea. If you are a spender, and you put yourself in front of something that makes you spend, disaster usually ensues -- just like dieting and a rich, delicious Snickers bar.

Two years ago, when I embarked down the path to a frugal lifestyle, I had no idea what I was getting myself into. I was not prepared. And because of that, I failed. In fact, I failed many times. It wasn't until I figured out how to mentally psyche myself into saving that I finally met with success. What did I do differently?

No 1: I set realistic goals.
I did not just wake up on morning with enough money to pay off all of my debts, but I did wake up with the resolve to start paying down my debts one at a time.

As I do with most other things in my life, I created a spreadsheet. And once I saw how much I was paying back (normally four or five times my total) to my credit card companies, it was enough to electroshock me into better fiscal behavior. I started by paying off my debt that had the smallest balance and highest interest rate, and then snowballed the rest of my debt from there.

I made paying off each debt a challenge; a game of sorts. Reviving my ultra-competitive streak got things done, even if I was only competing with myself.

No. 2: I did a (regular) mental check in.
Instead of looking at a frugal lifestyle as one of being deprived of everything I wanted, I adopted a new attitude: I began thinking of all the things I could do if I did not have a mountain of debt holding me back and prioritized my spending. When I prioritized my spending, it was much easier to cut spending on things that did not matter, in favor of things that did.

No. 3: I kept a "Yay Me" journal.
When I paid off a card or achieved a savings milestone, I documented my achievement, gave myself a pat on the back and then had a mini-celebration, rewarding my good behavior.

No. 4: I went with what motivated me.
Remember my saying that I would reward myself after each successful milestone? Well I did. However, before I did this, I had to figure out what motivated me. For me, a little splurge on a dinner out (not having to cook is a nice thing for me) was all the incentive I needed -- and naturally I wrote this splurge into my budget. It helped.

No. 5: I still have "mad money".
I realized that the primary reason I kept falling off the frugal wagon was that I was not seeing a payback for my cutbacks. So, I built a little frivolity into my budget, without making my budget frivolous. What do I mean by this? I give myself a "mad money" allowance at the beginning of each month.

Mad money is money I can do whatever I want with: I can buy a new pair of shoes, snag a new outfit, enjoy a girl's night out with my pals or do whatever else my little heart desires. Trick is, when that money is gone, I have trained myself to realize that it is gone until the next month. It gives me a reward for my frugal life, while helping me stay on budget during outings and splurges -- I think it's a win/win.

6. Go public.
I love accountability, and I find that talking about my frugal life using a public forum is great for that. I blog about my frugal life nearly every day. This activity keeps me accountable both to myself and to my readers. I even keep a Facebook fan page where I publish daily tips, alongside items I use to keep me on the frugal path.

If blogging is not for you, participate in self-help forums or get a money buddy. Both of these options keep you publically accountable as you proceed on your journey to living a frugal life.

How are you living a frugal life?
 
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5 financial fitness exercises

This last year, I have become an avid devotee of the fitness world. After having lost 45 pounds of fat, and getting on the yellow brick road to building long, lean muscle, I have spent the last 365 days knuckling down, busting my unhealthy habits and working toward a new and improved me.
However, as I got to thinking about my progress in fitness and my hopes for the future, I began thinking about how I tied that directly into my finances. Because, frankly, the primary reason I was so successful when it came to reaching my fitness goals was because I modified my fitness plan to mirror my financial one. Think fitness and finances don't mix? Think again.

No. 1: Goals
I set goals in fitness and in finance, regularly. And when I set those goals, I make sure that they are SMART goals.
 
For example, when I knew I needed to save money for my emergency fund, my initial goal was to save $1,000 in 60-days. Then, once that goal was set, I wrote down a plan to help me get there. This made my goal tangible, actionable and put it within my reach. The more you plan when it comes to reaching your goals, the more likely you are to get there.

No. 2: Track Progress
Every 30 days, I weigh in and take my measurements to track my progress. Tracking your progress is crucial. However, in finance I am a little more attentive to tracking, while still realizing that milestones are reached by viewing goals as marathons, not sprints.

I log on to my bank accounts every morning while I sip my coffee. I receive daily account updates via email and text, and I use Mint.com to help me track my spending and budgetary goals. I know that in order for me to get to my goals, I have to know where my money is going … at all times, by tracking that data like a fiend.

No. 3: Planning
John Jay said (and I am paraphrasing here), that if you should prepare for the worst, but hope for the best. I do this when it comes to fitness and finances all the time.

I never know when I might have an injury that causes me to miss a workout (I have a bum knee and scoliosis), and I don't know when Murphy will strike and force me to buy a new hot water heater or other random device. Because of this, I pad my workout plan to allow a few extra days and I pad my emergency fund with a little extra money each month ($100 to $200). This way, when Murphy does strike, I am prepared for his arrival without blowing through my emergency fund.

No. 4: Get a Money Buddy
When I work out, it is much easier to stick to my plan if I have a workout buddy. The same is true with money.

I have a financial planner who reviews my accounts regularly. Because he knows my habits, he can tell me what I'm doing wrong, and make suggestions on how to improve my course. There is no substitute for a pro. That goes for fitness and finance.

No. 5: I Splurge Sensibly
Each week (usually on Saturdays), I have a cheat day. On this day, I can consume whatever my little heart desires -- which is usually chili cheese fries, hot wings and wine. And I do the same thing with my money … sort of.

For instance, I am an epic movie buff. However, instead of paying $10 to see the latest 3D release, I buy my tickets for the afternoon showing, using a rewards card -- which gives me a 10 percent discount. I get to have my cake and eat it too, in moderation of course.

These five tweaks have helped me flex my financial muscle, and if you follow them to the letter, they can do the same for you.



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How Much House Can You Really Afford?

Before clicking the seatbelts shut for my clients after ushering them into the back seat of my car to take them home shopping, I made them do (no pun intended) a little homework. I required my clients to complete a few basic mathematical equations to find out how much house they could really afford, by factoring in some of the "hidden" costs of home ownership. I wanted my clients to come into the home buying process with a fresh set of eyes, and ditch the rose-colored glasses. And even though I knew that a math class was the last thing on an excited, freshly pre-approved homebuyer's mind, it was a necessity nonetheless.

Finding The Real Cost of a House
The cost of owning a home includes a lot more than just your mortgage payment. You have to account for your property taxes and a homeowner's insurance policy as well. Most mortgages will add these into your monthly payment, so be prepared for a figure that is drastically different from what you saw when you ran your numbers through a mortgage calculator initially.
How much?
 
According to the Insurance Information Institute, you can expect the average homeowner's policy to be around $880 a year, which will add about $73 a month (give or take) to your mortgage payment.
In addition to that, property taxes will be anywhere from one to three percent of your home's assessed value. For example, if the assessed value of your property was $250,000 and you pay two percent in property taxes a year, your property tax bill would be $5,000 a year, or $416 a month tacked on to your mortgage.

This means that $1,500 comfortable payment you once had is now a far less comfortable $1,989.
In addition to this, prepare to save one percent of your home's value toward maintenance and repairs. Using the example above, that means you should expect to save another $208 a month or $2,500 a year.

Why do I bring this up? Because when I told my clients this, they often needed to look at a different price point. This leads me to step two.

Spend vs. Afford
If you are like most of my clients, you have probably realized that what you can "spend" per your pre-approval letter probably doesn't match up exactly with what you can afford, especially after taking the hidden costs of owning a home into account.

The smartest thing to do is give your mortgage broker a figure that you are comfortable with as a monthly payment. When I did this, I made sure the broker understood that the monthly figure needed to include estimates for taxes and escrow, and pad in another percent for maintenance and repairs.
I had a tool in my MLS program that allowed me to do this, but I would verify my data with a loan officer, in order to come up with a new price range for the buyer. And, in my experience, that price point was usually at least $10,000 less than the original price point my buyer's wanted. However, buying less house was actually the more financially responsible choice. And step three proves that.

Making Wise Choices
Once you have come to a figure (by working from a payment you are comfortable with as a starting point), you need to make a few smart home buying choices.

I told my clients to buy the smallest, but nicest house they could afford in the nicest neighborhood, with a 15 or 20-year note (not a 30-year). Since location is everything in real estate, moving in to a desirable, well maintained neighborhood helps your property value increase. And the faster you can boost your property value, the more money you will get out of your investment when you sell. And while this strategy usually wound up in my buyers shopping for a house that was $30,000 to $50,000 below their original price point, they thanked me later.


If you sacrifice now, by not getting the house you think you have to have, you can buy a better house in less than 10 years, and do it with more money in the bank. Instead of looking at home purchase like a sprint, think of it as a marathon. With a forced rate of return (home equity growth) of around three percent annually, the less you finance and the faster you pay, equals a smart buy.
Know what you can spend, but don't let what you can spend be the end all be all of what you choose to buy. Smart buys pay off.




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Are You Flirting With Financial Disaster?

They say that money can't buy happiness. While that may be true, money does remain directly linked to our everyday life. The amount of cash we have on hand affects our emotions, self-worth and self-esteem. As a budget counselor, I am in a unique position. It's my job to help people recognize the ways that they are sabotaging themselves with money and help them get back on track. What's interesting about what I do is the simple fact that most folks I work with don't even realize they are on the verge of financial catastrophe. However, seemingly harmless acts can pave the path to financial disaster.

Juggling
I grew up watching my parents take on a financial juggling act. Instead of paying for services in full each month, my parents would make smaller, more frequent payments; enough to keep their heads above water, but not enough to pay the bill off.

Most utility companies, credit card companies and other institutions charge a late fee when payments aren't made in full in a timely manner. I sat down with one of my clients (who is an infamous juggler) and did the math. On all of her accounts, she was throwing away over $984 a year ($82 a month) in late fees; money she could have been saving, investing and applying elsewhere to help dig her out of her financial rut.

Spending Money Before You Have it In Your Account
I am a proponent of having a plan for your money. However, another huge mistake I have seen clients make is counting on a windfall, a large payment or just live on a prayer for future stability. They will then use this school of thought to justify taking on more debt or making irresponsible financial decisions.

Example: I have a client who will habitually "steal" from her light or water bill so that she can buy cigarettes. Then, if a paycheck is late or less than what she expected and when she can't pay her bills, she becomes the quintessential juggler I mentioned earlier. Yet, according to her, "it's never her fault. She just doesn't make enough money."

Shuffling Credit Cards
In my line of work, I hear a countless number of little white lies. Out of all the lies I hear, the most common is, "I don't have any debt, except for my house." All the same, upon further examination, I find that clients are not only in debt up to their eyeballs with their houses, but that they have racked up stacks of credit card debt on top of it.

To make matters worse, these clients will charge up the balance on one card to pay off another. However, instead of making headway and paying these cards off, they only continue making minimum payments and shuffling balances.

I sat down with one client who did this month to month and we found that over the last 4 years, she had racked up $11,000 worth of debt, paid $8,800 worth of interest, $1,200 in late fees and had nothing to show for it.

Living On Overdraft
Overdraft fees are expensive. My bank charges $34 for any NSF item presented to my account. When I have clients who are paying regular overdraft fees, I know that they are either on the verge of declaring bankruptcy, or that they aren't managing their money well enough. For these clients, I recommend using budgeting tools like Mint.com, checking their bank balance every day and keeping a good, old fashioned pen and paper register.

The last overdraft client I took on had paid a whopping $900 in the last year in NSF charges; obviously money she could have been using to save or pay off her debt.

Not Having Savings
If you're unable to set aside a small amount of money for savings in your budget, your finances are on shaky ground. Savings needs to be as much a part of your monthly budget as your light bill or grocery bill might be. When I'm dealing with clients who have little to no savings, I often find that they are up to their eyeballs in debt and taking out payday advance loans, loans against their car or even using their home equity as a piggy bank. The problem here is that all of these methods cost money, and a lot of it.

I force my clients to cut down on their expenses and make savings a budgeted line item. Then, I check on their progress every few weeks until they start building a nest egg, or emergency fund. The problem with these five pitfalls is that they are clear indicators that financial disaster (collections, late payments, bankruptcy, foreclosure and repossession) are looming right around the corner. The sooner you break these bad financial habits and exchange them for good ones, will be the sooner you can begin building wealth and breaking the cycle.




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7 Ways to Save Big When Dining Out

According to the U.S. Bureau of Labor Statistics, the garden-variety American family forked over $2,505 on dining out expenses in 2010. And in case you are wondering, that comes out to an average of $208 per month or $52 per week, per family -- and that's a lot of (excuse the obvious pun) dough.
A couple of years ago, my family mimicked this statistic. In fact, I think we spent a little more than the average family when it came to wining and dining away from home. However, that was before I found seven frugal ways to feast on the ultra-cheap.

I buy cheap gift certificates
If I had to pick a favorite stop for cheap gift certificates, that stop would be Restaurant.com. I buy $25 gift certificates for as little as $10, $50 gift certificates for just $20 and sometimes even score $100 gift certificates for $40 to all of my favorite local San Antonio eateries.
But every rose has its thorns. My dine-in only certificates can only be redeemed once per month per restaurant -- meaning that "to go" isn't in the cards.

I online coupon, like crazy
I use Groupon and LivingSocial to score added restaurant savings. From these nifty sites (I receive email daily), I have earned as much as 50 to 90 percent off all kinds of fare -- and scored other local bargains to boot.

I check in
My smart phone is surgically grafted to my palm. Okay, not really, but it may as well be. I have used the check in feature on the mobile Facebook app and won $25 gift cards I could redeem instantly, I have checked in on Yelp to get free fare and I have checked in on Foursquare for a little double dipping on my savings. Even if I can only use one deal on arrival, I can usually save my check in points for a future discount.

I eat free
I will never forget the first time I heard about how I could score a free breakfast at Denny's on your birthday. I was in the car with my teenage daughter, on a three-day road trip to Florida and I heard the ad on the radio. Immediately, I fell in love with the concept and let my fingers do the walking to see if anyone else offered up similar savings. From here, I stumbled upon eatfreeonyourbirthday.com. You're welcome.

Showing off my apps
I have downloaded a few apps that help me earn a discount when I dine out, just by showing my server the app itself. They work nearly anywhere:
Dining Deals
LocalEats
The Valpak app
Hint: use these apps to plan where you are going to eat in advance.

BYOB
An unapologetic cheapskate, I don't have an ounce of shame asking if a restaurant will let me bring my own bottle of wine. I don't see a point of paying $6 for a glass (or $30 a bottle), when I can buy a bottle of good wine for $10 to $12.
When I have found these places (they are rare), we have become regulars there, because we save as much as 50 percent off our tabs. Of course, if you don't drink this really won't benefit you.

Surveys and cash back
I signed up for iDine on a whim. Post-meal I fill out a survey and I earn cash back for each one I complete -- between 5 to 15 percent of my total tab. When I get to $20 in my iDine account, they send me a $20 American Express gift card.

And while eating at home is still best, it's nice to know that I don't have to fork over big bucks to enjoy a meal that I didn't have to slave over making -- at least, every once in awhile.



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A Year in the Life of a Minimalist

Once upon a time, I was a mindless spender, an impulse buyer, a compulsive shopper and found myself living paycheck-to-paycheck, hand-to-mouth. However, about two years ago, I had a wake up call. After a devastating medical diagnosis and a year's worth of expensive treatment, I was not able to continue on my 20-year career path. I was, however, able to forge ahead in a new career, earn a comfortable living and learn how to downsize my life.

Finding Minimalism
Minimalism goes by many names: simple living, life hacking, consumption reduction and scads of other monikers. However, no matter what you call it, the definition remains the same. Minimalists don't put a monetary value on "stuff". We eliminate stuff, and with it, the stress and the clutter of everyday life, in favor of buying only necessities.

Intensity Levels
The more I read about the minimalism movement, the more I realized that it came with varying levels of intensity. For instance, I am not the type of person who is willing to sit in a room without a stitch of furniture in it, reading by candlelight, not owning any electronics or modern conveniences. I am also not the kind of person who would be comfortable going dumpster diving for my next outfit. However, I knew I needed to do something. I was willing to give minimalism the jolly old college try, my way of course.

Starting Off
The obvious solution to becoming a minimalist is to have (and review) a budget. I did that. From there, I began managing and cutting mindless vices and financial drains, selecting my most obvious.

Mindless Vices Off
I was a TV junkie. I was addicted to my smart phone. I was a clotheshorse. I took my three biggest sins of excess and started minimizing them.

I went with a basic cable plan and bought a Nook. I started reading more instead of watching TV. And not surprisingly, I learned a lot more from reading books than I ever did watching the latest installment of "Jersey Shore". In fact, I think it helped me become a better, more well-rounded person.

Annual savings: $1,2000
 
I ditched the high dollar cell phone plan and went with an ultra-basic plan with unlimited texting. This eliminated the temptation to waste hours on the phone, prattling on about idle nonsense, freeing up my time for more productive pursuits.

Annual savings: $840
 
I donated half of my closet to a local charity - and yes, I did take the tax write off my $567 donation. After that, I made a rule: whenever I wanted to buy something new, I had to throw out something old. I made a "consignment/donation" basket in the corner of my closet. Each time I went shopping for new threads, I would either sell an old item to a consignment store or donate it.
At one point, I was spending about $230 a month on clothes. Now, I do not even spend a quarter of that.

Annual savings/donation: $2,780
 
To track my "mindless spending", I set up automated drafts into a savings account each payday, for the amounts I would have been spending. This kept what I would have been spending, and out of sight, out of mind. Then, whatever else I "saved" by walking away from a purchase that wasn't a necessity over the past year, was even more money I added to my savings account. After doing this for a year, I added up my savings. Surprisingly enough, I had about $5,000, and I was actually a happier person, even though I didn't have as much "stuff".

Today, I am continuing to downsize my life. My goal for 2012 is to save $10,000. I have changed my dining out habits, I am selling excess furniture and electronics and I have eliminated our second car. And, seven months into the year, I am well on my way to my $10,000 savings goal.
When I removed money as my mainstay for happiness, not only was it easier to make more money, but it was easier to keep more of my money. Today I can say that I have no debt, I am saving for a comfortable retirement, I can travel when I want to and I can splurge when I feel like it. And it's all thanks to minimalism.




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How Anyone Can Earn an Extra $100 a Month

When I review budgets with the clients I coach, I hear the same song and dance that I have heard a million times before. It's always the same mantra, different client. They all say, "I don't make enough money."

Does this complaint sound familiar to you? It sounds familiar to me. In fact, I have been guilty of using this phrase on more than one occasion. However, when I'm teaching people how to manage money their money better, I realize that not everyone marches to the beat of the same drum. In fact, most folks are incentive motivated. It is for these clients that I developed a motivational strategy to incentivize their spending and increase their income at the same time. If, after 30-days, they have made $100 or more using my methods, they agree to cut a few different frivolous spending habits in return.

Recently, I tried this particular strategy with one of my long-time clients, and it worked out even better than I expected.

Step 1: The Sign Ups
First, I had my client sign up with a few paid to click websites. I had her use these because I'm familiar with them, I know they are reputable and I know that they work.

Admimsy
Cash Crate
Clixsense
Inbox Dollars
 
After that, I also had her sign up for an E-bates account.

Now, before you put on your skeptic hat, let me tell you, all of these programs are 100 percent free, and I have used them for years to create multiple streams of income -- using a system I have perfected. 

Step 2: The Apps
Next, I had my client download a couple of free moneymaking apps. Since my client had a smart phone, we went with the IZEA We Reward app and the Bamboo Wallet app.

Step 3: The Daily Reminders
I realized long ago that having the right tools means very little if you aren't going to use them to their full potential. They only worked so well for me because (back in the days when I was down and out), I made these venues a regular source of income using consistency. Therefore, I knew I needed to develop (as part of my system) a strategy for my client to be able to use these apps to their full potential.

Since my client is like me, in the sense that she checks her email several times throughout the day, the best place to put her "task reminders" was in her Outlook. And since her email tasks synch to her smart phone, she would get plenty of reminders to log on, check in and complete her daily clicks.

Step 4: Working the Plan
The plan is simple: Everyday, my client was to log on to the pay to click websites, click on the ads and complete at least five free offers or surveys. This would take about 30 - 40 minutes per day, spread out however it worked for her.

Once she was done with that, she was supposed to choose one service and promote it to her social networks. It could be E-bates (who pays $5 for each free signup), Inbox Dollars who also pays $5 for each signup or even Cash Crate, who pays $1. It didn't matter which one she chose, what I was after was consistency.

After she completed that, her job was to open her apps and finish two or three offers on each one of those.

Step 5: Tracking
Each Friday we would look at her progress and adjust her plan. I gave her a weekly goal of $25 (getter her to that $100 a month goal).

As it turns out, it was easier than she thought it would be to get there. All she had to "earn" from these sites was $3.57 a day. By completing the offers and ads, in addition to getting a few referrals, she was actually averaging about $7 a day, just after her second week.

Step 6: The Reward
After 30 days of sticking with my program (and even though she took three full days off), she walked away $189 richer, just by using some easy and free websites the smart way.

She put that $189 in savings, and repeated the process for three months. The second month, she earned $220, and the third $300. After three months, she had saved $709 -- from nothing.
And, true to her word, after meeting with success using my system, she dropped a couple of her frivolous items. She nixed her $3 a day Starbucks habit and her $10 a week lotto habit, adding $100 a month to her savings on a regular basis.

What are you going to do?

Sometimes all it takes to change your money situation is changing your mind. And I'm here to give my clients a hand up in that process. Even though this client's results were above average, it's possible to add at least $100 a month to your accounts using this system, and even more if you cut one frivolous habit for each month you do.

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5 Steps to Grocery Shopping (and Money Saving) Bliss

First Person: 5 Steps to Grocery Shopping (and Money Saving) Bliss

Shauna Zamarripa, Yahoo! Contributor Network
Jul 27, 2012 "Share your voice on Yahoo! websites. Start Here."

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If there were one activity that I can honestly say that I loathe having to do, that activity would be shopping for groceries. Despite my distaste for this chore, however, I am always on the lookout for money (and time) saving tweaks that will make an activity I hate just an teensy bit more palatable. Most recently, I life hacked my grocery shopping habits to earn some wicked savings, in just five simple steps.

Step 1: Get Apps
The Food on the Table app helps me plan my meals around the sale items at my (favorite) local stores. If that wasn't awesome enough, it also helps me figure out what items have extra in-store incentive coupons that I can use to net extra savings. All on its own, this nifty app helps cut my grocery bill by $25 to $50 a week.

I combine my Food on the Table app with the Grocery IQ app for even bigger savings. The Grocery IQ app lets me clip and send printable manufacturer coupons direct from my iPhone, making my coupon hunting a breeze - and something I can do in my spare time. From here, I just print and save.
App savings average? $57 a week/$2,990 a year

Step 2: Planning Restocking Around Sales
I believe in having a well-stocked pantry at all times. Oftentimes, that means being on the lookout for killer sales and knowing when to buy in bulk (and when not to).

I print out four or five extra coupons for any item that has a six month (or longer) shelf life. Then, on the first of each month, I go to the store with the sole purpose of restocking my pantry buy combining buy one get one deals and additional coupons whenever I can.

Of course, I pad my budget with enough money to be able to score on big savings or even better sales all month long.

Average monthly savings? $100

Step 3: Plan Backwards
Using my apps, the information on sale items and the coupons I have already downloaded, I make my meal plan. It sounds simple, but by planning my family's breakfasts, lunches, dinners and snacks around my coupons is the biggest money saving life hack of all.

How much? $65 - 80 a month

Step 4: Go Late
While saving money is great, getting in and out of the grocery store without the bane of long lines and eye bulging traffic is even better in my book. I plan my grocery store adventures around 10 p.m. on Tuesday or Wednesday nights.

My grocer restocks on these days, immediately after the latest sales are announced, making it the best time to go. Going at these hours means that they are never "out" of whatever it is I want to get, and I get the best (and freshest) produce selection. Double bonus for me.

Even though I can't boast big savings on this habit, it is one habit that keeps me sane - which is priceless.

Step 5: Use Rewards
I love scoring extra cash back for buying groceries, and I do this in a couple of ways.
I can (sometimes) get discounted Wal-Mart - or other grocery gift cards - at a fraction of their original price using online gift card exchanges. From these, I can usually get a $100 gift card for $80 to $90; saving as much as $20 off my grocery budget from the get go.

However, even more reliable than gift cards are my handy, dandy, trusty cash back rewards cards. It's simple: I pay my grocery bill with my credit card, and then at the end of the month, I pay my credit card bill with my debit card, netting me two percent cash back between the two payment methods.
Savings? I earn $200 to $300 a year just by grocery shopping this way.

My total savings/bonuses? As much as $300 a month, or $3,600 a year. And if you ask me, that's a lot of (excuse the pun) bread.

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4 Things I Am Buying (And Saving Big On)

Despite the fact that retail spending is down nationwide, that doesn't mean that I have stopped looking for great deals wherever I can find them. And despite the fact that most necessities are going up in price by the day, there are a few things I have found that have become irresistible buys. Providing you follow a few simple frugal spending tips, of course.

No. 1: TV's
Television prices have come down dramatically in recent years, especially due to lack of demand with new 3-D technology and decreased consumer confidence on a national scale. Naturally, I took advantage of a ripe market, buying two new state-of-the-art televisions for my house with an "open item" discount at Best Buy. Before I bought, however, I compared what I was paying to what I could have been paying. The difference was nothing short of dramatic.
Original price: $1,275
My cost: $742
Total savings: $533

No. 2: Smartphones
Over 158 million smartphones were shipped in the last quarter of 2011. That was a 57% increase over the same quarter in 2010. I didn't have to be a rocket scientist to realize that when demand is up, prices on tech go down -- especially in the third quarter, which is when most corporations release their newest inventions.

Despite the fact that I typically wait to upgrade my tech until Q3, a cracked iPhone screen led me to replace my 3GS for a new 4S (with Siri) earlier than usual, but also for a song. I bought refurbished and leveraged some hefty incentives from my carrier to get my price way down.
"New" 4S: $399
Refurbished 4GS with incentives: $149
Savings: $250

No. 3: Laptops and Tablets
Every type of computer that you can imagine has declined in price, laptops and tablets in particular. In addition, recent recession filled years have led to a much steeper decline than what we have seen previously.

Because of this, I bought myself a new Lenovo laptop and my twins two deeply discounted HP laptops last Christmas, for a fraction of what I would have paid a year earlier. Of course, they weren't brand new models either (I bought refurbished, slightly "outdated" models), but that helped me save a bit more.
2010 Price: $1,450 (for 3 laptops)
2011 Price: $762
Savings: $688

No. 4: E-Readers
With all the competition flooding the market, electronic book readers (or E-Readers) are competitively priced. I bought two Amazon Kindle's and one Barnes and Noble Nook last year, a few months after release (and refurbished) and saved.
Original cost: $150 per unit
My cost: $100 per unit
Savings: $150

Saving a bunch of money on big purchases doesn't take even an ounce of magical ability. All it takes is a steady hand on the economic pulse of the nation, an understanding that as technology ages (even a little) it becomes less expensive and knowing how to leverage your cash for refurbished bargains -- that are still under warranty, of course. I do it, and I save big all the time.

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