If saving money was easy, everyone would be doing it. Unfortunately, the excuses for not are easy to stack — what with mortgage or rent, utilities, kids, student loans, pets, food and just the slightest social life, it can seem like there isn’t a penny to spare.
The trick to saving more is to make it simple, make it automatic and make it something you never have to think about. Still not convinced you can hack it? Check out some of these easy ways to save more every month and you might be surprised how much your bank account grows.
1. Sign Up For an Account That Automatically Saves For You
Many banks make it easy for customers to save these days by doing it for them automatically. For example, enroll in Bank of America’s Keep the Change program and for every purchase you make using a Bank of America debit card, the bank will automatically round your purchase to the nearest dollar and transfer the difference from your checking account to your savings. How easy is that? Check with your own bank to see if they offer a similar program.
2. Automate Your Savings Yourself
If you’re more of a “do-it-yourself” kind of person, automate your savings yourself by signing up for a monthly transfer directly from your checking into your savings account. You’ll know the transfer is coming every month, which will make you feel good, but you won’t have to go in and physically make the transfer yourself, which will feel even better. If you can, try setting up multiple savings accounts for your different goals (ie. house, travel, emergency, etc.). By purposefully diverting your hard-earned money into specific buckets, you’ll feel more like you’re working toward an actual goal, rather than just generally saving for a rainy day.
3. Use a Financial App to Track Your Progress
If you find that it’s hard for you to save because you aren’t seeing your progress at any given time unless you log into multiple accounts, there’s an app for that. Download a budgeting app and you can connect all of your banking in one area for ease of use. Don’t feel comfortable with an app? Your bank may offer something similar on their website. Now every time you make a purchase, put money into savings or take cash out of the ATM, you’ll be able to see exactly how your money moves have affected your current savings, goals and budget.
4. Make the Most of Your Credit Cards
If your current credit card isn’t garnering you some type of rewards, it may be time to make a switch. These days, credit cards offer such great incentives through rewards programs, so unless you’re prone to carry a balance on your card from month to month (rewards cards can come with higher annual percentage rates, which can cut into any rewards you earn), you could be missing out on some serious savings. If it’s pure cash that you’re interested in, check out our guide to finding the right cash-back rewards credit card.
5. Learn to Haggle
Remember, cars aren’t the only things you can haggle over. Check with your internet and cable provider and call your cell phone company to see if the price you currently pay is the best they can do. Ask for discounts on items in the grocery or retail stores, too. Take the difference between what you would have been paying and the final price you end up with and stock it away in savings.
6. Avoid Paying ATM Fees
You might think ATM fees aren’t worth worrying about, but those quick trips to the ATM can really add up. Fortunately, there are plenty of ways to avoid paying ATM fees.
Remember, you’ll save money on everything from your mortgage and auto loan to credit card interest if your credit scores are good. If you don’t know where yours stand, you can find out by taking a look at your free credit report summary.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
If money’s tight, you may think it’s hurting your social life, especially if you’re turning down invitations because you can’t seem to make ends meet.
This scenario is all-too-prevalent among recent college grads, and no wonder. Student loan repayments, rent, car payments, a wardrobe for work and other bills can add up. (Here are tips on how to pinch those pennies without feeling deprived.) But that doesn’t mean you can’t still have fun.
While you may not be able to drop serious cash every weekend going out to clubs, or even to the movies for that matter, your tight finances don’t mean nights alone on the sofa binging the latest Netflix series.
Here are some ideas for you and your friends to enjoy time together without going broke.
Throw a Viewing Party
When it’s time for the latest season of your favorite series, invite your friends over to watch. Ask everyone to bring a snack or beverages, and you’ve got a full-on party in the works.
Have a Potluck Dinner …
You don’t have to put together a four-course meal for your friends just to have them over. Instead, provide the main dish and ask everyone to bring sides. It’s cheaper on everyone and just as fun. You can even make it a supper club, rotating each month to everyone’s place, if you’re so inclined.
… Or a Potluck Picnic
If the weather’s beautiful, take it outside. Have everyone bring the yummies, plus Frisbees, kites and whatever will keep the fun going, and enjoy your day outdoors together.
Start a Book Club
Love to read? Have friends who love to read? No further explanation needed. Just add wine and cheese.
Find the Free …
Summer especially is great for free events, so check your local listings for what’s going on in your community. There’s lots to do …
… Like Concerts
Many cities offer free music events, particularly in public spaces like parks.
… & Movies
Likewise, there are lots of cities, and even apartment complexes, bars and restaurants, that offer free viewings of older movies. Just remember to arrive early, as these things are often crowded.
… & Lectures
Universities, museums and other entities often hold free lecture series where the famous and not-so-famous offer insights on a broad array of topics.
… & Classes
Same goes for extended learning. Want to learn to throw pottery? Write a screenplay? Repair a bicycle? Gather your friends and do it together.
Buy a Groupon Together
You can make it cheaper by buying a Groupon or similar discount together. Learn to ski or go to the spa without paying full price.
Hit Restaurant Week
Most major cities have a week or two every year when higher end restaurants offer a deeply discounted prix fixe menu. It’s a great opportunity to check out swanky spots without dropping a wad of cash.
Hit Happy Hour
Many bars and restaurants offer not just discount drinks but also food. Sometimes, there are even free nibbles, so do your research and find the place that can give you the best bang for your buck.
Go Backpacking or Hiking
If you already have the gear, this is a no-brainer. But even if you don’t, outfitters like REI offer inexpensive gear rentals on things like backpacks, tents and camping stoves that make getting out of town and on the trail easy.
Join an Interest Group
Many churches, synagogues, temples and mosques have young adult groups that provide free or inexpensive gatherings and outings for members. There are also groups for non-religious interests like running and cycling, chess, kickball and ultimate Frisbee. Find your people and get out there.
Become a Volunteer
If you love giving back, joining a volunteer organization is a great way to spend your free time in a positive way. It’s also an opportunity to meet people with similar interests. Best of all, it’s free.
What’s that you say? You like free things? Well, you’re in luck. We’ve rounded up 50 of our favorite things that you can get absolutely free. A few are tied to specific dates and age groups, but for the most part, everything here is free (at least as of press time) for the taking whenever you want it.
So, without further ado, here are 50 things that are totally free and totally awesome that you can get right now or anytime this year.
1. Free Chocolate
We wanted to start this list off right, so, yes, free chocolate. Join the Godiva Rewards Club and you will be eligible for a free piece of chocolate. Every. Single. Month.
2. Free Food at Grocery Stores
Take advantage of the free samples at your local grocer to not only get a free meal while you shop, but to also become familiar with new products. Most stores bring in sample tables during their busiest times – usually on weekends. So skip lunch and head to the grocery store. And check out other things grocery stores will do for you for free right here.
3. Free Food at Restaurants
Lots of restaurants and other food retailers have an annual freebie day. Think free pancakes from IHOP on National Pancake Day, a free doughnut from Dunkin’ Donuts, Krispy Kreme and others on National Doughnut Day and even a free Slurpee from 7-Eleven on July 11 (that’s 7/11 if you missed it.)
Throughout the year certain national parks do not charge entry fees. But each year there are free admission days to all of the national parks. You can check out the free-admission schedule here.
6. Free Admission to Museums & Cultural Events
Washington, D.C., is filled with free art and cultural events thanks to government funding. Head to the Smithsonian American Art Museum or the Phillips Collection and admission will be free. The monuments? Free. National Portrait Gallery? National Air and Space Museum? Free, free, free.
7. Free Credit Scores
Knowing where your credit stands and the impact your financial actions have on your them is important. You can get two absolutely free credit scores right here on Credit.com.
8. Free Credit Reports
Like your credit score, it’s important to keep track of your credit reports as well. They can affect your interest and insurance rates, as well as your ability to land a job or apartment, so it pays to make sure they’re accurate. You can get your free credit reports from all three credit bureaus every year at AnnualCreditReport.com.
9. Free Books
You can download digital copies of thousands of books at Gutenberg.org or the University of Pennsylvania online books page, and you won’t pay a penny to do so. That’s because the copyrights on these books have expired, so they’ve entered the public domain. Some of these books also are available for free through online retailers like Amazon.com and iTunes.com.
10. Free Audiobooks
Likewise, LibriVox.org offers public domain audiobooks for free for anyone to listen to, on their computers, iPods or other mobile devices or to burn onto a CD. And if you’d like to record a reading of one of the books for others to listen to, LibriVox is always looking for volunteers.
11. Free Music, for Listening …
You probably already know you can listen to as much free music as you like (with advertisements, of course) with apps like Pandora and Spotify, but it’s worth mentioning because they’re FREE.
12. … & for Creative Use
13. Free Coding Classes
Whether you’re looking at a career change or just self-edification, if you’ve ever wanted to learn to code, FreeCodeCamp.com is offering you the chance to do so.
14. Free Design Content
Are you a photographer, designer or other creative looking for free fonts, software add-ons and graphic elements for your projects? Creative Market offers a rotating basket of freebies each week available for your creative endeavors.
15. Free Font Help
Ever wonder what font is being used for that logo or sign? If so, What the Font can help. You can upload the logo and in a few simple steps, this app will show you a list of possible fonts.
16. Free Online Fundraising
If you’re looking to finance your product or startup and are considering crowdsourcing the funds but want to keep 100% of the money you raise, you might want to check out Redbasket, the crowdsourcing site that charges no fees and doesn’t take a cut of your donations.
17. Free Credit Calculators
These interactive calculators can help you prepare for everything from getting an auto or home loan to planning for retirement and setting savings goals. Our calculators provide instant results with no need to fill out complicated forms.
If you have a credit card, you may want to take a look at your cardholder agreement to ensure you’re getting the most value out of your card that you can. Many cards offer perks like rental car insurance coverage, extended warranties on purchases made with the card and other valuable offers. If your card doesn’t offer these things, you might want to comparison shop some other credit cards.
20. Free Hotel Stays
Want free hotel stays? One of the fastest ways to get them is by using a hotel rewards credit card. Here’s a roundup of some of the our favorite hotel rewards credit cards. If that’s not your thing, you could always join a hotel loyalty program and earn points that will ultimately earn you free stays. (It’s faster with the credit card, though.)
21. Free Flights
Same goes for airlines. An airline miles credit card is your fastest route to earning free airline travel, but you can also join your preferred carrier’s rewards program to earn points. Doing both, however, is the fastest way to rack up points.
22. Free Carry-On Luggage
Tired of paying to take your bag on the plane with you? Consider flying with Southwest Airlines, which allows two free carry-on bags per customer, or with JetBlue, which allows one free carry-on.
23. Free Tour Guides
Want to see your next travel destination through the eyes of a local? And not pay for it? Well, you’re in luck. Global Greeter Network’s vetted volunteers can show you the area for free with a strict no-tips-allowed policy. They can show you the sites they love or plan an excursion centered around things you want to see and do.
24. Free Travel Planning
Have a road trip in your near future? You’ll want to check out Roadtrippers before you put on your driving gloves. Just tell them your starting point and destination, and the site will provide information on must-see attractions and budget-friendly accommodations along the way.
25. Free Tax Preparation
If you need help preparing your income taxes, check out the IRS’s Free File program. You’ll qualify for free tax preparation software if your adjusted gross income is $64,000 or less. And if you made less than $54,000 last year, you could qualify for tax help through the IRS Volunteer Income Tax Assistance program. Want to know more? Check out our ultimate guide to filing your taxes for free here.
26. Free Financial Tools
Want to track your net worth, plan for your retirement and even analyze your portfolio? All in one place? And all for free? Personal Capital has the tools to let you do that. As they say on their website, “Our free financial tools make it easy to manage your entire financial life in one place.”
27. Free Oil & Battery Recycling
If you change your oil yourself, you know it can be a hassle to dispose of the oil you’ve drained from your car. Advance Auto Parts makes it easy. And free. For your used battery as well.
28. Free Mulch & Compost
Many municipalities offer free mulch and compost for home gardeners. Contact your city’s parks and recreation department to see what options are available.
29. Free Pest Inspection
Got bugs? Terminix will do a free pest inspection of your home, as well as a termite inspection. Be sure to ask about any available discounts if you decide to go with their recommended treatment plan.
30. Free Package Pickup
Need to ship a package but don’t have time or transportation to get to the post office? A postal carrier will pick up your package for you, free of charge. You’ll still have to pay for the shipping, but at least you don’t have to stand in line at the post office.
31. Free College Tuition
It’s a growing movement in the United States, with New York being the latest state to offer free tuition to state universities. Check out what options are available to you through your state’s education department or by using a tool like Get Schooled’s free tuition finder.
32. Free Career Training
The Student Career Experience Program is a paid student program that lets participants get work experience directly related to their academic field of study. According to Benefits.gov, “it provides formal periods of work and study while you are attending school. It requires a commitment by you, your school, and the U.S. Department of Commerce. You may be eligible for permanent employment after successfully completing your education and meeting work requirements.”
33. Free Assistance for Starting a Small Business
The Small Business Administration offers numerous resources to help you learn about what it takes to start a business and keep it growing.
34. Free Pet Care
If you’re having trouble affording your pet, whether feeding or medical care, the Humane Society has a list of resources that can help. Some even offer services free of charge.
35. Free Pet Safety Stickers
If your home is ever on fire or there is some other life-threatening situation, these stickers from the ASPCA will let neighbors and rescue workers know that your furry loved ones are in the house so they can take appropriate action.
36. Free Digital Estate Planning
You’re going to die someday. We all will, so might as well prepare for the inevitable. Dead Man’s Switch lets you create a secure email that will be sent out to your designated family and/or friends so you can make sure they have all of your important information, like usernames, passwords, bank account and other details. How does it work? The company sends you periodic messages asking if you’re still alive. If you someday don’t respond, it activates your email.
37. Free Price Checking
Ever wonder if you’re really saving on that Amazon purchase, but don’t feel like driving all the way to the store just to see? Services like Honey or CamelCamelCamel can help you compare prices quickly to ensure you’re getting the very best deal.
38. Free Broadband Speed Test
If you’re experiencing some slowness on your computer you may want to check to see just how fast your connection is. You can do that for free using the broadband speed test at Speedtest.net.
39. Free Samples
Want to try some new products, or get teeny-tiny tubes you can travel with? You can get everything from toothpaste and shampoo to mouthwash and more by visiting blogs and sites that compile free offers. Some to consider are Hey, It’s Free!, Mr. Free Stuff and FreeStuffFinder.com.
There’s also a Freebies Subreddit that does much the same thing for all Redditors out there in search of free stuff.
40. Free Used Items
In need of some wooden pallets? Maybe a garden rake or a lamp that needs to be rewired? Craigslist has a “Free Stuff” category that lets people post their unwanted items that are free for the taking. Check out the listings in your area.
41. Free Beauty Kit
If you like makeup, you probably like Sephora. And if you become a “Beauty Insider” you’ll have your choice of a free beauty gift each year.
42. Free Hearing Test
AARP members (only people age 50 or older are eligible for membership) can get a free hearing test over the phone. Membership to AARP is $16 per year and comes with multiple other benefits and discounts that more than pay for the membership costs.
43. Free Phone for Hearing Impaired
This service, funded by the Federal Communications Commission, gives free phones to people who have medically recognized hearing loss. Users are able to read what the person on the other end of the line is saying. Learn more at CaptionCall.com.
44. Free Prescription Drugs
Some supermarket pharmacies and pharmaceutical companies offer generic drugs for free to low-income patients without prescription drug insurance. Contact your pharmacy or search the RxAssist database to find free medication through drug companies’ patient assistance programs.
45. Residential Repair Services
Seniors needing minor work done around their house can reach out to their local government offices for the aging to see what services might be available. Keep in mind that the labor through these programs is offered for free but all necessary supplies will need to be paid for by the resident.
46. Free Baby Supplies
Babies are expensive, but lots of companies offer assistance for families who need a little help. Need formula? Similac offers free infant formula samples. You also can sign up with diaper manufacturers like Pampers to get free samples.
47. Free Birthday Treats
There are literally hundreds of restaurants and retailers that give away free birthday goodies, especially for loyalty club members. Offerings include everything from free desserts and surprise gifts to full meals, all for free. Check out your favorite company’s website to see what’s available.
48. Free Shipping
If you’re still paying for shipping on purchases, well, why? There are dozens of retailers that offer free shipping on all items year ‘round.
49. Free Uber Rides
Next time you need a ride, first check for the latest promo codes to see if any of them will offer you a sweet deal on getting to your destination. Groupon and other online coupon sites also offer deeply discounted fares when you buy in advance.
50. Free Wedding Swag
Planning a wedding? Check out sites like WeddingVibe, which offers giveaways for all sorts of free stuff for your wedding. From photo sessions for you and your spouse-to-be to shopping sprees and more.
Note: It’s important to remember that terms and conditions on products and services frequently change. As a result, rates, fees and terms cited in this article may have changed since the date of publication. Please be sure to verify current rates, fees and terms with providers directly.
When I was younger, I was a huge fan of Applebee’s. Especially to save money while in college, my friends and I would catch a movie then go to Applebee’s for half-price appetizers. My personal favorite was the wings. They were so crispy and juicy. And they were half off!
We would get a double order each – oh to have the metabolism of a teenager again.
To enjoy a meal at Applebee’s without breaking the bank, here are a few good tips.
It’s important to note that not all Applebee’s run the same deals. There can be some variation across the country, so check with your local location to see what offers are available for you. For example, some Applebee’s in Central Florida are standouts, as they started Club Applebee’s where the restaurant turns into a nightclub after 10 p.m. until closing at 2 a.m. They run half-price appetizers, drink specials and more during this time, but this is not something that is available nationwide.
1. Happy Hour & Late Night Specials
Applebee’s runs two specials during the day – an afternoon happy hour and a late-night special.
The happy hour time for many locations is between 3 p.m. and 6 p.m. Most Applebee’s have drink specials that include discounts on adult beverages plus half off on select appetizers. If you can’t get there early, you can try to get there late. At most Applebee’s, late-night deals take effect after 9 p.m. It’s usually the same discount on adult beverages and half price on select appetizers.
2. 2 for $20 Menu
Applebee’s has a 2 for $20 Menu where you can get an appetizer and two full-size entrees for $20 or $25. You don’t get the full menu and it’s a limited selection for the deal but many popular options are available.
These entrees can cost up to $15 each, so by pairing up with a friend you can save money on your meal and get an appetizer to share.
3. Get the App & Order Online
Applebee’s has online ordering service called Applebee’s Carside to Go that you can use to order food for pickup.
As of publication date, for your first order, you can use the coupon code 5OFF25 at checkout and get $5 off your first order of more than $25.
4. Join Their Email Club
When you sign up for the Applebee’s email club, you get the occasional promotional email with coupons and discounts but also a free dessert on your birthday. Many restaurants offer free food on your birthday so if this is something you’re after, you may want to sign up with all your favorite eateries.
5. Kids Eat Free
Many Applebee’s locations allow kids 12 and under to free on certain days of the week when an adult purchases a full-price entree. If you have kids and plan on dining at Applebee’s, find out if your local restaurant offers such a deal so you can save.
6. Buy a Gift Card Online
There are many reputable gift card marketplaces online and you can buy gift cards at a big discount from people who want to get rid of them.
7. Use a Rewards Credit Card
If you dine out often, you may want to consider paying the bill with a credit card, like one of these, that helps you earn extra at restaurants.
For the first time in more than 130 years, more young adults are living with their parents than are living alone, with a spouse or with roommates. And it’s happening all over the country, according to a recent analysis of U.S. Census data by the online apartment locator service ABODO, though there are some cities where it’s significantly more prevalent.
The findings show that the majority of these millennials, ages 18 to 34, are men (54%) even though men represent just 50% of this age group population; most are on the younger end of the age spectrum, with 41% of 18- to 21-year-olds still living with the ‘rents. Surprisingly, though, nearly 30% of all millennials living with their parents are age 26 or older, and a full third of that group are between 31 and 34, the analysis found. (On the flip side, there are cities where millennials are buying homes at a pretty good clip.)
It’s one of the facts of modern life: Keeping your home the right temperature can get expensive, whether you’re in a studio apartment or a spacious house, you may be paying more than you have to in order to heat your home. Fear not! There are several ways you can cut back on how much you’re spending on temperature control in your home. Here are 11 ways to lower your heating or cooling bill. (And if you’re looking for more ways to save on your monthly home expenses, you can check out these seven easy ways to save on your cable bill.)
1. Seal Your Windows
Windows that are improperly sealed can leak air, losing energy and causing your heating system or air conditioner to work harder.
“Gaps around the window frame allow air to leak, so caulk any gaps in the seals to save on your heating bill,” said Richard Ciresi, owner of Louisville Aire Serve, a heat and air conditioning company.
“New windows are a big investment, but not one without substantial reward,” said Larry Patterson, a Glass Doctor franchisee. “Replacing your old windows with double or triple-pane energy efficient glass can save you up to 30% on your energy bills.”
3. Get a Programmable Thermostat
Programmable thermostats can cut energy costs by automatically adjusting the temperature while you’re away, reducing the energy wasted on heating or cooling an empty home.
“Investing in a programmable thermostat is one of the simplest ways to save money on your heating, as you set your heating to turn on and off at specific times throughout the day,” said Max Robinson of Turnbull and Scott Heating.
You can program your thermostat to turn off while you sleep or while you’re at work and turn back on when you wake up or get home, Robinson added.
4. Change Your Air Filter
Your furnace uses air filters to keep dust from clogging your vents and circulating through your home. When the filters are dirty, your system has to work harder to push air through. Air filters are affordable and easy to switch out, and doing so will help your heating system run more efficiently. You should swap out new air filters every few months.
5. Open Your Vents
Closed vents can waste a lot of energy. When you turn on your heat, make sure your vents are open.
“Blocked or closed vents and registers make furnaces work harder than they should,” Ciresi said. “Blocked vents do not allow for proper airflow. The furnace will continue to run but the rooms won’t heat up. Always unblock and open all vents and registers before running the furnace.”
6. Reduce Hot Water
The energy spent heating your water contributes to your heating bill. You can reduce your hot water usage a few different ways: Take shorter showers, avoid the hottest water settings and wash your clothes in cold water.
Water heaters are often set at a higher temperature than is needed. You can lower your water heater’s base temperature to 120 degrees, which is sufficiently hot for most household needs.
7. Use a Space Heater for Small Rooms
Smaller rooms can be heated by an electric space heater. While this method still uses electricity, it’s far more energy efficient than using gas heat.
“The rest of the house will be cooler, but this shouldn’t be an issue if your entire family is gathered in one room,” Robinson said.
8. Check Your Outlets
Even your outlets can leak air and reduce the energy efficiency of your home. Make sure to check your outlets for drafts.
“Electrical outlets in exterior walls are usually a major source of drafts, as it is rare for insulation to be used in these areas, and when it is it is often incorrectly installed,” Robinson said. “Luckily it’s easy to correct this. Use a simple foam sealant to fill any gaps around the outlet, and place a gasket over the front of the outlet.”
9. Check Your Insulation
Your walls, attic and other home areas must be properly insulated. If not, the temperature will be much harder to control. Make sure to check your insulation, or hire a professional if you’re not sure how.
10. Find an Alternative Payment Plan
Many energy companies provide alternative payment plans. Some will reduce your bill for reducing your energy consumption, while other plans might lower your payments based on income. Check with your energy provider to see what alternative plans they offer.
If you’re doing things yourself, you may want to consider funding these projects with a store credit card that offers you rewards for your purchases. (You can read our review of the Home Depot credit card here.) Before you apply for any new plastic, it’s always a good idea to review your credit so you know what types of cards you may qualify for. You can see two of your scores free, updated every 14 days, on Credit.com.
11. Change Your Attire
If you’re cold, you can always turn down the temperature a few degrees and bundle up. Don’t neglect your feet and head, areas that can lose a lot of body heat. Fuzzy socks and a knit hat should do the trick. And if you’re looking to escape the heat? Try a bathing suit and a cool body of water — You can see 28 ideas on how to save for your next big adventure here.
It’s ironic people shy away from talking to others about money, considering everyone has to deal with it. But instead taking advantage of this shared experience, a lot of people keep their questions to themselves and outwardly pretend they understand what they’re doing with money. Only once they’ve dug themselves in a hole do they start asking for help.
No one is born understanding personal finance. It’s mostly on you to figure it out as you go, which doesn’t always work out well.
“Typically in America you don’t learn about these things — you don’t learn about debt and interest,” according to Alex Sadler, managing editor of Clark.com, the namesake site of personal finance and early retirement icon Clark Howard. “You’re handed a credit card … and it’s up to you to read the fine print. People get into serious trouble.”
Sadler knows this not only because of the people who ask questions on Clark.com but also because of her own experiences. “I maxed out credit cards, I had a student loan I didn’t understand, and living that way and not changing my lifestyle, I realized that that was going to prevent me from doing things in my life that I wanted to do.”
Ideally, people would get to know how money and credit works before they start using it, not the other way around. But that backwardness is often the reality of Americans’ personal finances, which is why Sadler and the Clark.com team started a new project called CommonCents.
“A lot of problems people face is not understanding what they are trying to tackle,” Sadler said. “A lot of times people … they think they have tried (to get out of debt) and they just don’t understand how it all works and how to make that attempt and effort successful.”
We asked Sadler about some of the core concepts that people need to know — but often overlook — in order to master their finances. Here’s what she said.
1. Understand Interest
Sadler said this is a common issue among people who reach out to Clark for help getting out of credit card debt.
“A lot of people think because they’re paying the minimum monthly payments they’re not getting charged interest,” she said. This, of course, is totally false. It’s not that making the minimum monthly payment isn’t a way to get out of debt — it’s just that it can take an extremely long time.
So, how does interest work? As far as credit cards go, you can get a sense of it by using this free credit card payoff calculator (and if you have credit card debt, the tool can help you make a plan to pay it off.)
2. Learn What it Means to Budget
It’s perhaps the core tenet of personal finance: Budgeting. But you can’t hope to budget if you don’t really understand what it means.
“Budgeting means making sense of your money: How much money are you making? How much money are you spending?” Sadler said. Budgeting, no matter how you do it, boils down to one thing: “Spend less than you make. You’re living paycheck to paycheck? You’re not spending less than you make.”
That brings us to her next point:
3. Know Your Numbers
“The majority of people that Clark talks to about debt, the first thing he asks is, ‘OK, you have credit card debt — how much do you owe?’ The majority of the time, this person asking the question does not know the answer,” Sadler said. “How do you plan to pay off your debt if you don’t know what you’re facing?”
That’s only part of the spend-less-than-you-make equation. Knowing your take-home earnings, your debt, your spending, your assets — these are all things that can help you make smart financial decisions every day that will also make sense years in the future, Sadler said.
When I first decided to do this little experiment, I’d agreed to try to feed my family for $5 per person per day, so I sat down and took a look at my grocery spending over the last few months, crunched some numbers, and … uh-oh…
Was it really possible we were already eating on roughly $5 per day? Yep, we were. My average grocery spend per week runs $80. For the two of us, that’s $5.71 per day per person. I needed a bigger challenge, or so I thought. Could I feed us for just $3 each per day? Seemed reasonable.
What I didn’t take into account as I was working my figures was that we typically eat out once or twice a week, so that $5.71 actually looked a bit more like $8. Still not a lot, but significantly more than the $3 goal I’d rather arrogantly set for myself.
I decided I was going to try it anyway, and, unsurprisingly, I didn’t come as close to that goal as I’d wanted. I also wasn’t willing to give up some things or shop somewhere cheaper. That, after all, was the challenging aspect of this. I mean, sure I could feed us 99-cent ramen noodles all week, but I wanted to be realistic. And eat some vegetables.
I did manage to cut my already frugal grocery spending by about half, though: $4.14 each, or right at $58 for a week’s worth of groceries.
Now, for the sake of full disclosure, we are mostly vegan – no dairy, no meat, no animal products in general – but we do include the occasional seafood and eggs in our diet. That said, I shop almost exclusively at Whole Foods, which I’ve heard some of my friends say they simply can’t afford. I suppose if I, too, were trying to feed a growing, teenage bottomless pit, I’d probably say that as well. But for just the two of us, it’s perfectly affordable and we eat really well-balanced meals and snacks without feeling deprived in the least. However – here’s two more disclosures – I cook. Every day.
But back to feeding us both for $58 for a week … Here’s how I did it.
First, I looked at what we were currently eating and how I could pare that back. I also considered that I’d be adding two dinner meals since we wouldn’t be eating out. Did we need the chocolate chip vegan cookies in the afternoon as a snack? What about lunch? Did I really need that amazing wheat-based, fake bacon I love on sandwiches? Or the bread I ate it on? Nope. We’d definitely have to say so long to our seafood protein options during this experiment. Yes, there were definitely some things we could do without in the short term.
I worked up my menu plan for the first week, keeping it super simple and rotating just three dishes for breakfast, three for lunch and three for dinner through the week (which also ensured I wouldn’t have any food waste) estimated the costs of the necessary ingredients and headed to the grocery store (also, I didn’t include staple pantry items like salt, pepper, olive oil, etc., or herbs from my garden in my costs). Here’s my menu:
Chilled broccoli and potato soup (this uses up the stems, which cost less and taste great)
Beans, greens and cornbread
Spinach enchiladas with rice and beans
Here’s my shopping list:
1 lb. bulk oats — $2
1 apple — $0.40
20 bulk raw almonds — $0.87
10 dried bulk apricots — $0.57
1 package firm organic tofu — $2.45
6 whole wheat tortillas — $2.69
1 quart almond milk — $4.25
1 package farfalloni pasta — $3.27
2 lbs. kale — $6
1 lb. bulk mushrooms — $5
2 cans cannellini beans — $2
2 heads lettuce — $4
2 heads broccoli, with stems — $3.75
1 large potato — $0.90
1 lb. bulk pinto beans — $3.58
2 cups bulk corn meal — $3.22
2 heads spinach — $2.87
1 lb. bulk rice — $2.25
1 lb. tomatoes — $3.25
1 cucumber — $1.83
1 red onion — $0.87
1 bell pepper — $2
Feeding two people for what would amount to a little over $200 a month is an interesting idea to me, and definitely a quick way to pay off any major debts you want to get rid of. But if I had the chance to do it again I probably wouldn’t. It’s actually amazing the flexibility and flavor that just an additional $20 a week spent on groceries affords. Still, it was interesting to see what I could manage to do without drastically changing our diets or going hungry.
A few things to keep in mind if you want to see how little you can spend at the grocery store.
1. Fresh Vegetables Are Your Friends
Variety is the spice of life, and there’s no better way to add variety to your diet than to buy seasonal produce, which is typically cheaper than out-of-season items shipped in from other parts of the world. It’s also a great way to experiment with new recipes and ingredients. Plus, all that roughage can help fill you up, as can the big shot of nutrients fresh veggies provide.
2. Protein & The Basics
If you want to save a ton of money, you’re going to need to rely on basics like legumes and rice that will give you the most nutritional bang for your buck, especially when it comes to protein. Animal proteins are just significantly more expensive.
3. Take Advantage of Coupons & Discounts
I wasn’t able to use coupons for my experiment because they were all for prepared or packaged foods the week I did this. That said, some planning ahead and stocking up on staples with a good shelf life can save you a bundle.
4. Buy in Bulk
Not only are you able to get the exact amount you need, thus cutting down on possible waste, you’re also not paying for the packaging and marketing of that product, so the per unit cost is always less.
So, you’ve decided to buy a home. Congratulations, you’re leaving the world of renting behind and investing in an asset you’ll come to cherish. But before you start researching homes, you’ll want to make sure your finances are in tip-top shape. After all, it’s next-to-impossible to pay for a home if your credit is in the gutter and/or you can’t afford a down payment. With those factors in mind, here’s a financial to-do list that will make the home-buying process easier.
If you’ve spent the past few years bouncing from job to job, now’s the time to look for something more permanent. The reason: Changing jobs, especially at the last minute between the time a loan is approved and the close of escrow, can kill the deal, according to Joe Parsons, senior loan officer with PFS Funding in Dublin, California. Lenders always perform a verbal verification of employment within 24 hours of funding a loan, so the last thing you want to do is change your employment status and wreck your chances of having it go through.
Every would-be homeowner should understand their debt-to-income ratio, or DTI, which has gross monthly income on one side and total debt on the other, Parsons said. Whether you owe money on taxes or a credit card balance, it’s important to see the big picture. DTI can affect borrowers’ ability to get approval for loans if their debt outweighs the money coming in. And, in some cases, a lender may say that in order to approve the loan, you’ll need to work on clearing your debt or even close an account. (You can learn how closing a credit account impacts your credit score here.)
Knowing your debt-to-income ratio is one thing, improving it is another. If you crunched the numbers and don’t like the result, you’ll need to make changes, Parsons said. That may mean putting your credit cards on ice, learning the difference between wants and needs, and sticking to a budget to help prevent overspending. Not only will your credit improve over time, your DTI will look a lot better — to you and your lender.
A recent change to Fannie Mae’s automated underwriting system on June 25 means trended credit card data plays a bigger role in mortgage approval. The new data shows not just your loan balance but whether you’ve made payments on time. So, if you’re known to slack on paying your bills, work on breaking the habit. You want to be considered a “transactor” — a borrower who pays their balances in full every month — not a revolver, who carries a balance.
When considering a new line of credit, it’s important to know where your credit stands so you don’t find any surprises that throw a wrench in the loan-approval process, Heather McRae, senior loan officer with Chicago Financial Services, said via email. Your credit score helps determine your eligibility for various rates, so if you need to improve it, you’ll want to know sooner than later. (You can view two of your free credit scores, updated monthly, on Credit.com.)
Knowing how much you want to spend on your monthly housing payment is part of any good financial plan, McRae said. She added, “if you are renting right now, can you use your current monthly rental payment as a guide? Ask yourself, ‘am I comfortable with how much I pay? Do I want to go up or down?’ ” This limit will prevent you from buying more house than you can afford.
You’ve got to know how much money you need to buy a home. “As a general rule of thumb, I would advise to have at least 5% of the purchase price saved,” McRae said. “There are programs that require as little as 3% for a down payment,” but remember, you will also have to cover closing costs. Other programs even require a higher down payment. Each situation is different.
Filling out an application with all the requisite documents — think pay stubs, tax returns, bank statements and so on — is part of the mortgage pre-approval process, Parsons said. When the loan officer pre-underwrites your loan application, you’ll find out how much home you qualify for.
From recent pay stubs to tax forms like W2s and 1099s, your lender will want to see proof of income, writes A.J. Smith. Some applicants are even required to provide the names and addresses of their employers from the past two years. Documents accounting for Social Security and/or disability payments, pension incomes, child support, alimony, bonuses and overtime may also be required, depending on your situation.
Got assets? If you have savings accounts, stocks, bonds, mutual funds, CDs, retirement accounts, a car and other real estate, for example, you’ll need to provide their documentation as well. This is so you can verify that you can cover a down payment, writes Smith, and that you are being honest about the source of your money.
“If you’re self-employed, the only way a lender can determine your income is by examining your tax returns,” writes Sheldon. “As a self-employed worker, these documents show how much you took home versus your net income.” Occasionally, you can get away with using just one tax return, such as when you go from working full-time to being a contractor, but most lenders will ask for two years’ worth.
If you’re light on cash, you may want to seek down payment assistance to get your foot in the door. This can be sponsored by a local, state or government entity or entity grant, according to Scott Sheldon, a Credit.com contributor. Though these programs are scarce, you may still have a shot at qualifying if you can find one. Just be sure to do your research to see which option is best for you.
A dollar isn’t always a dollar, as a recent report makes clear. Sometimes it’s $1.15. Other times it’s less than 85 cents, and it all boils down to where you live.
That’s the finding of the Bureau of Economic Analysis, which published in July its report for 2014 prices for household consumption across the country. Your dollar will go a lot farther — 30% farther, in fact — in states like Mississippi and Arkansas than it will in places like Washington, D.C., and Hawaii.
The states where your dollar (rounded to the nearest cent) is worth the most are:
1. Mississippi ($1.15)
2. Arkansas ($1.14)
3. Alabama ($1.14)
4. South Dakota ($1.14)
5. Kentucky ($1.13)
6. West Virginia ($1.12)
7. Ohio ($1.12)
8. Missouri ($1.12)
9. Oklahoma ($1.11)
10. Tennessee ($1.11)
11. Iowa ($1.11)
In all, the cost of living in 35 states was below the national average, the report showed. The Tax Foundation used the numbers to create a map showing a comparison of the value of $100 in each state across the country:
The areas where your dollar is worth the least are the District of Columbia (85 cents), Hawaii (86 cents), New York (86 cents), New Jersey (87 cents), and California (89 cents).
The BEA used regional price parities (RPPs) calculated by using price quotes for a wide variety of items related to food, transportation and education, and compared that to the national average. So, if the RPP for area A is found to be 120 and for area B it is 90, then on average, prices are 20% higher and 10% lower than the U.S. average for A and B, respectively.
If the personal income for area A is $12,000 and for area B is $9,000, then RPP-adjusted incomes are $10,000 ($12,000/1.20) and $10,000 ($9,000/0.90), respectively. In other words, the purchasing power of the two incomes is equivalent when adjusted by their respective RPPs.
Stretch Your Dollars — Wherever You Live
Regardless of where you live, credit card debt can be one of the most difficult things to overcome in trying to get ahead financially. Having a high balance on your cards will hurt your credit score, and it can be extremely challenging to break the spending habits that got you into debt in the first place.
Having a poor credit score won’t make you a credit exile — for instance, there are some credit cards for people with bad credit — but it can make your finances more challenging. One of the best ways to improve your credit while tackling debt is to prioritize making payments on time and reducing spending, so you can chip away at your credit card debt rather than add to it.
Paying off your credit card debt may also help you save money. The sooner you pay it off, the less you’re going to pay in interest and can save over time. (You can read this guide for tips on getting out of debt.)
Paying down debt will also improve your credit score. You run the risk of damaging your credit if you are in too much debt and can’t keep up with payments. To see how your debts and spending habits are affecting your finances, you can view your free credit report summary, updated each month, on Credit.com.