Often times you can not make room for a second job and that is when using your imagination, your dedication and the few minutes of free time you can carve out of your day to make extra money.

This list, when separated, may not bring a lot of extra money (accept for the first one) into your savings account. But when all are added up, they can bring you hundreds (and maybe even thousands) of dollars in revenue.

1. Pay Yourself First – I’ve heard this phrase time and time again, as I’m sure you have too. It didn’t make sense to me for awhile until I automated the transfer to my savings account and then set my budget for the amount of money I brought in after that automatic transfer. It’s extremely important to think of your income in the terms of this post-transfer amount.

2. Increase the Automatic Transfer – If you’ve set up your automatic transfer into your savings account with each paycheck but want to increase the amount, doing so gradually will be the best way for extra dollars to go unnoticed. You will want to increase the automatic transfer by a small amount each pay period until you reach the amount you are aiming for. For example, if you regularly transfer $50 each week into savings but want to transfer $75, try changing the amount in $2 increments each week. The first week, $52, the second week, $54, and so on. If you get to a point when you are running short of money, take a step back and hold at the amount you are currently transferring. Try to increase it again in a month or so.

3. Use Coupons – Yes, we all know that coupons save you money on your grocery budget. I suggest we make those coupons work twice for you. After you have completed your shopping, take the amount of money you saved and put it into your savings account.

4. Stick to Your Budget & Reward Yourself – When your budget is set, don’t just stick to it, try to come in under. Any amount you don’t spend for each category at the end of the month goes into your savings account. If you allow yourself $40 for each week of “free money,” then do your best to come in as low as you can. Any money that you do not spend goes into your savings account.

5. Keep Your Change – Whenever you buy something with cash, use whole bills. At the end of the day all coin that you have received back goes into your change jar to be deposited each month into your savings. (I suggested doing it each month. If you hang on to it for any longer, you’ll be more tempted to dig into it some day when you are tempted to splurge. Admit it, we’ve all dug into our coin jars for all the quarters we have to get dinner out.)

6. File for those Rebates – When rebates are offered for items you have purchased, be diligent and file them. When they come back, put that money directly into your savings account.

7. Sell Something – I have a tendency to donate anything I don’t want. My apartment complex is across the street from Goodwill so it’s very easy for me to drop stuff off easily. Instead of dropping off everything, I’m going to try to sell some of my gently used household items and clothing. Craigslist is one option, as is a yard sale but a consignment shop is my preferred route. I don’t have to do any of the work. In my area there is a shop called “New Uses” (not sure if they are local or a chain) and they will take household items much like Once Upon A Child does with baby and children’s clothing.

8. Make Extra Money Online – There are a number of ways to make money online with little work on your end. You can use websites like InboxDollars, Ebates or Swagbucks to bring in extra money for your savings account.

9. Bottle Returns/Aluminum Can Collecting – This old income stream is tried and true. My grandfather was obsessed with turning in aluminum can for cash. He was able to bring in hundreds of dollars a year just by letting people know he did this. They would often bring their cans to him. Tell your neighbors and ask them to put their cans in a bag by the curb on trash night. You can go for a walk and collect the cans (bonus, you get exercise too!).

10.  Find a Penny Pick It Up – I don’t know about good luck but when you see money on the ground, pick it up and add it to your savings account. Talk a walk over to the car wash or by drive thrus after closing, you might find some extra coins on the ground.

Just a few easy ways you can add extra funds to your savings account without a lot of work. They won’t bring hundreds of dollars a month but each of them can help you reach your goals.

Do you have any other easy ways to bring in some extra funds?

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Credit reports are a funny thing that even the most seasoned of financial experts have trouble understanding. With all of the “myths” and “misconceptions” about credit scores swirling around it can be difficult to decipher myth from the real truth.

Recently my friend went to a car dealership in search of a new vehicle to replace their old vehicle. Unfortunately, they didn’t have the money saved up to purchase the vehicle (I advised paying cash makes the most financial senseJ), and were going to have to finance the vehicle.

When applying for any loan or line of credit you are subjected to a credit pull to determine your credit worthiness. After the credit pull was complete and the score was in plain sight my friend was shocked to find their score was much lower than they expected. Not only was this car loan going to cost them more but their “lower” score was going to affect their insurance payments and maybe even their chances for employment.

They had many questions for me as they had fallen victim to believing the many myths about credit and had no idea they were causing the damage they did through actions they thought were innocent.

So let’s debunk some of these myths to clear up a few of the misconceptions about credit scores so you can get your credit score in tip top shape.

Myth vs. Reality

The BBB recently published a video by the NFCC, The Many Urban Myths About Money and Credit where some of the most common myths about credit reports are debunked.

Here are the top 5 myths:

1. “Bankruptcy Wipes the Slate Clean, Leaving me Debt Free”

2. “As Long as I’m paying something toward my debt, I’ll remain in good standing”

3. “I don’t have any credit problems. so there is no reason for me to check my credit report”

4. “When cosigning a loan, I am not responsible for the debt”

5. “The credit card companies know what I can handle”

My friend had actually believed 2 of these 5 myths; myths 3 and 4. They admitted to not having checked their credit for at least 2 years. There is no reason not to check your credit at least once a year, it’s free!

They had also gone through a divorce about 2 years ago and unfortunately had no idea the accounts they were cosigners for were affecting their credit. Their ex had let the accounts go delinquent causing a major drop in their score as they were equally responsible for the debt.

Many of us actually believe these myths and hurt ourselves by not understanding how credit scores really work.

5 More Myths for Thought

1. The amount of money I make affects my credit score. Debunk: While your income may be a factor in being approved for a loan, your income is not considered as a factor in your score. When computing your credit score, credit bureaus only look at things such as your payment history and how much debt you owe; personal information like your gender, age, and location can’t legally be considered.

2. Checking your credit will lower your score. Debunk: The Fair Credit Reporting Act, entitles you to one copy of your credit report a year from each of the three major credit bureaus. You can check once a month or more if you want (it’s not necessary) and it won’t adversely affect your score.

3. When you get married so does your credit. Debunk: Marriage does not mean married credit scores, each of you has your own profile. However, your spouse’s credit habits can affect your credit score, specifically activities like paying bills on time.

4. If you co-sign on a loan, your credit score is not affected. Debunk: When you co-sign for a loan, you are equally liable (along with the primary borrower) to repay it. This debt will appear on your credit report and will have the same ramifications as if it were your name alone. The bottom line is know who you are co-signing with. If the other person pays late, that late payment will show up on your credit profile as well.

5. If you don’t use it you lose it, your credit that is. Debunk: Your credit score is based on active accounts, but that doesn’t mean inactive accounts that are still open just disappear. Those accounts are still part of your “available” credit.

My friend got their “crash course” in credit report myths vs. truths after their disheartening experience at the car dealership. Knowledge is power, so get to know your credit report!

Have you ever been blindsided by your credit report?

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Several years ago, I found myself in a position I had never before envisioned: in debt. A combination of student loans, frivolous spending habits, and a general cost of living that was difficult on my income all coalesced to drive my bills higher and higher. Unable to pay, I consolidated them and resolved to crack down and pay them back. And, for a while, I did: I lived a far more frugal lifestyle and began chipping away, slowly, at my debt. I had turned the corner.

But being in debt is just as much a state of affairs as a state of being. Debt sits not only on your budget and on your bottom line, but it also hovers above you everywhere you go and with every purchase that you make. Although my debt was decreasing in amount it was no less weighty in the burden it imposed on me. I was capable of paying it off, I knew that I didn’t need a bankruptcy lawyer, but the debt still gave me a growing feeling of hopelessness. I began to wonder whether I would ever become debt-free.

It was exercise that helped me reverse course, change my attitude, and ultimately pay off my debt. I started small with the occasional jog or trip to the gym. Within a month, however, I was working out daily and I never again looked back. I am now debt-free. Here’s how exercise helped me get there:

Stress Reduction

Studies have shown that people who regularly exercise are generally more relaxed and less stressed. When you’re trying to slowly chip away at a mountain of debt, both of these qualities are highly desirable. Whenever I began to worry about my debt or feel disparaged about its persistence, I would go out for a run and usually change my attitude. This allowed me to tackle my debt issue instead of becoming overwhelmed and skirting it.

Transportation Savings

On a more concrete level, I quickly turned my passion for exercise into a cost-cutting measure by running to work every morning. Doing so gave me the freedom to forgo my car and the expensive gas and maintenance costs that go with it.

Healthcare Savings

As someone who has experienced intermittent health issues in the past, I am fully aware that even one problem can translate into thousands of dollars of medical fees. In fact, a sickness shortly after I started paying off my debt left me far deeper in the hole than I had ever been before. Exercise has helped me insure that this hole gets no deeper. I have been perfectly healthy since I’ve started running every day. This has, I believe, substantially reduced my health costs.

These are the major ways in which exercise helped me pay off my debt on both a mental and a financial level. If you are in debt, and if you have recently found yourself feeling overwhelmed and hopeless, an exercise regimen may be just what you need.

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Credit is their crutch.

I understand that.  Their habit is to use credit when they get in a pinch.  If they get into some financial trouble they reach for the credit card.  Their brain is not trained to reach for the money in savings.  They’ve never had money in savings.  Or maybe they’ve tried in the past and the money was quickly spent and never replaced. They learned their savings isn’t always there for them, but credit is.  There is always someone willing to let you borrow money, no matter how bad your credit is.

You can think of your savings account like your own personal credit card.  If you have $1,000 in an emergency fund, it’s like having a prepaid credit card of $1,000.  There for you when you need it.

If you are working a debt snowball (paying minimum payments on all debts except for the one with the lowest balance) then your debt might look something like this:

Credit card #1:  $5,500

Credit card #2: $7,00

Credit card #3: $12,500

With your $1,000 baby emergency fund in place you are sending all your extra money to credit card #1, let’s say you are sending $500 per month above the minimum payment.  If an emergency comes up can use the money from your Bank of YOU credit card (your emergency fund)  to cover it. Let’s say it was $400.   So now your debt snowball looks like this

Bank of YOU: $400

Credit card #1:  $5,500

Credit card #2: $7,00

Credit card #3: $12,500

The Bank of YOU card is always in the number one spot.  In our debt snowball you have an extra $500 per month that you are paying towards your debt. So you would send $400 to the Bank of YOU card and $100 to Credit card #1.  The Bank of YOU card would be paid off and you could continue on with your debt snowball.

With a small emergency fund you are putting a barrier between you and life.  If you have a $1,000 in savings and are sending $500 as extra debt payments you can actually absorb a $1,500 mishap before  you have to borrow.   As you start to pay off your debt the amount are sending extra grows.  This serves two purposes.  It gets the debt paid off more quickly but it also allows you to overcome larger and larger emergencies without taking on additional debt.

Once your debt is paid off you can grow the credit limit on the Bank of YOU card.  You can build that up to six months of living expenses.  If you have to “borrow” from the Bank of YOU then you still should back it back as soon as possible.

Once your Bank of YOU card is fully funded and prepared to support you for up to six months if necessary you are free to start building real wealth.

Investment products are typically positioned and marketed based on one of the following qualities; safety, growth, or some combination. Safety is the avoidance of risks.

Risks are perils, hazards, or other bad things that could happen to your money. Marketing in the financial services industry is very competitive and the temptation to use catchy yet misleading phrases is rampant. A recent case illustrates this very well.

Almost every major financial media outlet has discovered a new risk to investors. Evidently there is a risk you will live too long. Terrifying, isn’t it.  Google this risk and you will find articles and videos all over the web and from major respected media companies.

If living too long is a risk, you should also be concerned about the risks of winning the lottery, becoming a CEO, or discovering Richard Branson is actually your dad! There is no substance behind the risk of living too long. It’s just the marketing twist on the real risk facing investors, particularly retirees. The real risk is running out of money.

The risk of living too long is easily offset by smoking, eating lots of fats and sugar, avoiding all forms of exercise, or, if none of that works, a quick call to Dr Kevorkian the day before you run out of money. It’s quite simple to be “safe” from living too long. The risk of running of money is not so easily addressed.

To be safe from running out of money is only possible by addressing this issue early and consistently. If you want to be safe from the risk of running out of money, you must spend less than you earn, save, invest, and avoid non-mortgage related debt. You also must be willing to take some investment risk by putting some of your money in the stock market. And, if all that wasn’t difficult enough, you must have the patience to remain committed to all of these things regardless of market conditions.

Do not use investment firms marketing lingo as a source for your investment knowledge. The most difficult issue for investors is ignoring the garbage and focusing on time-tested, proven, approaches to managing your finances.

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How many of you have a plan you consistently follow each month to pay off debt?

Based on my own experience (before my wife and I got our financial heads together), I’d guess that many of you do not. I know the drill. You pay off a little debt here and a little debt there but it’s random and not based on any kind of written (or visual) plan. You make some progress and take a few steps forward but then suddenly find yourself taking a few more steps back.

Some of you may even be paying just the minimum payments thinking that eventually its got to get paid off. My wife and I have done that too.

None of that works in the long run. You need a plan!

The fact is that you are more likely to pay off your debt if you have a plan to guide you through the mud. Let’s face it. We need to see and visualize what we’re doing and how long it will take. If we say we want to pay off our debt but have no idea when it will happen, chances are we won’t make much progress towards reaching that goal.

Today I want to introduce you to a way for you to organize your debt free plan.

The site is called SavvyMoney and it’s designed to help you develop a plan and get out of debt.

So What is SavvyMoney?

SavvyMoney is an online debt management tool where you develop a plan that helps you pay off your debt five times faster than if you were doing it yourself. It is a complete organizational tool that allows you to set payment goals, customize and compare different payment methods, track your progress, and if you’re “gazelle intense” like me — it provides a way for you to accelerate your plan.

From what I’ve seen so far it is the complete package but one thing that I absolutely love is that it has the debt snowball as an option. You can compare a debt stacking plan (which targets highest interest rate) with a debt snowball (which targets smallest balance) payoff plan to see which one you like better.

Another thing I like is that instead of lowering the amount you pay towards your debt (as your minimum payments are reduced), SavvyMoney encourages you to keep paying what you were paying from day one until your debt is paid off. No need to play the psychological game creditors hope you’ll play so you end up paying them tons more interest.

I’m not being paid to recommend this awesome service to you either. The folks at Savvy Money have the same passion for helping you become debt free as I do and they were kind enough to let me try out this service for a few months so I could evaluate it and share my thoughts with you.

The rest is up to you.

How Much Debt Can I Pay Off in 6 Months?

Yeah — you’re right, I’m already debt free so what do I mean?

Since I will be trying out the service I thought it would be fun to simulate a debt free plan that shows you real numbers. I will be using real life scenarios that are consistent with what my wife and I were dealing with when we started our journey.

So just like in 2007 “we decided” that we are sick and tired of debt controlling our lives so we made it our New Years Resolution to get serious about eliminating our debt in 2012. January 1st was the first day of this journey and so we’re already one month in. Please assume that we’ve already saved our emergency fund of at least $1,000 to prepare us for radical debt elimination.

This is a snapshot of us at the starting line. We have $26,550 (11 accounts) in debt and we’re MAD AS HELL! Our minimum monthly payments equal $669 and we have committed to paying an extra $1,000 every month when possible towards our debt. When we first started our journey we both worked and had approximately that much extra to pay off debt each month. I will be using real life scenarios to make that number go up and down each month depending on different circumstances. In fact, just like back in 2008, we’re going to be super weird and sell our $8,000 car eliminating a $300 payment right away. Get ready to relive our intensity for debt elimination all over again!

**The image below shows 26,201 in total debt but only because I was messing around with the “record payment” feature and forgot to change it back before taking this screen shot.

This is a comparison of no plan, the debt snowball, and the debt stacking plans. I will be choosing the debt snowball method and I want you to pay close attention to the difference in interest paid using the three methods as well as the pay off dates.

• Using no plan at all making ONLY our minimum payments AND without adding a single dollar more of debt to our name, we’ll be in debt until December 2026. By using a plan, at best we’ll save $8136 in interest payments! That’s a long time and and a lot of money but for most of us it would be much worse since the debt cycle usually has us adding to our debt. That was definitely my wife and I prior to 2008!
• The debt snowball has us getting out of debt in May of 2013 which sounds super awesome to me and we also save $7886 in interest payments. We’re getting out of debt more than 13 years earlier using the debt snowball method as opposed to the debt cycle method of stress, frustration, and a mailbox full of minimum payments. Gazelle intensity is looking pretty good don’t you think?
• The debt stacking method has us getting out of debt the same month as the debt snowball (May 2013) but we would save $251 more in interest with this plan. This method would save us $8137 in interest and we’d get out of debt by May of 2013. (same as debt snowball)

As you can see the debt snowball and debt stacking methods are very similar. You may be wondering why I would choose to go with the debt snowball method since it would cause me to have to pay $251 more in interest.

To me it boils down to Motivation Versus Mathematics.

Debt Snowball = Motivation

The debt snowball prioritizes our debt from smallest to largest. Many people argue that paying off the highest interest rate debt first is the smartest because you pay less in interest. They do have a point but they’re not taking one very important factor into account. MOTIVATION. Not to mention that we’re only paying $251 more using this method over the debt stacking method.

Looking at the above chart you can see that in 6 months (if everything goes according to plan) we will have annihilated 6 out of 11 debt accounts — three of which have the highest interest rates on the list. (your results will vary depending on your interest rate)

The motivation you receive from eliminating half of your individual debt accounts is EXTREMELY SATISFYING!! There is absolutely nothing like looking down at your debt list and seeing 6 debts crossed off that fast!

I think it is essential to stay motivated especially in the beginning when you’re likely dealing with the behavior changes and the lifestyle adjustment that come with your new plan. If you lose motivation in the beginning you’re more likely to attach failure to that plan which could keep you from getting back on the wagon once you fall off.

To me motivation is worth $251 and debt freedom!

Bottomline:
Debt Free May 2013
Difference in interest paid: -$251

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Debt Stacking = Mathematics

Debt stacking prioritizes our debt by paying off the highest interest rates first. This is not a bad plan at all but if you look you’ll see that it takes you 4 months to pay off your very first debt. This is a critical time period in your new lifestyle and though it may not seem like much, MOTIVATION IS EVERYTHING! Keep in mind you’ll only save more in interest if you stay motivated and stick to your plan!

Bottomline:
Debt Free May 2013
Difference in interest saved: +$251

Start your 7-Day FREE TRIAL and get 20% off subscription!

How Do They Compare?

Ultimately I say go with the one you feel most comfortable with. That’s why they call it personal finance and what motivates me might be different from what motivates you. You will become debt free on the same month of the same year but maybe that $251 is what motivates you more. So pick one and GO FOR IT!

The important thing is that you get out of debt!

From what I’ve seen and experienced so far, SavvyMoney provides a very valuable service to help you get out of debt. I highly recommend starting the 7-day free trial to see how they can help you. Follow SavvyMoneycom. Be sure to follow @SavvyMoneyTip on twitter because you could win $100 for retweeting a money tip!

If you decide to try the 7-day free trial and want to continue using SavvyMoney, you will get 20% off your monthly subscription of $14.95. So for what it would cost to visit Starbucks a couple of times (Discount price comes to $11.95) you can have access to this great financial tool, save thousands of dollars in interest, and ultimately get out of debt sooner.

That’s a great investment and I wish it were available when my wife and I were paying off debt!

**IMPORTANT NOTE: If you signed up for the free trial prior to 2-3-12, please contact me if you choose to extend your subscription past the trial so I can make sure you get your 20% off.  The discount link was not yet set up prior to that date. Thanks!

Stay tuned each month to see my results based on real life circumstances! Good luck!

I’ve waited 5 years to say these words to you—good riddance.

I know you’re thinking that this is some sort of joke and I’m really about to burst into a Green Day song, but I assure you I’m not. I’m legitimately, once and for all, saying good riddance. You have caused me enough grief, frustration and sadness for two lifetimes. And I couldn’t be happier that you’re gone.

We started out as friends. You were a constant presence in my life. It was comforting to have you because it was a reminder of the good times we had. Vacations, drinks and dinners with friends, new clothes…all good things. And when I needed you most, you gave me a little more. I appreciated that because seriously, what 21 year old doesn’t need an $8000 credit limit? You allowed me to do things that I otherwise couldn’t have done. For that, I am grateful. Almost.

You see, you took advantage of me. You knew that I didn’t know what I was doing and you allowed me to get out of control. What’s that? I need to take responsibility for my own actions? Fine. I’ll give you that. I did use you frivolously and with a complete lack of responsibility.  I never bothered to learn about the importance of keeping you under control in order to protect my future.  I never thought that it was important to use you moderately and prudently. And really, it’s not like you told me.

No, you just sent me paperwork telling me that I had payment holidays and credit line increases.  I believed you when you said I didn’t have to pay for a month. I fell for it when you gave me more money. You never told me that there were consequences for taking advantage of your disguised generosity.  For instance, you never told me the impact my debt to income ratio would have on my ability to get good interest rates on a mortgage. You never told me that if I kept you around and made you fatter and fatter, you’d take a bigger part of my paycheck (yes, I realize logic should have told me this. But logic and I have never really been on speaking terms. You knew that when I first let you into my life).

But what I’m really angry about is what you took away from me. It’s not even so much that you took away my money or my freedom to leave a job I hate or even buy new shoes. No, what you took away from me was self-respect. You see, I always prided myself on being intelligent and responsible. The day I let you into my life, that all went out the window. Or, more appropriately, my wallet. I am ashamed that I fell for your magnetic strip, raised numbers and quick access to money I really didn’t have.

Not anymore. No, now you are out of my wallet and out of my life. The money I earn through my paycheck? I get to keep that instead of giving it to the people who own you. The lessons I learned from using you frivolously and irresponsibly? They are engrained in my head, a permanent reminder of what I will never again allow to happen.

You have no more power over me. You are banished from my life.

Good riddance.

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Our friends are working through marital issues, and have recently separated as they attempt to work through them. Their teenage daughter has taken it especially hard, and is very angry.   The 90 minutes following our arrival at their home included voices surging into screams,  and used tissues being strewn across the kitchen table.  At times, our friend cried so hard that she could barely breathe. Watching a family being ripped apart at the seams was an indescribable event I never wanted to witness, and it made my heart hurt.

In late 2009 my father was diagnosed with prostrate cancer, having his prostate removed the following February. His follow-up visits were encouraging as his PSA tests came back with the desired “undetectable” results. Unfortunately, recent tests have shown his PSA level again rising which could mean that there is still cancer in his body. His doctor is recommending that he begin radiation treatment as soon as possible.

The primary struggle in my adult life has been financial in nature.  I’ve laid awake at night staring at the ceiling for hours wondering how we were going to pay the next round of bills. I’ve looked at the balance of our checkbook wondering where the money was going to come from to buy groceries for the next week. It’s a horrible feeling that I wouldn’t wish upon anyone, and one that I hope to never again experience. But I’d take that feeling every single day of my life over the possibility of losing my family, or having to deal with a life threatening illness.

The truth is, I’ve never felt closer to my wife and my family than I do right now. I’m in love with Vonnie more now than I have been at any time in the more than 18 years that I’ve known her. I recently shared this with her,  to which she responded, “Yeah, you’ve been so wonderful, loving and patient lately…..it kind of worries me – like you’re trying to make up for something. ”

That statement also made me realize that I will never, ever fully understand the complexities of my wife’s female mind,  nor will I ever be able to “win.”  But maybe that’s the point, and why life is so much fun with her in my life.

Over the last year, I’ve lost a significant amount of weight, exercised regularly, and am eating quite healthy. At my last  physical, due to my family history with prostate cancer, my doctor recommended having an exam to get checked out.  The doctor with the self proclaimed “thinnest fingers in town” gave me a clean bill of health, for now.

Tonight, as I ready myself for bed, I’ll brush my teeth, look in the mirror, and see a 38 year old man who is in the best physical condition of his life.  Then, I’ll tuck into bed the best two kids that a father could ever ask for.  Finally, I’ll crawl into bed, and wrap my arms around my beautiful, and loving wife. As I slip peacefully into unconsciousness, I’ll think of how thankful I am.

Thankful that money problems are all I have.

Photo Credit

Drive

Rock it old school family vacation style and load up the station wagon, or minivan, as the case may be.  Sure, gas isn’t cheap but it’s way cheaper than buying a family’s worth of plane tickets.

Not only is it cheaper it’s also more fun to drive and see the sights together as a family.  I find flying extremely stressful with kids.  When we can, we try to save ourselves the hassle and vacation within a day’s drive of home.

Splurge on your space

It’s not everyday that you get to splurge and save money.  But it can actually be cheaper to rent a condo than a hotel room if you make use of the full kitchen.

A bargain priced hotel room will cost you at least $50 and that’s if your family can fit into one traditional hotel room.   Change that to a minimum of $100 if you have more than 4 people in your family.  If you upgrade your accommodations to a small condo you will have  more than just some extra space.  You might have more money too!

We recently rented a two bedroom condo in a desirable location for $165 per night.  We will save at least $80 per day by eating breakfast and dinner in our condo.  That brings our actual hotel costs to $85 per night.  I think if I really bargain hunted I might be able to get a hotel in this area for $65 per night.  But I’d also have to add in a shuttle to our specific vacation spot, wifi, and parking.  Those costs would bring the true cost of the hotel up to $95 per night.   And don’t forget.  We are going to be much more comfortable in our condo. We can spread out.  The kids don’t have to share a bed.  We can watch TV while sitting in actual chairs.  The list goes on and on.

The drawback here is that I have to cook.  But I bring super quick and easy meals with us to make things, well, quick and easy.  You can maximize the savings by having lunch at the condo too, but I like to eat out some.  We are on vacation after all!

Hit the off season

You can maximize your fun and travel dollars by traveling in the off season.  The same condo we rented above costs $225 per night during peak season.  The sweet spot is the first week of off season.  The prices and crowds will be lower but most of the attractions will still be open.  I hate crowds.  I’d rather miss a few shops and restaurants than to pay extra to stand in line.

What are your money saving vacation tips?

Your Home

In other countries, even the industrialized ones, it isn’t uncommon to see a family of 5 sharing a small apartment. In the U.S., however, we expect everyone to have their own large room and there to be adequate space for a large living room, dining room, great room, and kitchen – and it is costing us greatly. To save yourself some money, consider downsizing to a more appropriately sized home or even trying to search cheap apartments for something more affordable. You’ll save money on your mortgage, your private mortgage insurance, maintenance, and homeowners insurance.

Your Car

We love our SUVs, but they aren’t exactly cheap to upkeep or keep filled with gas. That gas-guzzler that can easy tow 8 people around may be beneficial if you do have a large family, but otherwise you are probably wasting nearly $300 in gas a month for no reason – not to mention larger vehicles also require more expensive oil changes, general maintenance, and tires. If you don’t need the space and have to commute regularly, consider switching out your SUV for a smaller vehicle with better gas mileage and lower maintenance costs.

Your Weight

The U.S. has one of the worst obesity epidemics of any other country in the world, and our large sizes are definitely costing us more. In addition to higher health care costs for all, if you are obese you can expect to pay higher insurance premiums as well as higher food bills. So if you are looking to save a couple extra dollars not, and thousands down the road in medical bills, consider shedding some weight.

Your Family

This may sound a bit harsh, but if you have a big family, there is a good chance that you are paying dearly for it. While there isn’t much that can be done once you have your family, if you are in the family planning stages, you may want to consider the cost of raising a child these days before you agree to have a larger family. While having kids is certainly the dream of many, choosing to have a larger family when you aren’t financially stable could literally lead you to financial ruin. To be a responsible parent, choose to only have as many children as you can afford.

Your Spending Habits

In the U.S., we don’t just buy one small thing in a store and then get out, we spend hours browsing and that box of Q-tips you went in to the store for quickly turns in to a shopping cart full of items totaling $100. When we consider dinner, we don’t just eat-in off that $5 casserole. We eat out and pay over $50 for the whole family to eat more than their calorie count for the day.  If you want to save yourself money, reconsider your spending habits on a typical day.  You don’t need the fancy coffee, when you could make your own at home.

If most Americans want to get their spending under control, then they are going to have to reconsider our typical “go big” mentality. While we all like our things, having too much of anything – whether it be space or clothes – is going to cost you, and has the potential to keep you in debt. So if you are looking to save yourself hundreds of dollars a year, consider downsizing – your life.

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If you are anything like I was and at times, still am, then you are setting yourself up for further failure. Something, or maybe more than one thing is holding you back, do you know what it is?

Here’s 3 potential ways you are roadblocking yourself from being in control of your finances.

Fear
Fear can be crippling. It can hold you back from everything you want to or need to do in life. Fear is an emotion we all feel from time to time whether it’s due to speaking in front of a crowd, beginning a new job or tackling your finances. If fear is stopping you from doing that, you are not alone.

But there are ways to overcome this fear:

1. Start slow. You know the phrase: baby steps. That works for your finances. Dave Ramsey’s entire program is based around baby steps. Find one thing you can do each day that will affect your finances. Maybe it’s simply checking your mail because you’ve been afraid to open the bills. Or add up your debt (you ARE going to have to do it at some point! Grab a glass of wine, a beer or a shot of Tequila and dive in. Have chocolate or another drink after you have finished.)
   
2. Change your way of thinking. As cheesy as it may sound, you are what you think you are. Even if it’s not true, what you think you are is going to be the reason behind your behaviors. You need to reprogram your mindset. Find ways to work through your fear that way. I love to post quotes through my house. They are often in the form of pink, heart shaped sticky notes. I stick them on the mirrors in my bedroom and bathroom. I have them taped to my fridge as well. Whatever you need to do to get your mindset changed, do it. Self-depricating thoughts will not help you in the process of becoming debt free.
   
3. Make it Fun. One of the best ways to tackle fear is to turn it into a game. If there are 10 steps you need to take, then make yourself a fun chart with rewards (inexpensive rewards) when you accomplish them. Pair up with a friend who is trying to do the same thing and see who can finish first.

Lack of Education
People often develop a preconceived notion that basic personal finance is a difficult process. I had a friend once who could not balance her checkbook. She didn’t trust herself because no one had ever shown her how easy it truly is.

Fixing this one is relatively simple:

1. Read a book. There are literally hundreds of books available about personal finance. Some of the best known authors are David Bach, Dave Ramsey, Jean Chatzky, Clark Howard and don’t forget the “for Dummies” books.
2. Read the internet. Obviously you are smart enough to find this blog and probably many others. You can certainly find the answers to your personal finance questions. Do a quick Google search with the words “How do I…” (put what you want to know about at the end, of course) and you will find plenty of articles to help you out.
3. Find a mentor. Do you know someone who is good with money or numbers? Ask around and I bet you can find someone who will be willing to help you.

Laziness
No one wants to admit that they are lazy but chances are a number of you are too lazy to pay attention to your financial situation. In his book That Makes Me Sick, Larry Winget talks about three reasons your life sucks. One of those reasons is being lazy. If you just can’t be bother to take the time, it’s laziness and it’s holding you back from a better life.

Lazy is the most difficult one to change. Mostly because you have to want to change. If you truly wanted to change, then you would start seeking out ways to do so. But I do have a couple of tips for turning your lazy behavior around.

1. Find a cheerleader. No not a real cheerleader, unless they are great with their finances and will motivate you. Rather, I suggest you find a motivational partner. Someone who will call you and ask you what you have accomplished. A friend who will encourage you when you fail or feeling less than great.
2. Set deadlines. Whether it’s small hourly deadlines, days away or even months, set a deadline and stick to it. I knew someone who gave her friend $1,000 to hold hostage. Once she accomplished a goal of her’s to lose weight, that friend gave her the money back so she could take a cruise. Until she did so, the friend kept the money. Talk about motivation.
3. Just do it. Yea, being told to “not be lazy.” Is like telling some one overweight to stop eating food. It’s hard to do but slow and steady wins the race. Take small steps each day and you will reap the benefits.

Changing your financial situation takes hard work and dedication. It also takes honesty. Be honest with yourself about why things are difficult and find a good way to fix it. You can do it and when things get tough, there’s plenty of resources out there for you to push through and succeed.

The following is a guest post by Jacob from My Personal Finance Journey, a personal finance blog offering actionable personal finance advice with the goal of achieving long-term success. In particular, Jacob focuses on long term investing and asset allocation strategy analysis, deciding how to prioritize new funds as they come in to various spending requirement areas, and how to develop a lifestyle of frugality.

Several months ago through the magic of LinkedIn, Brad and I were able to find out that we actually lived in the same city in Virginia. This was quite an awesome find, being as that the personal finance blogging community is relatively small, and most of the other bloggers I’ve met are scattered throughout the better part of the United States and Canada.

Since finding out we lived in the same city, I’ve been eager to find ways to team up with Brad and Enemy of Debt, and I figured a guest post might be a good way to do this!

However, being as that the name of the site is Enemy of Debt, I wanted to wait until I had an appropriate topic that might be well suited for his audience.

Recently, while talking to a group about regularly saving for an emergency fund, one of the class participants mentioned that his primary source of funds in the event that an emergency arose was his credit card. 

I have to admit that I was slightly surprised to hear that this was his plan for handling emergency expenses. However, when I started to think about how money for many families these days is very tight due to the economy, I figured that it’s highly plausible that many other people out there either are using or thinking of using their credit card for their emergency fund as well. Since (as you can imagine) using your credit card as your emergency fund can have a potentially huge impact on your current debt levels, I figured it might be a good topic for discussion on this site.

What Exactly Is An Emergency Fund?

Since Brad has discussed emergency funds several times previously on Enemy of Debt (I particularly liked reading the O Emergency Fund, Where Art Thou? post), I’m sure most of you are well aware of what this instrument is and the purpose it serves.

However, just to make sure we are all on the same page, listed below is the way I interpret the advice about what an emergency fund is and what it is to be used for:

• An emergency fund is a cash reserve account stored in a high yield money market account that contains approximately 6-9 months (amount can vary based on personal needs) worth of expenses.
• The purpose is to provide income in the event that you become unemployed or cover unexpected serious expenses that are necessary for your normal income creation to continue.

Using a Credit Card as an Emergency Fund

In a previous post, Brad mentioned that an emergency fund is perhaps the number one best way to avoid debt. I would have to say that I agree with him 100% on this. This is because when unexpected expenses inevitably arise, you have a source of funding to pay for them instead of having to take out a new loan.

So, even though it is obvious that using a credit card as your sole source of an emergency fund would be a very GOOD way to NOT avoid debt, I was curious to find out just how prevalent this trend is in our society today.

According to articles from Perkstreet and MSN Money, it appears that about 45% of Americans do not have an emergency fund and would resort to credit card debt in the event that a financial catastrophe befell them. 

Problems With Using Your Credit Card as Your Primary Emergency Fund

From the statistic above that over 40% of Americans would resort to using their credit card as their primary emergency fund, it is quite clear that the man from the class I was talking to was not alone in this potentially dangerous habit.

As such, I wanted to take a few minutes to explore some of the obvious and maybe not-so-obvious problems that could arise from the practice of using a credit card as an emergency fund. These are listed below:

• Racking up more debt from the high interest rates carried by credit cards - 

• This one is pretty straight-forward. Since the average interest rate on personal credit cards is between 12-15% and accrues daily, the balance you owe can increase very quickly!
• Credit card could be closed and/or your balance lowered - 

• At the end of the day, the money you spend using a credit card is, in fact, a loan. It is not your money. So, you can run the risk of your card’s balance being lowered below what is needed to sustain your family in the time of an emergency or having your card closed all together.
• Negative momentum (both real and psychological) of getting out of debt - 

• I know that Brad talks about the psychology of debt/money a lot on this site, so I wanted to point out that if you are making progress paying off debt and run in to an emergency that causes you to use your credit card, any forward momentum you were making will be difficult-to-impossible to maintain.
• Can you buy everything you need with a credit card? 

• Another set of potential problems that comes to my mind when thinking about using a credit card as your primary emergency fund is that you either:

• 1) Do not have enough remaining credit to support yourself and your family in the event that you are unemployed for a long-term period, or
• 2) Cannot use a credit card to pay for all of your required expenses (see next section below for more detail).
• Regarding potential problem #1 above, in doing some research on eHow, I found that the average consumer has a total credit limit of ~ $19,000 spread over 9 credit cards. While this total credit limit is likely sufficient to support you for emergency reasons, it is also highly probable that consumers will already have credit card debt and not have all of this credit limit at their disposal at all times.

Things That Cannot Be Purchased Using a Credit Card

In today’s society, let’s not kid ourselves – it seems that EVERYTHING can be purchased using a credit card. In fact, I personally only carry cash in my wallet for emergencies (pardon the reference to the topic of this post) and use personal checks sparingly. However, I always make sure to pay off my balance in full each month.

As such, I thought it might be interesting to do some thinking about things that CANNOT be paid for with a credit card that would present a problem to people planning to use a credit card as their primary emergency fund.

Listed below are some of the items I found that cannot be paid for using “plastic,” as well as some items that I was surprised to learn can be paid for with credit card:

• Rent - 

• Depends, but I personally wouldn’t count on it. Some company-type landlords I have had offered the option of paying rent via credit card with a transaction fee. For one-person operation landlords, I would imagine that credit cards would not be accepted.
• Mortgage - 

• Cannot. I did some reading on this, and apparently, several banks used to offer mortgage payment options by credit card. However, it appears that these programs were cut after the sub-prime fiasco in 2008-2009.
• Federal/State Income Tax -

• Can use a credit card, but involves a transaction fee. I really can’t believe they let people do this!
• Student loans -

• Amazingly, you can use a credit card! Wow!
• Car loan -

• Depends. Some financing companies let you, others don’t. 
• Credit card debt minimums - 

• No. While there may be some loophole to do this, but it just doesn’t make any sense. Let’s stay away.
• Electricity bill - 

• Can use a credit card, but involves a transaction fee.
• Homeowner’s Association Fee -

• Can use a credit card, but involves a transaction fee.
• Insurance - 

• Can use a credit card, but involves a transaction fee.
• Property tax - 

• Can use a credit card, but involves a transaction fee.
• Car repairs over a certain limit -

• Where I get my car fixed, credit cards can only be charged a maximum of $3000 for repair work.

To my amazement, many of the expense items listed above (even loans/other forms of debt) actually can be paid for with a credit card. Who knows – perhaps we’ve uncovered why America has such a high credit card debt – because consumers use one type of debt to pay off another, becoming a terrible cycle? However, in almost all cases, a convenience/transaction fee is charged, further increasing the cost to you beyond the high interest rate you incur on the money loaned.

Conclusions

So, what’s the bottom line with all of this?

Although I suppose having a credit card tucked away as your emergency fund is better than having nothing at all, in my opinion, relying solely on a credit card is a very bad idea for anyone trying to be debt free and financially independent. This is because unexpected urgent expenses and/or job-loss are inevitably going to pop up, and without a self-sufficient emergency fund, you could rapidly rack up thousands of Dollars in credit card debt that could take you anywhere from 2-10 years to recover from. Additionally, do you really want to take a chance and depend on someone else’s money to provide for you and your family in times of emergencies?

How about you? Do you have an emergency fund? If so, in what type of account do you house the money? 

Do you know anyone that uses their credit card as their primary source of money in the event of an emergency? Do they do this because of a lack of money overall or because they prioritize their money elsewhere?  

Share your experiences by commenting below!

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The economy has taken its toll on just about everyone, both consumers and business. In fact either you or someone close to you has likely fallen victim to a foreclosure, layoff, or downsizing. When you fill up at the pump you wonder when a gallon of gas and a gallon of milk began to cost the same amount.

As you ponder the rising costs of just about everything you buy you also begin to see your so called financial future disappear right before your eyes as the big banks you trusted with your life savings slowly swindle your retirement savings right before your very eyes. Yes I am talking about those hidden fees and costs we just can’t avoid.

Hidden fees and surcharges, pack their punch as the average American pays at least $942 each year in hidden fees according to research conducted by the Ponemon Institute. And that number continues to rise as consumers are passed on fees by businesses and industries that have taken financial hits themselves.

So how can you be prepared for battle when it comes to hidden fees and the unsuspecting corners they emerge from? Let’s find out so we can fight back!

Credit card companies & banks

Credit card companies and banks are probably the worse when it comes to hidden fees. The new Consumer Financial Protection Bureau requires banks to offer customers a one-page fee disclosure box, as credit card companies are now required to do thanks to the Card Act.

So what fees should you be looking for? For credit cards:

• Cash advance fees
• Late payment fees
• Balance transfer fees
• Card replacement
• Annual fees
• Phone payments

For banks:

• Overdrafts
• Stop-payments
• Minimum balance requirements
• Wire transfers
• Checks

Credit card and bank fees have become both more common and more expensive in recent years, even as new regulations have sought to keep institutions from taking advantage of consumers. In fact, some of the newest, sneakiest charges are a direct result of government regulation. Examples include increased maintenance fees and mobile phone deposits.

Same price…less product

Yes it is true you are paying the same, but getting less. Consumer Reports found that companies have reduced package sizes by as much as 20 percent.

Check out incredibleshrinkinggrocceries.com for the latest examples of what you are paying more for, but getting less of.

To combat the hidden expenses in your grocery cart pay attention to the per-unit price, and buy in bulk whenever possible.

Hidden Airline Fees

If you have done any traveling over the past few years you can’t help but notice the extra fees you must budget for when taking a trip.  Here are just a few fees that may take you by surprise:

• A fee for every bag you bring.
• Re-booking fees.
• Want extra legroom-you’ll pay extra for that.
• Headphones for the in air movie-that’ll cost you.
• Long trip? Want a blanket? A pillow? You guessed it you’ll pay extra for them too.

Dining Out  

Going out for dinner is always a highlight for me. I don’t have to cook and best of all there is no cleanup-I love a much needed break every now and then. But is it worth it? I budget for these nights of freedom and the hidden fees make it almost impossible to actually enjoy nights out without feeling anxiety about blowing my budget. Here are just a few to watch out for:

• The plate share fee. Why should I pay more to eat a healthy size portion vs. the monster size that is served?
• Special order requests.  My family has various dietary needs; diabetes and celiac disease. So we often need to make special requests-yes some restaurants charge extra for that.

Cell Phone Bills

This is one of the industries that really take advantage of consumers. According to Billshrink.com, “80 percent of Americans overpay on their cell-phone service by more than $800 million a year, or $300 a person on average.”

Are you kidding me? That is silent robbery. After reading this I called my cell phone company and was able to reduce my bill by $75 a month. Yes I had been paying $75 a month more than I should have been for over 3 years. Here are a few of those hidden fees that make your bill so high:

• Not bundling your features.
• Being in the wrong monthly plan.
• Paying for overages-texts and calls.
• Internet or data packages mandatory for smartphones.
• Early termination fees.
• Directory assistance calls.

Consumer Reports says that one of the biggest ways cell phone companies rip consumers off is by encouraging them to sign up for plans that leave them with large quantities of unused minutes.

According to a 2011 investigation by the Senate Commerce Committee, “cell phone companies have also been known to charge customers for services that they do not yet offer and allow third-party companies to attach mystery costs to customers’ bills – a practice called “cramming” that has cost consumers at least $2 billion since the 1990s.”

So buyer beware ask questions, demand answers, and don’t just agree to “mystery” fees.

As you can see it all adds up; a few dollars in a restaurant, a few more on your flight, and a cell phone bill that costs more than your car payment. The best way to combat hidden fees is to uncover them–be an informed consumer.

What are your tricks for dealing with hidden fees?

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When I was being trained everyone in my training class complained about these metrics.  They are hard to meet when you are first starting out.  Keeping your hold time down when you have to ask your supervisor 100 questions is tough.  Keeping your handle time down when you don’t have experience is hard.  Making sales when you aren’t confident is almost impossible.

But the complaints wouldn’t come in the form of statements like “What can I do to get my hold time down?”  Instead the complainers would say “Well, I had to wait for my supervisor to get off the phone!”.  They didn’t say “How can I better anticipate what questions the customer will ask?”.  They said “The customer wouldn’t get off the phone!  They just kept asking questions!”

My trainers always answered these complaints with the same statement.  ”Most people out on the floor can meet these metrics.”  In other words, it’s not the metrics that are the problem, you just need to learn how to do your job better.

I was checking out at a store the other day and the checkout person was complaining to a co-worker that she couldn’t meet her metrics.  She was blaming the customers.  She said she couldn’t meet the handle time per order because customers took too long with their coupons.  I wanted to interrupt and ask if other cashiers also get customers with coupons.  I’m sure they do.  I highly doubt that she is just that unlucky and gets all the slow coupon-ers that come through the store.

I wanted to say “The metrics aren’t the problem here.”

She should talk to the other cashiers and see if they have any tricks.  Tricks, like not starting the order until the customer has handed over all their coupons, rather than start it and then wait.  Or maybe they keep a stack of popular coupons by the register in case a customer starts digging for that one last coupon.

Is there anything in your life like this?  Is it someone else’s fault that you can’t keep a budget?  Is it someone else’s fault that you can’t pay down your debt?  Is it someone else’s fault that you can’t get ahead at work?

If so then it’s time to look in the mirror.  Ever hear that saying that when you point a finger at someone else there are four fingers pointing back at you?  Well, three really since your thumb isn’t pointing at you… but you get the point.  You have control over your own life.  Believe me, our customers and bosses aren’t suddenly going to shape up.  The only person’s actions we can control are our own.  When one person succeeds and another doesn’t it’s not because one got lucky, it’s because their actions were different.

You bring success upon yourself by making changes in YOU, not by sitting around waiting for others to change.

Do you want your 2 year old “learning” to swipe a credit card?

This Christmas Noah (our 2 year old) was given a Shop and Learn Cash Register.

At first I was excited.

The nerd in me eagerly opened it up and secretly drooled over the idea that Noah was going to start learning about money. It had buttons, sounds, lights, a working coin drawer, a scanner and groceries to ring up. Perfect fun right?

Then I noticed it also came with a credit card.

I’d rather it not have a card at all — debit or credit — but still I wasn’t bothered at first because I figured I could just refer to it as a debit card and explain things as needed or just throw the toy plastic away.

Then I heard the register give the option to “scan the credit card or insert coins.”

To some people this may come as no surprise and to others it may not even matter but I find it extremely inappropriate for a “learning company” to promote the use of credit cards in kids toys.

I don’t care what side of the credit card debate you find yourself on — my question is this — is it really necessary to plant things such as this in the mind of a child? Aren’t credit cards and the responsibility that comes with them something a little more appropriate for high school students? Regardless of how you personally feel about credit cards I think that kids toys — especially ones in the “learning and development” category — should be more age appropriate.

The box says “Play and Learn”. Yeah…learn how to swipe a stupid credit card.

Not in our house!

Why is it necessary to have a credit card with a kids cash register — especially for a 2 year old?

Why not just have a register that allows your toddler to learn about coins, counting, and paying for groceries?

If the card or the toy would have promoted Visa or any brand of credit card I would have thrown it right in the trash and thankfully it didn’t. Noah loved it and I certainly didn’t want to hurt the feelings of the gift giver who already felt bad when she realized the part about the credit card.

I doubt many people think twice about this kind of thing but I think they should. Americans now owe 798 billion dollars in credit card debt so it’s safe to say we have a problem with the concept. Kids don’t need to be bombarded by something adults can’t even handle responsibly.

Kids are young and impressionable. To know that companies out there feel the need to even try marketing the idea of credit to a 2 year old is disgusting!

I wonder how many little girls had a “Cool Shopping Barbie” — that came with a Visa credit card and said “credit approved” when the card was swiped — and grew up thinking it was cool to swipe a credit card. ($798 BILLION…HELLO!)

Credit companies know what they are doing. They are trying to put the idea of credit in kids minds to secure their crappy financial products (and profits) for years to come.

I’m sure some will say I’m overreacting and maybe even a tad paranoid but I know millions of dollars are spent on marketing to children.

They don’t spend that much because they hope it works. They spend that much because IT DOES WORK!

What are your thoughts about this? Do you think I’m being ridiculous or do I have a legitimate gripe? Should 2 year old kids be “taught” about credit cards? We protect them from other things we feel they shouldn’t be introduced to at such early stages of development. Why is this different?

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