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Six credit card guardrails to follow

KJ: A few months ago we posted about ways to use credit cards to your advantage and what the credit card companies don’t want you to know. This post takes a slightly different spin to focus on six credit card guardrails to commit to:

Avoid a balance
KJ: Credit card companies want you to carry a balance from month to month since that is their ‘cash cow.’ With interest rates so egregious (typically 16+%), carrying any balance can make it all that more difficult to get back on the right track. It’s not realistic to make 16% on your investments, so why give that option to the credit card companies?
AJ: This is credit card ownership 101. If you HAVE to carry a balance from one month to the next, do so with an achievable, manageable plan in place prior to doing so. Prior to Kirby and I marrying, there were some months where I needed new shoes for work because my current pair was literally falling apart and couldn’t wait to buy them until I had enough money in my checking account, so I put them on a credit card. I never allowed myself to carry the balance more than one month from the date in which I added the purchase to the card. Needing new shoes shouldn’t open a gateway to excessive spending.

Avoid teaser interest rates and gimmick rewards
KJ: Holding a card for a long period of time is good for your credit, so take the time to sit down and evaluate what the card’s benefits are beyond the initial term. Often, when you ‘lift the hood’ you will find it isn’t the great product that first appealed to you. One such example are department store and merchant specific cards: they are often not worth the hassle of the card. You often get a one-time discount and nominal rewards, plus it’s more cumbersome to keep track of yet another card with yet another due date. As such, we avoid most of these like the plague (with the exception of our Banana Republic card). It has better rewards than our main rewards credit card, and it gets great discounts that I get to use on products I was already going to buy. So far, it’s the only one of its kind we’ve found…
AJ: Most people we know would agree that it’s horrifying how much credit an unemployed college student can qualify for. Just because you’re not in college anymore does not mean that the credit card offers are any more reasonable than they used to do. Most college kids just plan to buy beer and food, you’re talking about major purchase with serious long-term ramifications if handled improperly. Checkout Bankrate.com if you’re looking for a card.

Evaluate annual fees
KJ: My experience has been that annual fees are often not worth the rewards. You find yourself stretching to take advantage of the reward…the opposite of what you should do! There are so many credit cards available with no fee and with rewards that you can typically find a card that suits your needs while avoiding the fee. Take the time to analyze what you would save compared to another card that may have less attractive interest rates or rewards. If you don’t know what you’re spending, then start by building a budget.

Know thyself
KJ: If you have trouble with credit cards, then be honest with yourself and do not apply for them, or at a minimum only keep one on file. The potential credit score benefits of having more cards coupled with low to no balance seldom outweighs the interest, penalties, and headache that it can bring if it gets out of control and you build up a balance. In a culture of overindulgence, it’s easy to binge on credit. Making a purchase in today’s world without credit is like telling a person with a food addiction to avoid food. It may not be an all or nothing conversation. It may take a lot of time and struggle, but learning to coexist with credit is a powerful discipline…especially if you can turn that struggle into triumph by getting rewards on purchases you were already planning to make. That will surely make your wallet happier!

Know your wallet
AJ: Make sure that you know what credit cards you have. If you can’t immediately identify how many credits cards you have and with what company, it might be time to evaluate your ability to keep a credit card at all.

Learn from your mistakes
AJ: As you consider your long-term goals, consider the damage that debt can do to those possibilities. I recently heard a woman in her 50s tell a story about how credit cards from years ago have continued to prevent her from purchasing a home at all because she cannot qualify for any kind of loan at any level. How devastating! To be able to afford monthly payments on something that would improve your lifestyle but not be able to receive the initial capital necessary to take that step based on mistakes you made years ago is truly life-changing. Fortunately, bad credit by law has a limitation on how long it can stay on your credit report (seven years from the last date of activity, but potentially up to ten years), so it won’t haunt you forever, but it can surely drag you down for years!

    Have you found a card that is worth the annual fee?
    Tell us about your credit card woes and struggles. What helped you break free?
    What are the credit card rules you live by?

Six credit card guardrails to follow is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

A day in the life of frugal (part 4): travel

AJ & KJ: A day in the life of frugal is a four part series. If you missed our first, second, and third posts in our series “A day in the life of frugal” check out: Part One: Food, Part Two: Home Goods & Tasks, and Part Three: Shopping.

This marks our last frugal installment, and this week we focus on travel tips.

Time SquareAJ dinner NY Pizza Pizza

Plan a food list
KJ: You guessed it. There’s a spreadsheet for that. While our trips are usually centered around where we are going to eat and what item we’re going to order. Before we step on the plane, we outline an expectation for what meals may cost for each day by looking at where we will be for breakfast, lunch, and dinner. Our trips usually involve a lot of down time, so we plan accordingly for lots of snacks, beers, and coffee. Our spreadsheet approach (that I use through a handy program called QuickOffice on my phone and iPad) helps us stay on top of items as we spend. It’s not about cutting costs so much as it is about how to afford the fancy meals we really want.

Shop vacation sites
KJ: Do your research, do your research, and oh, by the way, do your research! Use Kayak.com, Expedia.com, and Priceline.com. With all the great travel sites available to compare shopping and travel rates, you shouldn’t be paying too much for those travel arrangements you have been wanting (or needing) to make. We use Kayak.com and several other sites to book travel arrangements, so it keeps costs lower. Fortunately for us, we do not have children (other than our pets), so we’re free to scour the last minute packages that come up, and it’s how we’ve scored $200 round-trip flights to Chicago, New York, and many more.

REWARD yourself
KJ: Take advantage of those rewards and travel miles you have built up over the years. We planned our trip to Italy with miles earned on a new credit card (mind you, paid in full each month), so our airfare was slashed from $950 per person to simply $50 in fees and taxes. You can also redeem miles for hotel stays, entire vacation packages, and household items, so do your research and shop for the deal of the day. Don’t just assume it’s a good deal; do the math and see if you are saving more than what you would have paid or redeemed the rewards for. If you can spend 40,000 miles to get $900 off of airfare, should you use those same 40,000 to get a two night stay at a $300 per night hotel? I’d say find a better option!

Stay with friends and family
KJ: While it sure would be nice to have our own hotel room, it’s just not practical if you can save a little extra money, so you can spend the cash more wisely when dining out. Any chance we get we try to stay with family or friends, and the company isn’t too bad either!

Free is fun
KJ: Use that thing called “Google” and search for top things to do in a city for free. Often, you’ll get such a great perspective of the city and its culture. We go to museums – but we try to not overindulge on this one since we’re not too keen on museum after museum after museum…you get my point – and we make use of local parks. Whether it’s grabbing food on the cheap (dirty water hot dog anyone?) or meandering through the park enjoying the sights, there’s a lot to do. If all else fails and it’s a spectacular day out, then run to the grocery store, pick up some fancy cheeses, fruits, and meats, and enjoy a relaxing time in the park.

Carry-on, please!
KJ: Plan your suitcase with your S.O. and find ways to keep your travel gear down to a minimum. Whether that’s taking two carry-on suitcases combined with a backpack or other personal item, you can travel with a lot by divvying up the items. Not only do you avoid the checked bag fees – if you’re not fancy enough to get them for free – but you don’t have to worry about lost luggage either.

Split meals
KJ: I’ve said it before, and I’ll say it again. The best way to help keep your food costs while dining out are to share meals. This can allow you to try out many a places while keeping the costs minimal.

Pizza, pizza, pizza
KJ: My personal favorite food. Especially when you are traveling to Chicago or New York, find a way to have some pizza. You can order a pizza for a table and get a great cost per person, plus it’s incredibly delicious! Lou Malnati’s is the best in Chicago, so don’t waste your time on those other guys… $30 pizza dinner will usually end up with leftovers, so especially if you’re saving money by staying with relatives, you can indulge on that pizza for another meal later in the trip.

Public Transit
KJ: Travel on the cheap with public transit. Use Google’s map program to help guide you: they have public transportation stops and routes often embedded in their main maps program. Most cities allow you to pick up a multi-day pass and get everywhere you need in a city (that is, unless you live in a sprawled out metroplex like in Texas) on the cheap. Rental cars can often be pricey and taxis are expensive, so with a little extra planning, you not only get to know the city a little better, but you get to keep that cash for something you really care about like food!

We hope you’ve enjoyed our frugal series, and if you missed any of our prior posts for “a day in the life of frugal” then check out parts one, two, and three at:
Part One: Food, Part Two: Home Goods & Tasks, and Part Three: Shopping.

    What methods do you use to pinch pennies when you travel?
    Do any of these seem absurd to you?
    Do you have anything unique of your own to add?

A day in the life of frugal (part 4): travel is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Biweekly or semi-monthly: what’s the difference?

KJ: What’s the difference between biweekly and semi-monthly and how it impacts your budget? Most people think they are the same. Aren’t there about four weeks each month, so shouldn’t they be the same? Why should you care about the difference? There is a simple solution to saving a lot of extra moulah if you get paid biweekly (sorry, semi-monthly payees)…and your budget will be proud!

Let’s break down the biweekly vs semi-monthly paychecks
A biweekly paycheck means you get paid every two weeks. Semi-monthly means you get paid twice per month. With a biweekly payment, you get paid 26 times per year (52 weeks divided by 2), and with semi-monthly, you get paid 24 times per year (12 months times two). That means that the biweekly paycheck has two months of the year with an extra paycheck!

Save, save, save
A good strategy to sock away some extra savings (or add to your vacation fund, home down-payment, gifting, real estate taxes – if you don’t escrow) is to take those two months of the year with the extra biweekly paycheck, and save it! Try building your monthly budget based on just two paychecks, and then you will quickly discover that all of the sudden in two different months of the year (spaced conveniently about six months apart) you will have some ‘extra income’ from those extra biweekly payments. Who doesn’t like some extra income anyways? Even if you save nothing else during the year, this method alone can help you sock away 8% of your net income! That already puts you above the national average savings rate (scary huh?) and gets you that much closer to achieving your goals.

Money Stack

In our household, we have one semi-monthly payment and one biweekly payment. While it varies the timing of our income and expenses (as sometimes the biweekly payments occur early in some months and then later in other months), we focus on our total ‘cash flow’ for the month (income and expenses) excluding those extra biweekly paychecks to make sure we are on track. Hurry up March, here comes the next ‘extra’!

    Do you get paid biweekly or semi-monthly?
    Have you experienced both methods before?
    Which do you prefer – semi-monthly vs biweekly?

Biweekly or semi-monthly: what's the difference? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

A day in the life of frugal (part 3): shopping

AJ & KJ: A day in the life of frugal is a four part series. If you missed our other posts in our series “A day in the life of frugal” check out: Part One: Food, Part Two: Home Goods & Tasks, and Part Four: Travel. This week’s installment focuses on shopping.

Shopping as a competitive sport
AJ: Shopping has always been a passion of mine. I love the entire process of trying to find the perfect thing I’m looking for at exactly the price I’m willing to pay for it. Other people like competitive sports, I like bargain shopping.

KJ: As with any sport, it takes time and practice to get really good. The more we fine tune our practices, the better we get at saving on purchases and buying what we want while still having money left over. Shopping is really about buying what you need first, then what you want if there’s anything left over. Do we need those extra clothes, shoes, tvs, you name it? Find that right balance so you don’t find yourself on A&E hoarders…

someecards.com - It's not hoarding if you can hide it!

Never pay full price
KJ: Avoid regular priced items. We almost always have a coupon or some discount available when shopping in store or online. Next time you shop online, do a Google search for coupons for the website, and you might be amazed at what you can find by taking a few extra minutes and clicks to get that same product discounted!

AJ: I started eyeing a pair of boots I really liked in early December at one of my favorite stores. They were $399 and regardless of how much foot comfort I require, I knew they weren’t worth $399, so I walked away. At Christmas I received a gift card to the same store and have held on to it tightly, knowing those boots were bound to go on sale. On Monday of last week those boots dropped $200. $200!? Are you kidding me!? That tells you how high the margin is. I digress. I Googled looking for an extra discount for sale merchandise and didn’t find one, but I knew they would probably offer a deeper discount soon, so I held off. Six hours later a 40% off coupon appeared in my inbox and I literally paid $75 for that $399 pair of boots including tax and shipping. Anticipate when you will need to replace more expensive wardrobe and home items and plan to replace them at the end of a prior season. Stretch what you already have one more season and put the savings away for a rainy day.

Bargain shopping boots

Haggle?
KJ: I hate this, but some people are really good at haggling anything. There’s a whole A&E show about people who haggle on items and continuously upgrade what they are looking for. If you’re good at it, more power to you, but I can’t do it!

AJ: My grandfather was the king of haggling. Many beautiful pieces of jewelry were purchased for a fraction of the price being asked and my mother and I have loved the benefits of his haggling. I agree with Kirby that this is sometimes uncomfortable and less and less socially acceptable but be mindful of industries where it is still acceptable and benefit from it! We drove a hard bargain with two car dealerships over both of our cars both on the trade-in side for our existing cars and on the purchase price of the new cars we bought. In both instances we ultimately got to the number we felt was right for us and felt great about the costly purchase.

Be prepared to walk away
AJ: I promised myself when I was in high school that upon my first major career promotion I would buy myself a huge Louis Vuitton bag. I had my heart set on one specific style and just knew that owning that bag would remind me of my accomplishments. For the record, Kirby was not on board with this at any point, which ultimately led me to realize that I could do without that bag. I still think about it every time I see a woman carrying it but knew that realistically I would prefer a week on a beach with my husband over something so impractical. Even if the bag had been $50 you still have to know when to hold ‘em and when to fold ‘em. Even if what you want is more practical than my Louis Vuitton bag, really sit on the thought of how you might use it and how much longer you could make do without it before making the plunge into what could be a life-long relationship with a teal sofa you overpaid for during your “brights” phase.

Sleep on it
AJ: Most stores have a 24 hour hold policy. If you’re on the fence about something or promised yourself you weren’t going to buy anything, put it on hold and think it over until the next day. Putting something on hold is no more a commitment than window shopping and unlike haggling is completely socially acceptable. If a week later you decide you really do want and can afford whatever it is, go back and get it. If it’s gone, find it somewhere else. Nothing is really one of a kind anymore and someone is bound to have an acceptable version that’s similar enough to whatever it is you love.

KJ: Hasty, rash decisions are the epitome of bad shopping. By taking the time to step away from the purchase decision, you will more often than not realize that you didn’t really need it. Save that impulse buy cash for something you really care about.

Go shopping in your own house
AJ: If you find yourself feeling uninspired by what you already own and continually feel like you need more stuff, invite a friend over to help you do more with what you already have. Ask for help better organizing your pantry before spending money on costly solutions. Pull together multiple outfits with pieces you already own and photograph them so you don’t forget what you have. Regularly merchandise all of your belongings and toss what’s broken, donate what you don’t need, and really take stock of what you already have. If you’re like me your problem isn’t lack of space, it’s sheer excess which you can control by cutting back!

Again, if you missed our other posts in our series “a day in the life of frugal” then check out parts one, two, and four at: Part One: Food, Part Two: Home Goods & Tasks, and Part Four: Travel

    What methods do you use to pinch pennies when you shop?
    Do any of these seem absurd to you?
    Do you have anything unique of your own to add?

A day in the life of frugal (part 3): shopping is copyrighted by TheSimpleMoneyBlog.com without consent to republish. Card courtesy of www.someecards.com.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Enjoying life without spending an arm and a leg

Beach At NightAJ: Learning to enjoy life without spending an arm and a leg is a bit of an art. This post is so near and dear to my heart since many of the things I love most in this world are indulgences, and I really dislike denying myself the things I love.

 

Start by planning and STOP paying more for everyday, super not fun things
AJ:

    a. I buy in bulk as often as possible, and I’m not talking Sam’s and Costco. When chicken is cheap, I buy 10 pounds, divide them into meal-size portions and freeze them. When you save $5 more by purchasing more toilet paper, I buy 64 rolls. When deodorant is $3 off, I buy 8. It can skew our “monthly” expenses but it prevents us from (1) running out of things we regularly use and (2) overpaying for products that have an incredibly long shelf life.
    b. If I need new running shoes, I start researching months before I’m in a situation where there’s no tread on the bottoms. In my house, simply paying attention to things like this can take A LOT of effort. I know it’s hard, but pay attention. Stores regularly have sales on every single thing they sell. You can Google specific companies and find a plethora of information on annualized programs, loyalty programs, and email clubs that will earn you discounts immediately.
    c. Document known expenses and plan for them months in advance. We buy more than 100 pounds of food for our 3 animals every 2 1/2 months. If I didn’t pay attention, I wouldn’t know when they would run out of food until we hit the bottom of the container and six sets of eyes started plotting their revenge against me. In months when we have to buy $150 worth of pet food, I plan our meals to include more of what is already in our freezer and pantry and less of the things that I want to try that are new and contain more expensive ingredients. It means never going over our budget and never having to sacrifice on things that we want in lieu of poorly accounting for the things we need. Do this for things like hair cuts, toll tag payments, make up, birthday gifts, dry cleaning, doctor appointments, and vet visits.

Know what you need
AJ: Not like food, water, and sleep, but what you need in order to feel whole. I need to eat spinach dip and cheese fries at least once a month. I need to go to pilates when work gets really overwhelming. I need to buy baskets to organize all of our stuff, so I don’t freak out over piles forming in every corner. I’m thankful that Kirby and I are both employed and that we have the freedom to splurge a little. I need to see my husband over the dim light of candles at an all you can eat Churrascaria. He’s handsome all the time, but even more so after a few months of long days and evenings of working too hard finished with a complete indulgent beef experience.
KJ: With a caveat, as long as your budget can accommodate it and it’s not detrimental to your well being (drugs, gambling, etc.), then by all means go for it! Sometimes, in trying to fight that urge or ‘draw,’ you end up over-compensating when you do give in. When was the last time the diet you tried (you know, the one where you avoided all the pleasures of daily life) left you in a better position six months later? It goes against our innate behaviors, so we subsequently over correct.

Resign yourself to the thought of spending on what you love
AJ: Will you DIE if you don’t scuba dive once a year? Probably not (although, I may die if I ever scuba dive again. Fear of drowning while diving…for real!). Recharging our batteries is one of the things that Kirby and I have learned to do. We both reach a certain point where we need a three day hiatus from our lives, pack our bags, and leave for a few days. We’ve been known to watch marathons of TV shows we’ve never even heard of for two days just to let go of all of the pressing things we need to take care of at home. If splurging on three nights at a hotel means that you can make it another 100 days without a day off, that’s an investment in your sanity, and I’m fairly certain your co-workers might even chip in to help cover the cost!

Be creative
KJ: Some of my favorite gifts and memories were ones that had a lot of time invested (and not money) … sure the wedding ring and proposal was probably one of the greatest on the list of memories, but let’s set that one aside for now :). Some of my fondest moments were in college with hours of time spent creating photo books with reflections from the year and figuring out how to spend time with ‘my girl’ on a college budget. $5 Papa John’s pizza night anyone? Creativity not only gets you brownie points (a confusing concept for me when I had a teacher in Elementary School called “Mrs. Browning” wherein I thought these ‘brownie points’ were somehow related to her class and schoolwork), but it gives you lasting memories of time well spent.

Rely on people you trust
AJ: My girl at Ann Taylor lets me know when the pair of shoes I’ve been eyeing drops 40% in price. My travel agent sends me email updates when the all expenses paid resort we love has a special. My dog food provider lets me know when they’re running a 10% off special. Tom Thumb’s Just for U program tells me when stuff I buy regularly is especially discounted. I don’t have time to check on all of the things I want weekly, but positioning myself alongside people who are at my favorite stores daily (because they work there) means I can feel good about the deals I get on the items I really want.

The same goes for finding a good auto shop that you trust to make decisions on behalf of your vehicle and your safety. If you’re like Kirby and I, you know close to nothing about cars. Not because we don’t want to know, just because as soon as you open the hood suddenly everything looks like organs (oh, and I don’t know anything about intestines either). Find a great contractor, a great A/C repairman, etc. We do our best to plan for everything but there are just some things you can’t know to anticipate.

KJ: Building relationships around you that foster trust is a critical life skill (much easier said than done!). You really need people you can truly rely on as you progress from one stage of life to the next (graduation, marriage, home buying, starting a family). Not to be the devil’s advocate for this section, but just because you trust someone doesn’t mean you shouldn’t be well informed! It’s often when we get lackadaisical about expecting someone else to take care of our own interests that we get complacent and things can go awry. So learn to master the triple threat of bargain hunting and budgeting: (1) do your research, (2) ask good questions, and (3) rely on a trustworthy contact.

    What do you do to enjoy life without spending an arm and a leg?
    Are some of your favorite memories times when money was spent or was there little involved

Enjoying life without spending an arm and a leg is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

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