Credit card tips: what you need to know

Six credit cards
KJ: Lists, lists, lists. There are so many out there, but we keep coming across some great ones that will help you get on solid financial footing. In this post, we focus on Bank Rate’s 10 can’t miss credit card tips. Go ahead, read the full article. You’ll be amazed what you can learn in just a few minutes that could save you hundreds – or even thousands – over time!

AJ: I LOVE when Kirby finds articles that teach me things I don’t know. As an avid credit card user there are a ton of great takeaways in this article and even better reminders of things that make us successful credit card carriers.

Here’s our key takeaways that we felt were worth sharing:

Pay your bill twice a month
This is recommended because it keeps your credit card utilization low – one of the key factors in calculating your credit score. The lower your utilization (say you have a balance of $1,000 on a $10,000 limit that has been extended to you), the better your score. An alternative would be to put less on your card and/or see about having a higher credit limit at your disposal. The latter could get you into serious trouble though if you don’t use a program like to track your expenses and then pay your card in full each month, so beware.

Personally, I think this one more comes into affect when you are looking at purchasing a home, buying a car, etc. where your credit score is most front of mind and some type of long-term loan is on the line. Our preference to this is keeping higher credit amounts available to us, but just not using it.

Know card’s anti-skimming features
The regular mag-stripe on many credit cards could put you at potential risk with how easy someone can swipe your data. Try looking for credit cards that use the EMV technology that encrypts each and every transaction. Know how exposed you may be, and make changes as needed to help make sure you are protected.

Know your fraud protections
The Fair Credit Billing Act limits your liability with a credit card to $50 (and zero if it’s a data breach and only your credit card account information is stolen). Be sure to watch your expenses regularly and dispute any charges (maybe that waiter bumped up the tip a little more or a mysterious charge shows up). No one should be watching the transactions come across as closely as you!

Be aware that debit card liability limits often aren’t as great – and there are some significant differences in your potential liability. That’s why we prefer to use credit cards for all purchases and pay the balance in full each month.

Don’t pay for your cash back
Don’t get a rewards credit card and then not pay it in full each month. As we’ve written in the past, any amount you let carry over from month-to-month will very quickly eat into any benefits you thought you were getting!

Take stock of your wallet
This one’s pretty simple. Make a list of the cards you have in your wallet. Determine if any accounts need to be cancelled and closed. Check to see too that your spending pattern matches the best cards available today. Just because you opened a card years ago for rewards in a certain area doesn’t mean that it’s the best choice for your current lifestyle!

Be cognizant that closing a card can impact your average credit history and your available credit balance. Not that you shouldn’t do it, just be aware how it may impact your financing needs in the short-term if there is something on the horizon (say a move and new home purchase).

AJ: I am terrible at paying attention to what’s in my wallet. I’ve never lost a card (knock on wood), but things in my wallet are all kinds of expired, closed or invalid. Everything from insurance cards, benefits cards and credit cards, so thankfully Kirby is the king of maximizing credit card benefits in our house so he keeps us in the know on how to maximize our spending. All I have to do is remember which card I’m supposed to use on gas and groceries versus other expenses this month and we’re set!

Know what car rental insurance to take
Read the fine print on your cards! Many of your cards may cover rental accidents and damage, so don’t pony up for something you don’t need. Each card is different with what they cover, what deductible there may be, and whether international travel is covered, so be sure you know the stipulations.

AJ: This is completely new information to me! I love learning new things!

Know how to dispute a purchase
Be sure to check how to file a dispute with your credit card company if the goods and services aren’t up to snuff. Don’t avoid conflict in this area. It’s your money, so don’t let a retailer pull one over on you if you’re too timid to fight it and something was legitimately wrong (read damaged or incorrect product or price). Try to resolve it with the retailer first, and if it isn’t resolved, then work with the credit card company as needed.

    What credit card tips would you add to the list?
    Share with us your credit card must-knows.

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How do you balance cost and quality? Is the more expensive option actually better for your budget?

Shopping Carts
KJ: We’ve all bought something at some point because, hey, it’s cheap! Why not spend the $1 or $5 on [insert product]? What could you possibly lose? Well, as the adage goes, you get what you pay for [sometimes]. It’s not always best to just go with the cheapest option just because it is cheaper. But, it’s also not always the best to just go with the most expensive option. It seems that products in today’s world have a more limited shelf-life than they used to, so knowing a product’s shelf life before you make a purchase can work wonders for your long-term family budget.

This is often a discussion we have in our household particularly as it relates to all of our major purchases like appliances, but it also applies to everyday items like nice clothes, paint for the walls, and household goods. Knowing the answer to the following questions for each purchase you make though – no matter how big or small – will help set you up for maximizing how far your household’s budget will go.

AJ: When Kirby and I first started dating and were shopping for college necessities he absolutely insisted that he needed only one of each of the following items: a cup, a plate, a bowl, a fork, a spoon, a knife. WHAT?! I thought he was completely crazy! The longer we’ve lived together, though, I’ve come to appreciate Kirby’s philosophy. I’m a never-run-out, come to my house in case of emergency or natural disaster kind of shopper. I own two of most every pair of pants I’ve bought in the last ten years, I never buy one of anything, and I can always find something else I want. Thus, we comparative shop. We balance Kirby’s desire for practicality with my desire not to have to run to the store multiple times a week and shop smarter.

What is the average life span for the product?
Basics, people. If a major appliance comes with a one-year warranty, think twice. Read reviews, do research, price compare. Are there significant maintenance or return experiences from other customers? Our research seldom leads us to the cheapest out-of-pocket option today, and in fact, it often leads us to one of the higher end options. For instance, if you have a product that costs $200, yet you have to replace it every 3 years, then wouldn’t you prefer to pay $500 now for a more reliable product that lasts 6 years? Not only do you get an option that is often more durable and reliable, it often coincides with a more stable brand (especially when you factor in warranties or any other product guarantees – they’re only as good as the company backing that guarantee!). While the math is seldom as simple, it’s an exercise worth calculating when making almost any purchase. Being proactive about your major purchases means building in flexibility and the power to choose. Waiting until something pricey breaks to competitive shop means you’re forced to take whatever is available, often at the expense of either quality or price.

What is the price per ounce, gallon, unit of measure?
You have to start with the most fundamental detail – is this stuff physically going to rot before I can use or consume it? This is one of the easiest to calculate when it comes to the grocery store. Most grocery store companies now let you price compare instantly as you shop the aisles and can quickly see the cost per unit. Don’t just assume though that the lowest cost per unit is the best value for you. We’ve run into this a number of times in the last several years where a product seemed like a better choice for the budget, but it ended up costing more in the long-run. If something is half the cost, but you end up throwing away more than half of it because it expired sooner, is that really any savings to your family? Surprisingly, you could have bought the more spendy product with a higher quality and more durable shelf life. We’ve run into this with sour cream where the cheaper options just don’t last as long, so we actually end up spending more each month.

Now, I’m not advocating that all higher end products are worth the cost, but it’s definitely worth considering their long-term impact on your budget and not just the “whatever is cheapest now” option.

AJ: This concept becomes especially relevant for those of us buying in bulk. Not only are products often of an entirely different level of quality at super stores, but they’re also not always cheaper by ounce. The easiest way for me to keep track of what is really a good deal versus what is really just a whole lot more is to know what I pay per pound, per ounce or per unit on average. This applies to supplements we take, paper products, meats, produce, etc. It can’t always be about cost, but tracking can make a huge difference.

Is it cheap for a reason?
Not much to say here other than some products are just cheap for a reason. They aren’t durable, they are low quality, they break instantly, etc. Hey, that’s fine for some things – like a cheap gimmick item or one-use type products, but for most everyday products, it just doesn’t make sense.

AJ: Cheap is often about as good as “light” is delicious. Unless you’re talking about birthday candles and cotton balls cheap usually isn’t worth the paper your money is printed on.

The more spendy category can be difficult at first
When you first start saving and budgeting it can be quite difficult to shell any more out of pocket than the lowest of quality and cost. I can’t even think of spending an extra $100 NOW…I don’t have that in my bank account! But once you get yourself on better financial footing, you’ll find that you may actually be able to absorb the difference in your regular monthly budget. If not, maybe you’re able to trim a little bit over a few months to make it work.

Sometimes it’s hard to see past the end of your nose
In today’s world, we’re so used to having instant gratification on almost everything that it’s difficult to truly plan for any period of time past tomorrow. Teaching yourself discipline and really thinking about the long-term for you, your family, and your cash flow, will take you far. Few goals are just a month away, so reframing how you look at a purchase can make very meaningful differences on your family’s bottom line!

    What tips do you have when evaluating a purchase for your family?
    Share with us your experiences where cheap-for-the-sake-of-cheap worked well and where other times it didn’t quite work to your favor.

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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 billionaire’s perspective on working: a three day work week?…

Calendar Image
AJ: Irrefutable fact: Carlos Slim knows things about making money. His estimated net worth at $83 billion pretty much speaks for itself, and it makes him one of the wealthiest individuals in the world. Carlos Slim has an interesting take on the future of the working people – 3 day work weeks that span 11 hours each up until age 75. In our house we call an 11 hour day a Monday, or a Tuesday, or a Wednesday, take your pick, but 11 hour days aren’t something that gains attention in our household. I couldn’t physically do my job in 3 11-hour workdays currently, but maybe if I had until I was 75 it’d be a whole different story.

Live life at every stage
So what of it? Carlos thinks that life should be lived at every age and at every stage as though you’d earned the beauty of retirement day in and day out. I LOVE the idea of shorter work weeks, but my shorter work week would be 4 12-hour days, not 3 11-hour days, and I’m betting I’d still wind up working some evenings and weekends. I don’t think I’m special or unique, I think that’s just become more the standard of what we’re all accustomed to working in order to get our jobs done. Our generation is waiting longer to start families, is climbing the professional ladder faster than the previous generation and is working in a fully connected universe, so it’s impossible to imagine a world in which we work less than we do today, but maybe Slim’s onto something.

KJ: This is one of the daily conundrums of saving money. How much do you want to sacrifice or withhold consumption today only for some uncertain point in time in the future? Why push yourself so hard today and miss out on all the together time, family time, travel, whatever suits your fancy in the meantime? If there’s one thing we can glean from Carlos’ perspective now it’s that life is about balance – across all ages and stages and to not just continuously push for a brighter future. Relax, and learn to enjoy the scenery along the way!

75 isn’t so old
KJ:Standards of living have continued to rise over the last 30+ years, making the new 75 much more cozy than the previous generation’s life at age 75. And if that’s the case, maybe we won’t have all that much reservation to working to age 75, 80, 85. It all just depends on WHAT we are doing at that point and finding something along the way that we really enjoy that we could see ourselves doing for decades.

AJ: Slim votes for machines and services working 24 hours a day and people enjoying life more and spending more time in training. It’s truly revolutionary thinking and other richy rich people don’t love Carlos for his perspective which is why I find it so interesting.

Fascinatingly, the 5 day, 40 hour work week has only been in existence since 1938. I literally have jewelry that’s older than that. So is it really all that strange to think that we could be in a remarkably different working environment 20 years from now? I would love to see what a difference that kind of thinking would have on the quality of life for future generations.

What would three days of work change for you?
How would that change your overall quality of life?
What would you do with the extra time each week?

Read more about Carlos Slim’s perspectives from CNN Money on his work week thoughts from July 2014, and Carlos’ thoughts on a three day work week from October 2014.

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When was the last time you reassessed your budget?

Man And Tap Water With U.S. Dollar Banknotes
KJ: Sometimes, it seems like money pours out of the bank account, so what better time to see if your current plan is really what is right for you at this stage in your life? It’s easy to keep coasting as is, but address it before it really gets out of hand, so you don’t keep saying, “it will get better” or “this is temporary.” How many times have you heard yourself speak those words only to realize that your “temporary” had actually become your new normal? What better time than now to take a step back from your regular budget and assess if your budget and goals you have set for you and your family are realistic? Life happens, life is always changing and I have built SO many spreadsheets over the years with projection after projection of how much we need to save for different goals we have. It never ceases to amaze me how much things can change over even short periods of time like six months or a year.

An appliance breaks and you suddenly need to replace it. A windfall comes your way from the lotto (er, not quite, but wishful thinking, right?). The budgeting and goal-setting process should be fluid with lots of feedback loops. Something changes (unexpectedly or expectedly), so it’s time to work on a new plan and reassess. Did your expenses creep up and now you have a higher emergency fund need (the double-edged sword of expenses where the more you spend, the more you need to save for your emergency fund for that 3-6 months living expense goal)? Yet, the less ability you have TO save to that goal by nature of spending more…sheesh…enough to make your head spin sometimes!

Here are a couple of trigger events for when you might consider adopting a new budget.

Did you reset your budget if you had a change in income?
Maybe you got a raise that allows you just a little more wiggle room each month or maybe quite the opposite happened – you got a pay cut. Sometimes you can’t plan around either one of these, particularly if your company goes through some tough times. While other times the pay cut may be voluntary, through one person deciding to stay home for the family, reducing hours to allow for more home/family/vacation time, etc.

A change in income is most certainly a great time to look at your budget, and in most instances, is best if you reassess your budget BEFORE you take that leap, as is the case in a voluntary change of circumstances.

Have you continued to find it difficult to meet your budget each month? Did you need to reset your budget because it wasn’t realistic?
Maybe your expenses just aren’t all that realistic. Budgeting is about forecasting what you think your expenses will be, and at times that means you’re just flat out wrong. You could be way over budget or way under budget in certain areas.

When we moved to our existing house after having lived in a town home previously that had residents on either side, we weren’t quiet sure what to budget for the cost of electricity for a single family home let alone what the lawn watering costs were going to be. Fortunately, we WAY over budgeted for those expenses assuming a worst case scenario increase in costs, and we have been pleasantly surprised that our bills weren’t quite as high as we thought they would be – even in the cold of the winter or the heat of the summer. What this has meant though is we often take the “under” on this area and reassign to other areas that need increases for those one-off items like birthdays, pet food every few months, etc. Maybe it’s time to give up some of the “over” in this category and permanently reassign to somewhere else once and for all.

The other component of this too is your costs may rise. Gas prices may shoot up, your electricity contract renews – yet the only options now are more expensive, your insurance costs go up, the costs of your regular groceries go up. Any of this sound familiar? Don’t just assume you have to immediately increase your total budget though – as it may be an opportunity to cut back elsewhere to keep your expenses in check. Gas prices rising may simply mean being more creative in the kitchen and eating out one to two less meals a month.

AJ For me, reassessing the budget feels like a massive undertaking. I’m awesome at maintenance and upkeep, but change is a major speed bump in my budgeting world. For my tracking purposes the last year has been a major challenge. When we bought our first house (the town house) we had major buckets and few fixed expenses with no maintenance or updates to make, so there was more breathing room in our budget. We used to regularly save more than planned in a year because we just didn’t need to spend it. These days our unexpecteds in life seem to cost a whole lot more and sometimes they don’t fit quite as nicely into my monthly plans. However, when we sat down to talk about whether we needed to increase our budgets in some areas to allow for increased expenses, we ultimately decided that these overages were temporary and we’re budgeted appropriately for the foreseeable future, so I get to rest easy and continue resisting change – at least until next month!

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Personal umbrella liability insurance: what you need to know

Dollar Bag Under Umbrella
KJ: If you are like us, you’re working toward your goals. And working toward your goals (be it children’s education, retirement, or just financial independence) means saving money. Over time, you want to see that your money is protected in the event something happens. Most of the time, you have insurance for that – health insurance, disability insurance, etc. All of this to say that there’s a lesser known type of insurance that can help cover pesonal liability above and beyond what’s already on your home or auto insurance (plus some additional coverages), and it’s called umbrella insurance. Umbrella insurance isn’t as the name implies. It’s not coverage for when it rains – though it may be thought of as a protector for a very rainy day personally!

As you build your wealth (or maybe you’re already there!), this can be a critical component of your overall financial well-being. Personal umbrella coverage basically serves as an umbrella over your homeowner’s insurance and car insurance, kicking in extra coverage amounts above and beyond your homeowner’s and car policies. Plus, liability coverage amounts are significantly higher than under your existing policies (i.e. with coverage amounts $1 million and greater).

How it works
So, let’s say you have $300,000 worth of liability coverage on your homeowner policy and $1 million of coverage with your umbrella policy. If someone trips and falls on your property and has a massive claim against you (yes, it was that bad of a fall!…who knows!) for $500,000, then generally the homeowner policy would pay the first $300,000, then the umbrella policy will step in to kick in the other $200,000.

It’s cheap
Relatively speaking, it is a very cheap insurance to have for significant amounts of coverage. As with all insurance policies (and companies), there are a few things that could impact your coverage costs – pool, lots of land, and potentially other factors – but for around a couple hundred dollars per year, you can obtain $1 million in coverage. So, why not cover your family in the event of a catastrophe for such a cheap insurance?

It provides additional coverage
Additionally, umbrella insurance actually covers several scenarios that are NOT part of your standard homeowners or auto policies. In fact, they often cover slander, libel, false arrest, and many other personal liability scenarios (note: not business liability).

Some assets may be protected
Keep in mind that all states vary based on what is considered protected in the event of a bankrupty, but generally, some (or all) of your house can be protected and your retirement assets may be protected too. However, for a lot of your other assets, you may need some additional protections.

So, call your financial advisor and/or your insurance agent to discuss the coverage to see if you may need additional protection.

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