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Cut Your Cell Phone Bill with a No-Contract Phone

May 16, 2013 By Bianca Leave a Comment

I cringe whenever I hear of anyone paying in the $100 range or more for their cell phone bill. But then when I tell them I only pay $35 per month using a no-contract service, they’re usually the ones cringing. “Isn’t your service terrible? And don’t you have an old, useless phone?” they ask.

You may be surprised to hear that the answer to both those questions is, “Not at all!” A few years ago, I was getting standard service through one of the most popular providers – no fancy smartphone for me at that time. But the phone I had was outdated and barely functioning, and I was tired of that company’s service. So I decided to take the leap into buying a smartphone.

I looked at all the options and found that I’d probably be paying around $100 with any of the major carriers. Then a friend suggested Virgin Mobile, so I checked out their website and found that I could pay $45 per month for 1200 minutes, unlimited texting, and unlimited data. That seemed like a great deal. I did have to pay $200 upfront for the phone, but with the cost of my bill, it paid for itself in no time. Plus, the next month I looked at my minutes used: 150. I guess I’m not much of a talker – I prefer to text. So I switched to the cheapest plan: $35 for 300 minutes, unlimited texting, and unlimited data. I have never gone over my minutes or had any issues with the service because it’s on the Sprint network. So anywhere you would have Sprint service, you’d have Virgin Mobile service.

This was a few years ago, and now all the major providers have jumped in and are offering no-contract plans too. I’ve still found Virgin Mobile to be the cheapest, so I’ve stuck with it. But those of you who are weary of no-contract plans because the service might not be good can rest assured that if you use a Verizon or T-Mobile plan, you’ll get the exact same service you would with a regular contract plan.

So for those of you who feel like you’re spending way too much on your phone bill – jump on the no-contract bandwagon! It’s a great way to cut expenses and you’ll be shocked with how much you can save each month. This is one of the easiest cost-cutting tips I have for people.

Have you ever had a no-contract plan? What was your experience with it?

Filed Under: Cheap Living, Featured, Money Saving Tips

Creative Ways to Make Extra Cash

May 14, 2013 By Bianca Leave a Comment

In this economy, with so many people either unemployed or under-employed, many of us are looking for ways to make money on the side. I’m one of them! I’ve been asking our readers to share with us the ways they earn extra income, and here’s what they said.

Monica makes money selling her artwork to friends and family. She posted pictures of her work on Facebook, and people starting asking to buy specific pieces. She’s also had people ask for custom paintings. Her specialty is comic book characters and super heroes. Monica has also set up an Etsy page to sell custom golf balls painted with images of movie characters.

Ashe also uses Facebook to sell her artwork. She crafts earrings and other pieces of art, then promotes her work on her Facebook page, Art by Ashe.s. She has also sold it at First Friday celebrations. Ashe also works on the weekend doing Fire and Flow Art performances (learn more about this type of performance on Ashe.s’s fan page).

Justin has managed to turn a weekend hobby into something that makes him extra cash. He started throwing darts several years ago, then joined a dart league and starting practicing more often. He now goes out to a few tournaments each week and often walks away with an extra $20 to $50 or so in his pocket. Not bad for having fun!

A few years ago, Marshall and his two dogs moved into a new house with a big, fenced in yard. Shortly after he moved in, his sister was going on vacation and asked Marshall to watch her dog, Sparky, so she wouldn’t have to board him for a week. Sparky got along well with Marshall’s dogs, and his sister liked that Sparky had a yard to play in the whole week instead of being boarded up at the kennel. That gave Marshall the idea to pet sit, so now he frequently makes extra cash watching his friends’ dogs when they go on vacation.

Chris, a senior in college majoring in math, tutors middle school and high school kids having trouble with math. He advertises his services on Craigslist and on fliers around town, then charges by the hour. He recommends this as a good way for college students or anyone with expertise in a particular subject to make a few extra dollars on the side.

Several of our readers have mentioned using rewards programs and survey sites like MyPoints and Swagbucks to earn cash or gift cards. You can check out our past blog reviewing a number of rewards programs.

Now tell us, what do you do to make a little extra cash?

Filed Under: Featured, Ways to Earn Money

The Importance of Budgeting

May 9, 2013 By Bianca Leave a Comment

If you’re reading this blog, you’re obviously interested in saving money, paying off debt, or reaching a healthy financial state. Regardless of what your end goal is, it’s vitally important that you create a budget to plan and track where your money goes. So what are the advantages to budgeting?

You’ll immediately find ways to save money by identifying spending leaks. Maybe you spend more money than you realize on fast food or coffee or something else. If you find a number that’s way too high, you’ll know this is an area to cut back on to free up more money.

You’ll be able to prepare for emergencies. Once you identify spending leaks, you can cut back spending in that category, and why not throw the difference into an emergency fund?

You’ll reduce your debt. If you spend $50 a month on clothes, why not use that $50 to pay off the clothes you charged to your credit card last month?

You’ll reduce your stress level. Maybe ignorance is bliss, but when it comes to money, not knowing where you stand can be very stressful. Discovering you’re in more debt than you realized is stressful too, but by creating a budget, you’re taking a healthy step forward with your finances – and taking control will definitely help your stress levels.

You’ll help yourself reach your financial goals. Maybe you want to save for a down payment on a house, or take a dream vacation, or something else. Whatever your goal, you can add a category to your budget to help you save for it. Treat this category just like bills or rent or some other necessary spending category, and contribute that much to your savings account each week no matter what.

You won’t be surprised when your statements come in the mail. Your spending should be about the same every month, so when you’re budgeting and tracking your spending, you won’t get that sticker shock every time you open your credit card statement.

If you’re already a budgeter, what’s the biggest advantage of budgeting to you?

Filed Under: Budgeting, Debt, Featured, Financial Education, Financial Tips and Tricks, Money Management, Reduce Debt

Slash Your Grocery Bill by Buying In-Season Produce

April 30, 2013 By Bianca Leave a Comment

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I always like to share tips with you on how to save money at the grocery store. Face it, groceries probably eat up a HUGE chunk of your budget. My personal favorite way to save money is by using coupons, but not all stores offer coupons for the healthiest foods, like fruits and veggies or meat. For this reason, farmer’s markets are great places to get cheaper produce and meat direct from the source. But if you don’t have time to hit up the farmer’s market, or you don’t have one near you, the best way to save on fresh foods like produce is to buy what’s in season. Here’s our guide to seasonal food.

Spring

I love visiting pick-your-own farms in the spring for fresh strawberries. Those store-bought ones don’t even compare, but if you do buy strawberries at the store, they’ll be freshest from early May until early June. Other produce to buy during the spring: peppers, greens (lettuce, spinach, kale, arugula, etc.), peas, celery, asparagus, turnips, rhubarb, spring onions, etc.

Summer

I love how so many little produce stands pop up during the summer months. This makes it easier to get produce directly from the farmer without having to make time for the farmer’s market. The list of fresh produce during the summer months is huge, so here are just a few of many: greens (same as mentioned above), broccoli, cherries, blackberries, blueberries, cabbage, cucumber, corn, onions, peppers, tomatoes (there’s also nothing like a fresh-picked tomato!), potatoes, summer squash, zucchini, radishes, eggplant, apples, peaches, watermelon, and many more. Talk about endless variety!

Fall

You may be surprised to know how many veggies are in-season during the fall. Much of the spring and summer produce will be particularly expensive and less flavorful during the fall and winter months, so eat these foods instead: winter squash, pears, plums, carrots, peas, gourds, pumpkins, leeks, turnips, apples, zucchini, beets, cauliflower, etc.

Winter

Although this is probably the smallest list of in-season produce, there are still several options to choose from: winter squash, radishes, pumpkins, Brussels sprouts, carrots, onions, celery, greens, leeks, turnips, potatoes, etc.

When you buy food that is in-season, it’s not only cheaper but also more flavorful too! Grocery stores are able to buy it from local farms, instead of having it shipped from across the country, so the seasonal items you buy are much fresher and tastier than those that are out of season. Buying fresh seasonal produce is just another easy way to save on your grocery bill!

Filed Under: Cheap Living, Featured, Food, Money Saving Tips, Shopping

How Frugal Is Too Frugal?

April 25, 2013 By Bianca 1 Comment

Lately I’ve read several articles about the extreme things people do to save money. Take this article about a “dumpster dive café” or this one about eating roadkill, for example. OK, so obviously not everyone finds these ideas to be too extreme, but it got me thinking – where is the line between being frugal and being too frugal? I’m all for saving as much money as I can, but here are a few situations where, for me, it’s okay to splurge.

Comfort. Being uncomfortable just doesn’t make me happy, so I’m willing to pay for it. I don’t mean I’m going to go buy satin pillows and 800-thread-count sheets (do those exist?). But if my pillow has gotten too flat, I’ll buy a new one, for example. Similarly, while I do keep my apartment a little cool in the winter to save money because I can add layers, you’ll never find me keeping the thermostat on 80 degrees in the summer. That little bit of savings on the power bill simply isn’t worth it to me. Keep in mind, I’m not splurging on anything here – I’m just not going to make myself uncomfortable to save a few pennies.

Groceries. If you’ve read my blogs before, you know that I am an avid couponer so it should surprise you that I’m willing to splurge on groceries. But what I actually mean is that I’m occasionally willing to splurge. Couponing doesn’t take too much time for me anymore, but sometimes I am simply too busy or don’t have enough energy to spend an hour preparing for a shopping trip. Sometimes my time is more valuable to me than the savings from coupons, and I’d rather go pay full price (all generics, of course!) for a week’s worth of groceries. The best part of the occasional full-price grocery trip is that it’s great motivation to get back to coupons the next week when you see how much your bill is.

Dining out. As much as I love to cook, I really love to eat out. And sometimes I don’t have the right ingredients, or I don’t have energy, or I just don’t feel like cooking. So every now and then, my boyfriend and I will go out to dinner. Since we save money in other areas of our budget, we have a little wiggle room for things like this, but we still try to use restaurant coupons and we don’t make it a habit to eat out often. But it’s just not in my lifestyle to completely avoid eating food out – kudos to those who are willing to do so. Here’s the thing, though. I have heard of people who absolutely refuse to eat out for any reason – maybe it’s a close family member’s birthday and the whole family is celebrating together. They still choose not to go. If that works for them, then awesome! But for me, the experience of spending time with my family to celebrate is worth more than the price of the food, so you will never find me missing out on a dining out experience like that.

Travel and other experiences. This is all about the experience for me. I’m not going to learn anything about the world by sitting at home doing nothing. I want to experience things – adventures, travel, the world, anything! Unfortunately, these experiences do have a price tag. I won’t go out and book a 7 day cruise to the Bahamas because I can’t afford it, but the occasional weekend getaway is within reach, and again, the experience and memories are worth more to me than the cost of a hotel room.

Although I describe myself as quite the frugalista, I am afraid that by sitting at home afraid to spend any money at all, I will miss out on experiencing the world around me. And that, to me, is being too frugal.

Where’s the line between frugal and too frugal for you?

Filed Under: Cheap Living, Entertainment, Featured, Food, Money Management, Saving

Prom Night for Less

April 18, 2013 By Bianca 2 Comments

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It’s prom season, and to your high schooler that probably means a fancy dress or tux, glamorous jewelry, dinner at an expensive restaurant, perhaps a limo and chauffer, and crazy after parties – but to you, it probably means one thing: $$$$$

Prom is certainly a night that all high school attendees will always remember, but that doesn’t mean you have to drain your savings to help pay for that special memory. Even as a teenager, I was fairly money-savvy (I really just hated departing with the little money I had), and my parents weren’t in a place to completely ignore the family budget just because of one special dance. So we made some compromises and worked together to make it a perfect night. I didn’t have a limo or dinner at a 5-star restaurant, but I certainly didn’t miss those things, and neither will your teenager. Here are some tips to avoid breaking the bank when it comes to prom night.

Shop around for the dress, or look for the best deal on a tux. For my senior prom, I fell in love with a gorgeous purple and white dress that I found at a specialty boutique at the mall – but we did not have $300 to spend on it. I knew the style name and number, so I Googled for hours to try to track down the same dress online. It worked! It took a LOT of searching on my part, but I finally found the dress for about $100 on a prom dress website. So shop around, look online for cheaper prices, and don’t be afraid to check out discount bridal stores, which often have prom dresses as well.

Don’t go overboard with accessories. The dress costs enough as it is, so don’t spend another $100+ on shoes, jewelry, and a purse that probably won’t be worn again. No need to buy these things at expensive department stores – chances are your daughter can find what she needs at Claire’s or Icing – or maybe even in YOUR jewelry box! For my shoes, I knew I wouldn’t wear them again so I bought a cheap $20 pair at Payless and they worked out perfectly. Also, no expensive salon hairdo for me – my mom put mine up in a beautiful updo for free.

A limo might seen like a necessity to your child, especially if all his or her friends are planning to do it. I personally thought this was unnecessary because I enjoyed my date driving me himself, because we got to spend more one-on-one time together. But if your son or daughter is adamant about it, try to organize a big group to share one limo, that way it reduces the cost per person, and they’ll definitely have a blast with their friends. If it’s really not in your budget, ask your teen to save up and pay for this luxury with his or her own money.

Dinner at a 5-star restaurant might be tasty, but your kid will never remember much about how the food tasted. We went to a slightly upscale restaurant with moderate prices. This was so much fun because all the families dining out admired my dress and told us how nice we looked. I don’t remember what I ate, I just remember the experience of sharing that time with my date at a nice restaurant.

Prom can be a very expensive experience, so I would also recommend splitting some of the costs with your child. Perhaps you could agree to pay for the dress and accessories if your daughter pays for dinner and transportation. Find the arrangement that works for your family, and your teen will have a night to remember without the heavy price tag.

Filed Under: Cheap Living, Events, Featured, Shopping

Frugal Spring Activities for the Whole Family

April 16, 2013 By Bianca Leave a Comment

inexpensive frugal spring family activities

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Last week I posted a blog on cheap spring date ideas, and I promised to have a post this week about spring activities that the whole family will enjoy (that won’t break the bank, of course). Some of the date ideas we came up with can double as family outings too (like strawberry picking), but here are a few more ideas.

Learn the art of Geocaching. If you have a GPS (and almost everyone does these days), you can participate in this scavenger hunt. The object is to find caches (which are usually small containers filled with a log book and prizes – often anything from stickers to CDs to cameras, depending upon the difficulty of the cache). These caches are hidden by other geocachers, and once you find it you sign the log book, take a prize, and leave a prize of your own. Log on to Geocaching.com, look up coordinates for caches in your area, and plug the coordinates into your GPS. Then drive to the general area of the cache (they’re often in public parks) and start searching. Remember, caches are hidden, so it could take some time, but this is a fantastic FREE activity that everyone in the family will love.

Find out which days your local museums offer free or discounted admission. If you relied on these museums to get you through the cold winter months, see if there are any that have outdoor exhibits. There are at least a few science museums in my area that have great indoor exhibits (which are always changing, by the way, so even if you visited 3 months ago they’ll probably have something new already), but they also have tons of stuff to do outdoors – farm animals, a playground, a water station, a train ride, a dinosaur trail. Even better – my favorite museum has a picnic area so you can bring your own food.

Look for GroupOn or LivingSocial deals for fun outdoor adventures, like zip lining. There are at least two or three zip lining places within a 90 minute drive of my home, and they’re always featured on the daily deals websites. Zip lining can be expensive, but it’s made much more affordable with a half-off deal. I’ve seen other adventure deals for half off train rides, white water rafting adventures, kayaking lessons, or tubing trips. There are so many deals offered on these sites that it shouldn’t be hard to find something to fit your family’s adventure level (not to mention budget!).

Check your local Parks & Recreation department to see what free events they offer during the spring. Many departments host kids’ science days, fishing workshops, sporting events or leagues, or free movie nights for the whole family. Depending on where you live, they may offer events for your family every single week, so you’ll always have a free or low-cost option for your family activity.

What are your favorite inexpensive family activities this time of year?

Filed Under: Cheap Living, Entertainment, Featured

Retirement Investing 101: 401(k) Company Matching

April 2, 2013 By Bianca 1 Comment

This is the thirteenth post in our Retirement Investing 101 series written by Amanda Smith, Client Services Specialist at CESI. Check out Part 1.

During my tenure at Fidelity Investments as a Retirement Representative, I would receive calls from employees who opted out of participating in their company’s 401(k). These calls were my biggest pet peeve, specifically when their company matched contributions made by the employee. What is a company match? A company match is when your employer matches a percentage or dollar amount of your contributions up to a designated percentage or dollar amount. The majority of companies will only make contributions into their employees’ retirement accounts if the employee contributes their own money into the 401(k). There are quite a few misconceptions and misunderstandings on how company matches work, so I’d like to educate those who may not know.

A majority of employers will match a percentage based on how much the employee contributes. For example, an employer will contribute $1 for $1 up to 4% of an employee’s contributions. This means if an employee contributes 7% of their pay into their retirement account, the employer will contribute an equal amount up to 4% into the employee’s retirement account. This is an 11% total contribution into the employee’s retirement account. The recommended amount is 10-15% including any company matching. If an employee only contributes 2% of their pay into their retirement account, the employer will only contribute an equal amount of 2% into the employee’s retirement account. This is a 2% loss of free money the employee could be receiving from their employer. That 2% adds up over a long time but will be missed because the employee chose not to contribute toward their retirement account.

There are many misconceptions and misunderstandings on what vesting means in relation to matching. I’d like to clear these misconceptions and misunderstandings up for you so you have a solid understanding of how vesting works. What does vesting mean? Vesting is an accrual process that determines how much an employee is entitled to keep within their retirement account. The first important note is that all of your contributions are and should be 100% vested, meaning these contributions are solely yours regardless of your employment status with your employer. As far as employer contributions vesting varies among each company. Many employers choose to have a vesting schedule based on an employee’s longevity with the organization. For example, a vesting schedule will be 1 year of employment will be 20% vested, 2 years 40%, 3 years 60%, 4 years 80%, and 5 years 100%. An employee who works for an employer who uses this vesting schedule will not be 100% vested until they have worked for their employer 5 years. So how does this effect you? I’ll explain. If an employee terminates their employment after 2 years, the employee is only entitled to 40% of the company’s matching contributions and the remaining amount goes back into the company’s funds. The employee is not entitled to the remaining amount because they did not work for the company a full five years according to the employer’s vesting schedule.

I cannot stress enough how important it is to contribute into your employer’s 401(k) program for the matching portions at the very least. Further, make sure you know exactly how your employer’s 401(k) program works, particularly the vesting schedule as this may determine your choices of whether to leave your employer or not. The information is readily available to you from your company’s Human Resource Manager, HR website, or pamphlets provided to you upon hire. Again, do not miss out on free money given by your employer!

Filed Under: Featured, Financial Education, Retirement, Saving

Retirement Investing 101: Options for Contractors and the Self-Employed

March 28, 2013 By Bianca 1 Comment

This is the twelfth post in our Retirement Investing 101 series written by Amanda Smith, Client Services Specialist at CESI. Check out Part 1 or continue on to Part 13.

We’ve already discussed what a 401(k) is and how important it is to save for retirement, but what about those individuals who are not employed by a company or organization? Many contractors and self-employed individuals are unsure how they can save for retirement and receive the benefits of tax deferral saving. Have no fear, I have the answer for you! There are four options for contractors and self-employed individuals: Individual 401(k), SEP IRA, Defined Benefit Plan, and the Simple IRA.

The Individual 401(k) is available as a traditional 401(k) and a Roth 401(k) offering the same tax benefits. The Individual 401(k) allows a contractor or self-employed individual to contribute pre-tax dollars into the account for investing on a tax deferred basis using the traditional option where earnings are not taxed until they are withdrawn. The Individual 401(k) Roth option works the same as any other Roth savings where contributions are made with after-tax dollars and are not taxed when they are withdrawn. The Individual 401(k), whether traditional or Roth, is only for the sole proprietors who have no employees.

Another perk of the Individual 401(k) is that you can make contributions as an employee and employer allowing for optimal savings. For example, as an employee, you can only save the maximum ($17,500), but also as an employer you can save an additional 25% up to $51,000 for 2013. This is great news for the super saver in you who would like to save additional funds but max out under the employee thresholds. Keep in mind as an employer, you are also responsible for the administration fees associated with the account which can be potentially greater than employer sponsored retirement savings plans. Do your homework before opening such a plan.

A SEP IRA is a good retirement savings plan for sole proprietors and small business owners with employees. The SEP IRA allows these individuals to save for retirement on a tax deferred basis up to $51,000 for 2013. The SEP IRA does not offer a Roth option. All contributions are made with pre-tax dollars and are 100% tax deductible from personal income. These individuals are able to contribute the employee maximum and the employer maximum as an additional 25% of wages. These earnings grow tax deferred and are not taxed until the savings are withdrawn after the age of 59 ½. The SEP IRA has lower administrative costs associated with these accounts and are less time consuming.

The Defined Benefit Plan is for self-employed individuals and small business owners allowing for the highest contribution amounts among all options, but it also has the highest administrative fees. This option is most appropriate for those 45 years or older who wish to make contributions greater than the maximum amounts. In fact, contributions can exceed $100,000 for this particular option, depending on age and income, but are all 100% tax deductible. This plan works in a specific way that is different than the 401(k) and IRA options. Contributions into a Defined Benefit Plan are made to fund a chosen level of annual income at a predetermined future retirement date. For example, if an individual wishes to have $100,000 annual income for a predetermined retirement date set five years from time of account opening, this person will need to contribute above that to meet that income requirement.

Lastly, the Simple IRA really is pretty simple, and it’s a great choice for independent contractors who wish to contribute more than the maximum for a traditional IRA and a large portion of their income. Those who contribute into a Simple IRA may contribute 100% of their income up to the maximum amount of $12,000, or $14,500 for those 50+ years of age. A 3% additional employer contribution is allowable for maximum savings. Simple IRA’s have relatively low administrative fees, but also have lower maximum contribution limits.

If you are in an independent contractor or self-employed, I implore you to look into these available options and maximize your retirement savings as soon as possible. Each of these options offers special benefits and should not be overlooked. If you need additional information regarding any of these savings vehicles, research online using reliable sources or contact a financial professional.

Filed Under: Featured, Financial Education, Money Management, Retirement, Saving

Retirement Investing 101: Am I On Track?

March 26, 2013 By Bianca Leave a Comment

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This is the eleventh post in our Retirement Investing 101 series written by Amanda Smith, Client Services Specialist at CESI. Check out Part 1 or continue on to Part 12.

How do you know if you are on track toward having enough money saved for retirement? This is a very difficult question but necessary to review, though it’s impossible to have a firm answer because we can’t possibly know how much inflation will have increased daily living expenses. While a specific dollar amount may be impossible, you can still get a good idea of how much you may need and if you’re on the right track.

Many financial institutions have great retirement calculators available to determine if you are on track. For example, I like RetireMyWay by Capital One 360. This calculator tool allows you to choose the lifestyle you wish to lead during retirement and prepare an estimated budget based on that lifestyle. You can also manipulate the numbers to reflect whether you’ve paid off your house, wish to add travel to your lifestyle, and any hobbies you may take on requiring funds. Further, this calculator allows you to input how you invest, how much you currently have saved and will continue to save, and the age for which you plan on retiring. The result shows you if you’re currently on target and/or if you need to raise your game by increasing your contributions. This is only one calculator offered but there are many others out there that may be of benefit to you so I suggest doing some research and trying others out too.

Using these calculators every so often is a great way to check-up on how you are doing and if you are on track toward having enough to retire on. I suggest not including Social Security because there is no way to know if it will even be an option when you are ready to retire. Plus, you want to make sure you keep financial responsibility in your own hands without relying on the government or anyone else; however, you can calculate both scenarios if you wish. I suggest playing around with these calculators using several different scenarios as you don’t know exactly what your retirement will look like but at least you have various options available to you.

Stay tuned for one last blog devoted to retirement options for contractors, the self-employed, and stay-at-home persons.

Filed Under: Featured, Financial Education, Financial Tips and Tricks, Retirement, Saving