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Saturday, March 18, 2017

A Deeper Look at Check-Cashing Services: Do They Really Provide an ‘Alternative Banking’ Opportunity?

A couple of weeks ago, Business Insider published an amazing article by Alex Morrell on check cashing that I think is well worth everyone’s time to read: An Ivy League professor who spent four months working in a South Bronx check-cashing store says we’re getting it all wrong.

The article focuses on the research of University of Pennsylvania professor Lisa Servon, who spent several months working as a cashier at a check-cashing service in order to actually understand why people would ever choose such a service instead of the normal banking industry. She actually found a lot of interesting reasons why, ones that she’s outlined in her book The Unbanking of America.

I know several people who use check-cashing services, and their primary reason for doing so is that local banks will no longer do business with them. Those individuals built up a large history of overdrafts and other such misuses of the bank’s services until they had piled up a mountain of unpaid overdraft fees and other expenses, at which point the bank simply cut ties with them. They now use check-cashing services, for better or worse, for their financial needs.

First of all, let’s look at what the check-cashing industry is and the services it provides, because it’s something that many people who are “doing things right” in their financial life may be unfamiliar with.

A check-cashing service offers a number of financial services, many of which you would expect to find at a typical bank. Check cashing is obviously one, but others include payday loans, other short term loans, bill payments, money orders, notary services, currency exchange, public transportation passes, mail services, prepaid debit and credit cards, and so on. The exact services vary from business to business and even location to location.

At a check-cashing service, the biggest thing you’ll notice is that the services are listed on a menu, not too different than what you’ll find at a fast food service, and each service is denoted with an exact price. Those prices are often in dollar amounts, but sometimes, as in the case of the check cashing, it’s listed as a percentage of the face value of the check.

What a check-cashing service typically doesn’t offer is a checking or savings account. They don’t and won’t hold your money for you. They won’t enable you to write checks on behalf of an account that may or may not have money in it.

Here’s how I look at the two in comparison. A check-cashing service offers all of the services of a bank that don’t require extending trust to the customer; instead, all of the transactions are done over the counter for a clear fee. What sets a bank apart is that some bank services are oriented around extending some trust to the customer, but the fees come in whenever a customer does things that are outside of a narrow list of things, and the fees are often unclear.

You can see this when you compare the experience of taking a check into each of those businesses.

At a check-cashing service, you take your check in there and you see that they charge you 3% to cash that check. It’s a $1,000 check, so you pay $30 to cash it – they hand you $970. The business will attempt to verify the check before they cash it, of course, and that can take a few minutes. Once they do cash it, though, the $970 is yours. You walk out of there with no further business arrangement between you and the business.

At a bank, you take your check in there and there are no fees listed clearly anywhere. You take that $1,000 check up to the counter to cash it. They’ll cash it for you – if you have an account there – and if you do have an account, they’ll encourage you to deposit that check and may even require it to be deposited.

That’s the end of the story, right? Why would anyone ever use a check-cashing service, then? Here’s a quote from the article:

“The prevailing wisdom from bankers and policy makers went like this: People who used alternative financial services — like check cashers and payday lenders — were making expensive and unwise decisions. If we could just educate the ‘unbanked’ and ‘underbanked’ and usher them into the modern financial system with a bank account, their fortunes would surely improve.

‘It felt like the only way I could answer this question: If alternative financial service providers are so bad — if they’re so predatory and so sleazy and so much in the business of taking advantage of people — why are people using them in growing numbers?’ Servon said.

But Servon, a professor of city and regional planning at the University of Pennsylvania and a former dean at the New School, spent 20 years studying low-income communities, and to her, that picture didn’t add up. Most of the unbanked (the roughly 7% of US households without checking or savings accounts) and the underbanked (the nearly 20% that had such accounts but still used alternative financial services) that she encountered were neither naive nor irresponsible about money.

‘The implication of that’ — the biennial surveys of the ‘unbanked and underbanked’ by the Federal Deposit Insurance Corporation – ‘was these people were making poor decisions,’ Servon recently told Business Insider. ‘I knew that the people I had worked with closely who don’t have very much money know where every penny goes. They budget things. They know where to get the best deals on things. And so it struck me that if they were using check cashers, there must be a good reason for that.’

It didn’t even seem clear to people studying the banking industry as to why people would ever use a check-cashing service. Surprisingly, it turned out that there were reasons:

Servon was surprised by what people told her. Over and over, Servon heard and observed that check cashers often met customers’ needs better than banks did.

She discovered there were three main reasons people used these services instead of banks: cost, transparency, and service.

Cost Check-cashing services tend to charge very clear fees for their services and those fees often seem really high compared to traditional banking services. Quite often, that’s where the comparison stops – check-cashing services appear to be a ripoff.

The thing is, banks will often drain your money, too. They just do it in a more subtle way, through other fees. Banks charge ATM fees and account maintenance fees and overdraft fees. Many of the non-check-cashing services that they offer also undercut banks, such as the cost of a money order or a prepaid debit card. You also don’t typically have to wait for the services there, while on the other hand you’ll sometimes have to wait several days for a check to deposit.

Transparency Check-cashing services are very up front about their fees – as I mentioned earlier, they’re often displayed on a giant board inside the shop so you can see what everything costs right off the bat, just like at a fast food restaurant.

With a bank, you often don’t see the fees. They’re included in small text in a brochure or in the fine print of a lengthy handout. That means that such fees often surprise customers, and those surprises aren’t usually happy ones. Seeing your account dinged with a $3 ATM fee and a $9.99 maintenance fee for not having a particular balance or just to have the account open can be frustrating, especially when you’re not expecting it.

Service Check-cashing services are very much service-oriented businesses. They make their money through good customer service and interaction with customers. Most banks really don’t do that; they have tellers, but the tellers are usually driven by throughput of customers, meaning that they don’t spend a lot of time or a lot of effort establishing positive rapport with customers.

For many people, strong customer service is a real value that they’re willing to pay real money for. A person at the counter who will explain something to you instead of rushing you through it means a lot to many people. A person at the counter who positively engages with you, learns your name and your story, and remembers you when you return means a lot to many people.

If you look at things from this perspective, it becomes clear why some people use check-cashing services instead of the normal banking system. Many of those customers have been burnt by hidden fees and waiting for checks to deposit and are alienated by cold customer service, and that adds up to a deep mistrust of banks. That mistrust is exactly what’s met by check-cashing services.

All of this brings up a few interesting personal finance questions for everyone.

First, is there a reason for a typical customer of a bank to ever consider a check-cashing service?

It’s my view that most of the people who use traditional banks as opposed to check-cashing services are better served by the things that traditional banks provide today rather than the things provided by check-cashing services today.

Most users of traditional banking services today – people with checking accounts and savings accounts, in other words – are mostly in it for security and convenience. They want a safe place to put their money, and they want to be able to conveniently use that money to pay their bills and for other expenses. Banks cover these needs very well, and for many banking customers, that’s all they want.

I put myself into this category of people who are better served by the relative offerings of the traditional banking industry. I don’t particularly have a need for the relative advantages of check-cashing services in my life. When I take a check to the bank, I generally don’t need the funds immediately; in fact, most checks are just deposited automatically into my account and I don’t have to think about it. When I want to spend that money, again, I don’t want to have to go to a bank location to do so. I just want to be able to pay a bill online or write a check or something akin to that.

I also don’t typically engage in behavior that racks up fees – I don’t overdraft my accounts, I rarely use ATMs at all (and when I do, I know one that I use nearby that’s definitely fee-free for me), and I use the free checking option at my bank. I honestly don’t see many fees at all.

To put it simply, I don’t need or want to have to go to a location and pay a fee to have a check cashed right now, and I don’t get much value out of customer service with a person behind the counter. Those things don’t provide significant value to me.

That’s not to say that these factors are true for everyone. Some people do have a need for immediate check-cashing services, such as a small contractor who needs to pay his workers immediately (as described in the article). Some people do have a need for good customer service at the teller window, such as a person for whom English is a second or third language and they’re having trouble understanding some documents (again, as described in the article). Some people do struggle with fees, such as a person who is really struggling to make ends meet and keeps getting whammied by overdraft charges.

All of these people, and many more, may get more value out of check-cashing services than the traditional banking system. For me, however, there’s more value and fewer fees in the offerings at a traditional bank.

Second, is there anything a mildly frustrated banking customer can do without abandoning the advantages of traditional banking entirely and going with check-cashing services?

I think the best “middle ground” solution tends to come from credit unions, which tend to have a greater focus on customer service at the counter than banks do and usually have fewer hidden fees, and in my experience you can often get fees waived at credit unions simply by asking, something that often doesn’t happen at mainstream banks. That’s because of the purpose of a credit union – it’s a nonprofit that’s intended to serve customers first and foremost.

The catch with credit unions is that they tend to lack a few features that are appealing from other banks. One big factor is that many credit unions have closed membership, meaning you have to live in a certain area or be employed by a certain employer to be a member. There’s also sometimes a membership fee for joining. Most credit unions are very local, which means that they only have branches in a certain small geographical area. Some are not FDIC insured, something which is a given when it comes to banks, and some credit unions tend to have less robust online banking tools.

Because of those features, credit unions can feel like a “middle ground” of sorts, offering some of the customer service that people want from check-cashing services but also offering many of the conveniences of mainstream banking.

Third, what can a regular customer of a check-cashing service do if they’re finding that their needs are changing and they wish to move into a more traditional banking operation?

As alluded to in the previous answer, my initial suggestion would be for that person to check out the offerings at a local credit union. Find a union that you’re eligible for membership in, check out the services they provide, and sign up. You may even want to look for recommendations within your local social circle, as they may know of a solid option in your area.

Credit unions tend to be more forgiving of poor credit and are more up front when it comes to their fees, but they do offer most of the advantages of traditional banking – checking accounts, savings accounts, and so forth. They tend to be a great reentry point (or entry point) into traditional banking services for people, especially those who want good customer service at the teller window when they’re first figuring things out.

Here’s the take home message: many people use check-cashing services not out of ignorance, but because it is the best option for money services available to them that handles their needs. They may be locked out of the traditional banking system for any number of reasons. They may have particular needs that aren’t met at local banks, such as a need for rapid check cashing or language assistance. They may simply want positive interaction with people when doing their banking business. They may just simply be fed up with hidden fees that seem to keep dinging them.

For many people, those factors are relatively unimportant compared to the advantages of banking. If you keep a balance in your account, mostly just use online banking, and rarely use an out-of-network ATM, there’s almost no reason for you to use check-cashing services. Your bank provides what you need. That description matches me pretty well.

It’s not true for everyone, however, and check-cashing services do fill a niche that matches what some people need.

The only real “danger” of a check-cashing service is that people who might find better financial results in traditional banking use check-cashing services instead because of family history, recommendations, or so forth. (There may be situations where the reverse is true, too.)

In the end, having more financial services available to everyone is better for the purposes of competition and for customers looking for the right services for them. Even if you conclude that one particular type of service isn’t right for you, the presence of that service may eventually drive other services to improve their offerings over time. Check-cashing services, for example, may eventually push some banks to reconsider how they assess fees and how open they are with those fees, and in that situation, everyone wins.

Related Articles:

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Friday, March 17, 2017

So You Want to Make More Money? Seven Core Pieces of Career Advice I Wish I Knew Starting Out

Several years ago, I had the chance to work closely with an intern I’ll call Chris. Chris was quite good at the tasks we gave him and you could see strong glimmers of the type of professional he might someday become.

Chris interned with us for two different periods, and at the end of the second period, we held a small “going away” lunch for him. We all gave him small gifts. I gave him two tickets to a concert and a handwritten card where I wrote down all of the worthwhile career advice I could think of, and that was that.

Flash forward about 10 years. Out of the blue recently, I heard from Chris. It turned out that his career path went in several strange directions but he eventually found himself in a field and on a career path that he was happy with, and he wanted to thank me for the experience and the advice. After swapping a few emails, I asked him what advice he found useful, because I could just barely remember even writing that card. He sent back a list of seven things that I shared with him, and they’re the highlights below.

It turns out that, even after a career change of my own and another decade of maturity and life experience under my belt, I can still look at those seven pieces of advice and nod my head at how useful they really are.

If you’re at a job and you have any desire to eventually earn better pay at that job or to stay in that career path, following these tips will help. They’re tickets to success in virtually every job and every career path.

Tip #1: Show up five to 10 minutes early to everything.

Here’s the truth: This tip won’t help you as much as it’ll prevent undesired damage to your opportunities. The truth is that only really observant people will notice that you’re early and ready to go all the time.

However – and this is the really important part – supervisors absolutely will notice if you’re not there when they want you to be, and they won’t be happy about it, and that unhappiness is going to grow and grow.

Simply by showing up for everything a little bit early, you’re going to find yourself present whenever your supervisor expects you to be there or when an interviewer expects you to be there or whenever a recruiter expects you to be there. They’ll open up their office door and see you there and all will be good with the world.

The alternative is that they open their office door and you’re not there. That’s an immediate negative, whether it’s your fault or not.

Even better, you’ll sometimes find that the early bird gets the worm. Showing up early will sometimes enable you to be involved in conversations that you would have never otherwise been involved with. It can sometimes result in introductions that would have never otherwise have been made. It can even result in offers that you may never have otherwise heard. Those things happen simply because you happen to be there at the right moment.

It’s really simple to achieve all of those things at once. Just strive to be there 10 minutes early for everything. Be there early for your shift. Be there early for meetings. Be there early for interviews. Be there early for anything you might possibly write down on your schedule.

That alone will make you appear better than many of the people around you. It’s such a little, easy step, but it pays off time and time again.

Tip #2: Network and keep in touch with people.

Whenever you meet someone new, take a moment and do everything you can to imprint their name, their face, and a few pieces of information about them in your head. Depending on your mental agility, you may find it helpful to do something like ask for their business card or simply pull out a pocket notebook to jot down their name so that you don’t forget it.

Make sure that when you do this, you’re keeping track of at least three pieces of information. You need their name, some method of contacting them (social media contact is great, but an email works too), and at least one piece of info about them that’s worth following up on later. If your primary method of communicating with the person is in the workplace, then the contact info is less important, but the other two are still vital.

Then, if you don’t see that person again within a day or so, use the piece of contact info you have for that person to follow up in some way with that person. Remind that person who you are and then touch base with them regarding that piece of information you learned. If you don’t have anything to share, ask them some follow up questions or for an introduction on the topic.

Ideally, this leads to some message exchanges and the beginning of some kind of connection between you. Keep an eye on what they share and look for opportunities to easily help that person. If they ask for ideas or suggestions, give them. If they’re looking for something, help if you can. If you haven’t heard from that person in a while, touch base with that person again.

The goal is to establish a relationship with as many people in your field as possible. You want your name out there far and wide with a positive reputation, and this is how you build it. It works almost exactly the same in every field – just connect with people. Unquestionably, this is easier for some than for others, but it’s valuable for everyone.

Tip #3: Don’t just do the minimum amount expected.

Doing the bare minimum in order to get by is an easy trap to fall into. You receive a task, you put the absolute minimum amount of effort needed into that task in order to somewhat call it complete, and then you move on. That’s how many people do their jobs, and they wind up spending a lot of time loafing around in the workplace not doing much because of it.

Supervisors and coworkers notice when you’re sitting around doing nothing. It almost never reflects well on you. Coworkers think you’re lazy and not pulling your fair share. Supervisors think you’re not really productive and can potentially be tossed aside.

Unless you’re pushed up against the wall and have to run through tasks as fast as possible to keep up, you’re better off doing a good job with your tasks and not be seen standing around.

Again, this is one of those things where you sometimes don’t get noticed for doing things the right way, but you usually do get noticed – and not in a good way – for taking the easy route.

Tip #4: Share credit whenever possible.

Whenever you receive recognition for anything, openly and clearly share credit for that success with anyone who helped even a little bit with making that possible. It doesn’t diminish the credit you’re receiving at all – if anything, it enhances it a little – and it makes everyone else in the room feel good.

If your boss calls you out for a job well done, respond in public and point out that it was a team effort and that Darrell did this part well and that Tammy did this other part well. Your boss is now impressed that you’re a team player as well and Darrell and Tammy feel good because they’ve been recognized, too. Everyone is happier with you.

Yes, it’s hard to do this. It feels good to receive all the credit and feel special, and it can feel like a zero sum game where if you share some of the credit, you get less credit. It’s not true, though. There isn’t a cap on how much credit and appreciation there is in a workplace. It’s infinite, and there’s always more to go around if people step up to the plate. If you share credit, there’s more credit to be had all around and everyone benefits, from you to your supervisor to your coworkers.

Tip #5: Watch for opportunities and jump on them when they come up.

Sometimes, opportunities for advancement or showing off your skills will jump out when you least expect them. Someone will miss a shift and the supervisor will look around and see you, the reliable worker who’s been doing a good job (tip #3), and you’ll be pushed into being the shift manager. Take it. Relish it.

You’ve just finished up a project in which you’ve gone the extra mile (tip #3) and you’ve shared a lot of credit for the success when talking about it (tip #4). Your boss will drop a hint about a big project coming up that might reward those involved with a pay raise or other benefits. Jump at it.

Your boss and that person’s supervisor are having a lunch together and going over how a particular project is going. Your boss comments on your performance (tip #3) and leadership (tip #4) and your boss’s supervisor recognizes your name (tip #1). You get a call and a request for a meeting, and you show up early for it (tip #1), enabling you to meet several people up the food chain at work. You find yourself given a great offer, a scary offer, but you take it.

Opportunities happen when you do things to make yourself prepared for them. Pay attention. If you follow the other strategies on this list, you’re going to see more opportunities, and if you’re watching for them, you can jump on them.

Tip #6: Don’t be dissuaded by lazy coworkers.

If you follow these strategies, you’ll probably notice yourself working harder than other coworkers. Some of them will probably suggest that you not work too hard. It can be really tempting to slack off and slow down to their pace, but the truth is that they want you to slow down so that they don’t look bad by comparison.

It’s not advice to help you. It’s a strategy to cover themselves.

Ignore them. This is your job and your career, not theirs. Build your own career. Don’t downshift it just to make a lazy coworker happy.

Tip #7: Find a good mentor and follow their suggestions 110%.

If you do one single thing from this entire article, do this one. Find a mentor. Find someone in your career path who you respect and trust and ask them for advice, then follow that advice to the absolute best of your ability. Help your mentor in exchange for that advice.

You don’t have to formally ask this person to be your mentor. Just simply say that you’ve seen that he or she has achieved the kind of success you want in your career and that you want to be in that kind of position someday and you’d like to know how they did it and what they’d do if they were to start all over again.

It’s usually a bad idea to ask someone to be your mentor when you’re going to be in direct competition at any point. Don’t choose someone who you hope to displace in the future. In fact, in some places, it’s a good idea to choose a mentor from outside your workplace.

Take that person out for lunch. Ask questions. Listen to what they say. Take it to heart and do everything you can to follow their suggestions. If they ever ask you for help, give it your all.

Not only will a mentor provide direct useful guidance, a good mentor will often provide indirect assistance, too. They’ll quietly help get your name out there in a positive way and will sometimes open closed doors for you without you ever seeing it. I know from experience, both as a mentor and as a mentee, that this happen when the relationship is a positive one.

These steps provided the cornerstone of any and all success I’ve found in my careers. It’s all about doing the job, connecting with people, and exceeding expectations. If you do that, you’ll find success; it’s shocking how many people just don’t step up in those areas.

Good luck!

Related Articles:

The post So You Want to Make More Money? Seven Core Pieces of Career Advice I Wish I Knew Starting Out appeared first on The Simple Dollar.

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Thursday, March 16, 2017

31 Days to Financial Independence (31/31) – Bringing It All Together

“31 Days to Financial Independence” is an ongoing series that appeared every Thursday on The Simple Dollar for the better part of a year. This is the final entry in the series.

Before we get started with this final edition of the “31 Days to Financial Independence,” let’s make a giant list of all of the entries in one place. If you want to bookmark the series for future reference, this would be the article to save!

Getting Started
The series began by putting financial change in the context of your broader life and goals. Many people spread themselves too thin with too many desires and goals and end up missing out on many things that they really value because they’ve spent their time and resources on things of lower importance to them. It’s time to “go deep” on the things that really matter and absolutely minimize the other areas.
Day 1: The Shallows and the Deep
Day 2: Finding Direction in the Deep End and Cleaning Up the Shallows
Day 3: Finding Daily Direction and Meaning
Day 4: Figuring Out Your True Hourly Wage – and What It Means
Day 5: A Living Budget
Day 6: The Big Boost

Trimming and Cutting Your Spending
The next segment of the series focused on smart ways to cut back on spending throughout your life. The goal isn’t to cut everything, but to cut back on the parts of your life you recognized as having relatively low importance.
Day 7: Cutting and Minimizing Debt
Day 8: Trimming Your Spending – Housing
Day 9: Trimming Your Spending – Transportation
Day 10: Trimming Your Spending – Utilities
Day 11: Trimming Your Spending – Food
Day 12: Trimming Your Spending – Insurance
Day 13: Trimming Your Spending – Health Care
Day 14: Trimming Your Spending – Entertainment
Day 15: Trimming Your Spending – Apparel and Services
Day 16: Trimming Your Spending – Education and Miscellany
Day 17: Integrating Cost-Cutting Measures Into Your Life

Improving Your Income
Making more money goes hand in hand with cost-cutting on the path to financial success. Together, they can push you to unbelievable heights. This section of “31 Days to Financial Independence” will guide you toward bringing home more money in a variety of different ways.
Day 18: Improving Your Income at Your Current Job
Day 19: Getting Promoted at Your Current Job
Day 20: Finding a Better Job
Day 21: Starting a Side Business

Investing for the Future
Once you’re spending substantially less than you earn, the question then becomes: what exactly should you do with that extra money? Investing for the future is one key part of a stable and strong financial life.
Day 22: Using the Gap and Avoiding Lifestyle Inflation
Day 23: Investing for Retirement
Day 24: Investing and Saving for Education
Day 25: Investing and Saving for Other Goals

Special Topics
The series winds down with a number of standalone sections on specific topics of importance to anyone on the path to financial independence.
Day 26: Considering Insurance
Day 27: Handling a Crisis
Day 28: Handling the Long Valley
Day 29: Handling Changing Goals
Day 30: Getting Your Friends and Family on the Same Page

And here we are.

The road to financial independence is much like a jigsaw puzzle. It’s made up of a lot of little pieces, some of which are obvious in terms of what they are and how they fit, like a brightly colored edge piece, and some of which are vague and unclear at first, like an ordinary piece in the middle somewhere with a vague pattern.

However, for most people, it’s like getting a 500 piece jigsaw puzzle with 750 pieces in the box. Most personal finance advice you’ll find out there includes a lot of stuff that is relevant to your life mixed in with a lot of stuff that isn’t relevant, so part of the challenge is to discard those irrelevant pieces as you go. That’s the “personal” part of personal finance – figuring out which advice really applies to you.

How do you do that? I’m going to close out this series with the one tool that has brought everything in personal finance together for me and together for so many others. It’s a piece that many personal finance books completely overlook, but I consider it incredibly vital.

It’s regular reflection.

Exercise #31 – Reflecting on Your Journey and Bringing it All Together

The path to your financial destination is not a simple and straight one. Along the way, you’ll find yourself getting lost and circling back. You’ll find yourself wandering off down side paths and then wondering where you’ve gone. You’ll find yourself stopping for a while and wondering why you’re going. You’ll find yourself backtracking sometimes, or walking very slowly into a strong headwind.

It’s not an easy, smooth path, because life isn’t easy and smooth. Things change. People change. The great plan you came up with five years ago might not mesh with you right now. The circumstances of your life will almost assuredly change during that time. In a five year period in my own life, for example, I got married, switched jobs, had a child, bought a house, had a second child, and switched careers entirely, and my entire social circle completely rebooted along the way. My personal, professional, romantic, spiritual, and social lives were almost completely different at the end of that five year period as compared to the start.

It is completely unrealistic to think that the financial plans and goals that you had even a few years ago are still perfectly relevant today. That’s not how life works.

To compare this to the jigsaw puzzle analogy above, imagine that you’re assembling a 500 piece puzzle with 750 pieces in the box, except slowly over time the picture you’re trying to make changes, requiring you to be using different pieces. If you just keep moving toward the old picture, you’re going to find yourself unhappy at the end of the process.

What can you do, then? The first step is to recognize that a good personal finance plan is constantly being revised. You’re changing, your situation is changing, and the boundaries and specifics of your life are changing, so it’s natural that your personal finance plans and goals should change as well because good personal finance is a reflection of your life. What you’ve built in this series should never be set in stone.

Instead, you should begin a habit of regularly reflecting on your financial situation – your spending choices, your savings goals, and your priorities.

This shouldn’t be a “once per year money retreat” kind of thing. Instead, you’re far better off if the reflection is frequent but less intense. You should take advantage of the little windows in your life to really reflect on individual aspects of what you’re doing, as well as the big picture.

When you’re driving your kids to a soccer game, spend some time thinking through some of your recent spending choices. Were those choices really a good idea in the big scheme of things? What could you have done differently?

When you’re waiting at the doctor’s office, consider whether or not you’re putting yourself in a position to make more money at work. What could you be doing to put yourself in line for a raise? Or a promotion? Do you even want a promotion? Might there be opportunities elsewhere?

Personally, I find a great deal of value in putting aside ten or fifteen minutes each day just to think about my life as a whole and where it’s headed. I usually do this in the form of journaling – literally writing out the details of a concern I have in my life and then digging into that concern to find a good solution. Whether you actually write out those concerns or not is up to you (I find it powerful, but not everyone does), but the time put aside for really considering the details of one’s life is powerful for almost everyone.

During that time, consider different aspects of your financial, professional, personal, and spiritual life. Ask yourself really hard questions and think about the answers. If you’re unhappy with something, think about why you’re unhappy and what you could be doing better.

Many, many people go through their lives operating on instinct in terms of their day-to-day choices, and while instinct works pretty well for short-term impact, it’s pretty awful for building the life you want over the long term. Reflection is simply time where you consider the long term and perhaps retrain your instincts a little bit to incorporate more of the long term into your immediate decision-making instincts.

A concrete example might illustrate what I mean. In the last few months, I’ve spent a lot of time thinking about the coffee that Sarah and I enjoy in the mornings. Sarah is a heavier coffee drinker than I am – I just like a cup or two, while she’ll drink most of a pot in the morning. I’m also a more recent convert to drinking coffee than she is. While Sarah leaves for work in the morning, I stay at home and there’s often more coffee in the pot than I want to drink, and Sarah really doesn’t like stale hot coffee from the day before.

So, given that change, I’ve been thinking about how we can both get cups of coffee that we enjoy while keeping the cost low, and the solution I came up with was to try cold brew coffee. I essentially make it like iced tea in the fridge, putting some grounds in a large reusable tea bag in a large pitcher of water and letting it rest in the fridge for a full day. It makes a very mellow flavored but very potent coffee, one that Sarah and I both enjoy once we water it down a little bit (yes, it’s really potent). All she has to do is heat up some in her coffee mug in the morning and in her travel cup before she leaves, and then I can drink exactly what I want without wasting a drop. It’s also easier to clean up. It saves us money and takes less time each morning.

Sure, it seems like a simple thing, but it would not have occurred without some thinking about the problem and a better way of solving it to eliminate waste and unnecessary expense.

That’s a simple example about saving a dollar or so each day. For a bigger example, I’ll turn to our automobiles. For a long time, Sarah and I have been socking away money very steadily into our early retirement savings. I regularly ask myself if that’s the best choice without just assuming that it is, and recently I decided to tone it down a little bit.

Why? I’ve noticed that our cars are getting older. One of them was purchased eight years ago; the other was purchased seven years ago and was already several years old. They’re both approaching 200,000 miles and while they’re still in good shape, it’s fairly obvious that at some point in the next several years, they’re going to start wearing out and breaking down.

So, during one of those reflection periods, I realized that we’re probably cycling out both cars in the next three to four years, and because of that, it’s probably a good idea to make sure we have plenty saved up to replace them with reliable late model used cars. One will be a fuel-efficient and very reliable car for Sarah to commute with; the other will be big enough to transport our family on road trips with reliability and safety.

Thus, we made the financial choice to cut back on our retirement savings and instead channel a lot of that money into saving for replacement cars in about three years. We’re rapidly filling a savings account now and will continue to do so until we hit our car buying target number, at which point we’ll flip the switch back to early retirement savings.

I use reflection to constantly make little alterations to my spending habits, my personal choices, our savings strategies, and so on. All of those little alterations occur because I’ve noticed that something has changed in my life and I want to make sure my choices today reflect how things really are, not how things used to be several years ago.

Several years ago, I didn’t drink coffee and Sarah made just enough for her to take to work. Several years ago, our cars were fairly low mileage and recently purchased so replacing them wasn’t on the horizon. Several years ago, we were planning to move into the country in a few years, which isn’t true now because our goals changed. Several years ago, I made my own laundry soap in a giant bucket; now, I make it in a small container. Several years ago, we pieced through child care costs at a local daycare center; today, we piece through soccer league costs and band instruments.

Big things change. Little things change. It is only through constant reflection that you can continue to make the right choices based on the person you are right now and will be moving forward, rather than the person you were a few years ago. It is only through regular reflection that your choices reflect your situation right now and moving forward, rather than the situation you were in a few years ago.

Here’s my final exercise for you: make reflection on your life a daily part of your life. Every single day, spend some time actively and seriously thinking about what you’re doing in some aspect of your life. It can be a big picture thing, like whether you’re saving for a car or a house down payment. It can be a detail thing, like whether your laundry procedure makes cost-effective sense or whether there’s a way to have a delicious cup of coffee each morning at a lower cost or whether you made a good spending decision the other day when you were out with your friends.

Just focus in on one aspect of your life and ask yourself whether you’re making the right moves in that area right now, for the life you have right now and the one you’ll have going forward. Don’t just assume you’re doing things right; you’re probably doing things right based on your life a few years ago, but that doesn’t mean you’re doing things right based on the life you have right now.

You might decide that you’re doing it right, all things considered. You might decide that you could be doing things differently, but you’re not entirely sure what you might do that would be different (that’s often the time to do some research and then some further reflection). What you’re doing is updating that jigsaw puzzle of life so that the picture matches where you’re at now and where you want to be headed.

As I noted above, I often write in a journal when I do this, but I also do these kinds of reflections when I’m driving somewhere or when I’m waiting at a doctor’s office, or when I’m sitting in the car waiting for my oldest child to finish his soccer practice and I don’t have anything to write on.

Every once in a while, it might be a good idea to walk through this entire series again, starting from the beginning, just to make sure that you’re doing everything in a way that reflects where you currently are. You might find that different tips and strategies jump out at you compared to what seemed important a year or two ago.

The goal, as always, is to work toward a better life – financially, professionally, personally, and otherwise.

Good luck.

The post 31 Days to Financial Independence (31/31) – Bringing It All Together appeared first on The Simple Dollar.

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Three Reasons to Cut or Change Your Commute

The average American commute is now 26 minutes each way, according to the U.S. Census Bureau. That means the typical U.S. worker now spends almost an hour each day commuting. Assuming a five-day workweek, two weeks of vacation per year, and 4o years of working full-time, that adds up to roughly a year of your life just traveling to and from work. An entire year.

That’s obviously a lot of time to spend consciously raising your heart rate by getting cut off in 5 m.p.h. traffic or shoved at the bus stop for the hundredth time. So it probably won’t surprise you to hear that commuting is associated with all sorts of stress and negative consequences.

“Taking a job that requires an hour-long commute each way has a negative effect on happiness similar in magnitude to not having a job at all,” writes Elizabeth Dunn in her book, “Happy Money: The Science of Happier Spending,” co-authored with Michael Norton. “To offset the happiness costs of going from no commute to a 22-minute commute, the average person would need to see their income rise by over a third — and that’s just to break even.”

That’s right, zeroing out your commute could add as much happiness to your life as a 33% pay raise. Here are some more reasons to cut down on your commute, if at all possible:

1. A long commute increases odds of divorce.

Research from Umea University in Sweden showed that couples who commuted for longer each day were more likely to divorce. When one partner commuted for 45 minutes per day or longer, couples were 40% more likely to divorce than when both partners worked close to home. (Although, the odds were better for couples who were engaged in long commutes before they got together.)

2. You won’t have time to appreciate the benefits.

Commuting farther might open up more housing and job options — perhaps a higher-paying job or a bigger home way outside the city –but they’re unlikely to make you any happier.

“Although accepting a longer commute can provide access to both nicer houses and better jobs, people with longer commutes are no more satisfied with their homes, and they are less satisfied with their jobs,” writes Dunn.

“And individuals with long commutes are much less satisfied with their spare time,” she adds. “Commuting, it seems, undermines time affluence.” You won’t even have time to enjoy the perks.

3. Commuting could be breaking your physical and mental health.

A 2010 survey for the Gallup-Healthways Well-Being Index found that “American workers with lengthy commutes are more likely to report a range of adverse physical and emotional conditions,” including neck and back pain, high cholesterol, and obesity.

Researchers also found that workers who commuted 90 minutes or longer to work were more likely to report experiencing worry “for much of the previous day” – 40%, as opposed to 10% of workers who commuted for 10 minutes or less each way.

Longer commutes are also associated with less time spent sleeping, exercising, preparing food, and interacting socially — things we really ought to be doing more often. No wonder commuting makes us so miserable.

So, what’s the answer?

Unless you’re the boss, or working for yourself, your options are probably somewhat limited – after all, you probably wouldn’t have taken that job with the long commute if you had other, better options closer to home. But, that doesn’t mean you’re helpless to change your situation.

Negotiating for one day a week of working at home can cut down on your total commute time, and give you a break from the grind.

The same goes for making a deal with your boss to work on a more flexible schedule. If you can rearrange your commute so that you’re traveling at off-peak times — when other people are still asleep or already at their desks — you might be able to trim precious minutes (and road rage) from your journey.

Failing that, you might rethink your mode of transportation, where possible.

“When it comes to commuting, as with many things, length isn’t all that matters,” Dunn writes. “In a 2011 study comparing almost 300 commuters traveling from their homes in northern New Jersey to their jobs in New York City, people felt significantly less stressed and disgruntled after taking the train than after driving. Train travel was less effortful and more predictable than driving.” Meanwhile, some other forms of commuting, like walking or biking, can actually bring health benefits by injecting some exercise into your daily routine.

Ultimately, it’s important to keep in mind all the costs of commuting — beyond just the wear and tear on your car, parking fees, or the cost of a train pass. It might make you rethink taking a job that pays more, but requires you to spend more time on the road each day. Likewise, consider whether a commute-free life might be worth taking a lower salary at a nearby or more flexible employer.

Related Articles:

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Wednesday, March 15, 2017

How to Watch March Madness Without Paying for Cable

By Chris Brantner

Whether you’re a casual or die-hard fan, the NCAA men’s college basketball tournament is one of the biggest events in all of sports — in fact, it takes in more advertising revenue than even the Super Bowl. They call it March Madness for a reason, since it brings some of the most exciting and dramatic games you’ll likely see all year long.

Like other huge, spread-out sporting events — think the Olympics and World Cup — the games sometimes overlap and will be broadcast across multiple TV networks. This used to mean you needed to pay for an overpriced cable subscription if you wanted to keep up with your brackets and watch all the March Madness games, but now you have plenty of options to watch the tourney without cable.

However, since the games are spread out on several channels — CBS, TBS, TNT, and truTV — it can still be a little confusing. (You can see the full tournament broadcast schedule here and plan which games you most want to watch.) To help you get ready for the Big Dance, let’s take a look at all the tools and services that can help you watch.

The Classic Antenna

A basic TV antenna is one of the best and cheapest ways to watch any of the March Madness games broadcast on CBS. A full 24 games — including all the Final Four games and championship match-up — are on CBS, that’s a pretty big win for those looking to watch on the cheap.

TV antennas aren’t what they used to be — gone are the days of fighting static or wrapping foil around rabbit ears. The new antennas are high-tech devices that offer a wide range of bonuses and benefits like varying reception ranges and aesthetic designs that won’t be an eyesore in your living room. Plus, they can pull in free, high-definition signals from the major networks in your area, like CBS, ABC, NBC, and FOX. These channels even come in with a perfectly clear, HD picture. You can check here to find an antenna that will pick up CBS in your location.

CBS All Access

In response to the growing desire to stream live TV and sports, CBS launched its own standalone streaming service, CBS All Access. This lets you live stream everything that the CBS network is broadcasting in your area (currently in 150 markets, listed here). Obviously, this means the service will let you watch every single March Madness game broadcast by CBS during the tournament.

Yes, you can receive CBS broadcasts for free with a simple TV antenna, as mentioned above. But if you live too far from the broadcast tower, or want to watch on a mobile device or browse on-demand archives, the service only costs $5.99 per month to start (you can even stream without commercials for $9.99 per month). You’ll get tons of live TV, and access to a huge on-demand library as well. You can try the service free for seven days — meaning you could use it to stream the most important games of the tournament for free.

March Madness Live

The NCAA’s March Madness Live app lets anyone watch all of the tournament games broadcast by CBS for free. The only hang up is that you can either watch on the app with your phone or tablet, or on the March Madness live website on your computer. Unlike CBS All Access, you can’t stream it to your TV. (Editor’s note: In the past, I’ve been able to mirror the NCAA stream from my laptop’s Chrome browser to my TV using a Google Chromecast. –JG)

All of the games broadcast on TNT, TBS, and truTV are also available on the app, but you’ll need a valid cable login to watch them. So the only way to do that for free would be to borrow a login from a friend or family member.

PlayStation Vue

Sony’s streaming service, PlayStation Vue, can function as a full cable alternative. Depending on your location, it could be the only service you’d need to watch the entire NCAA tournament without cable. That’s because TBS, TNT, and truTV are all available to Vue subscribers nationwide, and CBS is available in 80 markets (listed here) throughout the U.S.

If you’re trying to simplify while not spending too much money, PlayStation Vue might be your top choice. The service only costs $29.99 per month in most markets — and you can also test it out free for a week. You can watch on phones, tablets, computers, or your TV through connected streaming devices. However, it’s worth mentioning that there are mobile restrictions that could prevent you from watching away from your home network.

Sling TV

Here’s another streaming service that’ll get you plenty of March Madness games live without breaking the bank. Sling TV is a little cheaper than PlayStation Vue, with simple packages that start at $20 per month (Sling Orange) or $25 per month (Sling Blue).

Sling Blue gets you TBS, TNT, and truTV, so you could stream all the games not on CBS during the tournament. The more stripped down Sling Orange doesn’t have truTV, but you can add it for $5 extra. Plus, Sling offers a week-long free trial, so there’s no reason you couldn’t watch some games for free.

Coupled with a TV antenna, the March Madness Live app, or CBS All Access, that would give you the entire tournament’s worth of action online for the same price or less than Playstation Vue.

DirecTV NOW

AT&T entered the streaming service market at the end of 2016 with DirecTV NOW. This is the most expensive of the streaming options with a starting price of $35 per month. But, in total in gets you more than 60 channels to stream, which is more than any other service.

This is another great way to watch games on TNT, as well as truTV and TBS, with all three being featured in the starting package. Since there’s a weeklong free trial here as well, you could always line up free trials on all the services above to watch nearly the entire tournament free. Since this is the newest live streaming option for cord cutters, you might want to read up a bit in this DirecTV NOW overview.

Your Game Plan

Compared to some other sports and live events, watching March Madness without cable is actually fairly easy – the real question isn’t whether you can watch the whole tournament, but how you plan to do it.

Check the broadcast schedule at NCAA.com and consider which games you really want to see: Are you most interested in the free-for-all frenzy of the wild opening rounds? Your alma mater’s match-ups? The intensity of the Final Four? This will give you a sense of which services you might need — and which ones you don’t.

Since most of the online streaming services offer a free one-week trial, you could stagger a couple seven-day trials to watch the first few rounds and the Sweet Sixteen, and then watch the Final Four and championship game over the air on CBS. As long as you’re not overpaying for internet service, you won’t be spending an arm and a leg, regardless of what setup you choose.

Related Articles:

Chris Brantner is founder of CutCableToday, where he helps people cut the cord and find the programming they want. Follow him on Twitter (@CutCableToday) for more cord-cutting tips.

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The Imitation Game

“You are the average of your five closest friends.” – Jim Rohn

I often use that quote on this site because it really hits home with a lot of truth. Look at the five people who you value the most in this world and most want to spend time with. Take an average of the various metrics of their life: the things they value, how they spend their time, their interests, their financial state, their level of physical fitness. That average is probably pretty close to a description of yourself.

Why? People naturally enjoy spending time with people who have similar interests and similar values to ourselves, and it’s those similar interests and similar values that form the basis of many of our conversations. It’s very easy to find ways to hang out and spend meaningful time with someone who shares a lot of interests with you; it’s much harder to do so if you don’t have any common interests. Life is all about the path of least resistance, and there’s simply less resistance to hang out with a person you share a hobby with and with whom you share some similar life perspectives.

Obviously, along with that comes some learning about how each other lives their lives and, in some obvious and subtle ways, we borrow and adopt things from the lives of each other in order to improve our own lives. If we see something that’s working well for a friend, it’s likely to increase our own interest and we have increased odds of trying that hobby or borrowing that routine and incorporating it into our own lives.

This brings us to one of our close friends, perhaps the one among our friends who is the biggest free spender. She likes to subscribe to those monthly subscription boxes, where a company bundles and sends you things in the mail centered along a certain theme. Depending on the box, the stuff inside can be absolute junk or it can be quality stuff (though you didn’t have a direct hand in selecting it).

This friend, who I’ll call Jennifer, naturally likes to talk about the highlights out of the subscription boxes that she receives. We don’t usually hear about the subscription boxes themselves – and we’re already too careful with our money to dive into those – but we do usually hear about the best product or two from each one and how she’s using it and which ones she’s going to continue to use in the future.

I don’t mind this conversation per se, but what I have noticed is that it has caused our friend to introduce us to a bunch of quality niche products that we would have never heard of or considered. Cleaning supplies, soaps, art supplies, and various other things have come onto our radar because of our friend and those kits.

Because of that, now I’ll find myself at the store looking through the cleaning supplies and I’ll notice a particular brand I would have never given a second thought to before. It’s something that Jennifer mentioned and thus, because of her mention and enthusiasm, that item merits a deeper look. The only catch? It costs a lot more than the usual store brand that I would buy.

Usually, I have enough financial backbone to skip it and still buy the store brand, but I’ll be the first to admit that because of Jennifer’s enthusiasm, we’ve wound up trying out some different cleaning supplies and soaps and other little things in the past few months.

That’s the “imitation game” at work.

The “imitation game” is my term for the subtle tendency for friends to somewhat adapt and change their lives to match what they see in their closest friendships. This is different than a “jealousy” or “keeping up with the Joneses” thing. This is a person’s tendency to follow the advice and positive life patterns of someone they value and trust, almost without thinking about it.

I’ll give you a clear example. One of my closest friends also works from home. He and I have shared a lot of tips for what has made working at home successful for each of us, and we’ve adopted quite a few of each other’s tips. When we first became good friends several years ago, our daily patterns were very different. Now, they’re actually pretty similar because we’ve effectively started imitating each other.

You swap recipes with friends and you find that your diets become more similar. You tell friends about different products you’ve used successfully and they start using some of them. You tell your friends about your favorite restaurant and they want to try it, too.

You imitate each other, not out of a desire of mimicry or keeping up with the Joneses, but out of respect for the opinions of your friends and the fact that if something works well for someone who is similar to you in a lot of ways, it’s likely to work for you.

Social marketing is the best marketing, they say.

So, how do you “win” at the imitation game? Knowing that this phenomenon exists, how do you use it to your advantage in terms of personal finance? Here are some strategies I’ve figured out over the years.

Build up friendships with frugal people. Make a conscious effort to invest some time and energy into building friendships with people who choose to live below their means and save money for the future. Look for people who don’t dress expensively and aren’t parading a constant array of new possessions. Look for people who pass the time and entertain themselves in low-cost ways. Look for people who are talking about things that frugal people do, like eating at home and going on low-cost vacations and engaging in low-cost hobbies.

How do you find these people? Get involved in your local community and intentionally choose activities that don’t require shelling out money. Avoid the country club and instead look at civic organizations. Avoid nightclubs and instead participate in volunteer organizations. Check out the free offerings from the parks and recreation department that are social. Look around your workplace; a great place to start is in the break room where people eat their lunches, because frugal people will often bring foods from home to eat.

What you’re doing with those two strategies is that you’re setting up the imitation game to be predisposed toward frugal behavior. You’re finding people with frugal attributes who are going to be partners in the game and elevating them in your life. Because of that, the ideas you bounce around and share with your innermost circle are gradually going to have more of a frugal bent.

Remember that quote at the top of this article, the one that says that you’re the average of your five closest friends? If you build friendships with frugal people and then reassess your five closest friendships in a year or two, it’s likely that the average of them will be more frugal. You’ll play the imitation game with those friends and gradually become more frugal yourself.

Now, feed the imitation game. Share financially wise things that you do with your friends. What are the best things you do in your life that save money, in terms of really getting maximum financial benefit for your efforts? What are the best “bang for your buck” products that you use to fulfill a genuine need in your life? Share those strategies. When a friend comes asking for a recommendation, suggest an item that’s truly “buy it for life” or, for a consumable item, suggest a reliable store brand. Thus, via the imitation game, you nudge your friends in a financially wise direction as well.

This creates something of a circular effect, of course. If you nudge your friends in a frugal direction, it’s likely they will nudge you back. They’ll offer good “bang for the buck” recommendations when you ask. They’ll be more likely to plan lower-cost social events with you, such as potluck dinner parties, because they know you won’t somehow turn up your nose at the concept. They’ll be likely to share their best frugal tips with you. Such initiatives feed off of each other in a very positive way.

You can feed the imitation game with your less financially-minded friends, too – you just need to approach it a little differently. Don’t get obsessed with finding the least expensive option for everything; instead, look for inexpensive routes to achieve what it is that you want to do. If someone asks for a suggestion, point toward good “bang for the buck” solutions – not the cheapest solution, but the one that will provide a ton of value for the expense. A good approach there is to sell the quality of the item up front and then finish with an “it’s only $20!” type of finisher.

What ends up happening is that your most frugal friends tend to share and imitate your strongest frugality strategies, while your less financially focused friends tend to share lots of good “bang for the buck” and “buy it for life” items – things that are couched in more values than just spending the minimum amount right now.

With a circle of friends like that, you’ll find yourself gradually balancing out to a more frugal you, one that mixes and matches smart money moves in a way that really works for your goals while still having a strong social circle where you’re not the “cheapskate.” In my eyes, that’s the big goal of trying to be a social person and a frugal person at the same time.

Good luck!

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Here’s What Our $150-a-Week Grocery Budget and Meal Plan Looks Like in Real Life

When my husband and I got serious about our finances years ago, our food spending was out of control. We were just two people and a baby at the time, yet we were inhaling $1,000 in food each month – and sometimes more.

One fix for our food spending woes was simple: We were dining out at least twice a week, and we knew we had to cut that out. To save money, we opted to set aside one night for a restaurant meal each month. And – voila! – hundreds of dollars poured back into our pockets every month.

Our remaining food spending issues were more complex. If I had to describe my old shopping style in one word, I would say “random.” Why? Because I walked through the store throwing random stuff in the cart with no rhyme or reason.

To save money and reduce waste, we knew we needed to plan our meals before we hit the store. In addition, we pledged to plan our meals around the weekly sales at our favorite grocery score, Kroger.

Around this time, we also started using a zero-sum budget, where each month you set aside a specific amount of money for each budget category ahead of time. For food, we decided $600 per month was enough.

It’s been years since we went down this path, and it’s worked great so far. We do go over our $600 limit sometimes, but we also spend less other months. To level out the uncertainty, I also include a $200 miscellaneous category in our zero-sum budget (our now-rare dinners out also come out of this fund). This helps when we spend $25 too much on food or have a big bill we failed to plan for.

How I Create Our Meal Plans

Most weeks, our budget dictates I spend between $125 and $150 at the store. I usually make an extra quick trip at some point as well to pick up a forgotten ingredient, bread, or milk.

While everyone plans their meals differently, I do what is most feasible for me – a busy mom who also works full-time. Basically, I buy ingredients to cook three or four good meals each week, and then make everyone eat leftovers until they’re gone.

As far as shopping around sales goes, that strategy works well for us. If strawberries are on sale, we eat strawberries. If our favorite meat substitutes are on sale, we stock up. If pantry staples are on sale, we generally plan our meals around them. This not injects a bit of variety into our meals, we’re also getting a good deal on almost everything we buy.

Another way I simplify our meals is by cooking food with simple ingredients. Not only does this make my life easier, but meals without a ton of fancy ingredients wind up being cheaper as well.

Our $150 Weekly Grocery Budget

Last week, I went to the store to buy groceries for our family of four — here’s exactly what we bought. As you browse this list, keep in mind that we have two kids, ages five and seven. Our kids are in school all day, meaning they don’t eat lunch at home. However, my husband and I work out of our home, so we both eat lunch at home, too.

(One other detail to note is that, in addition to this list, I deposit $50 into my children’s lunch accounts every few months. I do include this amount in our monthly budget, but I don’t include it in my grocery budget.)

Here’s what we bought last week, along with the meals we made (prices and totals are rounded):

Produce:

  • 10 bananas: $2.25
  • 2 heads lettuce: $2
  • Shredded carrots: $2
  • 5 zucchini: $2
  • Broccoli: $2
  • 3 onions: $2
  • 2 packages mushrooms: $3
  • 3 packages strawberries: $7.50
  • 6 packages raspberries (2 for $4): $6
  • 1 pint blueberries: $2
  • Package carrots: $2
  • Mini carrots: $2
  • Celery: $2
  • Parsnips: $2
  • Head cabbage: $1
  • Spaghetti squash: $2.50
  • 2 containers grape tomatoes: $5
  • Mandarin oranges: $5

Total produce: $52

Core Foods:

  • 3 loaves of bread: $3
  • 3 dozen eggs: $1.50 (insanely cheap right now)
  • 2 gallons milk: $2.50 (insanely cheap right now)
  • Almond milk: $2.50
  • Lasagna noodles: $1
  • 3 boxes generic cereal: $5
  • 2 containers vegetable broth: $4
  • 1 jar tomato juice: $2
  • French dressing: $2
  • Ranch dressing: $2
  • 3 packages shredded cheese: $6
  • Sliced cheese: $2.50
  • Ricotta cheese: $2
  • 3 cans beans: $3
  • 3 cans tomato soup: $2
  • 2 packages veggie crumbles: $6
  • 2 jars peanut butter: $4

Total: $51

Snacks:

  • Graham crackers: $2
  • 3 boxes Ritz crackers: $6
  • Granola bars: $2

Total: $10

Drinks:

  • 12-pack Coors Light (just keeping it real!): $10
  • 2 bottles of Diet Coke: $2
  • Generic cinnamon tea bags: $2

Total: $14

Grand total for the week: $127.25

Our Menu for the Week

Using those ingredients, here’s what we prepared for breakfast, lunch (for my husband and me), and dinner during the week.

Breakfast and Lunch

It’s kinda sad, but my family eats the exact same foods for breakfast and lunch each day. My children do get something different at school, but my husband and I are pretty boring with our meal choices.

  • I eat a banana for breakfast every day.
  • My husband eats toast.
  • My kids eat cereal and milk.
  • My husband and I also drink coffee, hence the almond milk.

For lunch, my husband and I had:

  • Salads (lettuce, shredded carrots, tomatoes, shredded cheese, salad dressing)
  • Leftover vegetable lasagna
  • Leftover soup
  • Omelets (with leftover vegetables and cheese)
  • Peanut butter on toast

Dinner

I planned and prepared five dinners throughout the week based on our shopping list. Here’s what I made, with a recipe for each:

Dinner Recipe No. 1: Vegetable Soup

My vegetable soup is a little different each time, mostly because I throw whatever I have in the pot.

Ingredients:

  • 2 large containers of vegetable broth
  • Small can of tomato juice
  • 4 carrots, peeled and diced
  • 3 celery stalks, diced
  • 2 parsnips, peeled and diced
  • ½ head of cabbage, diced
  • 2 cans of tomatoes, diced
  • 1 medium onion, diced
  • 2 cans of kidney beans
  • Basil, thyme, and coriander as needed
  • Salt and pepper

Directions: Heat up the vegetable broth and tomato juice while you wash and cut vegetables. Simmer it all together for an hour on medium heat, adding spices and more water as needed.

Dinner Recipe No. 2: Vegetable Lasagna

I use a vegetable lasagna recipe similar to this one, except I wind up using whatever vegetables I have on hand. This time, I had eggplant, so I added it.

Ingredients:

  • Lasagna noodles
  • Medium container ricotta cheese
  • 1 package soy crumbles
  • 2 jars of pasta sauce (or make your own)
  • Fresh or canned mushrooms
  • 3 zucchini, diced
  • 1 medium onion, diced
  • 1 eggplant, diced
  • 1 package of shredded mozzarella cheese

Directions: Start by boiling the lasagna noodles until they’re partially cooked (around 10 minutes). In the meantime, you can saute all your vegetables in a large pan with some olive oil. Once your ingredients are prepared, you can layer them however you want. I start with noodles on the bottom and then layer soy crumbles with sauce, vegetables, ricotta cheese, noodles, and so on. I also add salt and pepper within the lasagna and shredded mozzarella cheese between layers and on top. Bake for an hour partially covered at 350 degrees Fahrenheit.

Dinner Recipe No. 3: Egg Sandwiches and Fruit

I create mini omelets, set them on buttered toast, and melt cheese on top. It’s not fancy at all, but all four of us will happily eat this meal. I serve whatever fruit we have on the side.

Ingredients:

  • Bread (one loaf)
  • Butter
  • Eggs (one dozen)
  • Cheese (any kind)
  • Fruit

Directions: Beat the eggs in a bowl, then pour them in sandwich-sized blobs onto a preheated, buttered frying pan over medium-high heat. After you flip each mini omelet, melt a slice of cheese on the top. When done, plop them on buttered toast and serve with fruit.

Dinner Recipe No. 4: Spaghetti Squash and Sauce

When cooked, spaghetti squash shreds into long, thin strands that resemble — you guessed it — spaghetti. You can use it just like the pasta to mix things up with a healthier spin.

Ingredients:

  • Spaghetti squash
  • Bread (one loaf)
  • Butter
  • 1-2 jars spaghetti sauce
  • Mushrooms, diced
  • Squash, diced
  • Onions, diced
  • Fruit (served on the side)

Directions: Take a spaghetti squash and cut it in half. Clean out the insides, then lay each piece of the squash face down on a flat pan. Bake at 400 degrees for 50 to 60 minutes.

While the squash is cooking, make your own spaghetti sauce or use any kind from a jar. Depending on what vegetables I have, I always add them to the sauce as well: Mushrooms, squash, and onions all work great.

Once your squash is done cooking, use paper towels or regular towels to suck up all the extra moisture. Then you can shred your spaghetti squash and serve it like you would regular spaghetti. Offer buttered toast on the side, and you’re set.

Dinner Recipe No. 5: Grilled Cheese & Tomato Soup

Grilled cheese and tomato soup is a cheap, easy, and tasty meal pretty much anyone can pull off.

Ingredients:

  • Sliced cheese
  • Bread
  • Butter
  • Canned tomato soup (I like the generic version of Campbell’s – sue me!)

Directions: Simply grill some bread on your stove top with butter, melting your favorite cheese between two slices. Serve with your favorite brand of tomato soup, or make your own.

Snacks

The adults in the house try not to snack too much, but the kids snack all the time. Foods we snack on include:

  • Crackers
  • Fruit
  • Granola bars
  • Mandarin oranges
  • Bananas
  • Carrots with ranch dressing
  • Peanut butter toast

While this trip was typical for a week’s worth of groceries, we almost always go to the store at least one more time each week. Usually it’s for milk and bread, but sometimes it’s for a staple ingredient we ran out of. Either way, the goal is to spend between $125 and $150 per week so we can stay under our $600-per-month food total.

How Much Do You Spend on Groceries?

While many families might say spending $150 a week on food is an impossible feat, others probably think I’m spending far too much. Since each family is different, it’s hard to say there’s one perfect food spending budget everyone should adhere to.

I do know that budgeting and meal planning has made a huge difference in our finances, though. Where I once purchased whatever I wanted, I now create a simple meal plan that saves money and reduces waste. And since we’re not dining out very often, we’re eating healthier, too.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Related Articles:

Could you spend $150 per week – or less – at the grocery store? What does your food budget look like? 

The post Here’s What Our $150-a-Week Grocery Budget and Meal Plan Looks Like in Real Life appeared first on The Simple Dollar.

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Tuesday, March 14, 2017

Twelve Ways to Use Spring Break to Tidy Up Your Financial Life

In the coming month, many Americans of all ages – not just children – are going to be enjoying spring break. Students, teachers, school employees, college employees, and many others will enjoy a partial or full week away from the regular demands of their life to recharge and pursue other projects.

In my own family, that means everyone but me will enjoy a spring break in the near future, as my children are all in school and Sarah is a teacher. Most years – this one included – I plan around it, get some extra writing done in advance, and enjoy a bit of a spring break as well. Spring break is definitely a real presence in our lives.

So, what exactly can we do with this free week in order to tidy up and strengthen our financial lives? Here are twelve ideas for things you can do during your spring break – or even a long weekend during March or April – to put yourself in a better financial place.

Idea #1 – Do your own taxes
If you’re like most Americans, you have a stack of W-2s and 1099s in a folder or a cupboard somewhere, waiting until you get around to doing your taxes or take them to a tax preparer. Don’t let those forms wait around. Take care of those taxes sooner rather than later.

It’s pretty easy, actually. Just download some tax preparation software – I like Turbotax, personally – and fill in the blanks when prompted by the program’s questions. You’ll want to have all of your tax documents available when you start so that you can just grab them and type in the numbers as you go.

The whole process is actually very simple provided that you have a somewhat typical financial life. If you just have a bunch of W-2 forms and some 1099s from banks or investment firms and maybe a few more from consulting gigs, along with perhaps some mortgage interest statements and some charitable giving documents, then you should be able to burn through your taxes easily. It just requires you to sit down and do it – and then, when it’s done, it’s done.

Idea #2 – Study the investment options available in your retirement plan and make a strong choice
Many people sign up for their retirement plan at work or for their own Roth IRA, choose a default investment option when they start, and then just let it ride from there. They don’t really put in any additional thought as to whether the investment choices make sense to them.

Spend some time looking at the investment options available to you in your retirement plans. If you’ve chosen a target retirement fund, does it mature when you intend to retire (or a few years later)? Have you looked at the actual investments in that fund to see what it’s made of? If you’re in other investments, have you looked around at similar offerings within your account to see whether they offer similar risks and rewards with a lower fee? Are there index funds that do more or less the same thing as your mutual funds?

If you find something that matches your needs well, don’t be afraid to shift funds within your retirement account to those new investments.

Idea #3 – Write a business plan for your side gig
If you’ve ever thought about launching a small side business for yourself to run in your spare time, right now is the time to take the first big step toward that dream in the form of writing a simple business plan for your idea.

This might seem strange – shouldn’t you start with the actual work? – but the purpose of writing a business plan for even the smallest entrepreneurial endeavor is so that you think through what you’e trying to do and avoid obvious pitfalls from the start. It’s akin to sharpening your axe before chopping down a tree, to borrow an Abraham Lincoln anecdote.

Take the basic structure from our simple business plan guide and start filling in the pieces with elements of your idea and see what you come up with. You may be surprised at what comes out and what develops later as you revise and update the plan. It can turn a pipe dream into something real and actionable, something that could change your life.

Idea #4 – Read a personal finance book – or other personal growth book
For many people, spring break is a time to simply kick back and relax from a crazy start to the year. I know many students and teachers who fall into this boat, as the period between the start of the year usually represents the first half of a spring semester, in which everyone involved needs a chance to stop and breathe after midterms.

One great way to do that is to devote some significant time to reading a personal growth book of some kind – ideally, a personal finance book (this is The Simple Dollar, after all). Kick back with a good book and keep a notepad and a pen nearby to jot down thoughts and things you want to follow up on.

Want some suggestions? If you’re just trying to get a strong overall perspective, I recommend Your Money or Your Life by Joe Dominguez and Vicki Robin. If you’re struggling with a mountain of debt, I recommend The Total Money Makeover by Dave Ramsey. If you’re trying to learn more about investments and aren’t afraid of a bit of a challenge, I wholeheartedly recommend The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf. Honestly, any book that looks interesting in the personal finance section of your library is a good idea, though I’d avoid any book that talks about getting rich quickly or becoming a millionaire at age 30 or any nonsense like that.

Idea #5 – Clean out your closets and prepare for a Craigslist sale or yard sale
Almost all of us have unused stuff stowed away in our closets – items that we bought or were gifted to us with the best of intentions, only to go unused, put aside, and forgotten in the flow of our busy lives. Even if the item seems great, on some level, we’ve come to realize that it just isn’t for us, so it winds up in storage.

Now is a great time to go through those closets and pull out all of those items that got stowed away for later. Pull out those garments, those kitchen utensils, those DVD box sets, those project kits, those forgotten books, and make the choice to get them into the hands of someone who will actually use them.

This can be the first step to running a yard sale a bit later in the year – ideally, on a weekend where there’s a citywide yard sale so you can attract lots of customers – or it might be the start of a big selloff on Craigslist. Put all of the items in a big pile, get some sense of what they might sell for on Craigslist or at a yard sale, price them all out, and sell, sell, sell! You’ll make some money and free up some space in your home!

Idea #6 – Weatherstrip your doors
If you ever find that there’s cold air drifting into your home from the edges of a door on a winter day, you not only have discovered something that’s making your house chilly, you’ve also found a place where money is literally pouring out of your home. Your furnace and/or heaters are working overtime to heat up that chilled air and it’s costing you money.

The solution is simple – just install a weatherstrip where the cold air is leaking in. A weatherstrip is a simple strip of metal or other material that covers up that gap while the door is closed so that air doesn’t leak through it any more. It’s simple to install one with the right tools – you usually just need a drill and a kit from a hardware store.

Once it’s installed, you’ll find that cold air doesn’t leak through that gap any more and thus your furnace runs less often than it used to. In the summer, the reverse is true – it keeps hot air outside and thus causes your air conditioning to run less frequently. Both of those results are big money savers.

Idea #7 – Caulk your windows
A similar phenomenon happens around your windows. Many windows, especially older ones, will leak a little air around the edges and when there’s a big difference between the temperature of indoor air and outdoor air, that can result in your furnace running more in the winter and your air conditioner running more in the summer.

Go around your home, identify the leaks, and then get out a caulking gun and some caulk (both available at your local hardware store for a very reasonable price) and apply some caulk to those leaky seams to block that air flow.

Much as with the weatherstripping, this simple project will keep cold air out in the winter and warm air out in the summer, and the result of that is that your energy-hogging furnace and air conditioning will run less during their prime seasons, causing your energy bill to drop significantly.

Idea #8 – Check and update the insulation in your attic
Another place where the flow of warm air to and from the outdoors can really affect the energy efficiency of your home is in the attic. Many attics are full of insulation to create a block between the outside air and the inside air so that you don’t gain unwanted heat in the summer or lose heat in the winter.

A quick peek up into your attic can tell you pretty quickly whether there are any gaps in your insulation. Just look for places where you can see light coming in from the darkness or where you feel air that’s of a different temperature than the inside of your home to see a spot that should be filled. Visit your hardware store, pick up some attic insulation, and fill in the spots where you see light.

It’s a simple task, but for many people, getting up in the attic and wandering around, then going to the hardware store for a bit of insulation, then getting up there again to install it is something they just don’t get around to. Make this spring break a time where you do get around to it.

Idea #9 – Install a programmable thermostat
Another simple energy improvement task you can take on to tidy up your finances a bit is to install a programmable thermostat. If you’re typically not at home during the day, a programmable thermostat can save you a surprising amount of money.

Installing them is a snap. It’s mostly just throwing a breaker so that you don’t get shocked, then removing the current thermostat (usually just a screwdriver is needed) and putting the new one in its place, connecting the wires as instructed. Take pictures as you go so you can diagnose problems later if any arise (like your air conditioner running constantly, which can happen if you didn’t connect a wire in the right spot).

Once you have it installed and working, it’s usually very easy to program. Just instruct it to not have the air conditioning or furnace running while you’re at work or asleep unless the temperature gets extreme. Our programmable thermostat allows the temperature to go as low as 50 F at night without the furnace kicking on and as high as 82 during the day without the air conditioning kicking on. This helps immensely with our energy bills.

Idea #10 – Replace all of the lights in your home with LEDs
Here’s yet another little project you can take on to improve the energy efficiency in your home. Just go around your home to every socket with a normal incandescent bulb in it and replace that bulb immediately with an LED.

LED bulbs are so efficient and long lasting that it is more cost-effective to remove a still-functioning incandescent bulb from a socket and replace it with an LED than to wait until the incandescent burns out normally. So, you’re better off updating all of your bulbs at once.

Head to the store, pick up enough LED bulbs to cover all of the sockets in your home that still have an incandescent bulb in them, and then go home and swap out some bulbs. Your energy bill will drop noticeably.

Idea #11 – Practice cutting your own hair
Here’s a secret: I cut my own hair. Sure, I have a simple short haircut where I trim the sides pretty short with a short clipper attachment and then trim the hair on top with a longer attachment and then even out the dividing line with a graduated attachment. It’s easy to do. The truth is, though, that most simple haircuts are things you can do for yourself in front of a mirror for free.

The first time you try to do it is pretty intimidating, which is why it’s a good project to try during a break from work or community responsibilities. If you mess something up, you can go to a professional to “fix” what you did. If it turns out fine, then you know you can do it and then can repeat it with confidence.

Right now is a perfect time to give this little project a shot. Get out a comb and some hair scissors or a set of clippers and get to work on your hair. Better yet, see if your spouse can cut it for you or if you can cut your spouse’s hair.

Idea #12 – Make a bunch of make-ahead meals and freeze them
There are few things more convenient and more wallet-friendly than having a bunch of home-cooked frozen meals in the freezer. You can go home after a busy day, preheat the oven, take one of them out of the freezer and put it in the fridge (for a day or two down the road), take one out of the fridge that you put in there a day or two earlier, and pop it right in the oven. An hour or so later, you’ll pull out a home-cooked meal for everyone in your family to enjoy. It’s a low-cost and super-convenient home-cooked meal.

The catch, of course, is that you need to prepare a bunch of these meals in advance. That’s where spring break comes into the picture. You can just take a lazy day and make several pans of lasagna and several batches of homemade soup and several pans of tuna casserole and put all of them away in the freezer (except for one, which you eat for dinner that night). There are many “make ahead” recipes online, so just Google a make-ahead recipe for anything you like. (Note that virtually any soup works great as a “make ahead,” just use about 20% less liquid than the recipe calls for and freeze it in quart or gallon freezer containers or bags when it’s mostly done cooking.)

A freezer full of low-cost home-cooked meals that you can pop right in the oven or onto the stovetop to finish up whenever it’s convenient is an enormous money saver – and a time saver on a busy night.

Final Thoughts
Even if you find time to do just one or two of these things during your spring break, you’ll find that any of these projects will result in a greater understanding of your financial situation or more money in your pocket. Many of them will result in a permanent reduction in your bills, and some will even result in time saved over the long run.

What about me? What’s my big spring break project? I actually have four of them, three of which are straight from this list. I’m going to read a personal finance book (one that I’ll probably talk about or review later on The Simple Dollar, but that I’m reading primarily for my own enrichment) on the philosophical basis of frugality. I’m also going to do my family’s income tax filing, and I’m going to write a business plan for a side gig I’ve had in mind for a while. My final “spring break” project this year isn’t really personal finance related – it involves spending a day with a few old friends playing a very long board game together.

As for you? Set aside a bit of spring break time for a financial improvement task, and maybe some time for a special personal project, too. You won’t regret it!

The post Twelve Ways to Use Spring Break to Tidy Up Your Financial Life appeared first on The Simple Dollar.

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