The Frugal Prof

Its Not about the Money. Its about taking charge

How to Negotiate Discounts on the way to Debtfree

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The goal is to pay down debt, invest, and retire.  Simple, but not easy.

One of the best ways to reduce your spending is to negotiate a lower price on the things you use. Here are some tips on negotiating.

*Affiliate Disclosure:  Some links in this post may contain affiliate links to business partners of mine.  I may be compensated for this arrangement, but the reader pays nothing.  I strive to do business with quality, reputable companies.

The best way to get a discount is to firmly ask for a discount.

People have so many ill conceived ideas about negotiating  The media presents this ridiculous image of an alpha male business executive brow beating someone into getting whatever he wants.  This is pure fiction and makes too many intimidated to simply ask for what they want.

Ask for what you want. Firmly and confidently.

 

Value Investing

 

Ask for what you want.

Did you watch the TV Show, Mad Men?  Mad Men was a very good show about Madison Avenue in the 1960’s.  Here’s why I bring it up:  one of the senior executives is fired and a prime office becomes available.  The office has a dozen alpha male junior executives who all want the office.

But who ends up getting the office?

The most junior person -Peggy Olson- That’s right, the only female copywriter with the least experience gets the office.

Why? She was the only person with the courage to ask for it.

If you can get a 10% discount on many of the items you’re using, then you are that much closer to getting out of debt and investing for your future.

Discounts and Cash Back?  Yes!

Discounts on Online Shopping: 

Make sure you’re getting cash back from online shopping:  I use Ebates and they give me cash back for nearly all of my purchases.  Ebates gets a commission from stores you shop at and they share the commission with you.  Average cash back is about 7%, which is great.

Right now, they are offering a Free $10 Gift Card when you join and spend $25.  More about Ebates Here.

 

Cash surveys

 

 

An example from my own life:  As you know, I’m cutting back on frivolous spending.  So, I’m reviewing my credit card bills for all the monthly subscriptions I receive (there are a lot!).

Anyway, I really like XM Sirius radio in my car, but I would like it a lot more, if it was less expensive.

So, I called them.  I used a simple, honest approach.

I told the woman that I really liked the service, but I’m not sure I can keep getting it because it’s too expensive and I’m cutting back.

What happened?  She offered to cut the fee in half  (from $200/ year to $100).   I had to pay for the year upfront, which I agreed to do.

We both got what we wanted: I got a better deal and her company kept a customer.

Win. Win.

 

Save money on insurance:

One incredibly important way to cut your monthly bills is to compare insurance rates.  Companies are always changing their pricing to gain market share in this area, so it’s always worth it to check to see what competitors insurance rates are.  E-surance is a subsidiary of Allstate and offers very competitive insurance rates.

A few minutes can save you thousands of dollars a year just by being smart.

 

Relevant Articles:

44 Ways to Create Extra Income

Getting Results: How I Paid Off $17K

The Best Personal Finance Books

 

Introverts are good negotiators.

The goal of every negotiation is for both sides to get most of what they want.  That’s why alpha males are not the best negotiators and why research tells us that introverts and shy people are actually good at negotiating.

Why?  Because in order to be a good negotiator, you need to consider things  from the viewpoint of the other side.

When I ask for a 10% discount on a TV, I give the salesperson the ability to get what they want: the ability to tell their boss they made another sale.   Salespeople have credit card bills to pay too and they have pressure to make a sale.  Makes no difference what the product is.

 

 

If you don’t get what you want, walk away.

I’ve been meaning to open a new bank account lately because my bank no longer has any convenient atms near me and I’m NOT paying $6 per withdrawal!  So, I called the closest bank and spoke to them about opening an account.

In order to waive the bank fees

  • they wanted me to keep $7,000 in the account,
  • or a direct deposit every month,
  • or 10 debit card transactions.

Sorry, but no.

See my post on Banks that offer Free Checking here.

I walked away.

 

And last month, the same bank had a promotion for new accounts: they would waive the bank fees for just $1,500 in the new bank account AND they would credit me $250 to open the account.  Bingo.  Now, I’m interested.

 

Conclusion:

 

Negotiating takes a bit of courage, which is a muscle we all need to flex.  And it allows you to have more control over your life.  Which is a feeling we all want.

Ask for what you want.  You’ll be surprised how often you can get it.

 

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Investing: The risk to the current stock market no one talks about

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current stock market

I’m sure you agree that the current stock market has been on quite a winning streak now.  The stock market has gained nearly 25% under President Trump.

The Dow Jones Average just crossed the 26K milestone.  And while that may seem like good news, it is smart to evaluate the risks to the current stock market.

Here are some contrarian views on the stock market and major indexes.

In my view, the risk to the stock market is not a crash, but a more nuanced scenario for stock investors.

 

For most stock investors, the risks to the stock market are rarely discussed.  Here is my view of the risk to investors from the current stock market in the coming years.

Current stock market:  So here we are ~ Dow 26K.

  • Let’s review how we got here:
  • The financial experts predicted a stock market crash if Brexit passed.
  • It did and investors shrugged it off.
  • Then the stock market strategists warned us that if Donald Trump was elected, the stock market would crash.
  • The market has since rallied 12-15% to new highs in every index. Even cyber currencies like bitcoin, cryptocurrencies, and  etherium are at new highs.  And here we are at very rich valuations compared to historical stock prices.

 

How did the stock makret crash

 

Most mutual fund managers were underinvested heading into the election.

Since Trump’s improbable win, professional investors have been playing catch up– trying to get invested in a stock market that has not fallen by more than 1% on any day for a month- something that hasn’t happened in 54 years.  This applies to the S and P 500 as well as the Dow Jones Average, the major stock market indexes.  Stock market Volatility has been crushed.

 

 

 

 

Retail is Bullish: Individual Investors

Individual Investors are pouring money into this market.  Discount firms TD Ameritrade (AMTD) and E-Trade (ETFC) are seeing a huge appetite for stocks by retail investors.

Inflows to mutual funds and ETF’s hit $32B through last Wednesday, the largest inflows since 2002. 

ETF’s focused on Bitcoin shares have received $258M in a matter of days.  All retail brokerages are seeing new account openings fueled by millennials and those who fear missing out.

For seasoned investors, this is reminiscent of boom days gone by.  We don’t know how these new investors will react when volatility returns to the market.  But, retail excitement is almost always a sign that the easy money has been made.  And in my opinion, passive investing may exacerbate a downturn.

 

Investing - Wall Street

 

Davos Is Bullish:

“There are 2,000 people [here in Davos], and I don’t think I’ve met one person who’s been negative,”  -Billionaire Jeff Greene (NASDAQ:CNBC)

 

Stock Valuations are very stretched.  

Depending on the figure, we are at nearly 26X earnings on the S&P 500.  Levels last seen in 1929, 1999, and 2008.

This means the current stock market via the S&P 500 index  is expensive. However, due to the intervention by the Federal Reserve  in the bond market, the stock market is viewed as the only alternative for most investors.  This is a very unnatural situation. As a value stock investor, I can tell you there are hardly any undervalued stocks on the New York Stock Exchange.  Very few stocks are undervalued.  Investors may ask, “Is the stock market going to crash?”

The risk is not a stock market crash.  The real risk is that 7-10 years from now, we are still at or below 2400 on the S&P 500  or 21,000 on the Dow Jones Average.

 

Why?  The Federal Reserve, the Central Bank which essentially controls interest rates,  has used emergency level interest rates going on 7 years.  This was used to stimulate the economy due to the financial crisis. The federal reserve has a $4B balance sheet.

Interest rates have been at historic lows.  This has boosted stocks and real estate artificially.

Pulling future gains to the present.  If we have taken future returns, then future returns should be lower going forward.

The fed has been artificially supporting the market. We don’t know what will happen when they unwind their balance sheet and rates return to normal levels.

 

Artificial support.

 

 

My stock market analogy:

When I ran this morning, I cheated a little bit.  After I ran, I was walking on the treadmill, but was holding on to the side rails.  It’s cheating.  My arms were supporting my body.  That’s what the fed actions and the stock buybacks have created.  It’s artificial support.

 

44 Ways to Create Extra Income

Getting Results: How I Paid Off $17K

The Best Personal Finance Books

 

 

Value Investing

 

Are companies doing well?  Yes and No.  They’re shrinking their shares outstanding by buying back stock.  Where does the money come from?  Mostly from issuing bonds aided by low interest rates.

Stock Buybacks used to be done exclusively by companies that felt their shares were undervalued.  Today, almost every major buyback is being done at all time highs.

Think about that.  “Were buying back our stock because it’s undervalued … at All Time Highs!”

I’m not impressed.

There is a big difference between running 5 miles and walking 5 miles holding the side rails of a treadmill. This market has been sustained for far too long with artificial support.  I’m cautious and skeptical.

 

 

My intention is not to scare investors.  However, smart investors need to consider that the risks to the stock market do not just include some stock market crash like we experienced in 1987 or 2008.

The more significant fear for investors is something more devastating:  a return to normal returns and potentially, much lower rates of return for stock market investors.  The Federal Reserve has been helping investors for nearly a decade.  When they remove the artificial stimulus, rates of return may fall and create a disappointing climate for stock market investors for many years.

 

 



 

 

 




Designer clothes and living in debt

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debt reitre invest

Financial Freedom

 

Lets talk about designer clothes and living in debt. 

Right now, I’m focused on debt reduction, investing, and retiring early. But that does not mean that I know nothing about luxury clothes, online shopping, and consumerism. 

Unfortunately, I know a lot.  Ive spent a lot on designer clothes and I am paying the price today.

Ralph Lauren is not my friend.  I’ve spent so much money on designer clothes over the years that I don’t even want to think about it.

But I need to think about it to figure out why I spent money the way I did and whether or not I’m going to miss it if I stop.

For me the question came down to this:

What’s really important? Becoming debt free or designer clothes?

Even though I own a lot of Ralph Lauren clothes, I rarely purchased it them at retail stores. I usually bought them at Outlet Stores.  Luxury at a discount.  What could be better?

And I spent a fair amount buying designer clothing online as well.  But, Who hasn’t?

Related post:  Why You Don’t need Lululemon to work out here.

 

 

Luckily, I discovered Ebates a few years ago. I use Ebates and they give me cash back for nearly all of my purchases.  Ebates gets a commission from stores you shop at and they share the commission with you.  Average cash back is about 7%, which is great.  Right now, they’re offering a Free $10 Gift Card when you join and spend $25.  More about Ebates Here.

 

Related Articles:

Use Ebay to Create Fast Cash

Why you dont need Lululemon to work out

Achieve Financial Freedom with these Books

 

Financial regret:  There is nothing I can do about the money I spent on designer clothes.  You live and learn.  Perhaps you can learn from my mistakes.

Right now I choose to focus my energy on debt reduction, investing, and retiring.

  • I was able to create a plan to pay off $17K in debt last year.  More on that here.
  • And that led to me paying off my car.  More on that here.

I can’t go back in time.  But, I can take control of my finances from this point forward.

 

 

Am I never going to buy another luxury item? No.  But, in order for me to shop at an online luxury retailer these days, I need to love it and it has to be worth the inflated price.

 

I’m sick of living in debt.  My job is to make myself wealthy.  Not make Ralph Lauren wealthy.

5 Reasons Ebay is Great for Quick Cash.

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When I decided it was time to get out of debt, I quickly realized Ebay was going to be my best friend.

 

quick cash

Use Ebay to create quick cash

*Affiliate Disclosure: This page contains affiliate links to products or services that I endorse.  I may receive a commission from our business partners.  I strive to only partner with high quality companies that I believe add value to my readers.

 

I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.

–Steve Martin

 

Momentum is critical when you’re getting out of debt or taking control of your personal finances.   And Ebay can help you get cash quickly.  In my opinion, Ebay is the best way to get fast cash.




 

 

Why do I like EBay so much? Here are five reasons:

1. It’s easy. Find stuff you already own, take pictures, add a listing, and a week later you have cash.

2. You control the entire process.  You get to choose the minimum price you are willing to accept, you control how much time you want to spend on it, you control when the auctions will end, it’s all controlled by you.

3. It creates cash quickly.  You can receive money for your items in 3-7 days.

4.  It is a reminder that you’re buying stuff you don’t really need.  The next time you think about buying something, you can remember the items you sold on Ebay.

(More on this from my post, Why We Buy What We Buy here.)

5. You find out the real value of items.  All these items we buy depreciate immediately and lose much of their value.  Seeing the sale price of items on Ebay is a nice reminder that our purchases retain little value.

 

This month I became really motivated to sell some of my stuff on EBay.  I sold 19 items and brought in $493 of cash to help pay off my car.

I sold:

  • old headphones,
  • dress shoes,
  • a day planner,
  • an old football card,
  • and a bunch of other items.

New to Ebay? Learn more about selling on Ebay here.

 

Relevant Articles:

45 Ways to Increase your Income

9 Best Ways to Save $7K This Year

11 Legitimate Survey Sites for 2018

 

What I learned:  I don’t want to repeat this cycle of buying items, not using them and then trying to recoup their value on EBay.

It’s easier to avoid buying items that I don’t really need in the first place!

My main goal was to use Ebay to create some quick cash to help pay off my car. (Read about my last car payment here.)

However, if you have a discerning eye, it is possible to leverage  Ebay into a real business by flipping items.  It is a legitimate side hustle.  (More on Side Hustle ideas Here.)

I am not a big consignment shopper, but if I was, there is certainly a potential business using eBay.

One woman known in the media by her brand, Girlboss aka Sophia Amarosa, leveraged her eye for fashion into a successful store, brand, and following.  Her brand is worth around $100M and it all began with Ebay.

I never started a business. I started an eBay store, and ended up with a business. I never would have done it had I known it was going to become this big.  –Sophia Amoruso is the founder and CEO of Nasty Gal, which has grown to a $100 million-plus online fashion retailer

 

 

Creating fast cash: Tips for selling on Ebay.

Getting started:

Make sure you buy a few small items to create a rating.  Ebay keeps track of how many auctions you’ve had.  Ideally, you want to have a rating above 10 before you begin selling items.

This will allow you to become familiar with the process before you sell.

Quick tip:  Auctions that end on a weekend always attract the most bidders.

 

Lighting is very important.  My advice: Consider buying a light box if you will sell more than $1,000 in a year.  I believe they add about 10% to the value of an item, so it should pay for itself very quickly I really wish I had done this years ago.

Why lighting is important: High quality photos are very important and make it easier for your listings to sell.  And, your items will sell at a higher price.  The better lighting makes your items more attractive and they will stand out from the competition.  When you sell on Ebay, there are always competitive listings.

More on lighting here.

 

Be Honest:

Be honest about the quality/ condition of your items.  Positive feedback is important.  In the long run, it doesn’t make sense to embellish the condition of your items.

More Tips for Selling on Ebay:

  • The best days to start/ end an auction are Saturday/ Sunday afternoons EST.
  • You want the biggest audience for your items when they’re ending.
  • Make sure your item is worth selling.  Check what past auctions to get an idea of what your item it worth.
  • And make sure you consider the cost of shipping. It can cost up to $20 to ship shoes.
  • Remember to Sell in season. It’s hard to sell running sneakers in winter.
  • Having a PayPal account is very helpful. It’s worth having one even if you don’t want to use EBay.

 

Tools I recommend:

These are the minimum tools to get started:

Quality Shipping Tape

Label Scraper (amazingly helpful to remove price tags quickly and without danging the item)

Poly Mailer Bags for shipping

Good Bubble Wrap

Mister Clean Magic Eraser– To clean up books – Find the cheapest option

An acceptable and affordable shipping scale

A higher quality shipping scale

Quality  Lights for Ebay:  These were on sale ~$35 and they are great for the money.

Thank you stickers:  A classy touch:

Better pictures = higher profits on Ebay.  Lighting is very important.

 

Conclusion:

Keep in mind, EBay is a quick fix to create cash while you’re re-aligning your finances and getting out of debt.

But, for most people, it is not a long-term solution.

 




 

 

 

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My Problem with Side Hustle Ideas and The Best Side Jobs

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side hustle ideas

I’m always exploring new ways to earn extra money.  Even better if you can find a way to make money fast.

 

In this post,  I will offer some smart questions that one should ask before buying into a side hustle. Next, I will offer one of the better side income ideas that I have found.

Earning money on the side is a great idea.  I am in favor of having more money for your family, money to pay off debt, and more income to live a better life.  Absolutely.

I want to make sure that you discover the best side hustle ideas.

  • *Affiliate Disclosure: This post contains affiliate links.  Business partners may compensate me for inclusion on this blog, but I strive to only partner with quality businesses and the reader pays nothing.

Side Hustle Meaning:

Side Hustle:  typically part-time jobs that allow one to make extra money.  Sometimes a side hustle involves making money online, but not necessarily.  Some side hustles involve working from home.

Let me start by saying I like the idea of side hustles- part time jobs or gigs that can earn you passive income online.  And I occasionally listen to podcasts from side hustle entrepreneurs like Pat Flynn and Nick Loper.

In my opinion, you need to analyze any potential side hustle idea critically before you commit to them. You are investing two valuable resources in any side hustle opportunity:  you are investing money and you are investing your time.

 

Relevant Articles:

The Best Personal Finance Books

Survey Sites That Actually Pay

It’s not about the Money.  It’s about Taking Charge.

 

Questions you Need to consider before starting a side hustle:

1.  What is the probability this side hustle will make me money

Yes.  The main purpose of a side hustle is to make money.  I want an extra income.  I need cash.  Period.  So, the idea that you could invest in a side hustle course and not make money and possibly, lose money is something we want to avoid at all costs.

Just because there is a quote from someone on the internet claiming that they made money doesn’t mean much to me.  And also, When did this person make money?

Many opportunities no longer exist.

 

Value Investing

 

Flipping textbooks on Amazon via AMAZON FBA used to be a good money maker.  And then one day Amazon changed their fee structure.  Now, the people who did this side hustle are selling courses to teach a program that worked a few years years ago.

My concern with this side hustle is that you make an investment in inventory and Amazon can change their policy at any time.

It no longer works because Amazon eliminated the profit margin.  And it’s important to ask yourself, which other side hustle jobs have the potential to evaporate like this.

YouTube:  Recently, YouTube  changed their fee structure to smaller content providers.  You now need 1,000 subscribers and 4,000 hours of content to monetize your channel.

Realize that people had spent considerable time creating videos (and buying courses and video equipment), and now have almost no way to recoup their expenses.  They started a side hustle and lost both money and time. 

My intention is to look critically at side hustles to prevent this from happening to you.

2.   How much time will I need to commit?

There are many side hustles that allow you to make an income rather quickly and others you need to wait for a payoff.

Some side hustle ideas that pay immediately include: Getting Paid to Drive:

Essentially, You can Get a Check This Week

  • People Join Door Dash for a variety of reasons: to spend time with their kids, earn extra money, to pay for school, even to exercise and see the world.  You can use any car to deliver, as long as you have a valid driver’s license, insurance, and a clean driving record. Join Door Dash
  • Get paid to drive for LYFT:  Visit the LYFT website and Use this Exclusive CODE: DOUG4287 for an Extra $1,400 payout.

 

3.  How much can I Earn vs. The Costs to begin?

The purpose of a side hustle is to make money.  One needs to consider a realistic estimate of how much money one is likely to make.  And what is the source of the information.

I could show you 100 Pinterest Pins that claim someone has quit their job to blog full time and is making a six figure income.  Blogging is not a great side hustle if you need extra income now.

In reality, that is the exception.  Blogging is competitive and requires a lot of time and commitment before someone can make money.

It can also be a great side hustle for the right person.  See my post on, The 7 Golden Rules to a Profitable Blog Here.

 

Relevant Articles:

45 Ways to Increase your Income

9 Best Ways to Save $7K This Year

11 Legitimate Survey Sites for 2018

 

44 Ways to Make Money Now

4.  Is this Side Hustle Idea still making money?

Do you know who is guaranteed to make money from a side hustle?  The person selling expertise, a funnel guide, or a side hustle program.

Is this Side Hustle idea still making money.  Is this side hustle idea still viable. 

These are real questions.  And it requires research.  Right now, the Subway restaurant chain franchisees are suing the company for not supporting them with advertising.

Its being called a franchisee revolt.

You would never spend the $50,000 or $75,000 to invest in a Subway franchise after you learned this information.  Additionally, you would not want to invest in a side hustle course that is no longer viable.

 

 

5.  Does this Side Hustle add to my skill set?

Great question. A really good side hustle would add to your skill set as well as helping you earn extra money.

 

 

 

 

Become a Certified Closing Agent.

  • One big advantage of becoming a Closing Agent is that you learn a new skill.
  • You Earn Extra Income,  Set your Own Hours, and the Income is Excellent ($75-$200 per appointment).
  • You can get started with absolutely zero experience. You are hired simply based on your location in proximity to the loan signing.
  • Next, you can work from home and be your own boss. Owning your own business can allow you to take advantage its many benefits, such as tax write-offs.
  • • You have the ability to make money almost immediately.
  • It pays nearly 9X more than driving for Uber.  However, it requires you to take a class and invest time and money.
  • If you can do that, then you can start making up to $200 per signing.
  • Learn More about the Loan Signing System here

 

One of the Better Side Hustle Ideas I see:

This side hustle fits with all of the previous criteria I’ve mentioned.

You learn a valuable skill.

You earn an excellent fee of $75- $200 per appointment.

The up front costs are pretty small compared to the actual compensation.

Learn More about the Loan Signing Course.

 

Conclusion:

In this post we’ve reviewed the important questions you need to answer before you invest in a side hustle idea that’s being promoted.  Is this still a great side hustle idea.  Is this person selling a course because the idea is no longer profitable.  What’s the investment of time and money for this idea.  When will this side hustle make me money.  All legitimate questions.

My only interest is in helping you succeed. 

And I would hate for you to invest your time and money into something that is no longer a viable side hustle idea.

I’ve explored a bunch of side hustles and for me, they took too much invested time for a pay off that may or may not come someday.

My time and money is valuable.  And I need that payoff.

Caveat emptor!  Buyer beware.

 

 

 

 

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Have I gone too far? (I cut pizza out of my budget)

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Yes, I cut Pizza form my Budget

 

 Have I gone Too Far?

The first step in getting out of debt is to figure out where your money is going.  I learned a lot when I reviewed my spending last year. It was a bit depressing, but at least I learned how I was wasting my money.

I wanted to take control.  If I spent money on something, I wanted to get value from it.

So, when I reviewed my credit card statement,  I noticed that I spent a lot on pizza deliveries.  Each large pizza was about $23-$25 depending on whether I had a deal, coupon code, or special offer.

I almost always use a coupon code from Ebates and get cash back from my online purchases. More about Ebates Here.  However, pizza delivery is not usually a cash back item.

Either way, it’s a lot for a pizza when you compare it to a pretty good pizza I can buy frozen. It’s an extra $15-17 each time I order delivery pizza. And most of the extra cost is delivery fees.

So, I started buying store bought pizza and I’m saving about $51 each month ($17 savings 3 X per month).

 



 

 

Is it a huge savings?  Not really.  But right now, I’m fired up.  And I want my car payment to go away.  And I’m kind of sick of being ripped off.

Why is the delivery pizza so expensive?  There’s a $4 delivery fee and taxes plus I give the driver a tip.   I don’t know how much of the delivery fee that he/she gets to keep.  I like to tip people who work hard.  But, I would prefer to keep my money.  Delivery pizza is not that great.  And it takes much longer.

 

Related Articles:

44 Best Side Hustles To Make Money Now

 

The key to this process is to align where you’re spending your money with your values.

  • What do you value?
  • What is really adding value in your life?

For some people, cutting the cord on cable is a great way to save money.  For others, that would be crazy.  As long as you’re getting value, then it makes sense.

 

Relevant Articles:

45 Ways to Increase your Income

9 Best Ways to Save $7K This Year

11 Legitimate Survey Sites for 2018

 

What doesn’t make sense is spending money for a service without actually getting value.  I was paying over $100 a month for a storage locker.  That is a great example of an item that was adding zero value in my life.  Yet, here I was spending money month after month for this service.  Until I woke up and said, “No More.”

Bottom line- right now I’d rather be a little closer to paying off the car and being out of debt than pay $100 this month for pizza.  Also, I tend to eat too much of the delivery pizza because it’s better than the store kind.  So, this should help my waistline a bit too.

Maybe I’ve gone too far.  I’m fired up and focused on the paying off my debt. I’m seeing all the stuff I purchased over the last 15 years that added very little value to my life and I’m done spending money that doesn’t add value or make me really happy.

 

 

Please share your comments!

 

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Why You don’t need Lululemon to workout.  

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Consumer Debt is at Record Highs:

In the fourth quarter of this year, consumer debt, excluding mortgages and other home loans, rose 5.5% from a year earlier to $3.82 trillion. (via WSJ)

That is the highest amount since the Federal Reserve Bank of New York began tracking the data in 1999. Moreover, consumers’ non-housing debts accounted for just over 29% of their overall debt load, also the highest amount on record

Each person is responsible for their own choices.  But, it’s hard to imagine that this current debt binge will end well.

 

Value Investing

 

 

  • *Disclosure: My aim is to recommend products that will truly benefit you.    I believe in transparency and want to disclose that I’ve included certain products and links to those products on this page that I will earn an affiliate commission for any purchases you make.

 

I chose to become debt free and make changes to my lifestyle.  One of the things I did was to look at all of my purchases and analyze which products and services really added value to my life.  And paying more for a designer label really started to feel like a large waste of money.

Confession time:  Until last month I had never purchased any fitness clothing other than Lululemon, Nike, Adidas, or Under Armour.

 

I’ve always liked expensive brands like Ralph Lauren.  I make no secret about that.  Now that I am on a journey to early retirement, I try to evaluate which products are truly adding value to my life.

If a product is worth a premium price, then great.  But if not, I will switch to a more economical competitor.  It’s my money.  I want to use it in a way that adds value to my life.

By reviewing my purchases from last year, I know that so many of the products and services I was using didn’t add value.  That extra savings helped me pay off my car and become debt free.

It is about taking control of my money.

 

I use Ebates and they give me cash back for nearly all of my purchases.  Ebates gets a commission from stores you shop at and they share the commission with you.  Average cash back is about 7%, which is great.  Right now, they are offering a Free $10 Gift Card when you join and spend $25.  More about Ebates Here.

 

 

 

 

Frugal Tip:  Now I’m exclusively watching Amazon Deals for most of my new gym wear.  For example, last  month, I found a pair of Champion sweatpants for $14.   Amazon offers some great deals on less expensive workout clothes.  They have exercise clothes, workout gear, fitness equipment, and active wear.   At great prices.

So, I went for it.  And they’re better than the Nike and Adidas workout clothes I usually buy.  They fit better and are more comfortable.  And yes, I like that they saved me about $20-$25.  Yeah, I like that a lot.

Life goes on if you’re not in the most overpriced workout clothes (lululemon yoga pants)!

 

 

 

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I know some single people are thinking, yeah but I need to look good, because I’m single.  And to that I say, you might actually look better in other styles and brands of active wear and fitness clothing.

Again, if you’re getting value from a purchase, then that’s fine to pay a premium.  But, if you’re not, then definitely consider switching.

 



 

Are we getting what we pay for?

My dad used to always joke that every polo shirt is made in the same factory.  And for the Ralph Lauren shirt they put the polo player on it and charge $70, while the other polo shirts have no polo player and sells for $25.

There’s a lot of truth to that.

Luxury does not always equate to quality.  It used to.  But not always these days.  And certainly not in all things.   More on fashion and debt. 

 

Less expensive gyms:

I switched to a less expensive gym about a year ago.  I’m saving a lot of money and I haven’t noticed much of a change.  Working out is important and I know some finance blogs suggest cutting it out altogether.  I think that is a decision that is up to you.  For me, working out is important to keep me healthy both mentally and physically.  I get value from my gym membership.

I do suggest looking for gym deals and comparing gym membership prices.  And negotiating a better deal.

What I’ve learned is that You don’t need expensive yoga pants or an expensive health club membership to feel good about yourself.  It usually comes from inside.

 

Have you switched brands since you started paying more attention to your finances? 

Share in the comments.

 

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Emergency Fund: An Umbrella for your Life

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The emergency fund is the first step in any debt free journey.

Emergency Fund Definition:  An emergency fund is an account used to set aside funds needed in the event of a personal financial dilemma, such as the loss of a job, a debilitating illness, or a major expense.

*Disclosure:  My aim is to recommend products that will truly benefit you.    I believe in transparency and want to disclose that I’ve included certain products and links to those products on this page that I will earn an affiliate commission for any purchases you make.

 

According to financial host Dave Ramsey,  the first emergency fund is a $1,000 that should be set aside for unexpected emergencies.

A larger emergency fund is when one becomes debt free except for your home.  This  should cover 3-6 months of expenses.  So, for many people this could be between $12,000-$24,000, depending on your income.

An emergency fund prevents you from becoming desperate when an unexpected emergency happens.  And they will.   Getting a credit card advance or a payday loan are terrible alternatives.

 

How big should your emergency fund be?

The more stable your income and household are, the less you need in your emergency fund.

If you’re part of a two-income household or you’ve had a steady job for several years, then a three-month emergency fund is probably just fine.

But if you’re a one-income family, you’re self-employed, or you earn straight commission, then a six-month emergency fund is probably a better idea for you since a job loss could make you unable to pay the bills.

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Where should I keep my emergency savings?

Your emergency fund should be liquid, meaning you need to keep it in a place where you can get to it easily and quickly.  (See my post on banks that still offer free accounts.)

The best option is a simple checking account or money market account that comes with a debit card or check-writing privileges. That way, you can pay that doctor or mechanic quickly and with no headaches.

But . . . make sure you’re not keeping your emergency fund in a place that’s too easy to access. You don’t want to be tempted to dip into it!

What’s an emergency?

When a sudden expense pops up, it can feel like an emergency—but that might not be true.

Here are three questions to ask yourself to determine if you need to tap into your emergency savings:

1. Is it unexpected?
2. Is it necessary?
3. Is it urgent?

 

How to Quickly Build an Emergency Fund

One of the easiest ways to beef up your emergency fund is to sell some stuff! Go take a look in your garage or dig through your closet—is there anything you could part with? Selling some items that are collecting dust can add up to major cash in your emergency savings. And every little bit helps! You’d be surprised at how quickly $5 here or $10 there can add up.

 

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It’s important to note that investments do not count towards an emergency fund. Your retirement or 401 (k) does not count.  These accounts are not liquid or easily accessible (there are serious tax consequences for 401 (k) withdrawals.)

People who don’t have an emergency fund wind up being forced to take out a pay day loan or get a cash advance on a credit card.  Getting access to emergency loans or emergency cash is not what I want for you.

I don’t want this to happen to any of my readers.  The interest rate on a payday loan and credit card cash advance are incredibly high and will delay your ability to become debt free and invest.

 



An emergency fund is vital. It’s vital because emergencies happen.

People get sick, lose a job, car accidents happen, tornadoes, hurricanes, riots, fires, earthquakes all happen as well. As an adult, we prepare just in case something like this happens to us.  Because they will.

  • I am in my late 40’s:
  • I have lost a job,
  • had a health scare,
  • lived in a city that experienced a major riot (Los Angeles 1995),
  • and in a city that experienced a major hurricane and flood (New York 2012).

 

Life happens.  These were all near misses that should have been wake up calls for me.

Don’t wait.  At the very least, start saving for your $1,000 emergency fund today!

 

Having an emergency fund is an umbrella for your life.  Be prepared.

 

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Taking control of my money

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It’s starting to happen.  As the credit card bills roll in I realize that the steps I’ve taken over the last 6 weeks are paying off.  My credit card bills are down $700 from my average bill.  It feels amazing. I don’t wait to open the credit card bills like I used to do.  I’m keeping track of my spending.  And it’s going down.  I’m using the debit card more often. 

 I’m questioning each charge- do I really need that?  Can it wait?  Is it really worth $40 to me?  Pretty much, when I buy something now, if I don’t love it, it goes back to Amazon.  Yes, I use Amazon for many of my purchases.  Now, I’m also looking at their deals- especially lightening deals.  I want the best deal now.  Before, I would buy anything that was at a discount.  Not anymore.  

I feel in control and not on the defensive.  And it feels really good.  Dave Ramsey always says, “the psychology is more important than the math.”  Winning with money.  Still lots of work ahead of me, but I am on the path and I am in control.  

I estimate I will be done with my car payments in 9 months.  So excited for that.  I’m analyzing that if I can cut back here and there, if maybe it can be sooner like 5 or 6 months.  And then that money will go into saving and investing.  

It’s starting to happen 👍

Do I Regret the $600 Adele Concert? 

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Since starting this blog about personal finance and becoming debt free, I’ve spent countless hours looking to reduce my spending.  So, you might be surprised that I spent so much on a concert.

Do I regret it?

adele concert

Adele in Concert

The backstory: I had a family reunion in New York.  Using credit card miles, my room was free (savings of nearly $500).

One of my best friends wanted to go see the Adele concert. And I wanted to see her too. But, we needed tickets and the concert was only a few days away.

We spent a lot of time on stubhub looking for reasonably priced tickets. There were none.

About three days before the concert, the insider hold tickets became available. These are usually reserved for industry insiders: pr people, record executives etc…

The tickets were expensive, but in a great location: front row for about half the concert!  (see for yourself in this video!)

 

Adele: Live in New York at Madison Square Garden

 

Budget: Choosing Where my money Goes

Getting out of debt and sticking to a budget can be hard.  Inevitably, one will be tempted with something you really want.

The benefit of doing a budget is you can know exactly how you’re spending your money.

Once I took control of my money, I was able to choose what was important to me. And most of the time, experiences are better investments than stuff.  (See my post on, Why we buy What we buy here.)

 

Free travel

 

Experiences vs. Stuff:

I made a lot of progress in cutting back on spending and living a frugal life.  However, when I had the chance to see Adele live in New York with one of my best friends- it was an experience I could not pass up. And it was totally worth it.

We wound up spending a lot on the tickets, but we had the best seats in the house.  This photo was taken by me.  We were basically front row for about half of the concert.  It was amazing!

adele in concert

With that said, I am not sure I would want to spend that much on concert tickets again any time soon. Here are some great tips to help you save on your next concert.

6 Tips for  spending Less on Concert Tickets:

1. Sit near the back

You won’t have the best view, but you’ll still hear the music. In general, a seat farther back at a concert costs less than sitting in the first row. Take a look at the price for nosebleed seats before you dish out more for the front section.

 

2.  Get cash back on your tickets.

I use Ebates and they do give cash back for concerts and tickets.  Ebates gets a commission from stores you shop at and they share the commission with you.  Average cash back is about 7%, which is great.  Right now, they are offering a $10 Gift Card when you join and spend $25.  More about Ebates Here.

3. Buy from a reseller

Check out resale tickets from verified secondary sellers and ticket resale brokers — which can be offered at a better price and with a guarantee, according to Gary Adler, executive director and counsel of the National Association of Ticket Brokers (NATB), a nonprofit trade association and a member of the Council of Better Business Bureau’s National Partner program.

 

4. Wait until the last minute

We got lucky with the Adele tickets because they became available a few days before the show.

While concert ticket prices are unpredictable, in some cases prices could drop as the performance approaches, says Chris Leyden, communications manager at SeatGeek.

 

5. Smaller Cities

Ticket prices can vary depending on the location of the concert — even for the same artist and the same tour, Leyden says. Compare prices at concert venues to find lower prices.

“Check out the nearby shows,” Leyden says. “You don’t have to take a massive trip where you fly from Miami to St. Louis. If you live in New York, you can do a quick weekend trip to Philly or a weekend trip to Boston.”

6. Sit solo

When searching resale options, you’ll generally see better deals on single tickets, says Jessica Erskine, a spokesperson for StubHub.

“Often someone might buy tickets in threes or fours and have one friend who can’t make it, and they’re trying to sell that one ticket,” Erskine says. “It’s so hard to find someone who’s willing to go to a show as a single guest that often you can find single-price tickets at lower prices.”

 

7. Concerts at the Fair

OK, maybe Adele still isn’t in your budget. If you’re not picky about who you want to see live, check the fair circuit. Some county fairs grant free admission to a concert along with paid entry to the fair, which usually costs less than a concert ticket.

This was an Amazing experience for me. Plus, I shared it with one of my favorite people in the world.

We posted pictures and video on social media of Adele singing Hello Live in front of us.  It was an Amazing Night! It was an incredible experience.

Am I telling you to spend $600 on concert tickets?  No.

I learned that an expensive experience can be much better than spending money mindlessly.

 

What I learned is that I want to spend my money consciously.  I want my spending to bring memories that last.  And that paying off debt makes me feel great.  So, unless there is something truly special to spend my hard-earned money on, I’m keeping my money invested so I can retire early.

Share your thoughts in the comments!

 

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