Reader Stories: How to pay off debt and save money! Part 2

This post is from the series called "Reader Stories" about tips, success, and lessons learned by our readers. Be kind and enjoy!

Today's Reader Story comes from a mother of two with an eye for discounts. She has found ways to save money on many items and services we all use every day. Many tips are so simple, they are profound.

Understanding the difference between need and want is critical in being successful once you embark on a financial plan or goal

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If you absolutely need something try looking for it on Ebay or Craigslist prior to purchasing in a store.  One example is a cell phone charger.  I could have purchased one at the sprint store for 29.99 and decided to check on Ebay where I got not one but three chargers for a total price of $5.64.  I wanted a bobby pillow before having my second child to make breastfeeding easier and because this was a want not a need I decided to look for it used on craigslist versus buying at Baby R Us for $39.99 and ended up getting a used one for $5. 

According to Pet Education, the cost of owning a dog over its lifespan is anywhere from $5k-$14k depending on how thrift you are.  If you are thinking about purchasing an animal, I would advise against it if you are trying to pay off debts or save money because caring for animals is costly and a want not a need.

Clothes shopping?  I only shop at goodwill or salvation army for clothes.  Salvation army has 50% off most of their clothing and shoes every Wednesday which makes their prices much lower than goodwill prices.  I wear dresses often because the price is $4.99 at goodwill for a dress where an outfit would end up costing more than that.

Buy generic when better and take a calculator with you to the store.  If you are trying to determine which diapers or cereal box is the better deal.  Take the price of the item and divide by how many items you receive or ounces you get, then do the same for the other item so you know exactly how much you are paying.

$15.99 for 103 diapers (15.99 divided by 103 = 15.52 cents per diaper) 

$5.00 for 33 diapers ($5.00 divided by 33 = $15.15 cents per diapers)

In this example, it is a better deal to get the 33 pack diapers because per diaper it is cheaper.  I buy dental floss, mouth wash, aluminum foil at the dollar store and buy anything generic you can.  Walmart has equate Valvoline for $1.00 where the Valvoline (name brand alternative in same size bottle is $2.79).

I now only buy soda pop if I can get it for 25 cents a can or less and anything more than that, I am simply not interested.  This means I can have enjoy 6 cans over 6 days for the same amount of money I would have spent on one 20 ounce bottle at the work vending machine.  However, tap water is much cheaper than soda pop so would be the best option.

The average household in the United States has over 8k in credit card debt.  An $8,000 debt at a rate of 18% interest will take more than 25 years to repay and cost more than $24,000.  Do you know your interest rates?  If you don’t call your credit card companies and find out.  Some credit cards can charge interest as high as 30% or as low as 13%.  You want to pay off the 30% credit card first versus the 13% card.  However, work to never spend more money than you make.

How could a credit card pay you to use it? That sounds too good to be true.  The reason credit card companies want you to use them is because they get a cut every time you purchase something.  Credit cards charge the merchant for accepting the credit card 2-4% of the purchase price

Look for programs to help you save for your future goals.  For example, citizens bank has a savings program for purchasing a home where you save $100 a month for three years and they give you $1,000 in free money towards the down ayment on a home.  They also have a college savings program where you save 25 a month, each month, and are rewarded $1,000 in free money once your child reaches 18 years old.  Go here for more information:  http://www.citizensbank.com/savings-and-cds/college-saver.aspx

Buying a home, use an easy rule of thumb to ensure you are living within your means.  Never purchase a home greater than 2.5 times your yearly income.  Doing so could put you in dire financial strain in the future.

Aim to never buy a house unless you have 20% of the purchase price to put down on the home.  Why?  If you do not have 20% down when you purchase the home the bank considers you a risky person to lend to and buys “private mortgage insurance on you (AKA PMI).”  You will be paying an extra monthly charge with your mortgage of $37.50 a month or $450 a year.

Stay tuned for part 3 and don't forget to comment and discuss!

Want to share your success and tips? 

Email personalfinance4thepeople@gmail.com to find out how.

Reader Stories: How to pay off debt and save money! Part 1

This post is the first in a series called "Reader Stories" about tips, success, and lessons learned by our readers. Be kind and enjoy!

Today's Reader Story comes from a mother of two with an eye for discounts. She has found ways to save money on many items and services we all use every day. Many tips are so simple, they are profound.  

I bought a house for $56k and a car for $16k just five years ago and have paid them both off with an income of $45k a year.  I was also able to afford $6-8k a year in daycare expenses.  How did I do it?  Hopefully these tips will help.

     

The two biggest ways to manage or save money is through budgeting and auto-deductions.

1.)  Budgeting- Review all credit card statements and ATM withdrawals to find out exactly how much money they are spending in different areas.  From there, you can prioritize what's most important to you and where you are willing to cut back on spending to free up money to put toward their financial goals.  Typically, people are spending a lot more money than they realize on food, entertainment, miscellaneous expenses throughout the day, and clothing.  It's also a great idea to have people carry around a check register or regular pen and paper to immediately write down every expense they incur for one whole month.  It's amazing how fast expenses add up!

2.)  Auto-Deductions- Just like people have 401(k) contributions set up to pull money out of the paycheck before you see it.  People automatically adjust their lifestyle to spend whatever is left in their account so you most likely will not even miss it.

3.)  If you shop on the internet, don’t check out without googling a coupon code.  I have saved over $100 and received free shipping by simply finding these coupon codes online.  I recently made a purchase at K-Mart online free ship to store.  The local store already had the items I wanted and I used a coupon code to obtain 20% off my order and when I went to pick them up I didn’t have to wait in a large line or go look for my items.  They had my items ready to go and I already paid.  This saves time and money. 

4.)  Look at all your bills?  I have saved $5 a month for a year just by calling my cable provider and asking if there were any promotions or discounts available or anyway to reduce my bill.  I already had the smallest package they offer but they still were able to give me $5 off a month for a year because of my persistence.

5.)  Don’t go to the cell phone store, call them instead.  I went to a sprint store and they told me there was no such thing as a 500 minute plan.  They told me this, I propose, because they do not make any sales bonuses off selling contracts like this.  I called sprint customer service and obtained a 500 minute plan with free sprint to sprint (all I need) for $35 a month on a basic phone.  Not having a fancy phone is an easy way to save money.

Stay tuned for part 2 and don't forget to comment and discuss!

Want to share your success and tips? 

Email personalfinance4thepeople@gmail.com to find out how.

Tackling Student Loan Debt: Upromise

One of the questions I am asked most is about how to tackle student loan debt. There isn't much to really do, but pay what you can and take advantage of the little opportunities to lower your interest rate (by having the payment directly removed from your checking or savings account), make extra money to throw at it, use Upromise to earn money toward your loans, or taking E-Reward surveys to earn credit to pay towards your debt.

Upromise

Wikipedia describes Upromise as:

Upromise members accrue account credit on eligible purchases from grocery stores, online retailers, travel, restaurants and gas stations. Members can direct their earnings into a high-yield savings account or tax-deferred 529 plan, use it to pay down eligible student loans or request a check to spend the funds in any way they like -- the money is not required to be spent on college-related expenses.

Critics of the Upromise program point out that as of 2008, the average member has earned only $47 toward future college expenses -- and that to accrue this amount, the participant opts into a highly detailed purchase-tracking system, with information sold by Upromise to subscribing marketers.

shop online through upromise.com.

Get 1%-25% back from eligible purchases at more than 600 online retailers when you shop through upromise.com.
» Learn more

eat at our participating restaurants.

Get up to 8% cash back at thousands of participating restaurants — on food, drinks, tax and tip.
» Learn more

go to the grocery store or drug store.

Activate Grocery eCoupons each month to earn on participating grocery and drugstore items.
» Learn more

invite family and friends.

You can save over 2 times more when your family and friends help!
If you would like to sign up email me and I will send you an invite (hey I have loans to pay off also!) at personalfinance4thepeople@gmail.com.

For example:

What you purchase	Partner	Eligible spending	Partner contribution	Estimated Upromise earnings
Clothes	Gap through upromise.com	$150	5%	$7.50
Books	Barnes & Noble through upromise.com	$50	3%	$1.50
Airfares	Expedia through upromise.com	$300	1%	$3.00
Flowers	ProFlowers through upromise.com	$50	10%	$5.00
Dinner	Upromise Dining Program	$40	8%	$3.20
Groupon Deal	Groupon through upromise.com	$50	4%	$2.00
New Shoes	DSW through upromise.com	$60	4%	$2.40
Birthday Gift	ToysRUs through upromise.com	$50	1%	$.50
Ink cartridges	Staples through upromise.com	$60	2%	$1.20
TOTALS		$810		$26.30

You don't earn huge amounts, unless you utilize the the program to the fullest, so this isn't a way that I reccommend using as the only method to battle your student loan debt.

How Upromise works is pretty simple:

1. Register all of your grocery, CVS, Rite Aid, and other discount cards and your debit and credit cards.
2. Check the grocery coupon section for items you normally buy and add them to your account.
3. Shop.
4. When you buy anything online, buy it through Upromise.
5. Shop.
6. Eat at Restraunts that participate with Upromise and earn a percentage of your meal to go toward your loans.
7. Eat.
8. Earn!

 

Remember:

The more you do, the more you can get back!

Dimes make Dollars

Personal Finance 4 The People is pleased to team with others who are able to share their expertise in various areas. We hope to combine our efforts to bring a greater financial effort in order to help you reach YOUR Financial Independence. Today's guest post comes to us from J. S. Aikens.


One of my favorite sayings I heard from my mother is “Pennies make dimes and dimes make dollars.”  This applies whether you are making money or spending it.  In my last blog we figured out where our money was going.  If you followed the instructions from the $1 solution you know exactly where your money is going.  Based on what you found, you want to decide where you want your dimes to go.  And if you’ve found you don’t make enough dimes we need to figure out where you can get them.

Get dimes when you purchase.  If you’ve noticed, there are plenty of sites from which you can print coupons.  How many dimes can you save when you buy?  Take the time to print coupons.  If there are items or experiences you already use/enjoy regularly, clip or print out coupons for them. Now when you look at those receipts, take a tally of the dimes you’ve saved.

Get dimes from what you’ve spent.  During a holiday season a few years ago, I bought several roles of Christmas wrapping paper from a couple on Craigslist. The couple who sold them said they had earned roughly $19K that year by selling items they didn’t need on craigslist. I have never forgotten that couple. I realized that they had recycled their purchases. How many times have you thrown away something that someone else would pay a couple of dollars for? You don’t have to sell often or online, but make the decision to recycle what you’ve already bought. Make a simple spreadsheet.  These “extra dimes” will add up to dollars. How will spend them?   

The Latte Factor: The Price of Convenience

David Bach author of the Finish Rich and Automatic Millionaire series teaches about the power of the Latte. Not like super powers, unless you count slowly draining you of your hard earned money, but the power meaning how much of a role continually spending little bits of money everyday add up and negatively affect your finances. Bach uses the morning cup of coffee to explain how this works, but it really works with anything you buy continually; like lunch and that afternoon snack.



The Latte Factor can be that one thing that keeps your budget from working, thus keeping you from reaching your financial goals. Think about it….

That morning cup of Starbucks, let’s say, $5 a morning.
$5 x 5 days a week = $25
$25 x 4 weeks a month = $100
$100 a month x 12 months a year = $1,200


That's a lot of money!

$1,200 a year for a morning cup of coffee. And that’s not adding your morning Danish, or your lunch or your afternoon snack.

$1,200 a year for coffee, when you could buy coffee from the grocery store and bring it to work (a piece of fruit, granola bar, and nuts for snacks) and you save yourself so much money over the course of a year.

One of the first things I do when I am working with a client is to ask them to tell me what they THINK their spending is, THEN we go over what their spending ACTUALLY is. Every time there is a BIG difference. Unless our spending habits are laid out in front of us in of them in black and white. It’s always a shock.

The Latte Factor is one way to cut back your spending and be more conscious of what you spend your money on. Many things we buy are convince items that if we spent the same amount in the grocery store our money would go much further.

Go to the grocery store with a list, use coupons and see how much more money you have and depending on what you buy see how much healthier you are.

The Latte Factor Calculator – give it a try and see…

If you cut out one item you buy for convince how much would you save a month?

Confessions of a Couponer: Getting Started

Leigh Ann is back with more Confessions of a Couponer...




This is my story; how one momma earned the title “Couponer” (some say “extreme” but I do not feel I have earned that title yet). After hearing/seeing TLC’s new show. I began to reminisce back to when I first had my daughter and I did lots of couponing. I am a full-time teacher and in the spring realized I was going to be quite low this year on summer funds so decided to commit to a summer of couponing. Here is my story with a few recommendations from lessons learned. Feel free to ask questions.

How I started -

April/May - I simply bought newspapers, did online research, and set up customer rewards accounts. During this time of the year it’s very hectic around school with all the state testing. So I stuck to three basic tasks and set the goal to be complete within about 6 weeks. This research phase can probably be completed within 2 weeks it just depends on your personal preference but as I pointed out it was a very busy time of the year for me (I forgot to mention it was my hubby’s 30th birthday, a family cruise to celebrate, and my baby’s 2nd birthday so I was REALLY busy).

1. Buy the newspaper. Well kinda..Since this is titled “How I started” I’ll tell you want I did but I’m not necessarily recommending that this is “HOW YOU MUST DO IT” This is kinda a personal preference type of thing. I purchased 2 or 3 newspapers each Sunday and began asking friends/family for any coupon inserts they don’t use/want. Now at this point I had very little knowledge and I actually collected the papers but I did not sort or clip any coupons (again I don’t recommend following this method). Ultimately this was a double edge sword. I had a fantastic collection of coupons once I actually started “extreme couponing” but they were not organized they way I would go on to use therefore I did spend several long man hours with some friendly family volunteers to get the newspaper coupons all organized.

Recommendation - I recommend you DO gather newspapers during your “research” if you are unsure only collect 1 insert. I’ve seen it be recommended you collect 1 insert per household member but in the beginning 1 set of inserts is sufficient. Over time as you get into couponing regularly you will find a number of newspapers needed for your household.

2. I did lots of research reading “How to start...” blogs after the baby when to sleep. This helped keep my mind off of school and I found it interesting to read about others success. I had to learn the specific lingo, coupon organization methods, where to find coupons, and stockpile ideas. The research process is important for several reasons: it motivates, it familiarizes you with the jargon, and it exposes all the methods of couponing. I recommend checking out these sites which have great “how to start...” blogs

• http://www.livingwellspendingless.com/
• http://www.couponing101.com/
• http://thekrazycouponlady.com/


After checking out the “how to start....” I recommend doing your own generic searches for couponing blogs/websites. There are tons of websites dedicated to couponing. I have found I tend to stick with a select few but in the beginning during my “research” faze I was reading and viewing everything and anything on couponing. As you will see on some of these websites I also found that there are tons of “how to couponing...” videos on youtube.com.

3. Setting up customer reward program accounts was an easy process for me. Basically many grocery and pharmacy stores offer reward programs through the use of a store card. In the past I had cards but I never worried about maintaining them and at times I even would use other peoples cards. As an extreme couponer it is vital to maintain your store reward cards. I started with Giant, my local grocery store. I had a card but I did not know that you can go online and register the card. I am now able to view specific “gas points”. Many grocery stores offer coupons online that can be added to directly to your card. (no clipping or organizing YAY!) The next card I took care of was CVS. I activated my online access to my account and updated all the information. At that point I did not sign up for any new cards because I was just beginning and wanted to stick to three stores: Giant (my regular grocery), CVS (i was familiar with their plan from previous couponing experiences), and Target (i LOVE that place).

Recommendations:

1st - check out your local and most commonly used grocery store’s website and get signed up for an accurate account online and in the store

2nd - research CVS, Rite Aid, and Walgreens. Decide to commit to one store and set up an accurate rewards card account. I do not know anything about Walgreens but I can direct you to 2 great sites for CVS and 1 for Rite Aid.

o http://www.iheartcvs.com/
o http://www.simplycvsshopping.com/
o http://www.iheartriteaid.com/

3rd - research/consider signing up for several different incentive style websites

o https://savingstar.com/how_it_works
o http://www.swagbucks.com/refer/Gillisla
ohttps://www.mypoints.com/

June/July - Jumping In

After the school year finished I began taking all my new knowledge and coupons and putting them to use. Following the advice of several blogs I started with small specific well planned shopping trips. These small transactions help me recognize the value of shopping with coupons. At this point it really helps to have couponing buddies both my best friend's husband and my sister started “extreme couponing” during this time. Throughout the month of June I was experiencing crazy emotional highs and lows. Sometimes I left the store feeling like I didn’t have a successful trip because I wasn’t getting items free or saving 80-90%. Other times I was on an emotional high after scoring free or dirt cheap items. Throughout the first two months I have constantly reminded myself I committed to couponing all summer. At the end of the summer I will be doing a comprehensive evaluation to determine if this “extreme couponing” will continue to be my primary form of shopping.

Recommendations for the first two months:

 Only buy items you need/want.
 Be open to trying new products/food.
 For every coupon deal set the goal of saving 50% or more on individual items.
 Try to find a couponing buddy.

Words of encouragement:

I PROMISE IT IS WORTH IT! Do the thorough research and spend the extra time in the beginning to set up an organized method of collecting/organizing coupons. The additional time in the beginning will be worth it.

Stay Tuned for further adventures in Couponing....

What Was Your Financial “Ah Ha” Moment?

My financial moment of realization that I didn’t have to live in debt was when I realized that I make enough money that I should be able to buy a pair of shoes or take a vacation without worrying about money. This moment came after being in a relationship and sharing expenses for 2 years, it was just me and my money after that. And my money didn’t go as far as I would like. I made a conscious decision to make a change, it’s been hard and there have been a lot of road bumps along the way but I’m slowly making progress.

I got my finances in order by first analyzing my spending using Mint.com and making a budget. It’s taken a couple tries to come up with a budget I can stick to, but the important thing is I have a budget that works for me. Next, I made a list of all my bills, dates they are due, and how much; I put the dates the bills are due on my calendar at work, at home, and on my phone (I’m kinda forgetful). The next step was to figure out who I owe, I made a list of all the people I KNOW I owe and pulled my credit reports. Then I made another list of the debts according to my priorities to pay them off. The only thing left to do is follow my plan.

I give myself a weekly allowance and whatever is left over at the end of the week goes into a jar for my “tattoo fund”, this seems to be working pretty well so far. Like I have mentioned before, I have started selling things on eBay, using coupons whenever possible, and using the Food Share program to buy most of my groceries for the month.

It’s a long road, but at least I’m on the road to financial independence.

Confessions of a Couponer

A couple posts back I wrote about my interest in those who coupon and are successful at it, well it turns out one of my good old college buddies is a couponer. I asked her a couple of questions, check out the interview:




Thanks for agreeing to do this. I find this so fascinating and want to get into this a little
bit. One thing that I do use that helps with coupons and savings and paying back my
loans is using UPromise…if you don’t use it you should check it out.

What got you started couponing?

I first started “couponing” 2 years ago when I had Audrey. After having the baby I spent three months at home in between jobs. During that time I started using coupons for baby supplies and I found out about CVS. After returning to work I ran out of time and just did very basic formula and diaper couponing. Recently my best friend’s husband started getting into “extreme couponing” the TLC show. So I watched a few episodes and got motivated to start couponing again.

Where do you get your coupons? Newspaper? Websites?

Mostly the newspaper, I buy one or two newspapers on Sundays that have coupons. On Thursdays I receive a free paper which includes a set of coupons (usually). I also get coupons from Target, coupons.com, swagbucks.com. A great way to save is use store coupons which usually can be found on specific store websites. CVS (one of my main store that I stop at on a weekly basis) has a machine that will print store coupons in the store you can print new coupons every day/visit.

Do you have a strategy?

I try to make sure I always save at least 50 or 60% on any items that I’m buying for storing. My goal is always to get the best price.

Do you buy crazy amounts of stuff like on the show Extreme Couponing?

I don’t think so but it depends on what you consider crazy. I do usually buy multiples. Like today I purchased 2 packs of disposable razors because they were free. Also I have purchased three mayos, mustards, and A1 sauces at a time. The idea is you buy multiples of the items so that it will last you until the next time the super sale and coupon combination come along. From what I’ve read it tends to be sales rotate on a 6 month schedule (but I’m to new to this to really tell)

What has been your biggest savings since starting?

Well things I have gotten for FREE: razors, pasta, seasoning packets, shower gel, an air freshener, kitty treats, and paper towels

Do you have any tips or suggestions for someone who wants to pick up
couponing?

Its a process that takes time so you have to be patient in the beginning. Once you get in the habit the whole process will be less involved. My biggest suggestion is find the closest drug store and learn about their specific program. I started with CVS because that was the closest to me and their shopper program is pretty easy to use. Last week I add Rite Aid to my shopping plans and they seem to have an even better program. There are tons of videos on youtube.com that break down “how to shop at rite aid or CVS”. Also as soon as you commit to couponing you have to begin organizing your coupons. There are several different methods - try to pick one method and stick with it.

Stay tuned for more Confessions of a Couponer....