Quite often in the evenings, my family looks for activities to do together. Sometimes we’re frugal and we go to the park – other times we’re not so frugal and we go to the bookstore or to a botanical garden with an entrance fee or the like. The important (and healthy) thing is that we are spending time together, right?

Well, it turns out that almost every night in our local community, there’s some sort of free entertainment going on: a farmer’s market, a municipal band concert in the park, a play on the town stage, a free concert by a local band in the park, a planning meeting for the town festival, a basketball game at the local high school, a community dinner for the fire department, and so on. These events are all either free or else offer a deep discount (like a freewill donation at the fire department dinner, where $5 in the pot gets dinner and contact with people in the community).

If you want a ton of free entertainment, there’s a ton of it to be found in your local community. The only problem is that it can be difficult to be aware of what is going on. There’s a solution to that: call your city hall and also give a ring to your chamber of commerce and ask for a community calendar. In many cities, a weekly or monthly community calendar is printed and given away freely, which lists community activities of all kinds. Circle some that you like and attend them – you can’t get a bigger savings than having an entertaining evening for free.

Even more important: your local community can be a valuable resource, and this is a great way to get to know them. I’ve discussed the financial value of being involved in your community before, but when you pair it with activities that are free to begin with, you’re actually throwing away opportunities and wasting money by staying at home or going out to shop in the evenings.

The post Five Minute Finances #21: Look At Your Community Calendar appeared first on The Simple Dollar.

If you’re like me, your route to and from work takes you by a lot of temptations. For me, there are two drive through coffee places and a wonderfully cozy diner open for breakfast on the way to work, and on the way home my route takes me by an enormous bookstore and a nice little ice cream parlor, too. These places all tempt me to spend money that I shouldn’t spend, and for the longest time I was in the habit of spending some money at one of these places every day.

I broke this habit by using a very simple technique: for a few months, I took a slightly longer route to and from work each day that avoided these places. It cost me an average of three minutes each way, but the incidental stops at these places were completely gone, so it often took me less time to commute than before with the stops included. Instead of driving through town, I bypassed most of the town by taking the interstate to the next exit and backtracking just a bit, driving through a suburban neighborhood and near a hospital instead of through the commercial loop.

What happened? The positive impact of this change was pretty immediate on my credit card bills, as I was spending a lot less on spur of the moment things that I didn’t need. I also found that it was actually a more efficient route, as I didn’t stop nearly as often for extra things, so I could get from work to home much quicker.

If you find that “quick stops” for little things in the morning and evening are eating you alive, try a different route to and from your place of business. It can be a big money saver – and even a time saver.

The post Five Minute Finances #20: Drive A Different Route appeared first on The Simple Dollar.

Many people sign up for auto insurance when they acquire a new automobile and then forget about it. They get comprehensive, collision, and liability insurance on their newest auto and leave this insurance on there until the vehicle is ready to be traded in, continuing to pay for insurance that’s no longer cost-effective.

The truth is that once your car reaches a certain point, comprehensive and collision insurance are no longer cost-effective. One rule of thumb for this is when the cost of a year’s worth of collision and comprehensive insurance is more than 10% of the current cost of your car. Why? When your car is devalued to this point, it’s often getting close to the point where you would merely trade it in for a newer model.

If you’re driving an older car that is getting near the end of its lifecycle, it’s almost always just one major incident away from being traded in for another car. When you start to feel this way about your current vehicle, save some money by calling your auto insurance agent and canceling everything but liability insurance on the car.

I don’t want to trade in a nonfunctional car! Why not? When the inevitable does happen and you do need to trade it in, the car’s value will be small regardless of whether a part needs to be rebuilt or not.

Of course, for many of you, this doesn’t apply – many Americans don’t drive a vehicle until it reaches this point. However, if you do find yourself actually getting the full value out of a car by driving it to this point, you can pocket some additional cash by just giving your agent a quick ring.

The post Five Minute Finances #19: Adjust Your Auto Insurance appeared first on The Simple Dollar.

If the one thing keeping you from cutting up your credit cards is fear that you might someday desperately need them in an emergency, this tip is for you. When I was younger, my aunt once filled an ice cream container half full with water, put it in the freezer, waited twenty four hours, pulled it out, put her credit cards in there, then filled it up with water to the top and stuck it back in the freezer. The end result was a giant ice cube with her credit cards stuck in the middle.

What? Why? She realized that she was spending far too much money with the plastic and if she kept the cards around, she would keep using them on stupid things. She also realized that there may be a big emergency some day when she would need them. So instead of cutting up her cards, she froze them.

By freezing her cards, she didn’t destroy them, but she rendered them very difficult to use. To have access to the card, she would have to unthaw a rather large ice cube – it filled up a gallon plastic bucket and thus would take some significant time to unthaw, even if you used heating methods to help. This served two purposes: one, it got the cards out of sight and out of mind, and two, it made her take some very serious pause if she ever thought about getting them out to use them.

Using this strategy and about two years of steady payments, my aunt got herself completely out of credit card debt, and this technique was a big help in the process. The best part is that it’s quite simple and a very effective psychological trick to get yourself out of the plastic mentality.

The post Five Minute Finances #18: Freeze Your Credit Cards – Literally appeared first on The Simple Dollar.

Depending on your cell phone plan, you may be paying for far more service than you’re using – or not paying for enough service. Either way, you’re handing the cell phone company money for no good reason, and you can eliminate that by just keeping simple tabs on your cell phone usage.

If you’re using Verizon or T-Mobile, you can have your minutes in your web browser window. Just check out the Verizon Minutes Used Firefox plugin or the T-Mobile Minutes Used Firefox plugin to track your minutes. Both are quite useful for keeping track of how many minutes you’ve used without any effort. These both require that you’re using the Firefox web browser – there is no alternative for IE users.

Take a detailed peek at your cell phone bills. Make sure you’re not getting dinged with overage charges or other such charges. If you never see any and are using far fewer minutes than you’re paying for, that’s also a concern.

Call up your cell phone provider and ask for a plan change. If you’re going over your minutes every month, it’s almost always cost-effective to pay a bit more each month for a plan that includes those minutes. On the other hand, if you’re nowhere near your limit each month, then you can save some cash by dropping your total minutes down a bit.

I usually check this every six months or so; it takes about three minutes to figure out if a change is needed and about two minutes more to make that change. In just five minutes, I can often save $60 over the course of six months, which is a very healthy time investment.

While you’re at it, you might also drop any extras from your plan that you don’t use. I send maybe ten text messages a month, but at one time I was paying for unlimited text messaging. Dropping this down to a very small allotment of messages saved me some additional cash.

The post Five Minute Finances #17: Check Your Cell Phone Minutes appeared first on The Simple Dollar.

One thing I did recently that started saving us about fifteen dollars a month was that I made the useful observation that I don’t watch that many channels at home. We had a package that included Starz and I never watched it.

When we signed up for cable, my wife selected the package with the idea that we would have movies always available, but during the time that we have the television on, we’re usually watching specific shows or else watching C-SPAN or the news.

So, all I did was call my cable provider and simply ask what channels were on their most basic plan. They listed the channels and I discovered that 90% of the programming I watch was in these channels, so I simply switched to that plan. It took about four minutes and now I’m spending $15 a month less than I was before.

All you have to do is think about what you actually watch on television for a minute and then make a list of the “top” channels on a sheet of paper. Then give your cable or satellite provider a ring and ask for the cheapest plan that includes those channels. You can almost always save some cash each month by doing this.

The post Five Minute Finances #16: Cancel The Channels You Don’t Watch appeared first on The Simple Dollar.

Does the title surprise you? It shouldn’t. The financial costs associated with germs spread by hand-to-hand and hand-to-face contact numbers at least in the billions per year. For example, just in the health care industry, “transfer of germs by caregivers due to poor hand hygiene can contribute to nearly 90,000 patient deaths per year and $4.5 billion in medical expenses” (from Riley Hospital for Children). This doesn’t include the costs in lost productivity and medical costs from hand-to-hand and hand-to-mouth contact in the general population, which likely dwarfs this.

Odds are that sometime in the last several years, you’ve come down with an illness of some sort, and the odds are good that this illness was caused by something borne on your hands. A regular hand washing regimen, which takes just thirty seconds, can strongly reduce this risk.

All you have to do is wash your hands thoroughly each time you use the restroom. Moisten your hands, cover them thoroughly in soap, rinse, and dry, and you’ll eliminate the vast majority of the germs that may take up residence on your hands and thus vastly reduce the risk of illness due to these pathogens. This reduces medical costs and also lost productivity – time when you could either be making money or doing something you love instead of lying in bed feeling miserable.

The post Five Minute Finances #15: Wash Your Hands appeared first on The Simple Dollar.

One big factor for saving money that many people miss out on is motivation. For me, constant reminders of what I’m saving money for help me greatly to avoid spending money on unnecessary things. Here’s a gameplan for quickly finding motivation for saving.

Find a picture online of what you’re saving for. For me, I found two pictures: one of a house that I really liked (saving for a down payment) and a picture of my toddler son (reducing debt and saving for college).

Figure out how much it will cost (approximately). I estimated the cost of a down payment and also the cost of about a third of a college education in about eighteen years. The numbers were quite large, but not so large that they felt unapproachable.

Print out a few copies of that picture with the cost as a caption. I printed out five copies of each one. I actually put the numbers in bold on each picture near the bottom.

Place that printout several places you will see it. I keep one or the other wrapped around my credit card in my wallet so that any time I plan to whip out plastic, I see my son’s face or the home I’d like to have and I rethink the purchase. I keep them in other places, too: on the dashboard in my truck and so forth.

These reminders were very easy to make and help keep me on pace for saving money.

The post Five Minute Finances #14: Set A Tangible Savings Goal – And A Reminder Of That Goal appeared first on The Simple Dollar.

In the past, I discussed how you can do very well with the Borders Rewards program, but the effectiveness of free customer rewards programs extends far beyond that of just Borders. In fact, I sign up for any free customer loyalty program that is offered to me if I believe there is any chance of my return to the establishment. Because of this, just in the last three months, I’ve received two free large pizzas, a free sandwich, $20 in free groceries, and about $30 in additional discounts and savings. For just a minute’s worth of effort here and there, this is a very nice return.

Here are some general tips for maximizing rewards programs without revealing key personal information.

Set up an email address to handle nothing but rewards program emails. Then, whenever you sign up for a program, give this address. Keep tabs on that address every once in a while and see if you can dig out some good offers. Many rewards programs mail out great coupons via email that can really save some cash.

If you’re cautious about giving out other personal information, make it up. This might violate the rules of the program, but in most cases, the program’s benefits are “virtual,” meaning they don’t require direct contact with your identity.

Slim down your wallet by combining a bunch of the cards. Use justoneclubcard.com to cut down the size of your wallet by up to 87% by literally combining up to eight rewards cards onto a single card. I have several of these cards and I’ve found that they really work great.

The post Five Minute Finances #13: Sign Up For A Free Customer Rewards Program appeared first on The Simple Dollar.

Ever received a product that was severely worse than your expectations? For example, ever bought a bag of chips that was horribly stale, or bought some salsa that tasted bad, or a bottle of laundry detergent that was dried out on the inside? Most companies are quite willing to help you to make things right, simply because it is good public relations.

What’s the benefit? If you get ahold of their customer service department for most smaller consumer goods, you’ll often receive coupons for replacement products – often in multiples. For example, I received a huge pile of coupons for free salsa in the past, and I got about fifteen coupons for $3 off any package of Luvs disposable diapers (since I could get small packages of them for $4.99, each one made for nearly free diapers).

What’s the drawback, then? If you start to call on a regular basis, you will be noted and your rewards will go down rapidly. Most of the major consumer good providers share a database of frequent callers, a “blacklist,” if you will, and thus this technique has serious diminishing returns.

Got it – don’t overdo it. So what do I do? If you buy a consumer good and are unsatisfied with the experience, take a minute to call the customer service number on the package. Simply tell them exactly why you’re dissatisfied, but be open to trying the product again or trying similar products. The usual result from this (almost every time, from my experience) is that they’ll send you a supply of vouchers or very strong coupons that can save you some serious money.

For example, I had an incident with Luvs diapers a while back (about one in every three diapers in the bag had an elastic band that fell apart almost immediately). I called the company, explained the problem in detail, and several days later I received some vouchers for more diapers, plus a nice pile of $3 off coupons for Luvs diapers.

The post Five Minute Finances #12: Contact Customer Service appeared first on The Simple Dollar.

This is a tip that my parents discovered the hard way after I moved out, and it simply works. When I first moved out, my parents stopped heating the upstairs of the house because there was no one using the bedrooms upstairs. They simply went upstairs and closed up all of the vents without thinking too much about it. It makes sense, right? You’re just paying extra for the furnace to blow heat into rooms that aren’t being used.

Wrong.

They didn’t notice the problem the first winter because it was viciously cold; the bill was quite high, anyway, and they blamed it on the frigid temperatures.

The second winter, though, they expected to have nice low bills – and they weren’t so low. In fact, their average bill was roughly $30 higher a month than they expected. Why? It turns out that their gas usage in the furnace was higher than two winters previous, even though the outside temperature was warmer.

How is that possible? First of all, the furnace in their home was designed to blow hot air into every room in the house. By shutting off the vents, they were wasting a lot of hot air that was simply just circulating around and eventually coming out of the other vents.

Second, and more importantly, the cold air upstairs was draining the heat downstairs. Heat rises, and thus the heat from the first floor would seep up into the cold second floor through the stairwell and even directly through the ceiling to a degree. This same principle is true even in a one-story home if you have some rooms that you’re not heating – you’re often losing heat if one room is significantly colder than the rest.

In the summer, for their central air, it didn’t matter nearly as much because, again, the upstairs would be hot and they wanted only cool air. However, in the winter, they are much better off with the vents open than with them closed.

If you have closed vents in your house during the winter, open them up, especially if you have multiple stories in your home.

The post Five Minute Finances #11: Open All Your Vents In The Winter appeared first on The Simple Dollar.

An average clothes dryer is a real energy hog; it uses 5,000 watts. Let’s say it takes 50 minutes of use for you to do a load of laundry, and you do an average of eight loads a week (quite reasonable for a small family). This adds up to about 150 kilowatt hours, or $15 a month, or $180 a year. That’s a lot of cash, and it isn’t hard to trim some of it down with a piece of long nylon rope and some clothespins.

That’s right, I’m recommending doing what my parents used to do and I often do: hang up your clothes to dry. A few hours out on the line on a breezy day can dry a load of clothes and often leave them smelling fresher than in the dryer (especially if you live in a fairly rural area). It doesn’t take long, either; just about five minutes to hang up a load of laundry and maybe a minute or two to take them down, which isn’t all that much longer than it takes to load and unload the dryer, plus the folding is quicker if you fold them straight off of the line (they’re already ready to fold, no unraveling).

All you need is a big pile of clothespins, a long nylon rope, and a place to hang it up. You can even do it indoors if you have a place that catches a bit of a breeze and the climate is such that you can leave a window open for a while. Tying them up is easy, just use two half hitches on each end (make a loop around a pole, put the end of the rope through the loop, pull it tight, and repeat once.

How much does it save? Every load of clothes takes about 4.2 kWh in an average dryer. With electric prices averaging about $0.09 nationwide right now, you’ll save about $0.40 per load for every one you hang out, plus the laundry smells substantially better. It only takes an extra few minutes to handle a load – and not even that much if you have access to a proper clothesline. If you live in an apartment and only have access to a coin-based machine, your savings from using a clothesline can be quite tremendous. Want another reason? This is definitely the environmentally friendly way to dry your clothes.

Seems like too much effort. It’s really not, especially if you work it into your schedule. Toss a load in the washing machine first thing in the morning, then hang up a load before you leave for work. In the evening, you have a wonderful, fresh smelling, clean load of laundry to fold up, you saved some money, and you did something environmentally sound.

The post Five Minute Finances #10: Buy Some Clothespins And A Rope appeared first on The Simple Dollar.

This is a “five minute” trick I do twice a week or so: I assemble a big, delicious sandwich and put it in a brown paper sack to take to work with me. It just takes a few minutes in the morning (or in the evening before) to have something delicious at work the next day – and if you go out for lunch regularly, this will save you a lot of money. Just take five minutes, make yourself a sandwich, and put it in a brown paper sack. Don’t like sandwiches? Package up some leftovers.

Here are a few complaints I had with the “brown bag” club – and how I address them.

I don’t want to mess up the kitchen for this! I’ve found that for me the best time to do this is during clean-up time from supper. The kitchen is already a mess, so I just make my food for the next day and stow it away in the refrigerator.

I’ll lose out on valuable networking time if I do this. Unless you work in a tiny office, there are probably some people who don’t eat out. If you just take your lunch half the time, you can actually improve your networking by eating with the brown bag club sometimes and the regular crew other days.

Brown bag lunches taste like my mom’s old bologna. Brown bag lunches can be tasty if you do it right. For example, there are several slick tricks for making leftovers a lot better, and getting high quality condiments can make a boring sandwich great (I love my French mustard).

I use eating out for lunch as an excuse to get out of this miserable office. Take your sack lunch outside and eat in the fresh air. You can even take it to your car and drive to a park or something. Brown bagging it doesn’t require you to eat at work.

I don’t think I can miss out on kvetching with my friends. Try to convince a bunch of them to start a brown bag day once a week – it will be good for all of your wallets.

The post Five Minute Finances #9: Make a Sandwich (or Something Else) appeared first on The Simple Dollar.

Most American households still have all of their light sockets filled with old-fashioned incandescent light bulbs and have yet to convert them over to CFLs. If you’re still using traditional light bulbs to light your home, you’re throwing away money every time you flip on a light switch. In the past, I’ve waxed ecstatic about CFLs and how much they can save, but today I go one further: replace all of your bulbs NOW with CFLs, whether they’re burnt out or not.

I’ll use my own situation as an example. I replaced every light bulb in my apartment (a total of 22 bulbs) with CFLs. Almost all of the old bulbs were 60 or 75 watt bulbs; the new bulbs all used 20 watts. We kept track of our light bulb usage over a week or so and discovered that each bulb was on for an average of three and a half hours a day; in other words, an average day sees 77 hours of total light bulb usage, thus we’re saving about 3.45 kilowatt hours a day, or 104 kilowatt hours a month. At a price of about $0.10 per kilowatt hour according to our electric bill, the light bulb replacement saves us $10.40 a month, every month.

You may have to spend $40 or so to get enough bulbs to replace all of the old incandescents in your home, and you’ll have to discard your old bulbs, but it will only take a few months to make that money back. If you don’t feel comfortable pulling bulbs out of your sockets, you can just replace them as they go out, but it only takes a month or two to make up Even better: CFLs have five times the life of old incandescents, so you won’t have to replace them for years.

So, what’s the game plan? All you need to do is go to your local hardware store and buy a couple jumbo packs of CFLs. I recommend using the next higher “watt equivalency” that the packages tell you; for example, CFLs with a 60 watt “equivalence” aren’t quite as bright as real CFLs, so get the 75 watt “equivalence” bulbs – these use just fifteen watts, so you’re still saving 45 watts per hour per bulb. I personally recommend GE’s 20 watt bulbs, which are a 75 watt “equivalent” (meaning you should probably replace your 60 watt bulbs with them – they’ll be just a bit brighter than the old 60 watts) – those are the exact ones we use all over the place at our home and we love them dearly. They light well and they quietly make serious savings on our monthly energy bill.

So take five minutes, get some bulbs, and replace your old lighting today!

The post Five Minute Finances #8: Replace All Of Your Light Bulbs appeared first on The Simple Dollar.

According to CarCare.org, underinflated tires can reduce gas mileage by 0.4% for every 1 PSI below the recommended maximum in all four tires. Even more amazing, a car tire can be 10 PSI or more under this recommended maximum and not appear low at all with visual inspection, reducing your gas mileage by 4%. Over a year, keeping your tires properly inflated can save $40 even on a car with good gas mileage (10,000 miles driven in a 20 MPG car with gas costing $2 per gallon). If you drive more, or your auto gets worse mileage, you can save substantially more.

Even better, keeping your tires at the proper inflation reduces wear on your tires, thus extending their life, and also reduces the risk of a blowout. Though this savings is a bit more intangible, it will save you money over the long run.

The procedure for airing up your tires is very easy and can be done for free at most gas stations. The only thing you’ll need is an air gauge, which you can borrow from the front counter at many stations (though I found it easier to just start keeping one in my own glove box). Here’s what you do:

1. Look inside the door jamb of your car for a sticker. It should tell you the recommended maximum pressure for tires on your automobile.

2. Let the tires cool before checking their pressure. In other words, if you go to the station to do this, go to one near your home shortly after starting to drive after letting your automobile sit overnight.

3. Remove the cap from the valve on one tire. The valve is pretty obvious – it sticks out and has a little cap on the end that you can easily twist off. Put the cap somewhere where you won’t lose it (I lost one the first time I did it).

4. Push the tire gauge hard onto the valve. If you hear hissing, pull it off and try again, because that means you’re leaking air. You want to line them up straight and push firmly.

5. Add air to the tire. Take the air hose, press it onto the valve in much the same way as the gauge, and push about half a second for each PSI your tire was under the recommended maximum. Check the pressure again and add more if you need to using this rule of thumb.

6. Replace the valve cap.

7. Repeat steps three through six for all of your car tires.

You can also use this opportunity to check the wear on your tire. Jam a penny with the head out into the tread; if you can see any of Lincoln’s head, you might want to think about getting new tires.

How often should I do this? You should do it monthly during warm months and maybe once every two weeks in cold weather. I do it about every other fill up in the winter and about every third or fourth one in the summer.

The post Five Minute Finances #7: Air Up Your Tires appeared first on The Simple Dollar.

This is one of my favorite money saving tips, mostly because it’s so surprising to most people. Drink water? What does that have to do with saving money?

Give this exercise a try for one week. Before you prepare or order or buy any food, drink eight ounces of water (twelve or sixteen ounces if you’re a bigger fellow). It only takes a moment or two and you can do it almost unconsciously, but you’ll find yourself eating a smaller portion. This means a smaller bill at the restaurant, smaller meal preparations at home.

Not only do you directly save money on food bills (I estimate saving several dollars a week for myself alone by doing this), you may also indirectly save money on medical bills. The Cornell University Medical Center found that the majority of Americans are deficient enough in water intake to actually be considered dehydrated. To quote, “Asked to describe their beverage consumption habits, participants report drinking an overall average of only 4.6 8-ounce servings of water per day-most health and nutrition experts recommend at least 8 servings per day.”

In other words, drinking a little water before each meal is a real money saver in more ways than one. Today, when you start thinking about a meal, have a glass of water before you even get started. The end result? You’ll eat less, feel better, and save some money, too.

The post Five Minute Finances #6: Drink Lots of Water appeared first on The Simple Dollar.

If you haven’t started up a 401(k) plan (if you’re an employee) yet, what are you waiting for?

Let’s say you make $40K a year and you’re twenty five years old, meaning you’ll retire sometime around the age of sixty five. Even if you just contribute 1% of your salary – less than $10 a week (and it’s employee matched) into your 401(k), it returns an average of 8% a year, and you only get a 4% raise a year, do you know how much you’ll have at age sixty five? $369,388. If you make that donation just 2.5% – still less than $20 a week before taxes, meaning only about $15 a week out of your take-home – and get the employee match, you’ll have $923,471 in your retirement account at age 65, just shy of a million bucks. In short, a 401(k) plan can add up to huge amounts of money – and it doesn’t cost very much, either.

Even more impressive is the fact that most companies offer a match for every dollar you put in. Quite often, this can go as high as 5% of your paycheck that they’ll simply give you if you put it into your retirement account. All you have to do is invest.

I don’t know anything about investments! Don’t worry about it. Put it all in a target retirement fund (something almost all 401(k) plans offer) and let them do all of the investment managing for you.

But what about the folks who got ripped off by Enron? Since that debacle, retirement plans have had new rules introduced that protect you from such a catastrophe – they’re not allowed to invest all (or even most) of your retirement plan into the company’s stock. In other words, even if your organization collapses, your money won’t just disappear.

Make the phone call right now to your organization’s human resource office and ask to start up a 401(k) plan, even if you know nothing about investing. Tell the person you just want all of it in a target retirement fund, which means someone else manages the whole thing for you based on when you’re expecting to retire. I’d recommend putting in as much as your company matches for starters, but as you can see, even a couple of percentage points isn’t bad.

The post Five Minute Finances #5: Get Started on Setting Up Your 401(k) appeared first on The Simple Dollar.

The average American has a savings account at their local bank, which offers on average an interest rate of 0.5%. That’s abysmal, and it’s basically impossible to get ahead with that kind of interest rate.

Fortunately, there’s a new crop of savings accounts now appearing with all of the features of a regular savings account (FDIC insured, easy deposits) with an interest rate that actually works for you – regular rates at 4.5% APY or above and some introductory offers as a $25 sign-up bonus or a 6% APY over an introductory period.

How much can I make? Let’s say you have $1,000 in your savings account. A typical savings account earns about 0.5% APY, so after a year you’d have $1,005 in the account. HSBC Direct, for example, has a 5.05% APY, meaning that after a year, you would have $1,050.50 in the account, which is $45.50 more than you would in your local neighborhood savings account. Every year after that, the money you can make in a high-yield savings account is even greater than your local simple savings account.

How do I start? I personally use ING Direct (4.5% APY as of this writing, amazing customer service, stellar interface). You can find a huge list of high interest savings accounts at bankrate.com.

When you’ve found a bank, just sign up and transfer some money in from your checking account. I’d recommend setting up an automatic withdrawal plan into that savings account – even just a little bit each week – so that you can steadily grow that account over time. I use such a scheme myself to keep my emergency fund well funded – and an emergency fund is a valuable thing to have so that surprises don’t derail your financial plans.

The post Five Minute Finances #4: Get A New High-Yield Savings Account appeared first on The Simple Dollar.

Ever had to face down a $150 grocery bill? I have, and the reason was usually that I entered the grocery store without any sort of plan, wandered down every aisle trying to decide what we were going to have for supper, and ended up just buying tons of unnecessary stuff – including even some things I already had at home.

You can avoid that pain by starting a grocery list, sticking it on the refrigerator, and adding items to it as time goes on. Here’s what you do.

1. Get a magnetic note pad or make one yourself. You can get a cheap magnetic pad from Amazon, or make your own by gluing a freebie refrigerator magnet (or two or three of them) to the back of a normal pad of paper.

2. Attach a pen to the pad. Just take a pen with a cap, tie a piece of kite string around it, tape that string in place, then tape the string to the back of the pad. Done.

3. Put it on the fridge. Now, slap that pad up on the refrigerator door so you have a place to conveniently make a list.

4. Whenever you notice something you need, write it down. I often notice things we’re getting low on throughout the week, so whenever I see something that we actually need, I jot it on the top sheet of the pad.

5. Before you go to the store, think of a few meals you would like to make, see which ingredients you have, and write down the ones you don’t. This usually means planning your meals ahead a bit. My wife and I usually just identify three to four meals for the coming week and check to make sure we have all the stuff for them. Whatever we don’t have goes on the list.

6. Take the list to the store with you and stick to it as best you can. Once you’re in the store, you’ve already got a list of everything you need, so just stick with it. Don’t buy anything that’s not on the list – don’t even look at it.

This seems trivially simple, but very few people actually take a few minutes to do this and it saves a lot of money. How? By focusing on your list rather than the stuff on the shelves, you’re much less susceptible to the clever packaging and advertising of the products on the shelves – and thus you wind up with fewer unnecessary items in your cart.

Time spent: A minute here, a minute there
Money saved: $20 per store visit (that’s about what I save with weekly shopping trips, based on “before list” and “after list” comparisons)

The post Five Minute Finances #3: Make A Grocery List appeared first on The Simple Dollar.

Tip #2: Call your credit card company
According to CardWeb, the average American household has approximately $9,200 in credit card debt, with the average interest rate hovering around 16.5%. Just a quick bit of math shows that a household with the average credit card and credit card debt is paying $1,518 in finance charges a year. That’s a lot of dough.

Fortunately, there’s a very simple tactic that anyone can use to reduce those finance charges a bit without damaging your credit report. All it takes is a few minutes on the phone and suddenly your finance charges will be steeply lowered. Here’s what you do.

1. Take your highest interest credit card, flip the card over, and dial the customer service number on the back. Wade through their phone menu until you reach a customer service representative.

2. Ask to speak to a supervisor. At nearly all credit card call centers, the people who first answer the phone have no power to do anything at all.

3. Tell the person that you are having difficulty making payments on time and you are seeking a rate reduction. Usually, most supervisors will approve this request immediately and drop your rate by 5 to 7%, because it’s more cost-effective for the company to drop the rate than have to deal with a customer who may be making late payments.

4. If the supervisor refuses to budge, indicate that you are looking into debt consolidation, whether or not you actually are. Mention the possibility of transferring the balance to another card with a low introductory APR. Again, rather than facing the potential loss of income due to a complete payoff, the supervisor will often reduce the rate at this point.

5. If the supervisor still won’t budge, hang up and call back another time of the day (if you called in the morning, wait until the evening, and vice versa). Some supervisors are simply unwilling to reduce rates for any reason, while others are much more willing.

Some tips:

Don’t repeatedly request rate reductions on the same card. If you get one, consider it good enough and don’t continue to call and ask for further reductions. Why? Many companies maintain databases of “trouble” customers and customer service for these individuals in the database is much more difficult than before.

Don’t hesitate to try this on all your cards, but be aware that the lower the interest rate, the less likely you will see a significant rate drop. If you’ve already got a 7.9% interest rate, this phone call probably won’t do you too much good. Instead, save this tactic for the cards that are above 15%, as those are the cards where this tactic is cost-effective.

If you can’t get a reduction at all, consider another solution. This may include signing up for another card and transferring the balance, even though a new card will ding your credit report a bit in the short term. If a reduction or elimination of interest rates makes it possible for you to pay off your card quickly, this may be the way to go.

Remember, this advice is useless if you don’t also curb your spending. If you can’t afford to buy things, don’t buy them just because you have the plastic!

Time spent: Five minutes
Money saved: $460 (that’s 5% of $9,200)

The post Five Minute Finances #2: Call Your Credit Card Company appeared first on The Simple Dollar.